Subject: Textiles Sector- Changes in the excise duty structure- Regarding
I am directed to say that the following changes have been made in the excise duty structure relating to the textiles sector and notification Nos. 24 & 30/2000-CE and 24 to 28 & 30 to 32/2000-CE(NT) all dated the 31st March, 2000 have been issued in this regard.
Independent textile processors working under section 3 A:
2. The pre-budget position allowing abatement under sub-section (3) of section 3A to independent textile processors, in respect of closed and sealed stenters has been restored with effect from 1.4.2000. However, such abatement will be permissible only on closure of the stenter for a period of not less than fifteen days. The abatement will henceforth be sanctioned by the Joint Commissioner of Central Excise instead of the Commissioner. Rule 96ZQ of the Central Excise Rules, 1944, has been suitably amended for this purpose (notification No. 31/2000-CE(NT) refers). Notification No. 28/2000-CE has been issued bringing about some minor drafting changes in clause (a) of item (II) of notification No. 19/2000-CE
3. It has been decided to delegate the power with regard to determination of the annual capacity of production of the factory of the independent processor to the Deputy Commissioner of Central Excise/Assistant Commissioner of central Excise w.e.f. from 1.4.2000. Hot-air Stenter Independent Textile Processors Annual Capacity Determination (Amendment) Rules, 2000, have been suitably amended for this purpose. Notification No. 26/2000-CE(NT) may kindly be referred to in this regard. Accordingly, the assessees will henceforth file the declaration for determination of annual capacity of production to the Deputy Commissioner/ Assistant Commissioner in charge of the Division, with a copy to the Range Superintendent.
4. The deemed credit of the duty paid on the inputs, presently allowable in terms of sub-rules(5) and (6) of rule 57A of the Central Excise Rules, 1944, will henceforth be allowable in terms of rule 57AK of the Central Excise Rules, 1944. Accordingly, notification Nos. 29/96-CE(NT), dated 3.9.96, 16/2000-CE(NT) dated 1.3.2000 and 17/2000-cE(NT), dated 1.3.2000, issued under the earlier powers have been rescinded(notification Nos. 24 & 25/2000-CE(NT) refer) and Notification Nos. 28,30 and 32/2000-CE(NT), have been issued under rule 57AK, allowing the deemed credit with effect from 1.4.2000. Consequently, reference to notification No. 29/96-CE(NT) in para 2 of the Notification No. 17/2000-CE is being substituted(w.e.f. .1.4.2000) with a reference to notification No. 28/2000-CE(NT) (notification No. 30/2000-CE refers).
Explanation I in both the notification Nos. 28 & 32/2000-CE(NT), clarifies (as presently clarified under the Explanation to sub-rule (5) of rule 57A) that if the inputs declared under the said notifications are used directly by a manufacturer of final products, notwithstanding the actual amount of duty paid on such declared inputs, credit equivalent to the declared duty shall be allowed to the manufacturer. The deemed credit of Rs. 18 per kg. allowed in respect of texturised yarn(including draw twisted and draw would yarn) of polyesters has been extended to manufacturers of woven pile fabrics falling under heading 58.01 also (notification No. 29/2000-CE(NT) refers).
5. A specific duty of Rs. 2.50 per kg. was imposed in the budget (S.No. 114 of notification No. 6/2000-CE), on texturised yarn (including draw twisted and draw wound yarn) of polyesters falling under heading No. 54.02, manufactured by an independent texturiser, subject to the conditions specified therein. However, in the definition of independent texturiser (under notification No. 21/1999-CE(NT) and sub-rule (7A) of rule 57H, the product was described as texturised yarn only. This discrepancy has now been removed and in clause of sub-rule (2) to 57AB and sub-rule(3) of rule 57AG, the product description of texturised yarn has been amended to include draw twisted and draw wound yarn also.
6. It may further be noticed that as per clause (c) of sub-rule (2) to 57AB, CENVAT credit will not be available to the independent texturisers only in respect of the inputs used in the manufacture of texturised yarn (including draw-twisted and draw-wound yarn ) of heading No. 54.02. It is clarified that where an independent texturiser is also involved in the manufacture of goods other than texturised yarn (e.g. fabrics) on which he discharges normal excise duty, the CENVAT credit shall be allowed in respect of the inputs used by such independent texturiser for the manufacture of such other goods. an independent texturiser who manufactures texturised yarn (including draw twisted or draw wound yarn) of polyesters falling under heading No. 54.02, and also any “other goods”, shall be allowed to take actual credit of the duty paid on inputs used for the manufacture of such “other goods”, lying in stock as on the 1st day of March, 2000 or received in his factory on or after the 1st day of March, 2000.
8. Copies of the notifications follow.
9. The Trade and Association may be advised suitably. The Officers may be instructed to clarify promptly any doubt that may be brought to their notice.