Article on Recent Amendments in Excise Return (ER-4, ER-5, ER-6)

- Sukhvinder Kaur, LLB(FYIC)

Excise Returns: Recent Amendments

Every manufacturer has to file certain prescribed returns regarding his production, financial position, information on principal inputs etc. The filing of returns has been prescribed in the Central Excise Rules, 2002.

The Central Board of Excise and Customs has brought certain changes in the Central Excise Rules, 2002 regarding filing of returns by a manufacturer. These changes have been brought due to falling revenue collections. These changes have been made to check the evasion of duty in the industry and increase the revenue collections.

These changes have been explained in the following paras:

1.) Annual Financial Information Statement (ER-4):-

Rule 12 (2) (a) of the Central Excise Rules, 2002 provides that every assessee has to submit an Annual Financial Information Statement for which the statement relates by 30^th day of November of the succeeding year. This Statement is to be filed in ER-4 to the Superintendent of Central Excise. However, the assessees paying excise duty less than One Crore from account current during the financial year, to which the Annual Financial Information Statement relates, were granted exemption from filing the said Statement vide Notification No. 17/2006-CE (NT), dated 1.08.06.

Now, Notification No. 17/2006-CE has been amended by Notification No. 42/2008-CE (NT) dated 29.09.08. The words “from account current” have been omitted from the Notification No.17/2006-CE. The effect of this amendment is that the assessee, who is paying excise duty of One Crore and more in total, i.e. from PLA as well as from Cenvat Credit Account, is now required to submit the Annual Financial Information Statement in ER-4. This statement is to be submitted by 30^th November. Earlier, only the assessee paying excise duty of more than 1 Crore from account current (PLA) were required to file the Annual Financial Information Statement in ER-4 format.

2.) Information relating to principle inputs (ER-5):-

Rule 9A (1) provides that a manufacturer of final products has to furnish a declaration in respect of each of the excisable goods manufactured or to be manufactured by him, the principal inputs and the quantity of such inputs required for use in the manufacture of unit quantity of such final products. The said declaration is required to be filed in Form ER-5 annually before 30^th April of each financial year. Notification No. 39/2004-CE(NT) dated 25.11.04 exempted the manufacturers of the following categories of goods from filing ER-5 who had paid excise duty less than One Crores from Current Account during the preceding financial year.

Now, vide Notification No. 41/2008-CE(NT) dated 29.09.08 the words “through account current” have been omitted. The effect of this amendment is that the assessee who is paying excise duty of One Crore and more in total i.e from PLA as well as from Cenvat Credit Account is required to file the Information relating to principal inputs in ER-5. This return is to be filed by 30^th April of each financial year. Earlier, only the assessee paying excise duty of more than 1 Crore from account current (PLA) were required to file the Information relating to principle inputs in ER-5 format.

3.) Declaration by SSI units availing exemption from Registration:-

Notification No. 36/2001-CE(NT), dated 26.06.01 provides exemption from Registration to units manufacturing goods subject to ‘nil’ rate of duty or are fully exempt from excise duty by virtue of a Notification. Units availing SSI exemption are covered under this Notification. However, such units are required to file declaration that they fall under the exemption fixed, by submitting the details of goods manufactured by the factory during the preceding Financial Year.

Notification No. 36/2001-CE (NT) has been amended vide Notification No. 40/2008-CE(NT) dated 29.09.08. Now, the Units availing small scale excise exemption are required to file revised declaration for the year 2007-08 in new form for Declarant Units.

This revised declaration is to be filed by 31^st October, 2008 in new form.

4.) Annual Installed Capacity Statement in ER-7:-

Returns to be filed by an assessee have been prescribed under Rule 12 of the Central Excise Rules, 2002. CBEC has amended Rule 12 (2) of the Central Excise Rules, 2002 by the Central Excise (Fourth Amendment) Rules, 2008 which have been introduced vide Notification No. 38/2008-CE (NT), dated 29.09.08. A new sub-rule (a) has been added which provides that every manufacturer has to submit an Annual Installed Capacity Statement.

In this statement the assessee has to declare the annual production capacity of his factory for the Financial Year to which the statement relates. This means the assessee has to gives its annual production capacity of products manufactured, the details of main plant and machinery installed in the factory as well as the details of electricity consumed in his factory.

These details are to be submitted to the Superintendent of Central Excise in Form ER-7. This return is to be filed by 30^th day of April of the succeeding financial year. But for the year 2007-08, the said statement is to be filed by 30^th October, 2008. Form ER-7 has been prescribed vide Notification No. 39/2008-CE (NT), dated 29.09.08.

This return aim at curbing the evasion in the industry and increase in revenue. But the installed capacity will not bring revenue for the government. But the utilization of the same will bring the revenue. In Era of global recession, these steps will prove fatal for the industry. It will increase the corruption only.

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Article on Recent Amendments in Excise Return (ER-4, ER-5, ER-6)

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