Page 75 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes 5.1 Rules for clearance or removal of goods under Central Excise
Rules

1. Self removal procedure

Under this method, assessee is allowed that he can remove or clearance the goods but he must
follow the following steps for self removal:
1st step He must record in the production register daily.
2nd step He must prepare invoice.

3rd step He must calculate his duty liability by himself.
4th step Pass removal entry in production register (Quantity, rate, duty).
5th step Pass the debit entry of duty payable at the end of month.

In 1994 gate pass system changed with invoice –base system.
2. Removal of goods under bonds

It means assessee has right to remove the goods at concessional rate or exempted from duty
goods if he get bond of central excise department with surety or security.
Steps for this method

1st step Application is given by manufacturer to obtain the benefits.
2nd step Execute/get bond with security (it means in future these goods will become excisable,
he will pay the duty)

3rd step The amount of bond equal to the exempted amount or concession Value of duty.
4th step Application shall counter signed by Assistant Commissioner
5th step Record of concession or exempted goods.
6th step Recovery of duty in certain cases.

3. Removal of goods from Free Trade Zones (FTZ) or 100% EOU or Special Economic
Zones: (Rule 17)

If goods produced under free trade zones or 100% export oriented units or special economic
zone. The assessee has right to removal after paying its appropriate duty. In some cases, govt.
can give right to export without payment of duty.

4. Removal on payment of duty or on invoice: Rule 4

1st way
Removal of goods on payment of excise duty is best way for manufacturer and central excise
department. Manufacturer never remove until he pay his duty.

2nd way
Removal of goods on invoice. It means goods send out on invoice and signed by owner of
factory.

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