Circular No. 147/58/95- Central Excise

dated 12/9/95
F.No. 332/71/95-TRU

Government of India

Ministry of Finance

Department of Revenue, Tax Research Unit, New Delhi

Subject: Notification No. 110/95-CE, dated 31st August, 1995- Forwarding of

I am directed to refer to notification No. 103/95-CE, dated 4th July, 1995 withdrawing the tariff values prescribed for polyester filament yarns. Consequent to removal of tariff values for polyester filament yarns, the excise duty on value addition on account of dyeing, bleaching, etc. carried out on polyester filament yarns is required to be paid on the basis of section 4 value. Factories not having facilities for producing singly yarn and carrying out these processes on duty paid yarns are, however, not subjected to any further duty on the value addition on account of dyeing etc. (refer S.No. 2 of notification No. 35/95-CE dated 16.3.95 read with the proviso)

2. Notification No. 110/95-CE, dated 31st August, 1995 has now been issued exempting polyester filament yarn, dyed, printed, bleached or mercerised provided that duty has been paid at the texturising or draw twisting stage. In other words, value addition after the stage of texturising or draw twisting is not required to be subjected to any further duty, irrespective of the nature of the unit. It may be noted that the exemption contained in notification No. 110/95-CE, dated 31st August, 1995 would be available even to factories having facilities for producing single yarn, provided excise duty has been paid at the textured or draw twisted stage.

3. It is understood that most of the units which are selling dyed textured yarn, also sell undyed textured yarn. The valuation of textured / draw twisted yarn used captively in the production of dyed yarns, should not pose any problem. The value of dyed textured yarn where there is no outside sale of textured yarn, has to be determined as per Central Excise (Valuation) Rules, 1975.

4. It is requested that a monthly report (starting from September “95”) giving the following information may be sent to Shri Tarun Kumar Govil, Under Secretary, Room No. 146G, Tax Research Unit, Department of Revenue. The above information is required for each Commissionerate of Central Excise.

(i)  Number of units availing exemption under notification No. 110/95-CE, dated 31st August, 1995

(ii)  Average invoice price of dyed, bleached, printed or mercerised polyester filament yarn cleared from such units.

(iii) Average value of textured or draw twisted yarn on which excise duty in respect of yarns at (ii) above has been paid.

(iv) Number alongwith the production capacities of the units availing exemption vide S.No. 2. of notification No. 35/95-CE dated 16.3.95 in respect of polyester filament yarns, As these units may not be registered, the above information may be based on a quick survey or available data in this regard if any.

(R. Sekar)
Deputy Secretary, Tax Research

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