I need your support for the solution of one query:-
1.One of my clients is in sports goods and have fallen in this category
2.Their turnover for the last financial year was less than 4 crore.
3.In this financial year since 01-04-2010 and upto 28-02-2011, the turnover has already crossed 2.90 crores.
4.My question is that for availing this SSI exemption, we need to consider entire turnover since 01-04-2010 or just turnover w.e.f. 01-03-2011.
5.My doubt has arisen on this point since in a recent meeting of the trade association few advocates have advised the industry that the turnover needs to be reckoned from 01-03-2011 only and if the turnover in the month of march 2011 exceeds 1.50 crores, then we need to pay excise duty in this financial year otherwise they can wait even till next time the turnover exceeds 1.50 crores.
Kindly help me in clarifying this doubt as you know the matter is most urgent.
Excise exemptions are always on Financial year based So you need to consider turnover for Financial year starting from 1 st April and not from 1 st March.
PUNEET OBEROI
(CHARTERED ACCOUNTANT)
(100 Points)
Replied 03 March 2011
Dear Sir,
I was also assuming this, but on a finer reading of the article posted on the website of ICAI, it has been mentioned that the turnover of the "dutiable goods" and new goods now added because of amendment has to be clubbed to determine the turnover of 150 lakhs. Since my client was not paying any excise duty earlier and only with this amendment, the excise is becoming applicable so the view is that the client was having zero turnover of the dutiable goods upto 28th February, 2011. Hence, the turnover for the exemption notification 08/2003 will be taken from 01-03-2011. Please guide
Soumyen Sarkar
(free)
(102 Points)
Replied 04 March 2011
Dear Mr. Oberoi, may I assure you that the SSI exemption matter is controlled by the Notificatiion no 8/2003 - CE dated 01.03.2003. It provides that, whenever, the progressive clearance value of a manufacturer exceed1.5 crores, he will have to pay duty if the goods are not exempt from duty by any other notification (commodity-wise) . The couting starts from first day of a fiven financial provided the total clearance value in the preceeding year remained less than 4 crores. If in the preceeding year the clearance value was more than four crores, the manufacturer does not get the exemption upto a clearnance value of 1.5 crores.
But wherever the new levy has been proposed, it has a prospective effect for SSI exemptions. The counting for clearnce value will commence from 01.03.2010 because the Goods become excissable immediately on new levy. Though the present financial year is 2010 -11, the counting of progressive value will be from 1.3.2010 which is within 2010 - 11. This is applicable for all good and all SSI assessees. The advise of the advocate on point no. 5 is correct. From next year i.e. 2011-12, exemptions count from 01.04.2011. But any change in the SSI scheme itself would have started from the next finacial year. In your clients case if he clears good of more than 1.5 crore within March 11 starting from 01.03.2011, he wil hve to pay duty.
1 Like
PUNEET OBEROI
(CHARTERED ACCOUNTANT)
(100 Points)
Replied 04 March 2011
Dear Sir,
Thank you very much for an elaborate answer. Now please help me with one more query. This client of mine is doing both own brand and for other brand. Of course in case of third party brand, SSI exemption is not available but for own brand, this exemption is available. My question is that can he pay duty on goods cleared under third party brand and claim SSI exemption on his own brand?
Soumyen Sarkar
(free)
(102 Points)
Replied 05 March 2011
"My question is that can he pay duty on goods cleared under third party brand and claim SSI exemption on his own brand?"
Absolutely yes. The goods of the third party is not added to the turn over of your clent. So normal rate of duty is applicable in third party case. But in the case of goods of your client, it is his turnover and he would pay duty appropriately .i.e with exemption considerations. 8/2003 - CE 01.03.2003 is the guiding notification. Hope this meets up your query.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 March 2011
1st March, 2003
Notification No. 8/2003 - Central Excise
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2002-Central Excise, dated the 1st March, 2002, published in the Gazette of India vide number G.S.R. 129(E), dated the 1st March, 2002, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the descripttion specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of, -
(i)
the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (herein after referred to as the First Schedule); and
(ii)
the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act, 1985 (herein after referred to as the Second Schedule),
as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table:
Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565 (E), dated the 31st July, 2001, in the same financial year.
Table
S. No
Value of clearances
Rate of duty
(1)
(2)
(3)
1.
First clearances up to an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial year.
Nil
2.
All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods.
Nil
2. The exemption contained in this notification shall apply subject to the following conditions, namely: -
(i)
a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year;
(ii)
while exercising the option under condition (i), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely:-
(a)
name and address of the manufacturer;
(b)
location/locations of factory/factories;
(c)
descripttion of inputs used in manufacture of specified goods ;
(d)
descripttion of specified goods produced;
(e)
date from which option under this notification has been exercised;
(f)
aggregate value of clearances of specified goods (excluding the value of clearances referred to in paragraph 3 of this notification) till the date of exercising the option;
(iii)
the manufacturer shall not avail the credit of duty on inputs under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 (herein after referred to as the said rules), paid on inputs used in the manufacture of the specified goods cleared for home consumption, the aggregate value of first clearances of which, as calculated in the manner specified in the said Table does not exceed rupees one hundred lakhs;
(iv)
the manufacturer also does not utilise the credit of duty on capital goods under rule 3 or rule 11 of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed rupees one hundred lakhs, as calculated in the manner specified in the said Table;
(v)
where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to theaggregatevalue of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory;
(vi)
where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer;
(vii)
the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding financial year.
3. For the purposes of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely:-
(a)
clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4 ;
(b)
clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;
(c)
clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene.
4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases: -
(a)
where the specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001:
Provided that manufacturers, whose aggregate value of clearances of the specified goods for use as original equipment does not exceed rupees one hundred lakhs in the financial year 2002-2003 as calculated in the manner specified in paragraph 1, may submit a declaration regarding such use instead of following the procedure laid down in the said Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001;
(b)
where the specified goods bear a brand name or trade name of-
(i)
the Khadi and Village Industries Commission; or
(ii)
a State Khadi and Village Industry Board; or
(iii)
the National Small Industries Corporation; or
(iv)
a State Small Industries Development Corporation; or
(v)
a State Small Industries Corporation;
(c)
where the specified goods are manufactured in a factory located in a rural area.
5. This notification shall come into force on the 1stday of April, 2003.
Explanation.- For the purposes of this notification,-
(A)
"brand name" or "trade name" means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person;
(B)
where the specified goods manufactured by a manufacturer bear a brand name or trade name, whether registered or not, of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader;
(C)
"value" means,-
(i)
in respect of specified goods which have been notified under section 4A of the Central Excise Act, the value as determined in accordance with the provisions of that section, and
(ii)
in respect of specified goods other than those referred to in sub clause (i), the value as determined in accordance with the provisions of section 4 of the Central Excise Act, or the tariff value fixed under section 3 of the said Act;
(D)
in the determination of the value of clearances of Chinaware or Porcelainware or both, where a manufacturer gets Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or Porcelainware or both, belonging to the said manufacturer and fired in such kiln shall be taken into account;
(E)
where the specified goods are manufactured in a factory belonging to or maintained by the Central Government or by a State Government, or by a State Industries Corporation, or by a State Small Industries Corporation or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account;
(F)
"normal rate of duty" means the aggregate of duty of excise specified in the said First Schedule and the special duty of excise specified in the said Second Schedule read with any relevant notification (other than this notification or a notification in which exemption is based on the value or quantity of clearance) issued under sub-section (1) of section 5A of the Central Excise Act;
(G)
"clearances for home consumption", wherever referred to in this notification, shall include clearances for export to Bhutan and Nepal;
(H)
"rural area" means the area comprised in a village as defined in the land revenue records, excluding-
(i)
the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, or
(ii)
any area that may be notified as an urban area by the Central Government or a State Government.
(I)
for the purpose of goods falling under Chapter 61 or 62 of the said First Schedule, the expression "manufacturer" shall include a person who is liable to pay the duty of excise leviable on such goods under sub-rule (3) of rule 4 of the Central Excise Rules, 2002.
ANNEXURE
All goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985, otherthan the following, namely:-
(i)
all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon;
(ii)
all goods falling under heading No. 09.02;
(iii)
all goods falling under heading No. 21.06 and sub-heading Nos. 2101.10 and 2101.20;
(iv)
all goods falling under Chapter 24 of the said First Schedule (other than unbranded chewing tobacco, preparations containing chewing tobacco and tobacco extracts and essences, falling under heading No. 24.04 );
(v)
sandalwood oil;
(vi)
all goods falling under heading No. 3605.90;
(vii)
all goods falling under heading Nos. 37.01, 37.02, and sub-heading No. 3703.10;
(viii)
strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam, falling under Chapter 39 of the said First Schedule;
(ix)
all goods falling under Chapter 51 of the said First Schedule other than those falling under sub-heading Nos. 5105.30 and 5105.40 and heading Nos. 51.08, 51.09, 51.10 and 51.11 (except woven fabrics of wool falling under heading Nos. 51.10 or 51.11) and 51.12;
(x)
all goods falling under Chapter 52 of the said First Schedule other than goods falling under heading No. 52.04 and cotton fabric falling under heading Nos. 52.07, 52.08 and 52.09, intended for use in the manufacture of cotton absorbent lint;
(xi)
all goods falling under Chapter 53 of the said First Schedule except goods falling under heading Nos. 53.01, 53.02, 53.04, 53.05,53.08(other than goods falling under sub-heading No. 5308.14), 53.11(other than woven fabrics of ramie);
(xii)
all goods falling under Chapter 54 of the said First Schedule except goods falling under heading Nos. 54.01;
(xiii)
all goods falling under Chapter 55 of the said First Schedule except goods falling under heading Nos. 55.05 and 55.08;
(xiv)
all goods falling under Chapter 56 of the said First Schedule except goods falling under heading Nos. 56.01, 56.02, 56.03, 56.04, 56.05, chenille yarn falling under sub-heading No. 5606.00,56.07( other than of jute), 56.08 and 56.09;
(xv)
all goods falling under Chapter 57 of the said First Schedule;
(xvi)
all goods falling under Chapter 58 of the said First Schedule except goods falling under heading Nos. 58.03, 58.06, 58.07and 58.08;
(xvii)
all goods falling under Chapter 59 of the said First Schedule except goods falling under heading Nos. 59.01, 59.05, 59.06, 59.08, 59.09, 59.10, 59.11 and textile fabrics coated or laminated with preparations of low-density polyethylene;
(xviii)
all goods falling under Chapter 60 of the said First Schedule except goods falling under sub-heading No.6002.10 and fabrics of cotton man-made fibres not subjected to any process falling under heading Nos. 60.01 or 60.02;
(xix)
articles of apparel (except (a) raincoat, (b) undergarments including brassieres, panties, briefs, girdles, corsets, slips, vests, singlets, petticoats, braces, suspenders, garters and similar articles, and (c) articles of apparel, made out of handloom fabrics) falling under sub-heading Nos. 6101.00 and 6201.00;
(xx)
blankets of wool falling under Chapter 63 of the said First Schedule;
(xxi)
ceramic tiles falling under Chapter 69 of the said First Schedule;
(xxii)
stainless steel patties/pattas falling under Chapter 72 of the said First Schedule;
(xxiii)
aluminium circles, whether or not trimmed, falling under Chapter 76 of the said First Schedule;
(xxiv)
(A) all goods falling under –
(a) heading No. 74.03, excluding the following goods falling under sub-heading No. 7403.21,namely:-
(i) cast brass bars/rods of a length not exceeding three feet;
(ii) cast brass bars/rods of a length not exceeding ten feet used in the factory of production for making wires falling under sub-heading No. 7408.29;
(iii) copper flats of a weight not exceeding two kilograms used for making copper strips falling under heading No. 74.09;
(iv) brass billets weighing upto five kilograms;
(b) heading No. 74.09 (excluding copper strips produced from copper flats of a weight not exceeding two kilograms);
(c) sub-heading Nos. 7407.11, 7407.12, 7408.11, 7408.21; and
(B) copper circles, whether or not trimmed;
(xxv)
all goods falling under heading Nos 87.01, 87.02, 87.03, 87.04, 87.05, 87.06 and 87.11 [other than powered cycles and powered cycle rickshaw ("powered cycle" or powered rickshaw means a mechanically propelled cycle or, as the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so doing)];
(xxvi)
all goods falling under heading Nos 91.01 or 91.02;
(xxvii)
all goods falling under-
a) heading Nos. 93.02, 93.03, 93.04 [except air guns, air rifles and air pistols which are exempt from the provisions of the Arms Act, 1959 (54 of 1959)],
b) heading Nos.93.06 and 93.07 (except parts falling under heading Nos. 93.06 or 93.07);
(xxviii)
all goods falling under sub-heading No. 9605.10.
Alok Shukla
Deputy Secretary to the Government of India
F. No.334/1/2003 -TRU
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 March 2011
please read carefully , in notification nowhere mentioned that "exempted goods" are not to be taken for calculating the limit of 150 Lacs, however they are not entitled to pay duty above it but the limist is inclusive.
in my view the duty is payable from 01-03-2011
1 Like
M.S. Sharma
(Partner)
(21 Points)
Replied 05 March 2011
Yes it is right the turnover is to be taken from 1st april
PUNEET OBEROI
(CHARTERED ACCOUNTANT)
(100 Points)
Replied 08 March 2011
Dear Sharma Ji,
Thank you very much for the time and efforts put in by you in supplying the notificaiton and your views. On you advice, I have gone through the notification carefully and observe the following points:-
1. The notification in its first Para itself says "hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the descriptttion specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of" since this notification is not applicable till the goods are excisable, the counting of turnover from 01-04-2010 to 28-02-2011 does not arise. The clearances of only excisable goods have to be counted.
2. The annexure which prescribes the goods to which this notification applies is a negative list and the first negative item on the list is "all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon;" therefore the goods which were earlier chargeable to nil rate of duty should be excluded.
Taking these two reasons, I now believe that the turnover should be counted from 01-03-2011 only and not from 01-04-2011. Since Sports goods were earlier charged at nil rate of duty and hence were not dutiable.
This is the best analysis that I could do and may be I am wrong and if at all you do not concur with my views, kindly update
Vishal Goenka
(AA)
(24 Points)
Replied 08 March 2011
The notification reproduced above is old. The amended version is as follows:
NTF. NO. 08/2003-CE, DT. 01/03/2003
Seeks to supercede SSI exemption Ntf. No. 08/02-CE, DT. 1/3/2002 and prescribe SSI exemption, with effect from 1/4/2003 for units not availing CENVAT credit
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) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2002-Central Excise, dated the 1st March, 2002, published in the Gazette of India vide number G.S.R. 129(E), dated the 1st March, 2002, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the descripttion specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of, -
(i) the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (herein after referred to as the First Schedule); and
(ii) the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act, 1985 (herein after referred to as the Second Schedule),
as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table:
Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565 (E), dated the 31st July, 2001, in the same financial year.
Provided further that exemption contained in this notification shall not apply to goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon.
First clearances up to an aggregate value not exceeding one hundred and fifty lakh rupees [OLD-one hundred lakh rupees ] made on or after the 1st day of April in any financial year.
Nil
2.
All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods.
Nil
(In above table the words "one hundred and fifty lakh rupees" has been substituted vide NTF. NO. 08/2007-CE, DT. 01/03/2007 with effect from 1st day of April, 2007)
2. The exemption contained in this notification shall apply subject to the following conditions, namely: -
(i) a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year;
(ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely:-
(a) name and address of the manufacturer;
(b) location/locations of factory/factories;
(c) descripttion of inputs used in manufacture of specified goods ;
(d) descripttion of specified goods produced;
(e) date from which option under this notification has been exercised;
(f) aggregate value of clearances of specified goods (excluding the value of clearances referred to in paragraph 3 of this notification) till the date of exercising the option;
(iii) the manufacturer shall not avail the credit of duty on inputs under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 (herein after referred to as the said rules), paid on inputs used in the manufacture of the specified goods cleared for home consumption, the aggregate value of first clearances of which, as calculated in the manner specified in the said Table does not exceed one hundred and fifty lakh rupees [OLD- rupees one hundred lakhs];
Provided that nothing contained in this clause shall apply to the inputs used in the manufacture of specified goods bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4.
(iv) the manufacturer also does not utilise the credit of duty on capital goods under rule 3 or rule 11 of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed one hundred and fifty lakh rupees [OLD- rupees one hundred lakhs], as calculated in the manner specified in the said Table;
(v) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory;
(vi) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer;
(vii) the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees four hundred lakhs in the preceding financial year.
3. For the purposes of determining the first clearances upto an aggregate value not exceeding one hundred and fifty lakh rupees [OLD-one hundred lakh rupees] made on or after the 1st day of April in any financial year, mentioned against serial no.1 of the said Table, the following clearances shall not be taken into account, namely:-
(a) clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason;
(b) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4;
(c) clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;
[OMITTED-
(d) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene. ]
(In above paragraph 2 & 3 the words "one hundred and fifty lakh rupees" has been substituted vide NTF. NO. 08/2007-CE, DT. 01/03/2007 with effect from 1st day of April, 2007)
3A. For the purposes of determining the aggregate value of clearances of all excisable goods for home consumption, mentioned in clause (vii) of paragraph 2 of this notification, the following clearances shall not be taken into account, namely:-
(a) clearances of excisable goods without payment of duty-
(i) to a unit in a free trade zone; or
(ii) to a unit in a special economic zone; or
(iii) to a hundred percent. export-oriented undertaking; or
(iv) to a unit in an Electronic Hardware Technology Park or Software Technology Park; or
(v) supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue) No.108/95- Central Excise, dated the 28th August, 1995, vide number GSR. 602 (E), dated the 28th August, 1995.
(b) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4;
(c) clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;
[OMITTED-
(d) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene.]
(e) clearances, which are exempt from the whole of the excise duty leviable thereon under notifications No. 214/86-Central Excise, dated the 25th March, 1986 (G.S.R.547(E), dated the 25th March, 1986), or No. 83/94-Central Excise, dated the 11th April, 1994 (G.S.R. 375(E), dated the 11th April, 1994), or No. 84/94-Central Excise, dated the 11th April, 1994 (G.S.R. 376 (E), dated the 11th April, 1994).
(Above clause (e) has been inserted vide Ntf. No. 67/2003-CE, Dt. 11/08/2003)
[OLD -
3. For the purposes of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely:-
(a) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4 ;
(b) clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;
(c) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene. ]
4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases: -
(a) where the specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001:
Provided that manufacturers, whose aggregate value of clearances of the specified goods for use as original equipment does not exceed rupees one hundred lakhs in the financial year 2002-2003 as calculated in the manner specified in paragraph 1, may submit a declaration regarding such use instead of following the procedure laid down in the said Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001;
(b) where the specified goods bear a brand name or trade name of-
(i) the Khadi and Village Industries Commission; or
(ii) a State Khadi and Village Industry Board; or
(iii) the National Small Industries Corporation; or
(iv) a State Small Industries Development Corporation; or
(v) a State Small Industries Corporation;
(c) where the specified goods are manufactured in a factory located in a rural area;
(d) where the specified goods are account books, registers, writing pads and file folders falling under heading 4820 or 4821 of the said First Schedule.
(In above paragraph 4., for clause (c) and the entry relating thereto has been substituted vide NTF. NO. 45/2006-CE, DT. 20/11/2006)
[OLD-
(c) where the specified goods are manufactured in a factory located in a rural area.]
(e) where the specified goods are in the nature of packing materials and are meant for use as packing material by or on behalf of the person whose brand name they bear.
[OLD-
(e) Where the specified goods are in the nature of packing materials, namely, printed cartons of paper or paper board, metal containers, HDPE woven sacks, adhesive tapes, stickers, PP caps, crown corks, metal labels, plastic bags, printed laminated rolls, plastic containers and plastic bottles [OLD- PP caps, crown corks, metal labels, plastic bags, printed laminated rolls.] [OLD- PP caps, crown corks, metal labels, plastic bags [OLD- PP caps, crown corks, metal labels ].
Provided that in respect of plastic containers and plastic bottles, the exemption under this notification shall apply only where such plastic containers or plastic bottl es are meant for use as packing materials by the pers on whose brand name such goods bear.]
(In above clause (e) the letters and words "PP caps, crown corks, metal labels, plastic bags, printed laminated rolls, plasti c containers and plastic bottles" has been substituted & proviso added vide NTF. NO. 04/2010-CE, DT. 27/02/2010)
(In above clause (e) the letters and words "PP caps, crown corks, metal labels, plastic bags, printed laminated rolls." has been substituted vide NTF. NO. 09/2009-CE, DT. 07/07/2009)
(In above clause (e) the letters and words "PP caps, crown corks, metal labels, plastic bags" has been substituted vide NTF. NO. 02/2009-CE, DT. 11/02/2009)
(In paragraph 4., above clause (e) has been inserted vide NTF. NO. 47/2008-CE, DT. 01/09/2008)
4A. Notwithstanding anything contained in the preceding paragraphs, the exemption in respect of goods specified in entries (xi), (xii) and (xiv) of the Annexure, contained in this notification, shall be restricted to rupees ten lakhs during the month of March of the financial year 2005-06.
4B. Notwithstanding anything contained in the preceding paragraphs, the exemption in respect of goods specified in clause (e) of paragraph 4, contained in this notification, shall be restricted to rupees ninety lakhs for the remaining part of the financial year 2008-09.
(Above paragraph 4B. has been inserted vide NTF. NO. 47/2008-CE, DT. 01/09/2008)
5. This notification shall come into force on the 1st day of April, 2003.
Explanation.- For the purposes of this notification,-
(A) “brand name” or “trade name” means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person;
(B) where the specified goods manufactured by a manufacturer bear a brand name or trade name, whether registered or not, of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader;
(C) “value” means,-
(i) in respect of specified goods which have been notified under section 4A of the Central Excise Act, the value as determined in accordance with the provisions of that section, and
(ii) in respect of specified goods other than those referred to in sub clause (i), the value as determined in accordance with the provisions of section 4 of the Central Excise Act, or the tariff value fixed under section 3 of the said Act;
(D) in the determination of the value of clearances of Chinaware or Porcelainware or both, where a manufacturer gets Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or Porcelainware or both, belonging to the said manufacturer and fired in such kiln shall be taken into account;
(E) where the specified goods are manufactured in a factory belonging to or maintained by the Central Government or by a State Government, or by a State Industries Corporation, or by a State Small Industries Corporation or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account;
(F) “normal rate of duty” means the aggregate of duty of excise specified in the said First Schedule and the special duty of excise specified in the said Second Schedule read with any relevant notification (other than this notification or a notification in which exemption is based on the value or quantity of clearance) issued under sub-section (1) of section 5A of the Central Excise Act;
(G) “clearances for home consumption”, wherever referred to in this notification, shall include clearances for export to Bhutan and Nepal;
(H) “rural area” means the area comprised in a village as defined in the land revenue records, excluding-
(i) the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, or
(ii) any area that may be notified as an urban area by the Central Government or a State Government.
(I) for the purpose of goods falling under Chapter 61 or 62 of the said First Schedule, the expression “manufacturer” shall include a person who is liable to pay the duty of excise leviable on such goods under sub-rule (3) of rule 4 of the Central Excise Rules, 2002.
(J) “retail sale price” means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration of such sale;
Descripttion of excisable goods falling under Chapter, heading, sub-heading or tariff items of the First Schedule to the Central Excise Tariff Act, 1985, namely:-
(i) all goods falling under Chapter 2, 3, 4 and 5;
(ii) all goods falling under Chapter 7 or 8;
(iii) all goods falling under Chapter 9 to 20 [OLD- Chapter 9 ] (except heading 0902);
(v) all goods falling under heading 2102, 2103 or 2104;
(vi) all goods falling under tariff item 21050000;
(vii) all goods falling under heading 2106 (except tariff item 21069020);
(viii) all goods falling under heading 2201 or 2202;
(ix) all goods falling under tariff item 22072000;
(x) all goods falling under heading 2209;
(xi) Tobacco, used for smoking through 'hookah' or 'chilam', commonly known as 'hookah' tobacco or 'gudaku' falling under tariff item 24031010;
(xii) Other smoking tobacco falling under tariff item 24031090, other than those bearing a brand name;
(xiii) Chewing tobacco, chewing tobacco preparations and tobacco extracts and essences, falling under heading 2403, other than those bearing a brand name;
(xiv) Other manufactured tobacco and manufactured tobacco substitutes falling under 24039990, other than those bearing a brand name
(xv) all goods falling under Chapters 25, 26, 27, 28, 29, 30 (except sterile absorbable surgical or dental yarns and sterile surgical or dental adhesion barriers), 31 or 32;
[OLD-
(xxiv) all goods falling under Chapter 39 (other than strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam, falling under Chapter 39 of the said First Schedule); ]
(xxv) all goods falling under Chapter 40, 41, 42, 43, 44, 45, 46, 47, 48 or 49;
(xxvi) all goods falling under Chapter 64, 65, 66, 67 or 68;
(xxvii) all goods falling under Chapter 69 (except ceramic tiles);
(xxviii) all goods falling under Chapter 70 or 71;
(xxix) all goods falling under Chapter 72 (except stainless steel patties /pattas);
(xxx) all goods falling under Chapters 73;
(xxxi) all goods falling under headings 7401 and 7402;
(xxxii) following goods falling under tariff item 74032100, namely:-
(a) cast brass bars/rods of a length not exceeding three feet;
(b) cast brass bars/rods of a length not exceeding ten feet used in the factory of production for making wires of copper alloys falling under sub-heading 7408 (other than wire of which the maximum cross-sectional dimension exceeds 6 mm and wire of which the maximum cross-sectional dimension does not exceed 0.315 mm and used for manufacture of Zari);
(c) copper flats of a weight not exceeding two kilograms used for making copper strips falling under heading.7409;
(d) brass billets weighing up to five kilograms;
(xxxiii) all goods falling under heading 7404, 7405 or 7406;
(xxxiv) all goods falling under heading 7407 (except bars and rods of refined copper and copper alloys);
(xxxv) all goods falling under heading 7408 (except wire of which the maximum cross-sectional dimension exceeds 6 mm and );
(xxxvi) copper strips produced from copper flats of a weight not exceeding two kilograms, falling under heading 7409;
(xxxvii) all goods falling under headings 7410, 7411, 7412, tariff item 7413 00 00, headings 7415, 7418 or 7419 (except copper circles, whether or not trimmed);
[OLD-
(xxxvii) all goods falling under headings 7410, 7411, 7412, 7413, 7414, 7415, 7416, 7417, 7418 or 7419 (except copper circles, whether or not trimmed);
(xxxviii) all goods falling under Chapter 75 or 76 (except aluminium circles, whether or not trimmed);
(xxxix) all goods falling under Chapters 77, 78, 79, 80, 81, 82 or 83;
(xl) all goods falling under Chapter 84;
(Above entry at (xl) has been substituted vide NTF. NO. 39/2006-CE, w.e.f.10/08/2006 - till 31/12/2006)
[OLD-
(xl) all goods falling under Chapter 84 {other than power driven pumps primarily designed for handling water which do not conform to standards specified by BIS (Bureau of Indian Standards) for such pumps}.
NOTE: Above Entry (xl) effective upto 31st day of July, 2006 ]
(xli) all goods falling under Chapter 85 or 86;
(xlii) all goods falling under headings 8707, 8708, 8709, 8710, 8712, 8713, 8714, 8715 or 8716;
(xliii) powered cycles and powered cycle rickshaw ("powered cycle" or powered rickshaw means a mechanically propelled cycle or, as the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so doing) falling under heading 8711;
(xliv) all goods falling under Chapters 88, 89 or 90;
(xlv) watches of retail sale price not exceeding Rs.500 per piece and parts thereof, falling under heading 9101 or 9102;
(xlvi) all goods falling under headings 9103, 9104, 9105, 9106, 9107, 9108, 9109, 9110, 9111, 9112, 9113 or 9114;
(xlvii) all goods falling under Chapters 92;
(xlviii) all goods falling under headings 9301 or 9305;
(xlix) parts falling under heading 9306 or 9307;
(l) air guns, air rifles and air pistols which are exempt from the provisions of the Arms Act, 1959 (54 of 1959), falling under tariff item 93040000;
(li) all goods falling under Chapters 94 or 95;
(lii) all goods falling under Chapters 96 (except tariff item 96050010).
All goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985, other than the following, namely:-
(i) all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon;
(ii) all goods falling under heading No. 09.02;
(iii) all goods falling under heading No. 21.06 and sub-heading Nos. 2101.10 and 2101.20;
(iv) all goods falling under Chapter 24 of the said First Schedule (other than unbranded chewing tobacco, preparations containing chewing tobacco and tobacco extracts and essences, falling under heading No. 24.04 );
(v) sandalwood oil;
(vi) all goods falling under heading No. 3605.90;
(vii) all goods falling under heading Nos. 37.01, 37.02, and sub-heading No. 3703.10;
(viii) strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam, falling under Chapter 39 of the said First Schedule;
(ix) all goods falling under Chapters 50 and 51 of the said First Schedule;
(x) all goods falling under Chapter 52 of the said First Schedule;
(xi) all goods falling under Chapter 53 of the said First Schedule;
(xii) all goods falling under Chapter 54 of the said First Schedule;
(xiii)all goods falling under Chapter 55 of the said First Schedule;
(xiv) all goods falling under Chapter 56 of the said First Schedule;
[OLD -
(ix) all goods falling under Chapter 51 of the said First Schedule other than those falling under sub-heading Nos. 5105.30 and 5105.40 and heading Nos. 51.08, 51.09, 51.10 and 51.11 (except woven fabrics of wool falling under heading Nos. 51.10 or 51.11) and 51.12;
(x) all goods falling under Chapter 52 of the said First Schedule other than goods falling under heading No. 52.04 and cotton fabric falling under heading Nos. 52.07, 52.08 and 52.09, intended for use in the manufacture of cotton absorbent lint;
(xi) all goods falling under Chapter 53 of the said First Schedule except goods falling under heading Nos. 53.01, 53.02, 53.04, 53.05,53.08(other than goods falling under sub-heading No. 5308.14), 53.11(other than woven fabrics of ramie);
(xii) all goods falling under Chapter 54 of the said First Schedule except goods falling under heading Nos. 54.01;
(xiii) all goods falling under Chapter 55 of the said First Schedule except goods falling under heading Nos. 55.05 and 55.08;
(xiv) all goods falling under Chapter 56 of the said First Schedule except goods falling under heading Nos. 56.01, 56.02, 56.03, 56.04, 56.05, chenille yarn falling under sub-heading No. 5606.00,56.07( other than of jute), 56.08 and 56.09; ]
(xv) all goods falling under Chapter 57 of the said First Schedule;
(xvi) all goods falling under Chapter 58 of the said First Schedule;
(xvii) all goods falling under Chapter 59 of the said First Schedule;
(xviii) all goods falling under Chapter 60 of the said First Schedule;
(xix) all goods falling under Chapters 61 and 62 of the said First Schedule;
(xx) all goods falling under Chapter 63 of the said First Schedule;
[OLD -
(xvi) all goods falling under Chapter 58 of the said First Schedule except goods falling under heading Nos. 58.03, 58.06, 58.07and 58.08;
(xvii) all goods falling under Chapter 59 of the said First Schedule except goods falling under heading Nos. 59.01, 59.05, 59.06, 59.08, 59.09, 59.10, 59.11 and textile fabrics coated or laminated with preparations of low-density polyethylene;
(xviii) all goods falling under Chapter 60 of the said First Schedule except goods falling under sub-heading No.6002.10 and fabrics of cotton man-made fibres not subjected to any process falling under heading Nos. 60.01 or 60.02;
(xix) articles of apparel (except (a) raincoat, (b) undergarments including brassieres, panties, briefs, girdles, corsets, slips, vests, singlets, petticoats, braces, suspenders, garters and similar articles, and (c) articles of apparel, made out of handloom fabrics) falling under sub-heading Nos. 6101.00 and 6201.00;
(xx) blankets of wool falling under Chapter 63 of the said First Schedule; ]
[OMITTED -
(xx-i) terry towels falling under Chapter 63 of the said First Schedule; ]
(xxi) ceramic tiles falling under Chapter 69 of the said First Schedule;
(xxii) stainless steel patties/pattas falling under Chapter 72 of the said First Schedule;
(xxiii) aluminium circles, whether or not trimmed, falling under Chapter 76 of the said First Schedule;
(xxiv) (A) all goods falling under –
(a) heading No. 74.03, excluding the following goods falling under sub-heading No. 7403.21,namely:-
(i) cast brass bars/rods of a length not exceeding three feet;
(ii) cast brass bars/rods of a length not exceeding ten feet used in the factory of production for making wires falling under sub-heading No. 7408.29;
(iii) copper flats of a weight not exceeding two kilograms used for making copper strips falling under heading No. 74.09;
(iv) brass billets weighing upto five kilograms;
(b) heading No. 74.09 (excluding copper strips produced from copper flats of a weight not exceeding two kilograms);
(c) sub-heading Nos. 7407.11, 7407.12, 7408.11, 7408.21; and
(B) copper circles, whether or not trimmed;
(xxv) all goods falling under heading Nos 87.01, 87.02, 87.03, 87.04, 87.05, 87.06 and 87.11 [other than powered cycles and powered cycle rickshaw (“powered cycle” or powered rickshaw means a mechanically propelled cycle or, as the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so doing)];
(xxvi) all goods falling under heading No. 91.01 or 91.02 (except watches of retail sale price not exceeding Rs 500 per piece and parts thereon;
[OLD -
(xxvi) all goods falling under heading Nos 91.01 or 91.02;]
(xxvii) all goods falling under-
a) heading Nos. 93.02, 93.03, 93.04 [except air guns, air rifles and air pistols which are exempt from the provisions of the Arms Act, 1959 (54 of 1959)],
b) heading Nos.93.06 and 93.07 (except parts falling under heading Nos. 93.06 or 93.07);
(xxviii) all goods falling under sub-heading No. 9605.10. ]
[F. No.334/1/2003 -TRU]
(Alok Shukla)
Deputy Secretary to the Government of India
CAclubindia
