Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs, New Delhi
Subject : Cotton waste cleared by EOUs during the period 23.7.96 to 28.2.97 – Information on
1. Notification No. 8/96-CE dated 23.7.96 was issued exempting all goods falling under heading No. 52.02 produced or manufactured in a free trade zone and brought to any other place in India or by a 100% export-oriented undertaking and allowed to be sold in India, form so much of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985, as is in excess of nil duty. The interpretation of the notification was that exemption is only from the duties of excise specified in the Schedule to the Central Excise Tariff Act, 1985 and not from entire duty of excise leviable thereon under section 3 of the Central Excise Act, 1944. As per section 3(1) of Central Excise Act, 1944, an EOU is required to discharge the duty liability which shall be an amount equal to the aggregate of duties of customs which are leviable under section 12 of Customs Act 1962 on DTA clearances. Hence Notification 8/96-CE is applicable only in respect of additional duty of customs leviable on clearances of cotton waste by the 100% EOU and there is no exemption from basic customs duties in respect of such clearances.
2. This ambiguity remained for the period from 23.7.96 to 28.2.97. This was rectified by Notification No. 6/97-CE dated 1.3.97 wherein exemption from the whole of the duty of excise leviable under section 3 of the Central Excise Act has been restored.
3. There is a proposal to invoke the provisions of section 11C of the Central Excise Act 1944 with regard to cotton waste clearances by 100% EOUs for the intervening period i.e. 23.7.96 to 28.2.97.
4. I am directed to request you to furnish the following information urgently:
i) The number of 100% EOUs in your Commissionerate who have been clearing cotton waste claiming exemption under Notification No. 8/96-CE dated 23.7.96 to 23.7.96 for the periods from 23.7.96 to 28.2.97;
ii) Whether any demands on such cotton, waste for the period from 23.7.96 to 28.2.97 have been raised;
iii) If so, unitwise details of demands raised;
iv) Date of confirmation, if any w.r.t. demands raised against these units;
v) Whether any amount involved in confirmed demands have been paid by the parties and if so, details of payment thereof; and
vi) Any other information relevant in this regard.
You are requested to furnish the desired information to the Board”s office within 15 days from the receipt of this letter and not to enforce the levy for the period 23.7.96 to 28.2.97 pending final decision on the matter by the Board.