Levy of 1% Excise Duty without Cenvat Credit on 130 items:

1 The following changes have been made with respect to levy of 1% excise duty on 130 items which were fully exempt till 1st March 2011:

(i)  Out of the 130 items covered under Notification 1/2011-CE, dated 1-3-2011, 35 items have been notified under section 4A of the Central Excise Act, 1944 with an abatement of 35%. Notification No. 11/2011-CE (NT), dated 24th March, 2011 refers. The excise duty (and CVD) on these goods will thus be charged on the assessable value determined under section 4A.

(ii)  Since units that exclusively manufacture items attracting the duty of 1% are neither allowed to take Cenvat credit nor to pass it on to their buyers, a simplified procedure is being prescribed for them so that physical interface with them is minimized and the levy does not pose a compliance burden on them. The salient features of this are as under :

a.  Waste, scrap and parings arising in the course of manufacture of items subject to the 1% levy have been fully exempted. The benefit of this exemption is available only to units that exclusively manufacture these items. Notification No. 27/2011-CE, dated 24th March, 2011 refers. The benefit of this exemption is also available to units exclusively manufacturing mobile handsets including cellular phones.

b.  Post- registration verification of the factory premises shall not be required for such units.

c.  Visits to such units should not be required in the normal course. If at all the need arises, the officer visiting them should do so only with the prior authorization of the Assistant Commissioner or the Deputy Commissioner Central Excise of the jurisdictional division. The authorisation should be shown to the assessee and his signatures obtained on it at the time of the visit. These instructions may be disseminated to the field formations for strict compliance.

d.  Facility of quarterly returns is being prescribed for these units. Notification No. 8/2011-CE (NT), dated 24th March, 2011 refers.

e.  A simple format for this quarterly return will be notified in due course as the first return from such units will become due only in July 2011.

2 The entry relating to mobile handsets (S. No. 100 of Notification No. 1/2011-CE, dated 1-3-2011) has been modified. 1% conditional excise duty will now apply only to Radio Trunking Terminals while separate Notification No.20/2011-CE, dated 24-3-2011 has been issued prescribing unconditional excise duty rate of 1% on mobile handsets including cellular phones. The imports of these goods as well as their clearances from SEZ into DTA also will attract additional duty of customs of 1% over and above the NCCD of 1%. This duty rate will also be available to clearances from EOUs into the DTA.

3 The excise duty exemption on silicon wafers has also been restored. Other forms of silicon would continue to attract excise duty of 1% ad val.

4 As you are aware, the levy of 1% excise duty covers all kind of carpets (S. No. 57 of the Notification 1/2011-CE refers). The trade has represented that most of the carpets are woven by individual weavers and exported. It has been informed that in most of the cases, the domestic sales of the carpets are well within the exempted threshold of Rs. 1.5 crore. It is to clarify that in such cases the units need not register and can continue to export following the simplified export procedure for exempted units as prescribed under part III of Chapter 7 of CBEC’s Excise Manual of Supplementary Instructions, 2005.

5 Some difficulty has been expressed on behalf of producers of coal with regard to the registration of each mine. Centralised registration facility on the lines of that available for the purpose of the Clean Energy Cess imposed on this item last year has been permitted to coal producers in terms of Notification No. 10/2011-CE (NT), dated 24th March, 2011.

Source- LETTER D.O.F.NO. B-1/3/2011-TRU, DATED 25-3-2011

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September 2021