Sugar Factory Project

A PROJECT REPORT ON feign a path OF strike DUTY PAYMENT BY GABRIEL INDIA LTD. AT pic - Submitted By- AVINASH CHANRDAKANT IGHE - The search Guide- PRO-D. D. WALKE - Affiliated To - University of Pune N. D. M. V. P. Samajs Nashik pic Institute of Management explore and Technology (IMRT) For The Academic Year 2008 -2009 PREFACE Indirect appraise is the cardinal of the most enormous source of investment comp in all told army of the Indian authorities which aids to development expenses and some designer(a)(a)(prenominal)wisewise aspects. commutation impress is oneness aspects of fund/ tax charm.Features of indirect taxes. disposal of India needs funds for various purposes similar maintenance of law and order, defence, social /health attends etc. Goernment obtains funds from various sources out of which one main source is taxation, arbitrator Holmes of US Supreme Court has long ago rightly tell that tax is the price which we expect for a civilized society. -vi ew echoed in Parshuram clayw ar works ltd vs. ITO (1977) 106ITR 1(sc). Taxes ar conventionally broadly classified as send out taxes and indirect taxes.As the take a crap suggest, direct taxes atomic number 18 compensable outright and indirect taxes salaried indirectly. In the case of indirect taxes, they ar paying(a) by one soulfulness, but he rec eitherplaces the same from a nonher person. Thus, the person who deed of conveyanceually bears the tax burden pays it indirectly by some other person, Who existentisticly, merely acts as colleting agent of course, he is liable if fails to collect and pay the taxes. primeval come up is totly whit the manufacturing comp both(prenominal), which comp some(prenominal) Produce or per degree excisable goods as per cardinal walk out Act 1944.Excisable goods indicate which goods weakness beneath exchange scratch up Act 1944, And it is also moldiness be movable and martable and must be produce or make up in India. Indir ect tax structure on goods. chance on business 14%, Education cess 2%, Secondary and higher secondary teaching cess 1%, Vat 12. 50%. Invoice must be pick up a bun in the oven 4 copy 1) Original for buyer. 2) Duplicate for transporter. 3) Third for pass judgmentes. 4) Fourth cite copy. ACKNOWLEDGEMENT It gives me immense pleasure to present this design report on engage of grave transaction Paid out by GABRIEL INDIA LTD.In partial fulfillment of post-graduate course M. B. A. nowork give the axe be carried out without the help and counselling of various persons. I am able to take this opportwholey to impress my gratitude to those who rich person helped me in completing this draw report. At the outset, I would like to thank Mr. Kadam Head of Dept. ( mint) of GABRIEL INDIA LTD for their valuable advice and guidance during my experience completion, also Mr. Doke for clockly help concerning various aspects of project. I would be flunk in my concern if I do non em it my deep sense of gratitude to Prof.D. D. WALKE without his guidance. It wouldnt have been possible for me to complete this project work. Lastly I would like to thank all professors and staff at I. M. R. T. , my friends and all those persons who contributed directly or indirectly for successful completion of this project. AVINASH C. IGHE proclamation I, Avinash Chandrakant Ighe, student of MBA mull overing in Institute of Management Research & Technology, Nashik solemnly decl atomic number 18 that the project titled STUTY OF strickle DUTY PAYMENT BY GABRIEL INDIA LTD. was carried out by me in partial fulfillment of the MBA program low University of Pune. This project was beneath interpreted as part of academic computer programme as per university runs and norms and by no mercenary please or motive. It is my reliable work and non submitted elsewhere for any(prenominal) other purpose earlier. clothe NASIK AVINASH C. IGHE DATE INDEX Chapter No. Contents Page No. 1 INT RODUCTION ABOUT THE pick out 1-8 1. Object of the project 1 1. 2 Selection of the Topic for hold 2 1. 3 Objective of the project 3 1. 4 Research methodology 4 Scope of the field of direct 5 1. Limitation of pick up 6 1. 7 revenue enhancement collection of major taxes in India 7 1. 8 Bud stick to changes 2008 8 2 PROFILE OF THE ORGANIZATION 9-15 2. Introduction of the party 9 2. 2 crossway Profile 14 2. 3 Organizational structure 15 3 abridgment AND INTERPRETATION OF DATA 16-53 DDDDDDDATADATA 3. 1 Topic nether study 16 3. Key compendium & entropy presentation 35 4 EXECUTIVE SUMMARY 54-56 5 CONCLUSIONS & FINDING 57-58 6 SUGGESTIONS & RECOMMENDATIONS 59 7 APPENDICES 60-61 6. 1 Bibliography 60 6. Glossary 61 1. Object of the Project In Master in Business Administration, theoretical knowledge is not sufficient. possible knowledge got by the project is truly useful in our futurity. MBA has to make for quit responsible role as a manager, so that practical knowledge is must for management student. During the project we come across distinct real life both(prenominal)ers. This practical knowledge helps us in future to overcome such(prenominal)(prenominal) problems in the corpo charge per unit world. The objectives of the project work be as follows 1. To enable the MBA student to test their theoretical knowledge in practical. 2.To provide training to student by the organization, this is very useful in their future. 3. Preparation of project report is mandatory for every MBA student, that is why the offset printing-string objective of any project is fulfill the requirement of the syllabus with the prehension the knowledge. 1. 2Selection of the topic for study Topic selections the one of the important aspect of our project. As it decided the course of action, to be followed. The topic selected should be such that it helps in und erstanding the happen upon concept clearly, as was given the topic by the company itself. This topic given by project guide was STUTY OF EXCISE DUTY PAYMENT BY GABRIEL INDIA LTD.Covers all the things related to cancel abbreviation provided by the company. 1. 3Objectives of the project 1. To study mapping of of import scrape accommodation. 2. To study E. R. 1 figure of aboriginal chance on. 3. To study applicability of the interchange excise. 4. To study journey of Cenvat identification. 5. To study process of Cenvat reference point taken. 6. To study drawbacks of underlying excise. 1. 4RESEARCH methodological analysis Research methodology is a way to systematically solve the question problem. It whitethorn be understood as a science of perusal now research is make systematically. In that various qualitys, those atomic number 18 chiefly adopted by a researcher in studying his problem along with the logic behind them.Data collection is important step in any pro ject and success of any project give be monumentally depend upon now much accurate you leave be able to collect and how much age, money and effort allow be required to collect that necessary entropy, this is also important step. Data collection plays an important role in research work. Without proper data operable for analysis you cannot do the research work accurately. There are two types of data collection methods available. 1) original data The randomness closely the high society is gathered from the discussion with the employees/staff. 2) Secondary data- The secondary data collected The balance public opinion polls as on the see of 31st celestial latitude 2007 for the purpose of 1st April 2007 to 31st Dec 2007 The methodology of this study has been adopted on the next basis Study of various Journals, Notes & Books. Collection of Primary & Secondary data records of the organization. Analysis of the collected data for its use. 1. 5Scope of the project The excis e is the important tax from indirect tax. This project covers all points about excise and also cenvat reference work predominates and conditions. The central excise law mainly form of rudimentary scratch act 1944, key Excise conventionalisms 2002, Cenvat realisation observe 2004. This project also comprises central excise enrolment social occasion, assessee profile, finds related with central excise, journey of cenvat acknowledgment rule, process of cenvat credit taken and drawbacks of central excise. interchange excise is source of Indian Government from collection funds. 1. 6 LIMITATIONS OF THE STUDY Generally company does not allow outsiders to film any study or research work in company. There stem, get the project done in company itself was very difficult. Due to confidentiality some important information, which are important for the project, could not be collected. virtually of the information lack in accuracy, due to which close values were used for the anal ysis. Hence, the results also reveal approximate values. The project is based on theoretical guidelines and as per situations prevalent at the succession of practical training.Hence, it may not be apply to contrastive situations. The age span for the project was very short which was of 2 months, which itself acts as a major constraint. Moreover, studying the guidelines and applied it practically in spite of appearance such short time span was a task of great pressure. 1. 7 Revenue collection of major taxes in India pic Note- (1) N. A not available. (2) Figures in crores. 1. 8 Budget changes 2008. Budget 2007-08 and pay Bill 2008 was presented forwards Parliament on 29-02-2008. The changes which are effective immediately or from 1-04-2008 have been discussed at relevant places. The statutory changes and changes in traffic range are effectmarized in fort pages.High freshs as follows- General rate of canonical traffic reduced from 16% to 14% from1-3-2008. pattern 6(3) of cenvat credit rule recast to provide for proportionate credit in case where shaper is manufacturing both exempted and assessable goods and do provider is providing both rateable as healthful as exempted attend tos. In case of deemed industriousnessr, simple repacking allow for be fiction 1-3-2008. Till now, labeling, re-labeling and also repacking was required. Service tax on GTA to be paid by cash totally. Controversy relating to cenvat credit of outward freight continues. Strips of plastics for twist fabric eligible for SSI exemption 1-4-2008. EOU have to pay province mate to 50% of custom handicraft plus excise transaction 1-3-2008. NCCD of 1% imposed on mobile phones but NCCD on PFY and pan masala not containing tobacco has been withdrawn. 2. 1 Introduction of the company Gabriel India sets up its facility in Parwanoo in 1978 in collaboration with Federal Mogul, USA world drawing card in thin-walled, bimetallic engine bearings, the Parwanoo kit and caboo dle is equipped with a richly integrated facility for the manufacture of a complete range of bimetal bearing, bushes, flanges and thrust washes including manufacturing of powder metal and bimetal strips. In 2004, Gabriel has put up a spick-and-span plant in Khandsa (Haryana) for anufacture of aluminum tin bearings. Anand locomotive bearing division was e interconnected in 2007 from Gabriel India Ltd and is now called Anand locomotive engine Component Ltd. Anand Engine Component Ltd is a leading suppler of Engine bearings to domestic OEMS and replacement foodstuff in the automotive industry as well as other segments such Railway, Marine and power generation. Its output also being exportinged to several(prenominal) oversea markets. Name of the company Gabriel India limited, Address of company 29th milestones, Pune-Nashik course, settlement Kuruli, Tal Khed, Dist. Pune -410501 (India) Tel. +91-9922908401/2/3/4 Fax +91-2135-261200 www. anandgroupindia. com 1.Capital Employed $ 43 Million 2. Net Fixed Assets $ 31 Million 3. Major Products- dishonour Absorbers, Strutsand introductory Forks. Engine Bearings. 4. HQ Location- Delhi 5. Established 1961 2. 1. 1Brief history of Gabriel- 1997 Started intentt for OE passenger car shocks 1998 HMI, Tata labours & Ford India business started 1999 Toyota Kirloskar business started (Qualis) 2000 Acquired credentials for QS 9000 by BVQI 2001 HM business started (Lancer) 2003 Acquired certification for ISO 14000 2003 Acquired certification for OHSAS 18000 2003 Maruti business started 003 Acquired certification for TS 16949 by BVQI 2003 Acquired certification for Ford. 2004 GMI business started. 2. 1. 2 Mission of the Company- The mission statement of Gabriel is- To fighter and accelerate learning by providing world-class technological and managerial effect and act as the hub for canalise of learning by dint ofout the group. basal philosophical system behind that is Increase of value contribut ion & customer satisfaction which meat elimination of non value added activities and emphasis on value stream way of thinking rather than the traditional functional way of thinking. 2. 1. 3 logotype of the Company- pic 2. 1. 4 Location of the production Company has six branches in India. It is as follows. Pune. Dewas. Hosur. Parwnaoo (Himachal Pradesh). Nashik. Gurgoan. 2. 1. 5 Production capacity- 1) Struts 1. 5 Million units per annum. 2) Front Forks 1. 5 Million units per annum. 3) Shock Absorbers 10. 0 Million unit per annum. 2. 1. 6 Certification of the Company- 1-ISO9002 Nashik, Hosur, Parwanoo. 2-ISO14001 Hosur, Dewas, Pune. 3-QS9000 Hosur, Dewas, Nashik. 4-ISO16949 Hosur, Pune, Dewas. 5-OHSAS 18001 Hosur, Dewas, Pune. 2. 1. 7 Ride control global product range. Twin underground shocks (gas). Twin tube shocks (non-gas). Mono tube shocks. Spring seat shocks (semi-strut). hacker suspension damper. Steering damper. Strut cartridges. McPherson struts. Self l eveling shocks. Active suspension. intermission corner module. 2. 1. 7 Gabriel Pune pic 2. 2Product profile- pic pic 2. 3 Organizational cstag - thickset C Anand Foundation Mr. S. G. Kulkarni (D. G. M finance) Mr. A. Vispute Mr. S. Das (Sr. manager) Manager) Mr. M. Dalal Mr. S.Agnihotri Mr. A. Mane Mr. T. J. Kadam (A. M) (A. M) (A. M) (A. M) Miss. Harivanda Mr. A. P. Doke (Asst. ) (Officer) Mr. R. M. Wadekar Mr. M. D. Pardeshi 3. 1 event UNDER STUDY 3. 1. 1 Theoretical background - 1) voyage of substitution Excise. 2) rudimentary Excise Act 1944. 3) Central Excise regularizes 2002. 4) Cenvat creed regularisation 2004. ) Re affectionatenessration procedure of central excise. 6) E. R. 1 form, analysis and format. 3. 1. 2 Journey of Central Excise. Available historical evidence on the organized forms of goodness taxation shows that duty on two commodities salt and liquor was levied during comfortable Mauryan period (5% to 10%). During Mughal period, tax on manufactured goods was extended to indigo, cotton, soap, viands oil, tobacco and salt. Early British overshadow imposed duty on dairy products, handlooms, leather products. Iron and steel. Excise, as we understand it today, was 1st introduced on cotton yarn in 1894, mainly to check exports of Indian textiles to USA, China, japan and Hong Kong.Subsequently, excise net was widened and it was imposed on motor spirit (1917), coal oil (1922), Silver (1930), Sugar and matches (1934). More situations were cover under excise in 1943. Development of Excise Law Initially, give Act used to be introduced for each commodity. Thus, by 1944, there were 16 each enactment. whole these were amalgamate and a consolidating Act was passed in 1944(which is still in force). The consoli involvement act included various items called obligation Items (TI) like Sugar (TI-1), Coffee (TI-2), teatime (TI-3) etc. More and more items were added each twelvemonth, usually at the time of Budget. Finally, residual item c alled Not Elsewhere specify (NES) (TI-68)-was introduced w. e. f. 1-3-1975. Thus, effectively, all items were cover. traffic on TI 68 was 1% in the beginning, which was raised in stages to 12%. Central Excise tax - Since tariff item were added from time to time, the arrangement and sequence of each was not tariff item was not scientific and logical as items were added in the Schedule to central Excise Act from time to time. In the mean firearm, internationa diagnose Standards were developed for classification of goods and impost Tariff in India was revised to fall in line with worldwide Standards for classification. Excise tariff was also revised and Central Excise Tariff Act, 1985 was brought into effect from 1-3-1986. Thus, only 15 commodities were covered in 1944, against over 1,300 commodities covered in 1994.MODVAT in 1986 Modvat was introduced w. e. f. 1-3-1986, to avoid cascading effect of taxation. Coverage of MODVAT was increased over a period of time and now most of the inputs (except a few), are eligible. MODVAT was extended to pileus goods and petroleum products in swear out 94. (MODVAT was renamed as CENVAT w. e. f. 1-4-2000) opposite landmarks until 1938, excise duties were administered by provincial (Now called State) Governments. Central Excise and Salt Revenue Department was established in 1938. Changes in recent times- Some important changes in recent times are as follows 1-4-2000 Basic Excise affair leave be 16%on most on all commodities.Branded goods manufactured by SSI in unsophisticated area will be exempted from duty. 1-4-2000 Modvat was renamed as Cenvat. red-hot Cenvat rules 57 AK introduced Duty recompense on fortnightly basic, instead of at every time forrader clearance. 1-7-2000 All statutory records abolished. Department will rely on clannish records of assessee. New evaluation fragment 4 and new Valuation rules introduced. 1-7-2001- New Central Excise conventionalitys made effective and earlier Central E xcise recipes, 1944 scrapped. Many procedural simplifications made. September, 2001 CBE&C released New Central Excise Manual, 2001 and Custom Manual, 2001. Basically, these are consolidation of many former trade notices, everyday notices and CBE&C circulars.In addition, ecumenical information about customs and excise law is contained in these manual. 9-7-2004 Introduction of Education Cess 2% of duty or tax, Textile Articles practically out of excise net. 10-9-2004 Integration of Cenvat Credit of Excise duty on goods and go tax. Credit is inter-changeable. 1-1-2005 Service tax on Goods Transport Agency. Tax payable by consignor/consignee paying freight. 28-2-2005 Central Excise Tariff converted from 6 digits to 8 digits. 1-3-2006 AED (GSI) fully exempted. SED merged with basic excise duty. 13-7-2006 department can provisionally attach topographic point of a person to whom show cause notice has been served (section 11DDA of CEA). Basic procedure in Central ExciseAs per section 6 of CEA, registration is required to be obtained by (a) every manufacturer or manufacturer of excisable goods that is goods undertake in first and second schedule to central excise tariff act (b) in large quantities purchase or cut-rate sale or storage of any specify goods included in first or second schedule of central excise tariff act. As per rule 9 of Central Excise precepts, every person who produces, manufacturers, carries on trade, holds private store room or warehouses or other wise uses excisable goods shall get designateed. The rule also otherwise display board to issue notification (a) specifying conditions and procedures for registration and (b) grating exemption to person or class of person from eatable registration. Registration is compulsory as both section 6 of CEA and rule 9(1).It has been minute that registration granted in earlier old rule 174 will be valued under new rules. 3. 1. 3 Central Excise act 1944 (sec 40) This is the first act which gav e the power to excise military emplacementr for provision of collecting the excise or taking action of arrest, penalty, Valuation. personality of Excise Act The basic condition for levy of Excise Duty- 1) The duty is on goods. 2) The goods must be excisable. 3) The goods must be produced or manufactured with aid of power. 4) Such production must be in India. 5) Goods must be movable and marketable. 3. 1. 4 Central Excise manages 2002 Rule 1-Short title, extent and commencement. Rule 2 Definition of. Act judgement Assesses Board Duty Notification Tariff act Warehouse Rule 3 Appointment and jurisdiction of central excise tycoonr. Rule 4 Duty payable on removal. (Molasses) both person who produce or manufacture any excisable goods, or who store such goods in a warehouse, shall pay the duty livable on such goods in the panache provided in the rule 8 under any law, and no excisable goods, on which any duty is payable, shall be removed without retribution of duty from a ny place, where they are produce or manufactured, or from a warehouse, unless otherwise provided. Rule 5 Date for determination of duty and tariff valuation.If any excisable are used within the factory, the date of removable of such shall mean the date on which the goods are issued for such use. Rule 6 Assessment of duty. The assessee shall himself assess the duty payable on any excisable goods. Rule 7 tentative assessment. The Assistant Commissioner of central excise or the deputy commissioner of central excise, as may be required for finalizing the assessment, the is available, but within a period not exceeding six months from the date of the communication of the order issued under sub rule (1). Rule 8 Manner of payment. The duty on the goods removed from the factory or the warehouse during a month shall be paid. Rule 9-Registration. both person who produces, manufacture, carries on trade, holds privet store-room or warehouse or otherwise uses excisable goods, shall get regi stered. Rule 10-Daily stock account statement. All such records shall be preserved for a period of five days Immediately after the financial year to which such records pertain. Rule 11-Goods to be removed on vizor. No excisable goods shall be removed from a factory or a warehouse except under an chronicle singed by the owner of the factory or his authorized agent and in the case of cigarettes, each such invoice shall also be countersigned by the inspector of central or the superintendent of central excise before the cigarettes are removed from the factory. Rule 12- pass away to filingProvided that an assesses manufacturing pan masala failing under tariff item 21 06 90 20 or pan masala containing tobacco failing under tariff item 24 09 99 90, shall also file, along with the chase away ,for the month which the said return relates, a statement summarizing Rule 13 export without payment of duty. every excisable goods may be exported without payment of duty from a factory of the manufacturer or the manufacture or any other premises, as may be approved by the commissioner. any(prenominal) material may be removed without payment of duty from a factory of the producer or the any other premises, for use in the manufacture or affect of the goods which are exported, as may be approved by the commissioner. The export under sub rule (1) or sub rule (2) shall be subject to such conditions, safeguards and procedure as may be contract by notification by the Board. Rule 14 Warehousing provision. The central government may be notification, extend the facility of removal of any excisable goods from the factory of production to a warehouses to another warehouses without of payment duty. The facility under sub-rule (1) shall be available subject to such condition, including penalty and interest, limitation with discover to the period for which the goods may remain in the warehouse and safeguard and procedure including in the related to the dispatch, movement, rec eipt, accountable and disposal of such goods may be specified by the Board. 3. 1. 5 Cenvat credit rule 2004. (rule 16) Dated 10/9/2004 amended. Government appointed Dr. Vijay Kelkar for recommending tax reforms and as part of the report. fraternity budget 2003-2004 clearly recommendation of Kelkar committee have been accepted.A new rule 12 A was inserted vide notification no 19/2006, date 30/09/2006. which deals with the procedure and facilities for large tax payer, particularly with reference to the undermentioned aspects. 1) Removal of input or capital goods by a large tax payer through a transfer challan/invoice. 2) Transfer of cenvat available with one of the units of the large taxpayer to his other registered premises through a transfer challan. Cenvat credit rule deals with as follows goods, Rules 1 - Capital goods All goods failing under chapter 82,84,85,90 heading no 68. 02. Pollution control equipment. Component, spares and accessories of the goods. Specified (1) (2) a bove. Moulds and dies, jigs and fixtures. contumacious and material. Tubes and pipes and fitting. Storage tank. Note-office equipment and appliance in an industry and hence credit cannot be legitimate. Rules 2 - Inputs All goods and raw material Except light diesel oil, high speed diesel oil and motor spirit, unremarkably known as petrol and motor vehicles, used for providing any issue service. Rule 3 A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit. The duty of excise of specified in the first schedule to the Excise Tariff Act, livable under the excise act. The duty of excise specified in the second schedule to the Excise Tariff Act. The education cess on excisable goods under section 91. Rule-4 Condition for allowing CENVAT credit. The cenvat credit in honour of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of sidetrack service. Rule 5 Refund of CENVAT credit to units in specified areas. For the purposes of this rule, duty means the duties specified in the sub rule (1) of rule 3 of these rules. Rule 6 Obligation of manufacturer of nonexempt and exempted goods and provider of taxable and exempted services. Rule 7 Distribution of credit on inputs by the office or any other premise of rig service provider.A provider of output services shall be allowed to take credit on inputs and capital goods received on the basis of an invoice or a bill or a bill a challan issued by an office or premises of the said provider of output service, which receives invoice, issued in basis of the provision of the central excise rules, 2002, towards the purchase of inputs and capital goods. Rule 8 Storage of inputs outside the factory of the manufacturing. Rule 9 enters and accounts. (1) An invoice. (2) A supplementary invoice. (3) A bill of entry. (4) A protection issued by an appraiser of customs in adore of goods impo rted through a Foreign invest office. Rule -10 Transfer of cenvat credit. Rule 11Special dispensation in respect of inputs manufactured in factories located in specified areas of North easternmost region, Kutch district of Gujarat, state of Jammu and Kashmir and state of Sikkim. Rule 12 personnel of central government to notify goods for deemed cenvat credit. Rule 13 Recovery of cenvat credit wrongly taken or erroneously come backed. Where the cenvat credit has been taken or hire wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provision of section 11A B of the excise act or section 73 and 75 of the finance act. Rule 14 Supplementary provision.Any notification, circular, instruction standing order trade notice or other order trade issued under the Cenvat Credit Rule 2002, by the Central Government, the central board of excise and customs, the chief commissioner of ce ntral excise, and in fore of the commencement of these rules, shall, to the extent it is relevant and consistent with these rules, be deemed to be valid and issued under the corresponding provision of these rules. 6. Registration procedure of Central Excise As per section 6 of CEA 1944, Registration is required to be obtained by (a) every manufacturer or producer of excisable goods that is goods specified in first and second schedule to central excise tariff act b(b) wholesale purchase or sale or storage of any specified goods included in first or second schedule of central excise tariff act.As per rule 9 of central excise rules, every person who produces, manufacturers, carries on trade, holds privet store room or warehouses or other wise uses excisable goods shall get registered. The rule also otherwise Board to issue notification (a) specifying conditions and procedures for registration and (b) grating exemption to person or class of person from provisions registration. Registrat ion is compulsory as both section 6 of CEA and rule 9 (1) use the world shall. It has been clarified that registration granted in earlier old rule 174 will be valued under new rules. 1. Application for registration- in the beginning starting production of excisable goods or dealership for the purpose of issuing invoice to pass Cenvat credit, registration should be obtained.The Application Forms specified for this purpose are given in Annexure (Form A1 for all persons except certain textile processors/cheroot manufacturers). recognise Forms A2 is prescribed for registration of Power loom Weavers/Hand processors/ dealers of yarns and fabrics and manufacturers of readymade garments. Form A3 is the application for registration specified for manufacturers of hand rolled cheroots tobacco dropping under sub heading 2402. 00 of Central Excise Tariff. The application should be submitted in duplicate to the jurisdictional Deputy/ Asst. Commissioner of Central Excise. An attested copy of p ermanent Account Number (PAN) allotted by Income Tax Department should be enclosed with the application.Under the New Central Excise Registration functioning for Power loom Weavers/Hand processors/ dealers of yarns and fabrics and manufacturers of readymade garments, the C. B. E. and C. through Circular No. 708/24/2003- CX, dated 23-4-20032003(153) E. L. T(T63), asked departmental officers to issue registrations even if PAN is not available. 2. Registrations entryation- The Registrations Certificate in prescribed format Form RC-Annexure-2 will be issued within seven days. Normally, RC can be obtained across the table on the date of application itself. Verification of the premises will be made later. 3. perm constitution of RC- Registrations Certificate, once issued, is permanent except when it is suspended or revoked. RC is not required to be renewed. 4. No fee for Registration-Registrations Certificate is issued open of charge and there is no fee prescribed for the same. 5. S ame form for intimation of changes- The same application form is to be used for intimating any change in the information furnished originally at the time of applying for Registrations Certificate. Manufacture of new or additional products need not be intimated. 6. Transfer of Business- Excise registration is premises-specific. But it is non-transferable and hence, when the business is transferred to another person by way of sale or lease, the taking over the business (transferee) should take fresh registration in this name. 7. Change in the Constitution-If the entity holding Central Excise Registration is a substantial or company or association of persons, any change in the constitutions should be intimated to the concerned Central Excise Officer within 30 days. 8. De- Registration- If the business is not carried, Registrations Certificate should be surrendered to the superintendent of Central Excise. A declaration specified for this purpose Annexure-3 should be given while surrend ering RC. 9. Quoting RC Number- The PAN- based Excise registration number is required to be printed on top of all Central Excise invoices, duty challans, PLA & other Forms /documents. Textile units coming into Excise fold for the first time can clear their goods and pay duty pending grand of registration. 10. Revocation or suspension of registration-For contravention of provisions of Central Excise Act, 1944/ Central Excise Rules, 2002 and other specified offences, RC can be suspended or revoked by the deputy/Assistant Commissioner. As there are separate penal provisions to take care of various infractions, this is seldom resorted to. 3. 1. 7 Analysis and detail of Excise Return Form Excise Return (E. R. -1) form - Excise Return (E. R. -1) form is the most important document of excise return. Rule 12 of the Central Excise Rules, 2002 and rule 9(7) of CENVAT Rules, 2004. separately E. R. 1 form have two copies one is original and other is duplicate this document use for return of e xcisable goods and availment of cenvat credit for the month.Includes inside information of the manufacture, clearance and duty payable also detail of goods item code, registration number, name of the company, address, quantity manufactured, and quantity cleared assessable value etc. E. R. 1 form has details about basic excise duty 14%, education cess 2% and secondary and higher education cess. Attached all detailed value, item code number, description and also detail of cenvat credit availment and utilized. E. R. 1 form has details about cenvat input goods, cenvat capital goods, and cenvat service tax. The following points are include in cenvat credit availment and utilized. Credit on manufacture invoice. Credit taken on Dealers invoices. Credit taken on capital goods. Credit taken on input services. Credit taken on imported capital goods. Credits taken from inter unit transfer of credit by a large taxpayer. E. R. 1 form include Self assessment memorandum, acknowledgment and la stly authorized signature tune and name. 3. 1. 8 CENVAT Credit Process- (1) Cenvat credit is allowed to offset duty obligation on final product services. Hence, as per rule, Cenvat credit is not allowed on quantity of inputs and input service used exclusively in the manufacturer of exempted goods/ services. If cenvat credit is availed on inputs and input services used in the manufacture or rendering of both dutiable and exempted goods or services, 10% of total price (excluding sales tax and other taxes if any paid) shall be paid.The output service provider shall utilize credit only credit only to the extent of an keep down not exceeding 20% of the amount of service tax payable or taxable output service. Now sub-rule (3A) in Rule 6 Vide Notification No. 10/2008-C. E. (N. T. ), dated 1-3-2008. (w. e. f. 1-4-2008) provides for reversion of credit traceable to the input and input services used in the manufacture of exempted goods as per the prescribed in the said rule. (2) The condi tion of 10% payment is not applicable if separate accounts of receipt, consumption and inventory of such inputs or input service are maintained cenvat credit is taken on that quantity of inputs and input services used in the manufacture of dutiable goods/ taxable service only.In respect of certain specified services, such restriction doses not operate. Thus credit is allowed on the service tax pay without the requirement of maintaining separate accounts to consulting engineer, architect, and interior decorator, management consultant, real estate agent, commissioning and instillation service, technical inspection and certification service, commercial or industrial construction service security, security agency, scientific or technical consultancy, banking and financial services, life amends services, technical testing and analysis service, maintenance or repair service and intellectual property service, if these or not used exclusively for providing exempted output services.In the c ase of general insurance service, when both taxable and exempted services are provided, an optional scheme, utilize Cenvat credit attributable to inputs/ input services used in providing taxable services, has been provided. (3) For manufactured of certain specified exempted goods manufacturer shall pay an amount eq to Cenvat credit attributable to inputs and input services used in or in relation to manufacture of such final products. These products are A Goods falling within heading No. 2207 of the First Schedule to the Tariff Act (Ethyl alcohol and other spirits, denatured, of any strength) B Low reciprocal ohm Heavy Stock (LSHS) used in the generation of electricity C Naphtha (RN) used in the manufacture of fertilizer D -. Newsprint, in rolls and sheets, falling within heading No 48. 1 of Central excise tariff E Final products failing within chapters 50 to 63 Central excise tariff F Naphtha (RN) furnace oil used for generation of electricity G Goods supplied to defense pr ojects or to the Ministry of Defense for official purposes, under any of the specified notifications H Liquefied Petroleum Gases (LPG) falling within item 27111200, 2711300 and 27111900 of the said First Schedule I Kerosene for ultimate sale through Public Distribution System. If the above producer is not followed the assessee will be liable not only for recovery under Rule 14 of Cenvat Credit Rule, 2004, but also for interest penalty. (4) Amount of 8% paid (now 10% under Rule 6) while clearing non-dutiable goods and agnize from customers was held as not recoverable under section 11D of Central Excise Act, 1944 Unison Metals Ltd. V. commissioner, 2006 (204) E. L. T. 323(Tri. -LB).But if the amount was collected in respect of dutiable goods, the same Larger Bench judgment says, real identity of the amount collected is not relevant for section 11D whether the collection represented duty of excise alone is relevant. (5) As per new condition (d) in Rule 6(3), the output service prov ider in the case of general insurance service has to intimate the option in writing to utilize Cenvat attributable to inputs and input services in providing taxable output services to the cathode-ray oscilloscope Superintendent, giving prescribed details. The option once exercised cannot be withdrawn during the remain part of the financial year. (6) Credit is not admissible on capital goods used exclusively in manufacture of exempted goods/rendering of exempted services. 7) Under Rule 6 (3), no distinction is to be made between mean final product and unintended emergency of by product 2007 (208) E. L. T. 25(Tri. -LB) Rallies India Ltd. v. CCE. (8) The substantive provisions of Rule 6 as contain in sub-rule (1),(2) and (3) shall not apply for exempted goods cleared either to - ? SEZ Unit, ? 100% EOU, ? EHTP,STP unit, ? United Nations or an International Organization for their official use or supplied to projects listed in Notification No. 108/95 C. E. , or ? For export under bond under Rule 19 of the Central Excise Rules, 2002. C. B. E. & C. circular No. 785/18/2004 CX. , dated 17-5-2004 2004 (167) E. L. T. T35 ?Gold or Silver arising in the course of manufacture of strapper or zinc by smelting, or, All goods which are exempt from the basic duties of Customs and the additional duty (C. V. D. ) when imported into India and supplied against International competitive bidding in terms of Notification No. 6/2006 C. E. 2. KEY ANALYSIS & DATA PRESENTATION 3. 2. 1 EXCISE DATA OF THE COMPANY - fiscal highlight of the period 1st April 2004 to 31st edge 2008 A. Value of clearance goods. S. R. Particulars 2004 2005 2005 2006 2006 2007 2007 2008 1 Domestic clearance 774200060 1001839000 1024535335. 87 761355812. 0 2 eccentric 2990434 4460621 4406276 3947935 3 Export clearance 11270 2740620 5150444 1958831 4 Other 26581926 29447903 8895151. 08 00. 00 5 integral clearance 803783690 103783690 1042987207. 15 767262578. 50 B. Central excise duty . S. R. Particulars 2004 2005 2005 2006 2006 2007 2007 2008 1 allowance in PLA 48740016 53681491 41367098 26186202 2 Payment through cenvat credit 90119634 112750237 169196919 100193615 3 descend 138859650 166431728 210564017 126379817 C. Cenvat credit taken. S.R Particulars 2004 2005 2005 2006 2006 2007 2007 2008 1 On capital goods 4958440 4773122 8147200 7764147 2 On input goods 87752967 109226355 153488966 86673644 3 On input services 165307 311808 4044501 3008152 4 add together 91776714 114311285 165680667 97445943 Passenger cars in India- Share of Business The following chart shows market share of Gabriel India ltd. Conclusion- The above pie chart shows Gabriel is the enormous producer in the India which produces automotive components. Gabriel covered about 63%production and other companies covered only 37%.It is indicating Gabriel very important company for the Indian simple mac hine sector. Central excise paid by Gabriel (Payment in PLA, payment through cenvat credit) The following chart shows payment through personal ledger account and cenvat credit. Conclusion- The above chart shows central excise payment through personal ledger account and cenvat credit. Cenvat credit is the most important particle of excise. As per above chart company paid continuously excise from personal ledger account and continuously growth in payment of duty. Total excise payment of Gabriel (from 2001 to 2008) The following pie chart shows excise payment of Gabriel India ltd. ll payment shows in parentage from 2001 02 to 2007 08 pic Conclusion - The above chart shows every year increase the total value of excise clearance, that means Gabriel have incessantly growth and also paid the duty regularly. Cenvat credit taken - The following bar graph shows cenvat credit taken by Gabriel India ltd. The following value shows Capital goods, Input goods and Input Services. pic Conclusion - The above hart shows value of Capital goods, Input goods and Input Services in graphically. As per above chart input goods is one most important goods for cenvat credit and large commitment for cenvat credit. Capital goods and input services covered very small area of cenvat credit. See rule 12 of the Central Excise Rules, 2002 and rule 9 (7) of CENVAT Credit Rules, 2004 Large Taxpayer unit opted for (Name of City) Name of the assessee 29-Mile Stone Pune Nasik Highway Village Kuruli, Pune-410501 3.Details of the manufacture, clearance and duty payable 1 Motor Vehicle parts & Accessories Shock 8708. 00 14 % Absorber & Struts / Kits/Tube - 2 Tools & Dies 8207. 00 14 % 3 Waste & Scrap of Steel 7204. 90 14 % 2. mention of the principal inputs and capital goods used by the assessee.A) Inputs - 1) MS Steel Tubes 2) burnished Bar 3) Sintered parts. B) Capital Goods As per Annex- G. 4. Brief details of the revenue for the list three years in the Performa given below. Year. Total duty paid Total duty paid through CENVAAT Total duty PLA Inputs Cap. Goods payment (In Rs. ) (In Rs. ) (In Rs. Inputs /Cap. Goods 2002-2003 28871497 42919868 / 3224062 75015427 2003-2004 39091938 61721263 / 104876428 4063257 2004-2005 48740016 86010192 / 3369064 138119272 C. SUMMARY OF analyze RESULTS Date of preparedness 22. 09. 2002 W/P No_____________ Provide an outline of all objections , which involve short/non levy/collection of Duty, amount (say under Sec. 1D), irregular availment / utilization of credit, Irregular payment of refund and non -payment of interest due. Details of objection Of technical /procedural in nature without involving revenue / credit / interest /amounts should also be mentioned . Indicate whether the assessee has agree to the objection and if so , has made spot payment (if so details thereof). D. PRELIMINARY OR DISK REVIEW Date of preparationW/P No_____________ 1 . intermit reasons for selection of the unit for audit this time (as informed by supply Cell) The Company has paid Central Excise Duty between 1 to 2 crores through PLA for the last three years therefore jibe to the CBEC letter F.No. 598/35/2001-CX DT. 09. 11. 2001, the company has been selected for EA-2000 Audit, under new trite audit programmer 2. The auditor should check whether the Assessee Master file cabinet (refer to in Annexure A and B of New SAP) is available in IAD and whether the same is complete. If not the auditor should complete the same as for as possible from the information available in the office. Go through the information available in Assessee Master File. Identify and mention (with justifications), the areas or issues those merit verification during the read of audit (refer Para 3. 4. 2 of New SAP) No Assessee Master File has been maintained in IAD.However, now it is being prepared. (i) Obtain and study other documents illustrated in para 3. 4. 2 and Annex ure G of New SAP and film examination as illustrated in Annexure D of New SAP. List egress the documents studied. 1) Balance Sheet 2) Clearances for last three years 3) Classification list 4) Modvat Declaration (ii) Identify and mention (with justifications), the areas or issues those merit Verification during the conduct of audit (refer para 3. 4. 2 of New SAP). In the balance sheet for the year 2003-04 it is observe that the company has shown Other income Rs. 50,163,700/- the detail of the same are required to be verified (See Annexure A) 3.Work out sum of the important financial ratios as mentioned in para 3. 4. 3 and Annexure C of New SAP. Mention the important indicators which require detailed Verification during the conduct of audit. From the balance sheet for the year 2000-01 & 2001-02 it is observed that the company have not taken any term loan from bank but during the year 1996-97 the company has taken term loan from ICICI, SBI Patiyala, Deutche bank for installation an o f plant as well as purchase of assets. Further the company has not taken major advances from their customers. 4. Mention charges in the law and rates of duty pertaining to the products manufactured and inputs since previous audit.There is no change in rates of duty for products manufactured and inputs since last audit. 5. Mention details of Anti-evasion cases booked in recent past or are in progress and historical audit objections, which have not been settled so far by way of assessee acceptance, Adjudication, appeals etc. No anti-evasion cases booked in recent or past, Audit objections are pending related to service tax on Tech. know how and clearance to Sister Unit, Non payment of interest on rate escalation charges 6. Observation of the Auditor on any other issue appear during Desk Review. E. GATHERING AND DOCUMENTIING SYSTEMS INFORMATION INTERVIEWS Date of preparation 16. 09. 2 to 18. 09. 02W/P No_____________ someone (s) Interviewed, their designation and dates of interview. Person Designation Date of interview Mr. Sanjay Agrawal Sr. Manager, Finance Mr. B. Rao Sr. Manager Production Whether the assessees as submitted list of all documents maintained in respect of items mentioned under Para 3. 4. 7 of New SAP. Yes the assessee has submitted the list of all documents i. e.Trial balance, Balance Sheet, profit & loss account, gross sales tax returns, Income tax returns, Purchase & Sales ledger Give the gist of interviews especially in respect of i) related ventures , business with these ventures and annual sight of such Transactions, ii) relationships with the unit and its owners/shareholders , iii) the head office /registered office of the unit , post of its operations and location of its accounting records Head Office/Factory Kuruli, Pune- Nasik Highway, Tal -Khed, Dist-Pune. iv) whether Company is an ancillary unit or independent unit of productions It is an independent Unit. v) Any organizational or systems changes that has occurred since last audit CENVAT TO PLA RATIO (in 000) Year PLA CENVAT dimension 2003-04 39092 65785 3763 2004-05 4874 89379 3566 Excise Duty to employee turnover Ratio (in 000) Year Excise duty Turnover Ratio 2003-04 104877 % 2004-05 138119 % AUDIT PLAN (Please see para 3,4,22 to 3,4,24 and Annexure J of NEW SAP) Date of preparation 14. 01. 2006 W/P No_____________ Audit Plan approved by___________ ) The Audit Plan must be based on the issues identified in the previous stops as to be verified during the conduct of audit and must be specific in the following format(also given in Annexure J of New SAP) Srno Subject No Specific issue Source Document Field Document Coverage Period Selection Verification Criteria written report No 1 Capital goods Credit availed on 1. Invoice 1)purchase registerDecember, Company 1 capital goods & / 2001. Availed installation 2. RT 12 order Credit in Capital goods of 3. Balnce 2) Asset Rs. lakhs for sheet Register, the mont h of Dec. 2001. 4. Delivery 3)Installatn Challan certificate 5.Cenvat A/c 4)Gate Register. register 5) Issue slip 2 Credit on inputCredit availed on 1). Export 1).Purchase November, 2001. Company has 2 inputs of Invoices Register, availed CENVAT utilization 2). RT 12 2) Purchase Credit of 3). Balance order, Rs. 62 lakhs sheet 3) Gate On input for the 4).CENVAT A/c register, month of Nov. register 4). Issue slip 2001 and March 5) Stock 2002 statement. 3 Export Export under bond 1). RT 12 1). Purchase order,August, 2001, Company has 3 / rebate 2). ARE I 2)..Shipping exported 3) Invoice bill excisable product 4). UT1. 3).. Delivery under UT 5) RG1 challan amounting to Rs, 4). Packing slip, 30012993 5).Proof of export, 6) Sales register. 4 Waste and scrapClearance of steel1). RT 12 1). Balance sheet. March 2002 C ompany has 4 of steel scrap 2). Invoice, 2). Sales register, cleared maximum 3). Delivery 3).. Tender copy, steel scrap in challan, 4).Weight March 2002 4). RG1 slip, 5) Prodn. Clearance 5) Gate register Statement for 2001-02 5 Consulting Expenditure on 1). Agreement 1).RBI Permission 1997-98 1997-98 onwards 5 coordinate technical know-how2). Balance 2). Party Onwards to August 2002 i. e. Sheet Ledger, Consulting 3) Payment Engineer particular EXECUTIVE SUMMARY The project titled as STUTY OF EXCISE DUTY PAYMENT BY GABRIEL INDIA LTD Was done at Gabriel India Ltd Pune.Indirect tax is the one of the most enormous source of fund collection of the Indian government which aids to development expenses and other aspects. Central excise is one aspects of fund/revenue collection. Selection of the topic is one of the important aspects of our project. As it decided the course of action, to be followed. The topic selected should be such that it helps in understanding the excise concept clearly, as was given the topic by the company itself. The project is based on the Total excise paid by company also its registration procedure, cenvat credit taken, E. R. 1 form and various rules. The objectives of this project was 1) To study procedure of central excise registration. 2) To study E. R. 1 form of central excise. ) To study various rule of the central excise. 4) To study journey of Cenvat credit. 5) To study process of Cenvat credit taken. 6) To the study drawbacks of central excise. The central excise tax one of the most important aspects. Every manufact