exide new new

8/3/2019 EXIDE New New

1/79

1

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.


2/79

2

1. COMPANY INTRODUCTION

Exide, a global leader in stored electrical energy solutions with operations in over80 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 andISO 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.


3/79

3

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 centralexcise 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.


4/79

4

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 exciseat 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 in India. 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 know the system available under Central Excise for calculation of Exciseliability and CENVAT credits.

To know how the Exide Industries ltd makes the utilization of Cenvat creditrelated to the input transaction in their books of Account & what are the

provisions regarding the payment of duty they need to follow.

To know the effect towards breakdown of not paying the duty in due time & howmuch concession a SSI can benefit under the Central Excise.


5/79

5

1.3 SCOPE

The scope of this project is to understand Central Excise under Indian indirecttaxation.

The study is based on actual data collection and interpretation so it will help to see& examine the overall position of Exide Industries Ltd.

Improving the business by optimizing maximum credit availing facility fromsuppliers.

Eliminate divergent practices in the applicant of Excise laws and procedures atdifferent formations by effective monitoring and analysis of the computerizeddatabase.

This venture will surely clarify the complexity about the taxation and legislationswhich will be easy to understand by the society as whole.

The project is helpful to new entrepreneur for taking due care of the central Exciserules and regulations laid down by the governments.

To make it more helpful for business organizations, firms and individual.LIMITATIONS

Project duration was two months so in detail study of each and every concept wasnot possible.

Some data was confidential in nature due to which nearby information necessarywas not available so, appropriate figures are used.

Few working nature of excise duties were more critical which were difficult tounderstand.

Due to the month of filling returns of Exide industries, the working system ofaccounts department was always busy, due to which time availability was less.


6/79

6

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 croresas 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.


7/79

7

2.1 NAME, ADDRESS & LOCATION OF COMPANY

EXIDE INDUSTRIES LTD

(INDIAS ASSOCIATED BATTERY)

D-2, MIDC Industrial Estate, Chinchwad, Pune-411019.

Phone: + 91 - 2027451586

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, Kolkata700 014

R & D CENTER

Research & Development Centre,

217, Nazrul Islam Avenue,

Kolkata700 059

Phone: 03325005458 / 5225 / 5660

Fax: 03325005545

SERVICE NETWORK

91, New Chord Road, P.O. Athpur, Shamnagar743 128, 24 Parganas (North)

Phone: 03325800113/22812146/2147/2148

Mobile: (+91) 9932054192

Fax: 03325813930


8/79

8

2.2 VISION:

Simultaneous to providing credible valve addition to customer, employees and

shareholders, being recognize by society as a responsible corporate citizen. In

addition 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 core

valves.

CORE VALUES:

Fundamental axioms that organization believes in and people respect and work

towards.

Our Core values:

Customer Orientation

Personal Integrity & commitment

Teamwork and Mutual support

People development and Involvement

Striving for excellence

Management by process and facts

Responsible corporate citizen


9/79

9

2.3 HISTORICAL DEVELOPMENT

1916 Chloride Electrical Storage Co. (CESCO), UK, set up trading operations inIndia as an import house.

1946 First factory set up in Shamnagar, West Bengal. 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. 1995 Chloride Industries Ltd renamed Exide Industries Limited. (EIL) 1997 Fourth factory set up at Hosur, Tamil Nadu. 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 CorporateOffice, Nine Factories, R&D Centre and More than 30 Sales Offices across India.

2003 Commissioning of Eighth factory at Bawal, HaryanaNew JV Company in UK- ESPEX Batteries Ltd formed with 51% EIL holding.

Strategic Alliance with IBG in Netherlands for Marketing in Europe.

2005 Investment in 50% shareholding of ING Vysya Life Insurance CompanyLimited.

2007 Acquired 100% stake in Tandon Metals Ltd. 2008 Acquired 51% stake inLead Age Alloys India Ltd.


10/79

10

2.4 PRODUCTS

SUBMARINE BATTERIES

INDUSTRIAL BATTERIES

AUTOMOTIVE BATTERIES


11/79

11

2.5 AWARDS/ACHIEVEMENTS

100 PPM award from OEM customer American Power CorporationJanuary 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 ToyotaApril04 Green award from OEM customer Toyota - April04 Best Quality supplier award from OEM customer ToyotaApril05 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 Society2005

Leadership and Excellence Award in Safety, Health & Environment by CII2006 Indian Manufacturing ExcellenceGold 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


12/79

12

3. THEOROTICAL BACKGROUND

INDIRECT TAX SYSTEM 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 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.

Union Government

State Governments

Urban/Rural Local Bodies


13/79

13

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 RADICAL

CHANGES.

Reduction in customs and excise duties Lowering corporate tax Widening of the tax base and matching up the tax administration

INDIRECT TAXES REFORMS

The indirect tax rule in India is still in the early stages of growth. Both the Centraland 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/ValueAdded 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 atransaction, have enough backup documentation to support their tax positions and

keep looking for ways for tax maximization.


14/79

14

WHAT IS A TAX?

A compulsory contribution made by the assessee to the government from his earnings.

HOW MANY TYPES OF TAXES ARE THERE?

There are two types of Taxes in India

DIRECT TAXES INDIRECT TAXESDirect tax refers to the type of tax which has to be paid by the person on whom it is

imposed and cannot b transferred on another person, ex-corporate tax and income tax.

Indirect tax refers to the type of tax which is imposed on one person but is transferred

to another. Ex-vat and sales tax are the taxes which are imposed on a product and

therefore on a retailer but the retailer realize it from the customers.

CONCEPT OF INDIRECT TAXATION

An indirect tax is a tax collected by an agent (such as a retail store) from the person

who bears the ultimate economic burden of the tax (such as the consumer). The agent

later files a tax return and forwards the tax proceeds to government with the return. In

this sense, the term indirect tax is contrasted with a direct tax which is collected

directly by government from the persons (legal or natural) on which it is imposed.
http://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Tax


15/79

15

IMPORTANCE OF TAXATION:

Without taxation there is no nation. Without some form of formal governance, no

group larger than a small village can operate. Things that are jointly needed, like

roads, hospitals, armed forces for protection, police, etc, all require taxation to

operate.

A nation cannot be built by individuals. It requires the combined efforts of all

members of society. It means that some must work entirely for the public good, for

example building roads or canals, ports, etc, and they must be provided for by the rest

of society. The only practical way to do that is through some form of taxation.


16/79

16

TYPES OF INDIRECT TAXES

A] THE CENTRAL EXCISE:

The Central Excise duty is levied in terms of the Central Excise Act, 1944 and the

rates of duty are prescribed under the Schedule I and II of the Central Excise Tariff

Act, 1985. The taxable event under the Central Excise law is manufacture /

production and the liability of Central Excise duty arises as soon as the goods are

manufactured or produced. As per the Central Excise Act, duty is leviable only on

excisable goods. I.e. Goods specified in Central Excise Tariff Act, 1985.

The Central Excise Officers are also entrusted to collect other types of duties levied

under Additional Duties (Goods of Special Importance) Act, Additional Duties

(Textiles and Textiles Articles) Act, and Cess etc.

In 2001, new Central Excise (No.2) Rules, 2001 have replaced the Central Excise

Rules, 1944 with effect from 1 July 2001. Other rules have also been notified namely,

CENVAT Credit Rules, 2001, Central Excise Appeal Rules, 2001etc.

There are less numbers of rules, only 32 as compared to 234 earlier. With the

introduction of the new rules several changes have been effected in the procedures.

The new procedures are simplified.

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).


17/79

17

WHAT IS CENTRAL EXCISE? HOW IT DIFFERS FROM OTHER TAXES:

"Excise', as stated in the Oxford Dictionary, was originally 'acise' , a word derived

from the Latin, 'accensav', meaning 'to tax'.

The primary and fundamental meaning of 'Excise Duty' or 'Duty of Excise' is tax on

articles produced or manufactured in the taxing country and intended for home

consumption (i.e. consumption within the same country).

It is an indirect duty which the manufacturer or producer passes on to the ultimate

consumer, that is, its ultimate incidence will always be on the consumer.

IMPORTANT ROLE OF CENTRAL EXCISE IN INDIA:

Central Excise revenue is the biggest single source of revenue for the Governmentof India.

The Union Government also tries to achieve different socio-economic objectivesby making suitable adjustments in the scope and quantum of levy of Central

Excise duty.

The scheme of Central Excise levy is suitably adapted and modified to servedifferent purposes of price control, industrial growth, promotion of small scale

industries and the like.

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 personally manufacture the goods Those who get the goods manufactured by employing hired labour Those who get the goods manufactured by other parties


18/79

18

TYPES OF CENTRAL EXCISE DUTIES

Under the custom laws, the following are the various types of duties which are

leviable.

There are three types of Central Excise duties collected in India namely

Basic excise duty

This is the duty charged under section 3 of the Central Excise Act, 1944 on all

excisable goods other than salt which are produced or manufactured in India at the

rates set forth in the schedule to the Central Excise tariff Act, 1985.

Additional duty of excise

Section 3 of the Additional duties of Excise (goods of special importance) Act, 1957

authorizes the levy and collection in respect of the goods described in the Schedule to

this Act. This is levied in lieu of sales tax and shared between Central and State

Governments. These are levied under different enactments like medicinal and toilet

preparations, sugar etc. and other industries development etc.

Special excise duty

As per the Section 37 of the Finance Act, 1978 Special excise Duty was attracted on

all excisable goods on which there is a levy of Basic excise Duty under the Central

Excises and Salt Act, 1944.Since then each year the relevant provisions of the Finance

Act specifies that the Special Excise Duty shall be or shall not be levied and collected

during the relevant financial year.


19/79

19

B] CUSTOMS

Customs duty is on imports into India and export out of India. Section 12 of Customs

Act, often called charging section, provides that duties of customs shall be levied at

such rates as may be specified under The Customs Tariff Act, 1975, or any other law

for the time being in force, on goods imported into, or exported from, India.

TYPES OF CUSTOM DUTIES

Basic Customs Duty

All goods imported into India are chargeable to a duty under Customs Act, 1962 .The

rates of this duty, popularly known as basic customs duty, are indicated in the First

Schedule of the Customs Tariff Act, 1975 as amended from time to time under

Finance Acts. The duty may be fixed on basis or specific rate basis. The duty may be

a percentage of the value of the goods or at a specific rate. The Central Government

has the power to reduce or exempt any good from these duties.

Safeguard Duty

Central Government is empowered to impose 'safeguard duty' on specified imported

goods if Central Government is satisfied that the goods are being imported in large

quantities and under such conditions that they are causing or threatening to cause

serious injury to domestic industry. Such duty is permissible under WTO agreement.

Safeguard is a step in providing a need-based protection to domestic industry for a

limited period, with ultimate objective of restoring free and fair competition
http://www.eximguru.com/exim/indian-customs/customs-acts-1962.aspxhttp://www.eximguru.com/exim/indian-customs/cta-1975/customs-tariff-act-1975-act-no-51-of-1975.aspxhttp://www.eximguru.com/exim/guides/export-finance/default.aspxhttp://www.eximguru.com/exim/guides/export-finance/default.aspxhttp://www.eximguru.com/exim/indian-customs/cta-1975/customs-tariff-act-1975-act-no-51-of-1975.aspxhttp://www.eximguru.com/exim/indian-customs/customs-acts-1962.aspx


20/79

20

Protective Duties

Tariff Commission has been established under Tariff Commission Act, 1951. If the

Tariff Commission recommends and Central Government is satisfied that immediate

action is necessary to protect interests of Indian industry, protective customs duty at

the rate recommended may be imposed under section 6 of Customs Tariff Act. The

protective duty will be valid till the date prescribed in the notification.

Anti Dumping Duty

Often, large manufacturer from abroad may export goods at very low prices compared

to prices in his domestic market. Such dumping may be with intention to cripple

domestic industry or to dispose of their excess stock. This is called 'dumping'. In order

to avoid such dumping, Central Government can impose, under section 9A of

Customs Tariff Act, anti-dumping duty up to margin of dumping on such articles, if

the goods are being sold at less than its normal value. Levy of such anti-dumping duty

is permissible as per WTO agreement. Anti dumping action can be taken only when

there is an Indian industry producing 'like articles'.
http://www.eximguru.com/exim/indian-customs/anti-dumping-duty.aspxhttp://www.eximguru.com/exim/indian-customs/anti-dumping-duty.aspx


21/79

21

C] SERVICE TAX

Service Tax was first brought into force with effect from 1 July 1994. Service Tax is a

form of indirect tax imposed on specified services called "taxable services".

Service tax cannot be levied on any service which is not included in the list of taxable

services. Over the past few years, service tax been expanded to cover new services.

The objective behind levying service tax is to reduce the degree of intensity of

taxation on manufacturing and trade without forcing the government to compromise

on the revenue needs.

The intention of the government is to gradually increase the list of taxable services

until most services fall within the scope of service tax

Some of the major services that come under the ambit of Service Tax are:

Telephone Stockbroker General Insurance Courier agencies Air travel agents Architects Management Consultants Practicing Chartered Accountants Real Estates Agents/Consultants Credit Rating Agencies Underwriters Agencies


22/79

22

3.1REVIEW OF LITRETURE

Project No.1

YEAR OF THE PROJECT: 2005-07.

INSTITUTE NAME: Vishwakarma Institute of Management.

NAME OF THE COMPANY: Visteon automotive system India Pvt. Ltd.

CANDIDATE NAME: Rimon Rakshit.

MAJOR OBJECTIVES OF THE PROJECT:

To Study all related aspects & the law relating to Central Excise. How the Visteon Automotive System makes the entry of their excise related

transaction in their books of Account & what are the provisions regarding the

payment of duty they need to follow.

What will be case if there any failure of paying the duty in due time & how muchconcession a SSI can benefit under the Central Excise.

MAJOR FINDINGS:

Discuss with Excise Authorities & Experts- A plan of assessee can be discussed

with excise authorities and experts and he need not be over confident in these matters.

Study Product & Pricing Policies- An assessee needs to study the product and

pricing policies thoroughly and ensure that these are so designed that unnecessarily

heavy duty is not paid.

Project No.2

YEAR OF THE PROJECT: 2006-07.

INSTITUTE NAME: Vishwakarma Institute of Management.

NAME OF THE COMPANY: Ameya Management Consultancy Pvt. Ltd.

CANDIDATE NAME: Ashish.D.Kulkarni


23/79

23

MAJOR OBJECTIVES OF THE PROJECT:

To understand the concept of Cenvat credit and the charging section of the same. To understand the situations in which Cenvat credit can be availed. To know the various section relating to penalties if the Cenvat credit is wrongly

availed.

MAJOR FINDINGS:

The accusation about wrong availment of Cenvat credit made on the party isbasically wrong because the process of manufacture can be seen as a process of de

coiling, slitting, notching etc are intermediate stages of manufacture and thus no

doubt these activities are as per the said definition.

In addition to this the reason that Cenvat credit is legally claimed is because thecoil which is purchased is an input for manufacture of final product and thus credit

is allowed on it.


24/79

24

3.2 FUNDAMENTAL CONCEPTS

CENVAT

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.

1986 Modified value added tax i.e. modvat introduced by the central government

which enabled the manufacturers to avail credit of excise duty paid on the input used

in or in relation to manufacture of end product.

Offset of duty paid on input stage against duty payable at the final stage.

In 1994, modvat was extended to capital goods modvat scheme was changed to be

called central value added tax scheme i.e. Cenvat scheme.

In 2000 with the object to combine and unify the rules 57aa to 57ak for capital goods

and input goods into one set of rules the Cenvat credit rules, 2001 was framed it was

further simplified and reviewed into new Cenvat credit rules 2002.

Scheme designed to reduce the cascading effect of indirect taxes on final products.


25/79

25

THE BENEFITS OF CENVAT

One of the reasons why Cenvat is chosen as a tax system is that it is said to stimulate

the production of goods and services within a country. This is because under this

system manufacturers get credits when they choose to buy their materials locally and

these credits can be used against tax on the finished product. This is good for the local

economy because it means that the manufacturer will be less tempted to buy materials

abroad in countries where there is less tax to be paid.

The fact that the manufacturer pays less tax on their finished goods due to credits

because they bought materials locally means that they can then sell their product for

less. This encourages people to buy and so this will further stimulate the local

economy. All in all this type of system is seen as a good way to keep a country

prosperous and producing plenty of goods.

As well as stimulating local production there are also many other benefits to the

Cenvat scheme. As we have already mentioned it is based on the same idea as value

added tax and this has been shown to be a very successful form of taxation. This is

because there tends to be a lot less tax evasion and thus increased compliance and

more tax revenue for the government. The other notable benefit of this type of

taxation is that it is a lot more transparent than other forms of taxation.


26/79

26

CENVAT IN ACTION

The scheme was originally called Modvat (modified VAT) and the purpose of this

was to allow the manufacturer to take credit of excise duty paid on raw materials that

they use to make their products. The Modvat scheme was later renamed Cenvat; it

also changed slightly because Cenvat had less restrictions than Modvat. The use of

Cenvat proved very successful in India because it provided manufacturers with a great

incentive.

ADVANTAGES OF CENVAT:

The CENVAT scheme is very liberal 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 industriesthere will be better compliance by the assesse which will ultimately increase

revenue to government.


27/79

27

A CENVAT CREDIT - CREDIT RAISED AND AVAILED PROCESS

COMPANY

Manufactures Pen @

Rs 2/-

Purchases material atRs 1/- from

vendor/supplier.

Sales refill to companyat Rs 1/- which already

includes paid tax.

The Company Processes

materials to finished

product & sells at Rs 5/-

by adding their

appropriate charges.

While selling the Pen @

Rs 5/- company have to

pay Rs 1.50/- as tax but,

Rs 0.50/- is already paid

while purchasing refillfrom supplier.

VENDOR/SUPPLIER

Manuf cost Rs 0.20/-

Tax Rs 0.50/-

Profit Rs 0.30/-

1) In this diagram it is clarified that the amount of taxpaid by the vendor to govt is collected from the

company while selling.

2) Once the company processes the finished goodsthey are charged with certain profits and sold at

appropriate selling price.

3) As the 50% of tax is paid by the vendor andrecovered 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.

Manufactures Pen Refill

@ Rs 1/-


28/79

28

How CENVAT scheme operates?

Example:

Product X

Amount of duty paid (Rs.)

A) Inputs1) Steel 1502) Aluminum 1503) Components 904) Paints 505) Consumable (e.g. Welding Electrodes) 706) Packing Materials 40TOTAL 550

B) Final ProductsAssessable Value 10000Duty (10%) 1000

C) Payment of Excise Duty on clearance of finalproducts Duty payable as per B

1000

Less CENVAT Credit on inputs availed as per

A

550

Duty payable by Cash 450


29/79

29

PROCESS RELATED TO TRANSACTIONS & PROVISIONS REGARDING

THE PAYMENT OF DUTY THE COMPANY FOLLOWS:

The details are taken from the Document of Cenvat challan. Due to 3

rd

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).


30/79

30

The 2nd

area lies for the G/RGoods Receipt no. Input it in system.


31/79

31

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 EDU CESS HIGHER EDU CESS

10% 2% 1%


32/79

32

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.


33/79

33

INPUT, INPUT SERVICES & CAPITAL GOODS

Inputs which are goods are eligible for Cenvat Credit by both manufacturer as well as

service provider.

Definition: Input covers fuel used in factory in or in relation to manufacture of final

products or for any other purpose. Thus fuel will be eligible for Cenvat Credit evenif

electricity/Stream generated is utilized outside the factory.

Cenvat is available on Packaging Material: Cenvat is available on packing material

as per Cenvat Credit Rules.

Earlier specified packing materials and materials from which such packing material

are made, provided the cost of such packing materials is included in value of final

products as input.

Input Service: Input service means any service,

(I) Used by a provider of taxable service.

(II) Used by the manufacturer, whether directly or indirectly, in or in relation to the

manufacture of final products and clearance of final products from the place of

removal.

Capital Goods for Cenvat: Cenvat Credit is available on capital goods.

Some provisions are common while there are some specific provisions in respect of

Cenvat on Capital Goods.

General Provisions applicable to both inputs & capital goods.


34/79

34

Following are the Capital goods,

o Machinery.o Pollution Control Equipment.o Components, spares and accessories of the goods.o Moulds and dies.o Refractorys and refractory materialo Tubes, pipes and fittings thereof used in the factory.o Storage tank.Capital goods manufactured within the factory: As per rule of Cenvat Credit

Rules, input includes goods used in manufacture of capital goods which are further

used in the factory of manufacturer.

Thus if a manufacturer manufactures some capital goods within the factory, goods

used to manufacture such capital goods will be eligible as inputs.[i.e. 100% Cenvat

Credit will be available in the same financial year].

It may be noted that capital goods manufactured within the factory and used within

the factory are exempt from excise duty.

Conditions for availing Credit on Capital Goods: The conditions are duty paying

documents eligible are same for Cenvat on inputs.

Depreciation under section 32 of Income Tax Act should not be claimed on the excise

portion of the Capital Goods.

Otherwise the manufacturer will get double deduction for Income Tax Act.


35/79

35

UTILIZATION OF CENVAT CREDIT

Cenvat Credit can be utilized for payment of any excise duty on:

Duty on any final product manufactured by manufacturer. Payment of amount on capital goods if they are removed as such. Payment of amount, if goods are cleared after repairs under rule 16(2) of Central

Excise Rules.

Payment under Cenvat Credit Rule 6 of 10% amount on exempted goods orreversal of credit on inputs when common inputs or common input services are

used for exempted as well as dutiable final products.

Time Limit for taking the Credit: Rule 4(1) of Cenvat Credit Rules states that

Cenvat

Credit can be taken immediately on receipt of inputs in the factory or the premises of

service provider.

Department has clarified that immediately means at the earliest opportunity when the

inputs are received. Immediately does not mean within 24 hours. It is not necessary to

take credit as soon as inputs are received in the factory.

However manufacturer / Service provider should take credit at the earliest

opportunity.


36/79

36

Duty / tax paying documents: As soon as a manufacturer receives an input, he can

avail Cenvat Credit of the duty paid on the inputs Rule 9(1) of Cenvat Credit.

Rules prescribes that credit can be taken on the basis of Invoice of manufacturer from

factory.

Invoice of manufacturer from his depot. Invoice issued by importer from his premises or consignment registered with

Central Excise.

Supplementary Invoice. Bill of Entry. Invoice, Bill or Challan issued by input service.

No Cenvat Credit if final products: As per basic principle of VAT, credit of duty or

tax can be availed only for payment of duty on final product or output services.

Returns: A manufacture has to be submit returns to Range Superintendent of Central

Excise in the prescribed forms ER-1 to ER-6 in respect of Cenvat availed,

Others have to submit returns as follows:

Quarterly return by first stage/ second stage dealer within 15 days from close ofquarter.

Half yearly return within one month from close of half year, by provider of outputservices.

Half yearly return within one month from close of half year, by Input ServiceDistributor.

First stage dealer- Person who purchase the goods direct form the manufacturer.

Second stage dealer- Person who purchase the goods directly form first stage dealer.


37/79

37

No Cash Refund: In some cases, it may happen that duty paid on inputs may be more

than duty payable on final products. In such cases, though the Cenvat Credit will be

available to the manufacturer, he cannot use the same and the same will lapse.

There is no provision for refund of the excess Cenvat Credit.

Accounting Treatment of Inputs in Cenvat:

Purchase A/C Dr. xx

Cenvat Credit Receivables A/C Dr. xx

To Suppliers A/C (Purchase price plus Excise) xx


38/79

38

PAYMENT OF DUTY METHOD, MANNER AND MODE:

Exide Industries Ltd is liable to pay the duty leviable on excisable goods in the

manner provided in Rule 8 or under any other law and no excisable goods, on which

any duty is payable shall be removed without payment of duty from any place,

whether they are produced or manufactured or from a warehouse unless otherwise

provided.

Provided that the goods falling under Chapter 62 of the 1st schedule of CETA, 1985

produced or manufactured by a job worker may be removed without payment of duty

leviable thereon and the duty of excise leviable on such goods shall be paid by the

person referred to in sub-rule (3) as if such goods have been produced or

manufactured.

Duty is payable on fortnightly basis by large units and on monthly basis by SSI, who

are availing concession of duty based on turnover.

The duty on the goods removed from the factory or the warehouse, during the first

fortnight of the month shall be paid by the 20th of that month and the duty on the

goods removed from the factory or the warehouse during the second fortnight of the

month shall be paid by the 5th of the following month.

It is again clarified that the duty liability shall be deemed to have been discharged

only if the amount payable is credited to the account of the Central Government by

the specified date. Thus, mere depositing cheque in collecting bank is not sufficient.

The cheque must be cleared by due date.

The duty is payable by making payment of duty in Government Account in Bank

under a TR-6 Challan.


39/79

39

TR-6 Challan

The prescribed challan form TR-6 should be filed and should contain following:

Name and address of manufacturer. Electronic Control Code Number of manufacturer (10 digit code no.) Code No.

of Excise Commissionrate/ Division / Range.

(PLA) Personal Ledger AccountNumber. Account head of duty, Commodity Name and Code (6 digit code i.e. tariff Item

No).

Bank Branch Code No. Amount deposited in Cash/ Cheque /demand draft. Amount under TR-6 Challan for taking credit in PLA can be paid in bank with Signature of Assessee or Authorized Officer of the Assessee, Counter signature

of Excise Officer is not necessary.

Manufacturer of matches is issued match excise band rolls on payment ofappropriate duty and then affix the excise stamp on each match box cleared.

Four copies are submitted to authorize bank.

Original, Duplicate, Triplicate & Extra.

Two copies of Challan are returned by bank duly stamped after amount is paid and

two copies are retained by bank.

One copy is to be submitted to excise authorities along with return (out of two copiesretained by bank, one copy is sent to excise authorities directly for their accounting

and cross verification of the credit entries made by assessee).

If cash is deposited, receipted Challan is given immediately by bank. However, if

payment is made by cheque, Challan given duly receipted only after cheque is

realized.

Credit of amount deposited in bank can be taken only after the bank issues receipted

Challan.


40/79

40

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.


41/79

41

MEANING OF LEVY

Section 3 uses the words levy and collection. Article 265 of Constitution also uses the

same words. Levy means imposition of tax. Once a tax or duty is imposed, it has to be

quantified (assessed) and then collected. Once a duty is levied it has to be collected.

However, constitution specially uses the words levy and collection.

Hence, it has been held that the term levy includes both impositions of tax as well as

assessment.

ASSESSEE AND ASSESSMENT

The assessee means one who is assessed.

He himself has to determine classification and valuation of goods and pay duty

accordingly.

Assessment means determining the tax liability.

Duty is paid by the manufacturer on his own while clearing goods from the

factory/warehouse, on self assessment.

GOODS

The word goods define goods as goods include all materials, commodities and

articles. As per judicial explanation, for purpose of levy of Excise Duty, an article

must satisfy two requirements to be goods i.e.

Goods must be movable Goods must be Marketable.EXCISABLE GOODS

Goods excisable even if exempt from Duty Excisable goods do not become non-

excisable goods merely because they are exempt from duty by an exemption

notification.


42/79

42

DUTIABLE & NON-DUTIABLE GOODS

Dutiable goods are those goods which attract duty as per the Tariff.

Non-dutiable goods are excisable goods on which no duty is payable, either because

of Nil rate of duty because of exemption.

MANUFACTURE

Section2 (h) Manufacture includes any process (I) Incidental or ancillary to the

completion of manufactured product or (ii) which is specified in relation to any goods

in the Section or Chapter notes of the 1st schedule to the Central Excise Tariff Act,

1985 as amounting to manufacture or (iii) which in relation to goods specified in 3rd

schedule to the CEA, involves packing or repacking of such goods in a unit container

or labeling or re-labeling of containers or declaration or alteration of retail sale price

or any other treatment to render the product marketable to consumer, and the word

manufacture shall be understood accordingly and shall include not only a person who

employs hired 23 labour in the production or manufacture of excisable goods but also

any person who engages in their production or manufacture on his own account.

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)


43/79

43

PROCESSING AND MANUFACTURE

Processing can amount to manufacture if a new & identifiable product known in the

market emerges.

In the Central Excise Tariff Act, operations like labeling, sorting, packing and

repacking from large pack to small pack etc. have been termed as Process.

In the manufacture of goods the entire process carried out by the dealer of converting

raw materials into finished goods should normally include the entire process carried

out by the dealer of converting raw materials into finished goods.

MANUFACTURE MUST BE IN INDIA

Under Section 3 of Central Excise Act is that excisable goods must be manufactured

or produced in India. Thus, excise levy cannot be imposed on imported goods or

goods manufactured in Foreign Countries. This is also true if goods are imported in

Semi knocked Down or Completely Knocked Down condition and they are only

assembled in India, as no new product is emerges. However if goods are classified as

per rules of classification as complete machine as per legal fiction but actually

components or subassemblies are imported, its assembly in India will amount to

manufacture and excise duty will be payable.


44/79

44

SMALL SCALE INDUSTRIES (SSI)

An industrial undertaking in which the investment in fixed assets in plant and

machinery whether held on ownership terms on lease or on hire purchase does not

exceed Rs 10 million.

The industries in India which are organized on a small scale and produce goods with

the help of small machines, hired labour and power, are the small scale industries

present in India.

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.

Choice of several exemptions to SSI:

SSI units have been given 3 types of exemptions:-

a) SSI units can avail full exemption up to Rs 100 lakh and pay normal duty

thereafter. Such units can avail Cenvat Credit on inputs only after reaching turnover

Rs 100 lakh in the financial year.

b) SSI units mean to avail Cenvat Credit on inputs on its entire turnover. They have to

Pay 60% duty for first 100 lakh & 100% duty for subsequent clearance.

c) SSI Unit can also pay full 100% duty and avail Cenvat Credit.


45/79

45

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

PENALTIES

Penalty for violation of legal provisions involved a penalty of money and elimination

of goods. This penalty can be imposed by excise authorities like Commissioner, and

Assistant Commissioner Etc. within the powers granted to them.

Excise authorities are empowered to impose penalties like fines, confiscation of

goods, etc.

EXCISE OFFICERS CAN IMPOSE:

a) Penalty for violation of law,

b) Confiscate the goods,

c) Give option to pay fine in lieu,


46/79

46

Under rule 25(1) of Central Excise Rules [earlier rule173Q or 209], following are

offences:

Removing excisable goods in breach of Excise Rules or notifications issued underthe rules.

Not accounting for excisable goods manufactured, produced or stored. Engaging in manufacture, production or storage of excisable goods without

applying for registration certificate.

Breaching any provisions of Central Excise Rules or notifications issued underthese rules with intent to evade payment of duty.

Mandatory penalty in case of fraud, suppression of facts:

A mandatory penalty equal to the duty short paid or not paid or erroneously refunded

is payable if such nonpayment or short payment or erroneous refund was due to fraud,

collusion, willful misstatement or suppression of facts etc.

Personal Penalty:

Normally, penalty is imposed on the company/firm who has committed an offence.

Goods that can be taken away under rule 25 of CE:

Following goods are liable to confiscation-

Goods removed in breach of Central Excise rules,

Goods not accounted for,

Goods on which Cenvat Credit is wrongfully taken,

Goods manufactured without registration of the factory .


47/79

47

Excise Audit/ Checks

Audit means scrutiny and verification of documents, events and processes in order to

verify facts and draw conclusions regarding correctness of recording the facts and the

efficiency of a system under study. For Central Excise purposes, Audit means scrutiny

of the records of the assessee and the verification of the actual process of receipt,

storage, production and clearance of goods with a view to check whether the assessee

is paying the Central Excise duty correctly.

Visit of Officer:

Every factory comes under jurisdiction of Range Superintendent. The Superintendent

and Excise Inspectors working under him do occasionally visit factories. However,

they are expected to have day to day checks.

A] Stock Taking:

New Central Excise Rules make no provision for Store Room or Stock taking.

However it does not mean that stock taking by excise authorities is prohibited.

B] Road Checks:

Surprise road checks are carried out to see that all goods moving are accompanied by

duty paying documents.

C] Information from Informants:

Like all tax departments, department can and does collect information from secret

informants.

D] Preventive Section:

Each Commissionrate has preventive section to have surprise checks and raids when

evasion is suspected.


48/79

48

Self Audit (Internal Audit)

Each company should conduct self audit of their excise operations for various

purposes:

a) Ensure that all excise rules and procedures are being carefully followed to avoid

any penal consequences,

b) To ensure that duty is not paid in excess and classification & valuation is correct.

All allowable deductions are claimed.

c) Cenvat is claimed on all inputs & inputs are procured from such sources that

Cenvat

Credit on all inputs is available.

d) Train people in excise law. Such audit can be conducted by expert employees or

outside experts. Such audits will be highly beneficial to industries.


49/79

49

Powers of Central Excise Officers

Excise officers have been given powers of visit and inspection. As per rule 22(1) of

Central Excise Rules, an officer empowered by Commissioner shall have access to

any premises registered under CE Rules for purpose of carrying out any scrutiny,

verification and checks as may be necessary to safeguard the interest of revenue. All

officers in the rank of Inspector and above are authorized for this purpose.

Visit Book of Excise Officers

Each factory is required to maintain a visit book in prescribed form.

Inspector and Superintendent visiting the factory are required to fill in the book.

The visit book should contain name and address of the factory, excisable items

manufactured.

Restricted visits to SSI Units

Excise officers and departmental audit parties can visit small scale industries for

specific purposes only and on specified written permission.

The visiting officer parties of Comptroller and Auditor General of India. This audit

called

CERA audit (Central Revenue Audit).


50/79

50

ELIGIBILITY

The units whose value of clearances computed in accordance of the notification isless 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 onemanufacturer 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 year20102011, 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 specifiedlimit) 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. Inpresent provisions this limit works out to be Rs.90 lakh (Rs.150 lakhRs.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 cando so.


51/79

51

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 Historical Vs. Original Quantitative Vs. Qualitative


52/79

52

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 andfilm 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.


53/79

53

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 fromvarious financial management books, web sites and communication of people who

have good knowledge about these topics.


54/79

54

4.2 DATA 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

Data

CollectionMethod

Secondary Data

CommunicationInformation

System


55/79

55

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.
http://www.businessdictionary.com/definition/SAP.htmlhttp://www.businessdictionary.com/definition/SAP.html


56/79

56

4.3 CASE 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.


57/79

57

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.


58/79

58

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

o Supplier Relationship Management (SRM)o Strategic Enterprise Management (SEM)o Catalog Content Management (CCM)o Compliance Management (CM)o Supply Chain Management (SCM)o Product life Cycle Management (PLCM)o 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.


59/79

59

WORKING SYSTEM OF COMPANY

Logon Screen


60/79

60

Home Screen

Working area

Screen


61/79

61

Processing

area Screen

Multiple Options

Screen


62/79

62

DATA PRESENTATION:

Direct Taxes Collections (Rs. in crores)

Corporate tax 241,921

Income tax 128,235

Other direct taxes 2833

Direct Taxes Collections (Rs. in crores)

Corporate tax

Income tax

Other direct taxes


63/79

63

Indirect Taxes Collections (Rs. in crores)

Customs 84,542

Central Excise 101,666

Service tax 55731

Indirect Taxes Collections (Rs. in crores)

Customs

Central Excise

Service tax


64/79

64

PRODUCTION CLEARANCE

Amt in (crores) 2009-2010 2010-2011

Total Duty Utilized 59 94

Cenvat Availed 43 68

Export 10 13

0

10

20

30

40

50

60

70

80

90

100

Total Duty Utilized Cenvat Availed Export

Production Clearance 2009-

2010

Production Clearance 2010-

2011


65/79

65

EXPORT

Amt in (crores) 2009-2010 2010-2011

CT-1 0.23 0.44

CT-3 0.8 11

0

2

4

6

8

10

12

CT-1 CT-3

Export 2009-2010

Export 2010-2011


66/79

66

EXPORT

2009-10 109515239

2010-11 136301470

While looking at the composition of current and previous season's growth in relation to

Export, Company achieves a growth of 26.78%

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

160000000

2009-10 2010-11

Export

Export


67/79

67

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


68/79

68

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.


69/79

69

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.


70/79

70

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.


71/79

71

6.2 RECOMMANDATION & SUGGESTION:

Companys policy of utilizing its asset & machinery to optimum level should becontinued in future also.

It is recommended that the data must be stored and processed more in electronicform rather than manual form.

It is recommended towards the supplier that they must carry the simplest way forwork & communication.


72/79

72

6.3 CONCLUSION:

As Exide Industries Ltd is in manufacturing sector they avail the differentcredentials benefits through CENVAT.

Company is increasing their revenue through introducing new product line. 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 its investments for future gains. Investors will continue to invest in Exide.


73/79

73

BIBLIOGRAPHY:

A) Print Materials

Books

R.K. JainCentral Excise Law Manual 52nd Edition 2011-12.

Exide IndustriesAnnual Report & Accounts 2010-11.

Exide IndustriesMagazine Exchange 2010-11.

T. Gunasekarans CENVAT Manual 22nd Edition 2010-2011.

V.Raghuram & Madhukar N. HiregangeCentral Excise Law & Procedures 2011-

2012

C.R. KothariResearch 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/


74/79

74

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=90

7877971&sa=X&ei=SmgeTrG_MsTMrQeI37ioAg&ved=0CDkQ1QIoAA&biw=144

0&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=10833l11

142l0l12946l3l3l0l0l0l0l152l400l0.3l3

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.


75/79

75

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.


76/79

76

(vi) Clearances of excisable goods without payment of duty?

Ans: ABC Ltd. is a manufacturing unit situated in Haldia. In the financial year 2009-

2010 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?

o Maintenance of accounts of various units by a single person and at one officeo A single security was in charge of security of all unitso Units engaged in production and transactions assessed to sales tax and income

tax separately is a pointer to different entities.


77/79

77

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.


78/79

78

CALCULATION OF EXCISE DUTY:

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.


79/79

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. INV.NO.

03-22-212805 03-23-107980

03-22-213181 03-23-108260

03-22-212623 03-23-108026

Kindly acknowledge the receipt on duplicate copy.

Thanking you,

Yours Sincerely,

For Exide Industries Ltd,

exide new new

Documents