Circular No. 771/4 /2004-CX
16th January, 2004

F.No.224/32/2003-CX 6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

Sub: Exercising option to avail of the exemption to specified goods cleared from factory located in Uttaranchal and Himachal Pradesh vide notification no. 49/2003-CE dated 10.06.2003 as amended and notification no. 50/2003-CE dated 10.06.2003 as amended- regarding.

I am directed to say that clarification has been sought regarding the time limit for exercising the option in writing for availing of the exemption under notification no. 49/2003-CE dated 10.06.2003 and notification no. 50/2003-CE dated 10.06.2003 as amended vide Notification No. 76/2003-CE dated 5.11.2003. 

2. Notification no. 49/2003-CE dated, 10.06.2003, as amended, exempts specified goods manufactured and cleared from a unit located in the State of Uttaranchal or State of Himachal Pradesh.  Notification no. 50/2003-CE dated 10.06.2003, as amended, exempts goods, other than specified in the said notification, and manufactured and cleared from a unit located in the Industrial Growth Center or Industrial Infrastructure Development Center or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area.  The exemption under these said notifications is available to the following kinds of units, namely:

(a) New Industrial Units which have commenced their commercial production on or after the 7th day of January, 2003.

(b) Industrial units existing before the 7th day of January, 2003 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25%, on or after the 7th day of January, 2003.

3. The above mentioned notifications have been amended vide notification no. 76/2003-CE dated 5.11.2003 prescribing certain conditions for availment of the exemption. One such condition is that the manufacturer who intends to avail of the exemption under these notifications should exercise his option in writing to avail the benefit of these notifications.  Some doubts have been raised about the time limit for the said option in different situations.

4. Proviso ( i ) inserted in both the aforesaid Notifications Nos. 49/2003-CE and 50/2003-CE vide amending Notification No. 76/2003-CE, inter-alia, stipulates that the manufacturer who intends to avail of the exemption shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option.  Another proviso (iii) introduced by the amending Notification No. 76/2003-CE lays down that the manufacturer may, for the current financial year, submit his option in writing on or before the 30th day of November, 2003.  The different scopes of the said two provisos are clarified below:

(a)  As the amending Notification No. 76/2003-CE was issued on the 5th November, 2003, a period upto 30th day of November 2003 is permitted for those eligible units which were already working under Notifications Nos. 49/2003-CE and 50/2003-CE both dated 10.06.2003 as on 5.11.2003 to exercise their written option on or before the said date.  If these units failed to submit their option in writing on or before 30.11.2003, they were not eligible to the benefit of the said exemptions.

(b) The eligible Industrial Units which had not been working under Notifications No. 49/2003-CE and 50/2003-CE and who want to effect their first clearance under exemption vide the said notifications in the current financial year any time after the issue of Notification No. 76/2003-CE dated 5.11.2003, may exercise their option any time in the current financial year in writing before effecting such first clearance.  Thus, the time limit upto 30.11.2003 is not applicable to this category of industrial units.

5. Trade and field formations may be informed suitably.

6. Receipt of the circular may be acknowledged.

7.  Hindi version shall follow.

Neerav Kumar Mallick
Under Secretary to the Government of India

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