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Excise Duty on Sweets & Namkeens

Atul Sarda (Chartered Accountant) (24 Points)

04 March 2011

Can anybody tell whether the sweets (mithai) and Namkeen preparations are chargeable to Excise Duty? If yes, please give the tariff heading of these items.

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4 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 05 March 2011

Circular No. 841/18/2006-CX

6^th December 2006

F.NO. 21/6/2006 – CX 1

Government Of India

Ministry Of Finance

Department Of Revenue

Central Board Of Excise & Customs

Subject: Ready to eat and packaged Namkeens, Bhujia etc. falling under tariff item 2106 90 99 of the Central Excise Tariff, whether eligible for full exemption under Sr. No. 29 of notification no. 3/2006-CE dated 1.3.2006 or attract 8% duty under Sr. No. 30 of the said notification.

I am directed to say that references have been received from field formation seeking clarification as to whether ready to eat packaged food items like namkeen, bhujia etc. are eligible for full exemption or are liable to 8% excise duty under notification No. 3/2006-CE dated 1.3.2006. Sr. No. 29 and Sr. No.30 of the notification No. 3/2006-CE grant following exemptions:

S. No.	Chapter or heading or sub-heading or tariff item of the First Schedule	Descripttion of excisable goods	Rate	Condition No.
(1)	(2)	(3)	(4)	(5)
29.	2106 90	Sweetmeats (known as ‘misthans’ or ‘mithai’ or by any other name), namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, papad and jal jeera	Nil	-
30.	2106 90 99	Ready to eat packaged food	8%	-

2. Further, the supplementary Chapter Note 6 of Chapter 21 of the Central Excise Tariff reads as under:

6. Tariff item 2106 90 99 includes sweet meats commonly known as “Misthans” or “Mithai” or called by any other name. They also include products commonly known as “Namkeens”, “mixtures”, “Bhujia”, “Chabena” or called by any other name. Such products remain classified in these sub-headings irrespective of the nature of their ingredients.

It is noticed that doubts have been expressed in view of the fact that the goods like ready to eat packaged namkeen,bhujia,etc, conform to the descripttion provided at both Sr. Nos. 29 and 30 of the notification no. 3/2006-CE dated 1.3.2006. A question arises as to whether such goods would attract nil rate of duty under Sr. No. 29 or 8% duty under Sr. No. 30.

3. The matter has been examined .As the same items fall under two entries of the notification, the exemption of nil rate of duty would be available to goods covered by Sr. No. 29 of notification No. 3/2006-CE dated 1.3.2006 , even when the said goods are also covered by Sr. No.30.

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Soumyen Sarkar (free) (102 Points)
Replied 06 March 2011

Mr. Sarda, the following the withdrawal of exemption as was provided in notification no 4/2006 - CE dated 01.03.2006

Chapter 21

21.1 The exemption from basic excise duty on coffee or tea pre mixes, sauces, ketchup and the like, soups and broths and preparations, all kinds of food mixes, including instant food mixes, etel nut product known as “ supari”, ready to eat packaged food, milk containing edible nuts

with sugar or other ingredients is being withdrawn. However these goods would be subject to the

concessional rate of 1% without CENVAT credit facility (S. Nos. 15, 16, 17, 18, 19, 20, 21, 22 of

Notification No. 1/2011 – C.E dated 1st March, 2011 and S. Nos. of 5,6,7,8,9,10 of Notification

No. 2/2011 – C.E dated 1st March, 2011 refers. Further S. No. 24, 25, 26, 27, 30, 30 A, 30 B of

Notification No. 3/2006 – C.E dated 1st March, 2006, is being omitted by Notification No. 3

/2011-C.E dated the 1st March 2011 )

21.2 A Tariff rate of 5% has been prescribed for the tariff items falling under tariff heading

2105 00 00, 2106 90 92 while keeping the effective rate at 1% with Cenvat credit.

As your good are falling in this chapter you may find out the exact subheading and see whether in 2011 budget any exemption have been withdrawn or the 1% or 5% duty levey.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 06 March 2011

Originally posted by : Soumyen Sarkar
	Mr. Sarda, the following the withdrawal of exemption as was provided in notification no 4/2006 - CE dated 01.03.2006 Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Calibri","sans-serif"; mso-bidi-font-family:"Times New Roman";} Chapter 21 21.1 The exemption from basic excise duty on coffee or tea pre mixes, sauces, ketchup and the like, soups and broths and preparations, all kinds of food mixes, including instant food mixes, etel nut product known as “ supari”, ready to eat packaged food, milk containing edible nuts with sugar or other ingredients is being withdrawn. However these goods would be subject to the concessional rate of 1% without CENVAT credit facility (S. Nos. 15, 16, 17, 18, 19, 20, 21, 22 of Notification No. 1/2011 – C.E dated 1st March, 2011 and S. Nos. of 5,6,7,8,9,10 of Notification No. 2/2011 – C.E dated 1st March, 2011 refers. Further S. No. 24, 25, 26, 27, 30, 30 A, 30 B of Notification No. 3/2006 – C.E dated 1st March, 2006, is being omitted by Notification No. 3 /2011-C.E dated the 1st March 2011 ) 21.2 A Tariff rate of 5% has been prescribed for the tariff items falling under tariff heading 2105 00 00, 2106 90 92 while keeping the effective rate at 1% with Cenvat credit. As your good are falling in this chapter you may find out the exact subheading and see whether in 2011 budget any exemption have been withdrawn or the 1% or 5% duty levey.

please read the query specific asking for sub heading only of the products.

CA Saiyum khan (Practicing CA) (690 Points)
Replied 15 March 2011

On going through the notificaiton 3/2011-Central Excise which is in context of modificaiton of original notification no.3/2006-cx stating the list of the items exempted from the levy of duty or at concessional rate of duty. Int he said ntoification sr. no.29 specially for the Misthan and Namkeen has not been omitted. So in my view Misthan and Namkeen will still enjoy the exemption given under notification no.03/2006 i.e. at "NIL" rate of duty.

Pls. share if any of you have differnet view.

The ntoification 3/2011 has been pasted below.

Notification New Delhi, the 1st March, 2011
No. 3 /2011-Central Excise
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A
of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that
it is necessary in the public interest so to do, hereby makes the following further amendments
in the notification of the Government of India in the Ministry of Finance (Department of
Revenue), No. 3/2006-Central Excise, dated the 1st March, 2006, published in the Gazette of
India, Extraordinary, vide number G.S.R. 93(E), dated the 1st March, 2006, namely:-
In the said notification, in the Table,-
(i) for the letters “Rs.”, wherever it occurs, the symbol “`” shall be substituted;
(ii) in column (4), for the entry “4%”, wherever it occurs, the entry “5%” shall be
substituted;
(iii) S.No. 6, and the entries relating thereto shall be omitted;
(iv) S.No. 12, and the entries relating thereto shall be omitted;
(v) S.No. 17B, and the entries relating thereto shall be omitted;
(vi) S.No. 22, and the entries relating thereto shall be omitted;
(vii) S.No. 22A, and the entries relating thereto shall be omitted;
(viii) S.No. 24, and the entries relating thereto shall be omitted;
(ix) S.No. 25 and 26 and the entries relating thereto shall be omitted;
(x) S.No. 27, and the entries relating thereto shall be omitted;
(xi) S.No. 30, and the entries relating thereto shall be omitted;
(xii) S.No. 30A, and the entries relating thereto shall be omitted;
(xiii) S.No. 30B, and the entries relating thereto shall be omitted;
(xiv) S.No. 32, and the entries relating thereto shall be omitted;
(xv) S.No. 32A, and the entries relating thereto shall be omitted.
Note.- The principal notification was published in the Gazette of India, Extraordinary, vide
number G.S.R.93(E), dated the 1st March, 2006, and last amended by notification No.
21/2010-Central Excise, dated the 29th April, 2010, published vide number G.S.R. 357 (E),
dated the 29th April, 2010.