The Central Excise Rules, 1944
Rule 57CC. Adjustment of credit on inputs used in exempted final products or maintenance of separate inventory and accounts of inputs by the manufacturer. -- (1) Where a manufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as in any other 2[final product which is exempt from the whole of the duty of excise leviable there on or is chargeable to nil rate of duty] and the manufacturer takes credit of the specified duty on any inputs (other than inputs ussed as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are compled with, pay an amount equal to eight per cent. of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearance from the factory.
(2) The amount mentioned in sub-rule (1) shall be paid by the manufacturer by adjustment in the credit account maintained under sub-rule (7) of rule 57G or in the accounts maintained under rule 9 or sub-rule (1) of rule 173G and if such adjustment is not possible for any reason, the amount shall be paid in cash by the manufacturer availing of credit under rule 57A.
(3) The provisions of sub-rule (1) shall not apply to final products falling under Chapters 50 to 63 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).
(4) The provisions of sub-rule (1) shall also not apply to -
(a) articles of plastics falling within Chapter 39;
(b) tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40;
(c) Black and White television sets, falling within Chapter 85; and
(d) Newsprint, in rolls or sheets, falling within Chapter heading No. 48.01;
which are exempt from the whle of the duty of excise leviable thereon or chargeable to nil rate of duty.
(5) In the case of final products referred to in sub-rule (3) or sub-rule (4) and excluded from the provisions of sub-rule (1), the manufacturer shall pay an amount equivalent to the credit of duty attributable to inputs contained in such final products at the time ot their clearance from the factory.
(6) The provisions of sub-rule (1) shall also not apply to final products which are exported under bond in terms of the provisions of rule 13.
(7) The provisions of sub-rule (1) shall apply even if the inputs on which credit has been taken are not actually used or contained in any particular clearance of final products.
(8) If any goods are not sold by the manufacturer at the factory gate but are sold from a depot or from the premises of a consignment agent or from any other premises, the price (excluding sales tax and other taxes, if any, payable) at which such goods, are ordinarily sold by the manufacturer form such depot or from the premises of a consignment agent or from any other premiseees shall be deemed to be the price for the purpose of sub-ruel (1).
(9) In respect of inputs (other than inputs used as fuel) which are used in or in relation to the manufacture of any goods, which are exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty, the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs for the aforesaid purpose and shall not take credit of the specified duty paid on such inputs.