ACKNOWLEDGEMENT The Project titled INDIRECT TAXATION WITH SPECIAL REFERENCE TO CENTRAL EXCISE at Exide Industries ltd; is the

outcome of the combination of my theoretical knowledge and practical experience. I am extremely grateful to Our Director Mr. Ajay Kumar to provide necessary and essential facilities to do this project report. My sincere thanks to our (Head of Department) Mr. Sunil Dhanawde, Department of Management Studies for providing me with an opportunity to study and to do this project work. I express a deep sense of gratitude to my Guide Mr. Vikas Barbate, MBA. Faculty Department of Management studies, for his encouragement, support and guidance to complete this project work successfully. Finally, I convey my heartiest thanks to Mr. V.V Sapre (ACCOUNTS HEAD) of EXIDE INDUSTRIES LTD, who kindly granted permission to do this project report in his esteemed organization. The development and combination of this project effort involves sincere contribution from Mr. S.R.Yelmar (ASST MGNR), and Mr. D.D.Samant (ASST MGNR) Certainly this project would not have been successfully completed without their cooperation. Ashish. B.Bhalerao MBA Finance

INDEX
CHAPTER No.
EXECUTIVE SUMMARY INTRODUCTION 1. 1.1 PROJECT INTRODUCTION 1.2 OBJECTIVES OF THE STUDY 1.3 SCOPE & LIMITATIONS COMPANY PROFILE 2.1 NAME, ADDRESS & LOCATION OF COMPANY 2.2 VISION , MISSION 2. 2.3 HISTORY 2.4 DIFFERENT PRODUCT PROFILES OF THE COMPANY 2.5 AWARDS THEORETICAL BACKGROUND 3. 3.1 REVIEW OF LITERATURE 3.2 FUNDAMENTAL CONCEPTS RESEARCH METHODOLOGY 4. 4.1 RESEARCH CONCEPTUAL CLARIFICATION 4.2 SOURCES OF DATA COLLECTION 4.3 SAMPLE DESCRIPTION 5. 6. DATA ANALYSIS FINDINGS 6.1 FINDINGS BASED ON ANALYSIS 6.2 RECOMMENDATIONS / SUGGESTIONS 6.3 CONCLUSION BIBLIOGRAPHY ANNEXURE

TOPICS

PAGE NO.

EXECUTIVE SUMMARY HISTORY OF TAXATION In India, the system of taxation as it is known today has been in force in one form or another even from ancient times. There are references both in Manu Smriti and Arthasastra to a variety of tax measures. The origin of the word "Tax" is from "Taxation" which means an estimate. The levies and taxes in various forms were imposed to meet the needs of the governments for their military and civil expenditure, safety towards the common needs of the citizens. CONCEPT OF INDIRECT TAXATION Indirect taxes, ranging from VAT and customs duties to environmental levies, affect the supply chain and the financial system. They create unique challenges to multi-national tax functions. CONSTITUTIONAL BACKGROUND OF INDIRECT TAXATION Indian Constitution has given powers to Central Govt. and State Govt. to levy various taxes and duties. Powers of Central and State Govt. are enlisted in Seventh Schedule to our Constitution. Excise is a duty on excisable goods manufactured or produced in India. Each word of this definition is vitally important to fix liability of Central Excise Duty. Power to levy excise duty is derived from Constitution.

1. COMPANY INTRODUCTION

Exide, a global leader in stored electrical energy solutions with operations in over

80 countries and one of the worlds largest producers and recyclers of lead-acid batteries. Exide is a dominant player in the Industrial Battery segment. The Company exports batteries which have captured niches in South East Asian and European markets. Global Quality developed and produced according to international standards and ISO 9001, 14001& ISO /TS-16949. EXIDE Offer a Wide Range of Batterys. EXIDE product range covering capacities from 2.5 Ah to 10,000 Ah and more. EXIDE offers complete solution regarding equipment selection, battery sizing, optimum room layout, installation, operation, & maintenance. We offer lead acid batteries from 2-5Ah to 20,400Ah. No other company in India offer wide range of capacity. Over 52 years accumulated experience of Research & development, manufacturing 7 field operations. EXIDEs R & D centre, set up in 1976, Research under ministry of science & technology, govt of India.

1.1 PROJECT INTRODUCTION A study on Indirect taxation with special reference to central excise at Exide Industries ltd. PROJECT CATEGORY: This project title presentation is for central excise which is underlined for Exide Industries Ltd. Company is a manufacturing dominant player in the Industrial Battery segment. REASON BEHIND CHOOSING THIS COMPANY & PROJECT: One of the High revenue paying company.

1.2 ENDEAVOR, OBJECTIVES ENDEAVOR: As brought out in the title of the project the basic try of the project is to analyze the workings under central excise at Exide Industries Ltd; and keeping this as the major priority in mind was essential that the project was carried out in the systematic manner.

OBJECTIVES:
To understand the meaning, concepts and importance of Indirect Taxation. To know the different types of Indirect taxes such as (Central Excise, Custom

Duty, Service Tax)through various different Legislations & Acts made by the government for collection of revenue from manufacturing industry. To analyse the rules and regulations under Central Excise. To study formats available under Central Excise to calculate excise liability and CENVAT credits. To make necessary suggestions and recommendations.

1.3 SCOPE The scope of this project is to understand Central Excise under Indian indirect taxation. The study is based on actual data collection and interpretation so it will help to see & examine the overall position of Exide Industries Ltd. This project will surely clarify the complexity about the taxation rules and legislations which will be easy to understand by the society as whole. The project is helpful to new Entrepreneur for taking due care of the Central Excise rules and regulations laid down by the Governments. This project is more helpful for business organizations, firms and individual.

LIMITATIONS Project duration was two months so in detail study of each and every concept was not possible. Some data was confidential in nature due to which nearby information necessary was not available so, appropriate figures are used. Few working nature of excise duties were more critical which were difficult to understand. Due to the month of filling returns of Exide industries, the working system of accounts department was always busy, due to which time availability was less.

2. COMPANY PROFILE

Production: Lead Acid Storage Batteries; 2.5 AH to 12600 AH; Automotive, Motorcycle, Industry standby, Motive power, Submarine. Capital: Authorized Rs.100 Crores, paid up 80 Crores Turnover: 4554 crores as on 2010-2011. Employees: Approx 10349 globally as on 01 June 2009. Different segments : 35% Market share in after market (including under organized sector) 80% of Organized Sector 50% Industry Battery Market.

2.1NAME, ADDRESS & LOCATION OF COMPANY

E X I D E

I N D U S T R I E S
(INDIAS ASSOCIATED BATTERY)

L T D

D-2, MIDC Industrial Estate, Chinchwad, Pune-411019. Phone: + 91 - 20 27451586 REGD. & HEAD OFFICE 59 E Chowringee Lane, Calcutta 7000020. Tel: (020) 27503000, 27451585-88 Fax: (020) 66114480 MARKETING OFFICE Exide House 6A, Hatibagan Road, Entally, Kolkata 700 014 R & D CENTER Research & Development Centre, 217, Nazrul Islam Avenue, Kolkata 700 059 Phone: 033 25005458 / 5225 / 5660 Fax: 033 25005545 SERVICE NETWORK 91, New Chord Road, P.O. Athpur, Shamnagar 743 128, 24 Parganas (North) Phone: 033 25800113/22812146/2147/2148 Mobile: (+91) 9932054192 Fax: 033 25813930

2.2 VISION: Simultaneous to providing credible valve addition to customer, employees and shareholders, being recognize by society as a responsible corporate citizen. Achieving operational excellence along with caring for environment protection. MISSION: To carefully balance the interest of all stakeholders, strive to fulfill aspirations of the employees and pursue excellence with passion, without deviating from our valves. CORE VALUES: Fundamental axioms that organization believes in and people respect and work towards. Customer Orientation: Customer orientation adapts the product or services to a customers needs and wants. Its main objectives are to assist, inform, and to be flexible. Personal Integrity: Integrity provides insight that is useful to analysts, managers and other researchers. Teamwork and Mutual support: Took the initiative in setting up and facilitating meetings where you lead the team members towards a common objective.

People development and Involvement: A compelling vision tells people who they are, where they are going, and what will guide their journey. Striving for excellence: Excellence is an art won by training and habituation. We are what we repeatedly do. Excellence then, is not an act but a habit.

2.3HISTORICAL DEVELOPMENT 1916 Chloride Electrical Storage Co. (CESCO), UK, set up trading operations in India as an import house. 1946 First factory set up in Shamnagar, West Bengal.
1947 Two Indian Companies were formed: Associated Battery Makers (Eastern)

Ltd. ABMEL took over the manufacturing operations. 1969 Second Factory set up in Chinchwad, Pune. 1976 R&D Centre established in Kolkata. 1981 Third factory set up in Haldia, West Bengal. 1992 First Submarine batteries delivered to the Indian Navy. 1994 Technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a subsidiary of the Hitachi Group. 1995 Chloride Industries Ltd renamed Exide Industries Limited. (EIL) 1997 Fourth factory set up at Hosur, Tamil Nadu. 1998 Exide acquires the Industrial Operations of Standard Batteries Ltd as a going concern, thereby adding four more factories, taking the total number of factories to eight. 2000 Acquisition of 100% stake in Chloride Batteries South East Asia Pte Ltd., (CBSEA), Singapore & 49% in associated battery Manufacturers, Ceylon, (ABMEL), and Sri Lanka.

 2000 Implementation of SAP Enterprise Resource Planning integrating Corporate Office, Nine Factories, R&D Centre and More than 30 Sales Offices across India. 2001 Launch of autoexide.com, a fully fledged auto portal. 2003 Commissioning of Eighth factory at Bawal, Haryana New JV Company in UK- ESPEX Batteries Ltd formed with 51% EIL holding. Strategic Alliance with IBG in Netherlands for Marketing in Europe. 2004 Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka became a subsidiary consequent to acquiring further 12.50% Equity holding. 2005 Investment in 50% shareholding of ING Vysya Life Insurance Company Limited. 2006 Launch of SAP-CRM in Industrial SBU. 2007 Launch of SAP-BW in Industrial SBU. 2007 Caldyne Automatics Ltd becomes 100% subsidiary consequent to acquiring the balance 49% shareholding. 2007 Investment with 26% shareholding. In CEIL Motive Power Pty Ltd. A Joint Venture in Australia. 2007 Acquired 100% stake in Tandon Metals Ltd. 2008 Acquired 51% stake in Lead Age Alloys India Ltd.

2.4 PRODUCTS

SUBMARINE BATTERIES

INDUSTRIAL BATTERIES

AUTOMOTIVE BATTERIES

2.5AWARDS/ACHIEVEMENTS

100 PPM award from OEM customer American Power Corporation January 03 Quality award from OEM customer Toyota - April 03 & April 04 Safety award from Government of Tamilnadu - April03 100 PPM award from OEM customer Hyundai - June03 Zero PPM Award from OEM customer Toyota April04 Green award from OEM customer Toyota - April04 Best Quality supplier award from OEM customer Toyota April05 Zero PPM award from OEM customer Toyota- April05 Quality Delivery Award from OEM customer Toyota - April05 First Prize in Best Garden Competition (Industrial Category) awarded by Mysore

Horticulture Society 2005 Leadership and Excellence Award in Safety, Health & Environment by CII 2006 Indian Manufacturing Excellence Gold Award for Automotive Ancillary

Category from Frost & Sullivan in 2006 CII-EXIM Bank Award for Strong Commitment to Excel by CII in 2006 6th TERI Corporate Environmental Award- May 07

3. THEOROTICAL BACKGROUND TAXATION IN INDIA India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax, Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc. Since 1991 tax system in India has under gone a radical change, in line with liberal economic policy and WTO commitments of the country. Some of the changes are: Reduction in customs and excise duties Lowering corporate tax

Widening of the tax base and matching up the tax administration

WHAT IS A TAX? A compulsory contribution made by the assesse to the government from his earnings. HOW MANY TYPES OF TAXES ARE THERE? There are two types of Taxes in India Direct Taxes Indirect Taxes The Taxes whose burden falls directly on the Tax payers are the Direct Taxes like Income Tax, Wealth Tax etc. The taxes in which the burden is passed on to a third party are called Indirect Taxes like Service Tax, VAT etc.

DIRECT TAXATION IN INDIA Direct taxation in India is taken care by the Central Board of Direct Taxes (CBDT). It is a division of Department of revenue under Ministry of Finance.CBDT is given the authority to create and control direct taxes in India. In India the tax structure is divided amongst the central government and state government. Central government levies tax Income, custom duties, central excise and service tax. State government levies tax State excise, stamp duty, VAT (Value Added Tax), land revenue and professional tax.

Direct taxes are charged on the basis of residential status and not on the basis of citizenship. The assessee are charged based upon the following factors

Resident Resident but not ordinary resident. Nonresident.

Direct Taxes Reform The system of direct taxes was very much complex and inefficient because of the combination of high marginal rates of personal income and wealth taxation and high rates of corporate profits. It had a major impact on economic policies, creation of savings and the trend of investment.

INDIRECT TAX SYSTEM INDIA The Constitution gives the permission to levy a large number of indirect taxes. But the most important ones are customs and excise duties charged by the Central government and sales tax excepting inter state sales tax to be charged by the state government. The indirect taxes levied by the centre like customs, excise and central sales tax and the major indirect taxes levied by the states and civic bodies like passenger and goods tax, electricity duty and Octroi. Since they are less observable than income tax, politicians are tempted to increase them to generate more state revenue.

Indirect Taxes Reforms

The indirect tax rule in India is still in the early stages of growth. Both the Central

and State governments charge a multitude of indirect taxes. The central government charges tax on goods at the point of import (Customs duty), manufacture (Excise duty), interstate sales (Central sales tax or CST) and on provision of services (Service tax).

The state governments charge tax on goods sold within the state (Sales tax/Value

Added Tax or VAT), and on the goods that enter the state (Entry tax).

In the present scenario corporate would have to analyze the tax cost involved in a

transaction, have enough backup documentation to support their tax positions and keep looking for ways for tax maximization.

3.1REVIEW OF LITRETURE QUICK VIEW ON BUDGET CHANGES 2011-12: The Honble Finance Minister, Shri Pranab Mukharjee, presented his 6th Budget on 28th Feb. 2011 in the LOK SABHA. The Aam Aadmi relief for whom was talked about a lot in & out of the parliament has reason to feel disappointed as there is nothing for him in the budget. Rather the finance minister has proposed to raise an additional Rs 1150/-from Indirect taxes, mainly Central Excise duties. INDIA BUDGET 2008 As per the Ministry Of Finance there has been significant development in planning for introducing the goods and services tax (GST) from April 1 2010.As a first step the rate of central sales tax (CST) is under proposal to be decreased to 2 per cent from April1 2008.The general rate of central value added tax (CENVAT) has been decreased from 16 per cent to 14 per cent across all goods.

WHAT IS EXCISE DUTY? Excise duty is an indirect tax levied and collected on goods manufactures in India. An excise or excise tax (also called an excise duty) is a type of tax charged on goods produced within the country. It is a tax on the production or sale of a good. This tax is now known as the Central Value Added Tax (CENVAT). Though the collection of tax is to augment as much revenue as possible to the government to provide public services, over the years it has been used as an instrument of fiscal policy to stimulate economic growth. OBJECTIVES OF CENTRAL EXCISE: To improve the business by optimizing maximum credit availing facility from suppliers. Adopt unified Modvat rules for inputs and capital goods. Eliminate divergent practices in the applicant of Excise laws and procedures at different formations by effective monitoring and analysis of the computerized database. To generate more revenue basically towards central & state government.

CONCEPT OF CENTRAL EXCISE: Excise are levied and collected by the Government of India only on Production or Manufacture. It is one of the Indirect Taxes by character as the manufacturers can shift the incidence of the Central Excise duty on the Consumers. The concept of central excise can be divided into three categories namely. Which are as follows? BASIC - Excise Duty, imposed under section 3 of the 'Central Excises and Salt Act' of 1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of basic excise duty in India. Basic excise duty for most of the items is 8% at present. Also rectify the Tariff as it may change according to the commodity. ADDITIONAL - Section 3 of the 'Additional Duties of Excise Act' of 1957 permits the charge and collection of excise duty in respect of the goods as listed in the schedule of this act. This tax is shared between the central and state governments and charged instead of sales tax. SPECIAL - According to Section 37 of the Finance Act, 1978, Special Excise Duty is levied on all excisable goods that come under taxation, in line with the Basic Excise Duty under the Central Excises and Salt Act of 1944. Therefore, each year the Finance Act

spells out that whether the Special Excise Duty shall or shall not be charged, and eventually collected during the relevant financial year.

IMPORTANCE OF EXCISE DUTIES:

Trade on which excise are not paid by the company are to be maintained and submitted to Central Excises appropriate superintendent. It has a huge importance to send the unpaid duties towards excise department i.e. not to have an imbalanced account records, complexity in data, and interruption in business. It is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw materials used type of process employed etc. WHO ARE LIABLE TO PAY EXCISE DUTY? The liability to pay tax excise duty is always on the manufacturer or producer of goods. There are three types of parties who can be considered as manufacturers: Those who manufacture the goods Those who get the goods manufactured by employing hired labour Those who get the goods manufactured by other parties

CONSEQUENCE OF AVOIDING PAYMENT OF EXCISE DUTY: Under the different sections of the central excise act, the fines for evading tax can range 25% to 50% of the amount of duty evaded. When you look at the amount of excise you may have to pay, this is a rather large amount and along with the financial impact, you also have to encounter a stained image. The effects on organization, if they are not maintained & followed Bear Penalties Loss of reputation Disappointments of client Disarray.

No. of cases frequently observed Monthly approx about 80-90.

Minimum period for filling & sending the report 24 hours.

HOW IT IS CALCULATED?

MRP or Cost of goods * 14% excise * 2% Cess (charged on the 14% excise duty) * 1 % educational cess = MRP * 14.42% * Chargeable value of MRP

For example: If u have a dish wash bar which is MRP Rs.18

MRP: 18 Excise duty: 14.42% Rebatement or Chargeable value of MRP: 67.5% of MRP

There for ED = 18 x 0.1442 * 0.675 = 1.752

Excise duty has to be included in the basic cost of the product and has to be declared by the manufacturer upfront before the goods leave the manufacturing plant.

FORMAT OF SENDING REPORT FOR UNPAID TRADES:

Our Ref. Cancellation

Date. 28.02.2011

Superintendent of Central Excise, Chinchwad Range-II Div.II, P.J.Chambers, Pimpri, Pune-411 018.

Sub: Cancellation of Invoice. Respected Sir, Enclosed please find herewith the cancellation invoices which are erroneously prepared.

INV.NO. 03-22-212805 03-22-213181 03-22-212623

INV.NO. 03-23-107980 03-23-108260 03-23-108026

Kindly acknowledge the receipt on duplicate copy. Thanking you, Yours Sincerely, For Exide Industries Ltd,

XYZ ASST MANAGER- ACOUNTS

Encl: OFB & DFT copies

CENVAT: BROAD DIVISIONS OF MANUFACTURING INDUSTRY: Manufacturing for sale to customers (Within the state & outside the state) Manufacturing for sale to transfer to depots (Within the state & outside the state) Manufacturing for exports Manufacturing for sale to deemed exports

Manufacturing for sale to 100% EOUs (Export Oriented Units)

MEANING: The term CENVAT refers to excise duty under Sec 3 of the central excise act 1944. Cenvat is a scheme under central excise and service tax law which enables manufacturers to take credit of their specified duties paid on eligible inputs and capital goods as well as Service tax paid on notified input services which are received with specified duty/tax paying documents and used in, or in relation to manufacture and clearance of dutiable final product. ADVANTAGES OF CENVAT:
The CENVAT scheme is very moderate and user friendly.

All industries will certainly derive of the benefit of the CENVAT scheme, more so when the applicability has become wider and record keeping has been made much easier.

 Due to easy compliance and acceptance of the scheme by many industries there

will be better compliance by the assessee which will ultimately increase revenue to government.

A CENVAT CREDIT - CREDIT RAISED AND AVAILED PROCESS

COMPANY

VENDOR/SUPPLIER

Manufactures Pen @ Rs 2/-

Manufactures Pen Refill @ Rs 1/-

Purchases material at Rs 1/- from vendor/supplier.

Sales refill to company at Rs 1/- which already includes paid tax.

Manuf cost Rs 0.20/Tax Rs 0.50/Profit Rs 0.30/-

The Company Processes materials to finished product & sells at Rs 5/by adding their appropriate charges.

1) In this diagram it is clarified that the amount of tax paid by the vendor to govt is collected from the company while selling. 2) Once the company processes the finished goods they are charged with certain profits and sold at appropriate selling price. 3) As the 50% of tax is paid by the vendor and recovered from company while selling. The company further avails the credit of 50% tax which have already being paid and remaining tax amount is paid to the govt.

While selling the Pen @ Rs 5/- company have to pay Rs 1.50/- as tax but, Rs 0.50/- is already paid while purchasing refill from supplier.

CENVAT CREDIT The basic scheme concept of the scheme is to give instant credit of the Central Excise Duty paid (including additional duty, special excise duty and counter vailing duty on input) on goods used in the process of manufacture of Final product. Such instant credit can be utilized towards the payment of excise duty on the final product. In short, the manufacturer is reimbursed the amount of duty paid on the components and raw materials used in production process. The assesse is eligible to take 100% credit of the duty paid on inputs. The manufacturer can avail the benefits of CENVAT scheme provided that inputs and finished products are excisable commodities and within the range of product under notified scheme. Why CENVAT? MODVAT Credit Scheme, which is known as CENVAT Credit Scheme, was introduced mainly to avoid the cascading effect of tax on tax so that in the domestic market as well as in the international market, the goods manufactured in India can be offered to the customer at a competitive price and at the same time, the end user does not pay the price including the taxes paid at multiple stages. FEATURES OF CENVAT SCHEME: Coverage Wider Acceptability Simplified Procedure

 Utilization Of Credit

How CENVAT scheme operates? Example: Product X Amount of duty paid (Rs.) A) Inputs 1) Steel 2) Aluminum 3) Components 4) Paints 5) Consumable (e.g. Welding Electrodes) 6) Packing Materials TOTAL B) Final Products Assessable Value Duty (10%) C) Payment of Excise Duty on clearance of final products Duty payable as per B Less CENVAT Credit on inputs availed as per A Duty payable by Cash 150 150 90 50 70 40 550 10000 1000 1000 550 450

EXCISE CENVAT AVAILMENT: The details are taken from the Document of Cenvat challan. Due to 3rd party documentation it was unable to show the actual contents and the challan format. The very 1st area of system lies on the first screen of system.

Select then area for [JITEX] which states for (Incoming Excise Invoices).

The 2nd area lies for the G/R Goods Receipt no. Input it in system.

The 3rd screen appears while clicking the G/R no.

1st Tab i.e. Excise Invoice Input the following details in system. Excise Document No. /Doc Date/ Excise Base amount-This amount is assessable amount It is the value on which we avail 10% Cenvat CENVAT 10% EDU CESS 2% HIGHER EDU CESS 1%

Click Post CENVAT

We receive a screen with Excise Invoice operation. Take Excise Invoice No. Serial No. Acct Doc No. Note: If by mistaken there is a wrong entry input in system it cannot be changed. But it should be reversed in system.

IMPORTANT DEFINITIONS:

EXEMPTED GOODS Exempted goods means goods which are exempt from the whole of the duty of excise leviable thereon and includes goods which are chargeable to NIL rate of duty. FIRST STAGE DEALER First stage dealer means dealer who purchases the goods directly. SECOND STAGE DEALER Second stage dealer means a dealer who purchases goods directly from the first stage dealer. MERCHANT EXPORTER A merchant exporter is a business man, who buys good n exports the same. MANUFACTURER EXPORTER A manufacturer exporter is one, who produces goods n exports the same LARGE TAXPAYER UNIT (LTU) Large Taxpayer Units have been setup as a self contained tax office under the Department of Revenue to act as a single window clearance point for all matters relating to Central Excise, Income Tax/ Corporate Tax and Service Tax. Presently, there are four LTUs functioning in Bangalore, Chennai, Delhi and Mumbai

SALIENT FEATURES OF CENVAT

1) CREDIT ON DUTY PAID TO MANUFACTURER OF EXCISABLE GOODS The provisions of CENVAT scheme shall apply to the manufacturer of notified excisable goods that uses the notified inputs in the manufacture of final product.

2) CREDIT ON DUTY PAID ON INPUTS The CENVAT scheme is principally based on system of granting credit of duty paid on inputs. Under CENVAT scheme, the manufacturer while making the payment of duty on final product can avail and utilize the instant credit of duty paid on inputs. This will result in avoidance of duty on duty.

3) INPUTS MAY BE USED DIRECTLY OR INDIRECTLY The inputs in respect of credit of duty paid is claimed, must be directly or indirectly used in relation to the manufacture of the final product.

4) NO CREDIT ON HSD AND PETROL Duty paid on high speed diesel and motor spirit (petrol) is not available as CENVAT credit, even if these are used as raw materials.

5) NO CREDIT IF THE FINAL PRODUCT IS EXEMPT FROM DUTY No CENVAT credit is available if the final product is exempt from duty.

6) SPECIFIED DOCUMENTS AND RECORDS CENVAT credit can be availed on the basis of specific documents as a proof of payment of duty on Inputs. The manufacturer should maintain proper records for receipt, disposal, consumption and inventory of the inputs and capital goods containing details such as value, duty paid, person from whom inputs are purchased.

7) INSTANT CREDIT Credit of duty paid on inputs can be taken instantly i.e. as soon as the inputs reach the factory. In case of capital goods 50% credit is available in the current year and balance 50% in subsequent financial year.

8) PROCESSES LOSSES CENVAT credit is available on all inputs even if some of inputs go as process loss.

EXCISE EXPORT PROCEDURE: A with regard to exports would assume significance considering the fact that exports out of the country are to be zero rated. Apart from this principle, the exporters are also entitled to certain additional benefits like sourcing inputs required for production of goods to be exported without payment of applicable duties. The benefits that are available to exporters are not provided under any one single law and include the Central Excise Act, 1944 and Rules, Customs Act, 1962, Foreign Trade Policy of the Government considering the fact that most of the manufacturers who export goods have to comply with the provisions of both Central Excise and Customs laws apart from adhering to the basic guidelines laid down by the government under the Foreign Trade Policy for promotion of exports.

There are mainly three categories of exports: Export of all excisable goods to all states except Nepal and Bhutan Export to Nepal and Bhutan Export to Foreign countries

The procedures relating to export can be classified into two: Export of goods without payment of duty. Export of goods on payment of duty under rebate.

The conditions and procedure relating to export without payment of duty are contained in Notification of Central Excise issued under rule 19 of the Central Excise 2002

EXCHANGE RATES FOR IMPORT & EXPORT OF GOODS (Foreign only) S. No. Foreign currency Rate of exchange of one unit of foreign currency equivalent to Indian rupees (For Imported Goods) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Australian Dollar Canadian Dollar Danish Kroner EURO Hong Kong Dollar Norwegian Kroner Pound Sterling Swedish Kroner Swiss franc Singapore Dollar US Dollar 46.05 46.40 8.45 62.80 5.85 8.15 74.15 7.15 49.00 35.85 45.70 (For Export Goods) 44.65 45.10 8.15 61.10 5.75 7.85 72.20 6.90 47.65 34.90 44.75

S. No.

Foreign currency

Rate of exchange of 100 unit of foreign currency equivalent to Indian rupees (For Imported Goods) (For Export Goods) 53.95

1.

Japanese Yen

55.60

EXPORT WITHOUT PAYMENT OF DUTY [Rule 19] (1) Any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner. (2) Any material may be removed without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of goods which are exported, as may be approved by the Commissioner. (3) The export under sub-rule (1) or sub-rule (2) shall be subject to such conditions, and procedure as may be specified by notification by the Board. Rule 19 of Central Excise Rules 2002 governing export under bond/Letter of undertaking states that any excisable goods may be cleared for export without payment of duty from either the factory of manufacture or warehouse or any other premises approved by the Commissioner of Central Excise.

EXPORT WITHOUT PAYMENT OF DUTY UNDER BOND/LETTER OF UNDERTAKING Export without payment of duty is further classified into the export to the countries other than Nepal and Bhutan for which there is a different procedure. Exports to these two countries are subject to more strict safeguards which have been notified separately and would also be subject to restrictions in terms of discharge.

EXPORT TO ALL COUNTRIES EXCEPT NEPAL & BHUTAN CONDITIONS:

Merchant exporter shall furnish bond in Form B-1 & obtain certificate in Form CT-1. A manufacturer-exporter may furnish annual Letter of Undertaking in Form UT1(no CT-1 is required in this case).

WHAT IS THE DIFFERENCE BETWEEN MERCHANT EXPORTER AND MANUFACTURER EXPORTER? A merchant exporter is a business man, who buys good n exports the same. A manufacturer exporter is one, who produces goods n exports the same

FORMS TO BE USED: ARE.1 is the export document for export clearance which shall be prepared in quintuplicate (5 copies) If the export is under bond executed by merchant exporter, the form should be signed by both manufacturer as well as merchant exporter.

THE DIFFERENT COPIES OF ARE.1 FORMS SHOULD BE OF DIFFERENT COLORS INDICATED BELOW: Original Duplicate Triplicate Quadruplicate Quintuplicate White Buff Pink Green Blue

PROCEDURE FOR EXPORT UNDER DIFFERENT SITUATIONS:

A) Procedure for clearance from the factory or warehouse A merchant-exporter who has furnished a bond shall be provided sufficient number of certificates (CT-1), duly signed/certified, in multiples of 25 copies, normally covering a period of one to three months. The certificate should be provided according to the volume of exports. The second part of CT-1 is very important. B) Sealing of goods and examination at place of dispatch The Superintendent or Inspector of Central Excise, will verify the identity of goods mentioned in the application and also verify whether the duty assessed is appropriate and the duty payable has been has recorded in the Daily Stock Account. The exporter is required to prepare five copies of application in the Form ARE-1.

 If he finds that the declaration in ARE.1 and the invoices are correct from the point of view of identity of goods and its assessment to duty, he shall seal each package or the container ensuring that the goods cannot be tampered with after the examination.

C) Distribution of ARE.1 in the case of export from the factory or warehouse Original (First Copy) The said Superintendent or Inspector of Central Excise shall return to the exporter immediately after Duplicate (Second Copy) endorsements and signature. The said Superintendent or Inspector of Central Excise shall return to the exporter immediately after Triplicate (Third Copy) endorsements and signature. Sent to the bond sanctioning authority, either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in official Quadruplicate (Fourth Copy) Quintuplicate (Fifth Copy) records. Retain for official records. Optional copy - The said Superintendent or Inspector of Central Excise shall return to the exporter immediately after endorsements and signature.

D) Distribution of ARE.1 in the case of export from other than factory or warehouse Where goods are not exported directly from the factory of manufacture or warehouse, the distribution of A.R.E.1 will be the same as above except that the triplicate copy of application shall be sent to the Superintendent who shall, after verification forward the triplicate copy in the manner specified.

E) Dispatch of goods by self-sealing and self-certification Self-sealing and self-certification is a procedure by which the exporter who is a manufacturer or owner of a warehouse or a person (who should be permanent employee of the said manufacturer or owner of the warehouse holding reasonably high position) duly authorized by such owner may remove the goods for export from his factory or warehouse without examination by a Central Excise Officer. F) Export by parcel post In case of export by parcel post after the goods proposed for export has been sealed, the exporter shall affix to the duplicate application sufficient postage stamps to cover postal charges and shall present the documents, together with to the postmaster at the office of booking.

G) Examination of goods at the place of export The place of export may be a port, airport, Inland Container Depot, Customs Freight Station or Land Customs Station. The exporter shall present together with original, duplicate and quintuplicate (optional) copies of the application (A.R.E. 1) to the Commissioner of Customs or other duly appointed officer The goods are examined by the Custom officers for the purposes of Central Excise to establish the identity and quantity, i.e. the goods brought in the Customs area The officer of customs shall return the original and quintuplicate (optional copy for exporter) copies of application to the exporter and forward the duplicate copy of application either by post or by handing over to the exporter in a tamper proof sealed cover to the officer specified in the application, from whom exporter wants to claim rebate.

EXEMPTION BASED ON VALUE OF CLEARANCES (SSI) The Small Scale Units (SSI) is given certain relief under the Central Excise Law by passing exemption notifications. These exemption notifications are popularly called SSI exemption notification because they were originally meant to be an incentive to SSIs. The exemption to SSIs started with the Notification No. 175/86 The manufacturer availing the notification has to satisfy certain conditions for availing the benefit and the goods manufactured should be covered under this notification. MEANING OF SMALL SCALE UNITS The definition basically takes the investment made on the plant and machinery by any industries as the basis for determining the small scale industries. PRODUCTS COVERED UNDER THIS SSI EXEMPTION NOTIFICATION The exemption to be given to SSIs is not applicable for all the goods. The benefit of the said notification is restricted to the products listed in the notification. The notification covers most of the products However, tobacco products, pan masala, watches, matches and some textile products are specifically excluded from SSI exemption.

ELIGIBILITY

The units whose value of clearances computed in accordance of the notification is less than 400 lakh (4 crore) in the previous financial year are eligible for the benefit of the notification The limit will be calculated by taking into account the clearances in respect of one manufacturer from one or more factories or from a factory by one or more manufacturers. For example, if ABC Ltd. wants to claim the benefit of the notification in the year 20102011, then it has to see whether the clearances of the year 2009-2010 has exceeded Rs. 4 crore. Exempted units whose turnover is more than prescribed limit (called specified limit) have to file a declaration in prescribed form with Assistant Commissioner of Central Excise and should obtain a dated acknowledgement. Such declaration is filed only once in the lifetime of the assesse and not every year. The specified limit for this purpose is Rs.60 lakh below exemption limit. In present provisions this limit works out to be Rs.90 lakh (Rs.150 lakh Rs.60 lakh). Therefore, the declaration shall be filed by units whose turnover exceeds Rs.90 lakh. Small units whose turnover is below the specified limit (Rs.90 lakh) per annum shall not file any declaration at all. If the manufacturer wishes to pay normal duty availing CENVAT facility, he can do so. The manufacturer has to intimate his option with the following details either to

Assistant Commissioner of Central Excise or Deputy Commissioner. (a) Name and address of the manufacturer; (b) Location of the factory/factories; (c) Description of the inputs used in the manufacture; (d) Description of goods manufactured; (e) Date on which this option is exercised; (f) Aggregate value of clearances of goods.

RELAXATION IN THE DUTY

Value of clearances in Rs. lakh in a financial year Duty Structure Amount Duty 0- 150 lakh 0% >150 lakh Normal duty

CLUBBING OF CLEARANCES As per section 2(f) of the Central Excise Act, 1944 a manufacturer means not only a person who employs hired labour but also person who engages in production or manufacture on his own account. The words on his own account have caused considerable legal action. The Department normally denies the benefit of the exemption on the ground that one manufacturer wants to split up one unit into various units to take advantage of Nil duty clearances up to Rs.150 lakh in respect of each unit. It is the argument of the Department that there is considerable revenue loss when the manufacturer purposely plans his affairs in this manner while continuing to exercise managerial control over all the units. Therefore, the Department denies the benefit of the exemption notification when they find common directors or common shareholders or common employees or common usage of facilities including funds.

The main aspects which lead to clubbing of clearances are as under: Reason to start is due to customers not willing to pay the excise duty Beneficial financial interest in new unit Working in cycle and as one unit Common procurement or sale Common stock usage

The reasons for commencing investigation are same location, same product, sharing of customers, same partners, interest free advances, shared facilities, sharing of expenses and incomes etc.

4. RESEARCH METHODOLOGY INTRODUCTION Research methodology is a way to systematically solve the problems. It may be understood as a study about how research is done mathematically & scientifically. It includes the overall research design, the sampling procedure, data collection method and analysis procedure. RESEARCH A careful investigation or inquiry especially through search for new facts in any branch of knowledge TYPES OF RESEARCH Descriptive Vs. Analytical
Applied Vs. Original

Quantitative Vs. Qualitative

Conceptual Vs. Pragmatic.

TYPES OF RESEARCH USED FOR PROJECT ANALYTICAL RESEARCH Analytical Research is that research where the researcher use that facts or information which is already collected by some other person. The research uses this facts or information and makes critical evaluation of data for providing results or solution to specific problem. In analytical research two types of analysis can made:1. Analysis of Historical records, Recording of notes, content analysis, tape and film listening and analysis. 2. Analysis of document, Statistical compilations, reference and abstract guides, content analysis.

DESCRIPTIVE RESEARCH Designed to provide further insight into the research problem by describing the variables of interest, can be used for profiling, defining, segmentation, estimating, predicting, and examining associative relationships. CAUSAL RESEARCH Designed to provide information on potential cause-and-effect relationships, most practical in marketing to talk about associations or impact of one variable on another.

4.1 RESEARCH CONCEPTUAL CLARIFICATION METHODOLOGY USED FOR PROJECT Research methodology is way to systematically solve the research problem. Research is a scientific and systematic search for pertinent information on a specific topic. It has its special significance in solving various operational and planning problems of business and industry in it we study the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them. For this project analytical research is carried. The methodology used for calculating excise duty of the company had based on formula and the values from previous reports of the company. The methodology is to know the excise duties paid annually i.e. 2010-11. The methodology to analyzing various different Legislations & Acts made by the government for collection of revenue from manufacturing industry. For theories related to topic, exchange rates and interpretation was gathered from various financial management books, web sites and communication of people who have good knowledge about these topics.

4.2DATA COLLECTION METHOD SOURCE OF DATA Both primary and secondary data are used for the data collection. PRIMARY DATA Primary data are those data which are collected as fresh for the first time, and thus happen to be original in character. The primary data is collected from the (Level M1) respondents through questionnaire. The responses are collected from them and used for analysis SECONDARY DATA Secondary data are those data which have already been collected by someone else and which have already been passed through the statistical process. The secondary data is collected from books, Web sites, magazine etc. The data relating to the history of the company is collected from the personal website of the company.

Primary Data

Secondary Data

Data Collection Method

Information System

Communication

INFORMATION SYSTEM SAP: Systems Applications and Products in Data Processing. A company that develops software which allows businesses to track customer and business interactions. SAP is well-known for its data management programs. COMMUNICATION People who have good knowledge about these topics. People such as senior officers, accountants, managers. Different sources of communication were used such as email, telephone, IM messenger.

4.3SAMPLE DESCRIPTION The issue involved in this case is in respect of refund claims of the respondent company rejected by the adjudicating authority But on appeal, the Commissioner (Appeals) allowed the appeal of the respondent company. The refund claim ought not to have been sanctioned to the respondent company, as they had issued Credit Notes to their Purchasers. The Commissioner, in this context, relies upon the decided case-laws wherein it has been settled that refund cannot be sanctioned on the basis of Credit Notes being issued to the Purchasers of the goods. None appeared for the respondent company, despite notice. Considered the submissions made by Commissioner and perused the records. It was found that the Commissioner (Appeals) in his findings observed the followings:When going through the order in original; there is no dispute that the appellant made over-payment because of some calculation mistake. Therefore, the amount claimed by the appellant did not represent excise duty at all. The amount, therefore, should be refunded to the appellant. No evidence in support of this finding was shown in the negotiation order.

Besides, the authority did not find it necessary to consider the appellant's request that credit notes were issued to their buyers maintain their claims that the amount was not bear by their customers as excise duty. The appellant also issued commercial bills showing the correct amount of excise duty. Therefore, it was unable to accept the adjudicating authority's finding that the amount was passed on to the buyers. From the above, it is very clear that the Commissioner (Appeals) had considered all the aspects of the case-laws relied upon by the authority before me. Coming to the conclusion that the payment of duty by the respondent company is due to a mistake, and the said mistake has resulted in excess payment of amount to the government. Since the excess amount has not been recovered by the respondents from their purchasers, the respondents were eligible for refund of the said amount.

5. DATA ANALYSIS INTRODUCTION TO SAP (SYSTEM ANALYSIS AND PROGRAM DEVELOPMENT) SAP Stands for System, Application, and Product in data Processing. Founded by five German engineers in 1972, SAP is the Worlds Leading provider of business software, offering application and services to companies of all sizes across more than 25 industries. SAP offers an integrated system, which means that all sap modules are designed to share information and automatically create transaction based on various business processes. SAP OFFER THE FOLLOWING SOFTWARE SUITES Supplier Relationship Management (SRM) Strategic Enterprise Management (SEM) Catalog Content Management (CCM) Compliance Management (CM) Supply Chain Management (SCM) Product life Cycle Management (PLCM) Customer Relationship Management (CRM) SAP: Systems Applications and Products in Data Processing. A company that develops software which allows businesses to track customer and business interactions. SAP is well-known for its data management programs.

WORKING SYSTEM OF COMPANY

Logon Screen

Home Screen

Working area Screen

Processing area Screen

Multiple Options Screen

DATA PRESENTATION:

Direct Taxes Collections (Rs. in crores) Corporate tax 241,921 Income tax Other direct taxes 128,235 2833

Indirect Taxes Collections (Rs. in crores) Customs 84,542 Central Excise Service tax 101,666 55731

PRODUCTION CLEARANCE Amt in (crores) Total Duty Utilized Cenvat Availed Export 2009-2010 59 43 10 2010-2011 94 68 13

EXPORT Amt in (crores) CT-1 CT-3 2009-2010 0.23 0.8 2010-2011 0.44 11

EXPORT 2009-10 2010-11 109515239 136301470

While looking at the composition of current and previous season's growth in relation to Export, Company achieves a growth of 26.78%

INDIAS GDP GROWTH RATE The Gross Domestic Product (GDP) in India expanded 7.8 percent in the first quarter of 2011 over the same quarter, previous year. From 2004 until 2010, India's average quarterly GDP Growth was 8.40 percent reaching an historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India's output with less than one third of its labor force. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points.

COUNTRIES

Our economy has succeeded in maintaining one of the highest GDP growth rates in the world in the last decade with very low inflation, there are several areas where immediate improvements are required to sustain the growth.

The two principal concerns: The weakening public finances.

Relatively weak performance of exports and foreign direct investment (FDI).

On the monetary side, while the government needs immediate attention to raise the declining tax to GDP ratio. On the external front, Indias success in integrating into the world economy critically centered upon raising the share of its exports in world trade.

The stated objective of the Ministry of Finance and Company Affairs in setting up this task force on Indirect Taxes is to take advantage of information technology and bring the indirect tax systems and procedures at par with the best international practices and encourage compliance.

This mandate the review of the present indirect tax laws and procedures - Customs, Central Excise and Service Tax with an eye toward removing complexities and facilitating voluntary compliance.

The bottom line is to set in place a user friendly and transparent tax administration in tune with the best international practices.

The understanding is that such measures would improve voluntary tax compliance and reduce the transaction costs and, thus arrest the trend of falling tax to GDP ratio. The most direct way to raise tax to GDP ratio is to remove most of the excess of exemptions granted on import and excise taxes for a variety of reasons.

To boost exports and FDI, the government must sharply reduce the transaction costs associated with trade and doing business with India.

The main objective is to reduce the cost of doing business for all parties by eliminating unnecessary administrative burdens associated with bringing goods and services across borders.

A positive stance by India in WTO on trade facilitation would serve two purposes:
We could use it to get some concessions from the developed countries who are

championing this idea. This would improve our international image as a committed reformer.

6. FINDINGS SWOT ANALYSIS (Strength, Weakness, Opportunities, Threat) INTRODUCTION: The company is engaged in the business of development/ manufacturing/ covering the broadest spectrum of applications. Exide Industries is the biggest storage battery producing company in India. It is also the largest power storage company in the whole of the south-east Asian region. STRENGTH: The Company exports batteries which have captured niches in South East Asian and European markets. All the suppliers, customers, business partners believe in Exide for its value of reputation in market. And no other company in India offers wide range of capacity. Exide has over 52 years accumulated experience of Research & development. WEAKNESS: In Exide industries ltd, the communication and infrastructure are not standardized. The products manufactured and the services offered are as per the requirements of the customers.

OPPORTUNITIES: India is one of the fastest growing economies in the world registering the Gross Domestic Product (GDP) in India expanded 7.8 percent in the first quarter of 2011. This growth momentum was coupled with the BHARAT NIRMAN & NATIONAL URBAN RENEWAL MISSION efforts calls for large capital investment outlay. Investments in manufacturing and other core industries give a tremendous boost to the industry, which is balanced for continuing growth during the next 10-15 years. Exide industries ltd being the manufacturing dominant player and market leader will continue to benefit from these growth and opportunities. THREATS: Whenever there growth opportunity, it is quite natural that lot of international players will enter the market. The significant players in Indian organized sectors apart Exide industries ltd are AMCO YUASA, AMARON, TATA GREEN, LUMINOUS, etc and many other regional/national/international players. While the treats from international players is quite visible, the domestic manufactures Exide industries ltd are fully prepared to meet the ever increasing demand for battery products for existing and emerging new applications.

6.2RECOMMANDATION & SUGGESTION: Companys policy of utilizing its asset & machinery to optimum level should be continued in future also. It is recommended that the company should improve the working infrastructure. It is recommended that the data must be stored and processed more in electronic form rather than manual form.
It is recommended to increase few more staff to be recruited.

Communication gap should be improved.

It is recommended towards the supplier that they must carry the simplest way for

work & communication.

6.3CONCLUSION: As Exide Industries Ltd is in manufacturing sector they avail the different credentials benefits through CENVAT. Company is increasing their revenue through introducing new product line. Exide Industries Ltd achieves Quality & Productivity commitments. Company is in appropriate Trading, manufacturing, production, & tax fillings.
Exide Industries Ltd takes a good startup for marketing their products since 1st

June 2011. E.g. Exide Industries Ltd introduces [SF Sonic Batteries] whose Brand ambassador is bollywood actor Salman Khan. Company has efficiently managed to use the long term funds of owners and creditors. Company has efficiently managed its investments for future gains. Investors will continue to invest in Exide.

BIBLIOGRAPHY: A) Print Materials Books R.K. Jain Central Excise Law Manual 52nd Edition 2011-12. Exide Industries Annual Report & Accounts 2010-11. Exide Industries Magazine Exchange 2010-11. T. Gunasekarans CENVAT Manual 22nd Edition 2010-2011. V.Raghuram & Madhukar N. Hiregange Central Excise Law & Procedures 2011-2012 C.R. Kothari Research Methodology 2nd Revised Edition 2009. B) Internet Web site, no author Links: http://finmin.nic.in/ http://dor.gov.in/ C) Professional or organizational Web page Links: http://www.aces.gov.in/ http://www.aces.gov.in/REGASE/switch.do?prefix=/ui/jsp/common&page=/firstlogin.do

Magazine article: Exides Exchange 2011. D) Images Google images Links: http://www.google.co.in/search? hl=en&gbv=2&tbm=isch&q=excise+duty&revid=907877971&sa=X&ei=SmgeTrG_MsT MrQeI37ioAg&ved=0CDkQ1QIoAA&biw=1440&bih=784 http://www.google.co.in/search? hl=en&gbv=2&biw=1440&bih=784&tbm=isch&sa=1&q=excise+duty&oq=excise+&aq =1&aqi=g10&aql=&gs_sm=e&gs_upl=10833l11142l0l12946l3l3l0l0l0l0l152l400l0.3l3

The development and combination of this project involves sincere contribution in the form of time and efforts of many people. Certainly this project would not have been successfully completed without their co-operation.

QUESTIONAIRE 1 (SSI) (i) What is the eligible turnover for claiming exemption? Ans: The eligible turnover for claiming exemption under the said notification is Rs.400 lakh. (ii) How the turnover is computed when the manufacturer has more than one factory? Ans: When a manufacturer clears the goods from one or more factories, the turnover of all the factories have to be combined for the purpose of claiming exemption under the said notification. (iii) What does value mean? Ans: The value for the purposes of the said notification would mean the value fixed under section 4 or section 4A or the tariff value. (iv) Can Cenvat credit on capital goods be availed by SSI units that avail the benefit of exemption? Ans: Yes! 50% Cenvat Credit on Capital Goods is available in the first year of purchase of Capital Goods and 50% can be availed in the next subsequent year as per Excise rule. (v) The availability of CENVAT credit on capital goods under the notification? Ans: The units can avail CENVAT credit on capital goods but the same can be utilized for payment of duty on final products only after the turnover reaches Rs.150 lakh.

(vi) Clearances of excisable goods without payment of duty? Ans: ABC Ltd. is a manufacturing unit situated in Haldia. In the financial year 20092010 the total value of clearances for the unit was Rs.350 lakh. The break-up of clearances is as under: (a) Clearances worth Rs.50 lakh without payment of duty to a unit in special economic zone. (b) Clearances worth Rs.50 lakh exempted under job-work. (c) Export clearances worth Rs.100 lakh (75 lakh to Sweden and 25 lakh to Nepal). (d) Clearances worth Rs.100 lakh which are used captively to manufacture finished products that are eligible for exemption under notification 8/2003. Such clearances are also eligible for exemption under notification 8/2003. (e) Clearances worth Rs.50 lakh of excisable goods in the normal course. (vii) Reasons for clubbing of clearances of SSI units? Maintenance of accounts of various units by a single person and at one office A single security was in charge of security of all units Units engaged in production and transactions assessed to sales tax and income tax separately is a pointer to different entities.

QUESTIONAIRE 2 (Excise) Q1: Importance of sending the unpaid excise duties? Ans: Invoices on which excise are not paid by the company are to be maintained and submitted to Central Excises appropriate superintendent. It has a huge importance to send the unpaid duties towards excise department i.e. not to have an imbalanced account records, complexity in data, and interruption in business. Q2: What are the effects on organization, if they are not maintained & followed? Ans: Bear Penalties, Loss of reputation, Disappointments of client, disarray. Q3: How frequently no. of cases is cancelled for invoices? Ans: Monthly cancelled invoices are approx about 80-90. Q4: What is the minimum period for sending the report? Ans: The minimum period for sending the report is 24 hours. Q5: Reasons for not paying the excise duty on invoices are as follows? Ans: Transportation Problem, Quantity or Quality problem, Units difference etc.