Notification exempts small scale industries from payment of excise duty for clearances upto Rs.1 Crore

New Delhi, dated the 1^st March . 2000

11 Phalguna, 1921 (SAKA)

Notification No.08/2000-Central Excise

No. 8 /2000 – CENTRAL EXCISE, dated 1-3-2000 (effecter from 1-4-2000), as amended by Notification No. No. 31/2000-CE., dated 31-3-2000,  No. 47/2000-CE., dated 1-9-2000 and No. 6/2001-CE., dated 1-3-2001.

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption, of excisable goods of the description specified in the Annexure appended to this notification (hereinafter referred to as “the specified goods”), from so much of the aggregate of –

(i) the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and

(ii) The special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act,

as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table

TABLE

‘ILLUSTRATIONS REGARDING SL NO 1 OF THE TABLE (In these Illustrations, “clearances” means clearances for home consumption)

Illustration 1. As on the 31^st day of August, 2000, a manufacturer has made clearances of an aggregate value of forty lakh rupees at nil rate of duty. He shall be entitled to additional duty free clearances upto an aggregate value of sixty lakh rupees, only in the remaining part of the financial year 2000-2001.

Illustration 2. As on the 31^st day of August, 2000, a manufacturer has made clearances of an aggregate value of sixty lakh rupees, comprising of fifty lakh rupees at nil rate of duty and ten lakh rupees at the concessional rate of duty at five per cent. He shall be entitled only to additional duty free clearances upto an aggregate value of forty lakh rupees only, during the remaining part of the financial year 2000-2001.

Illustration 3. As on the 31^st day of August, 2000, a manufacturer has made clearances of an aggregate value of one hundred and ten lakh rupees, comprising of fifty lakh rupees at nil rate of duty , fifty lakh rupees at the concessional rate of duty of five per cent and ten lakh rupees at the normal rate of duty. He shall not be entitled to any additional clearances at nil rate of duty during the remaining part of the financial year 2000-2001.

2. The exemption contained in this notification shall apply subject to the following conditions, namely:-

1. A manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year.

2. While exercising the option under condition (i), the manufacturer shall inform in writing to the Deputy Commissioner or Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely:-

1. name and address of the manufacturer;

2. location/ locations of factory / factories;

3. Description of specified goods produced;

4. date from which option under this notification has been exercised;

5. aggregate value of clearances of specified goods (excluding the value of clearances referred to in paragraph 3 of this notification) till the date of exercising the option;

1. The manufacturer shall not avail the credit of duty under rule 57AB or rule 57AK of the Central Excise Rules, 1944, paid on inputs used in the manufacture of the specified goods cleared for home consumption, the aggregate value of first clearances of which, as calculated in the manner specified in the said Table does not exceed rupees one hundred lakhs.

2. The manufacturer also does not utilise the credit of duty under rule 57AB of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed rupees one hundred lakhs, as calculated in the manner specified in the said Table.

3. Where a manufacturer clears the specified goods from one or more Factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory.

4. Where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer.

5. The aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding financial year;

3. For the purpose of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely:-

1. clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason;

2. clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4;

3. clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;

4. Clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene.

5. clearances of hot re-rolled products of non alloy steel falling under sub-heading Nos. 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90, lying in stock on 31st March, 2000, on which duty of excise has been paid under section 3A of the Central Excise Act, 1944;

6.  clearances of ingots and billets of non-alloy steel falling under sub-heading Nos. 7206.90 and 7207.90, lying in stock on 31stMarch, 2000, on which duty of excise has been paid under section 3A of the Central Excise Act, 1944

1.  The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases:-

1.     where the specified goods, being in the nature of components or parts of any manchinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in Chapter X of the Central Excise Rules, 1944. Manufacturers, whose aggregate value of clearances of the specified goods for use as original equipment does not exceed rupees fifty lakhs in the financial year 1999-2000 as calculated in the manner specified in paragraph 1 may submit a declaration regarding such use instead of following the procedure laid down in Chapter X of the said rules;

2. where the specified goods bear a brand name or trade name of –

1. the khadi and Village Industries Commission; or

2. a state Khadi and Village Industry Board; or

3. the National Small Industries Development Corporation; or

4. a State Small Industries Development Corporation; or

5. a State Small Industries Corporation;

1. where the specified goods are manufactured in a factory located in a rural area.

4A. The following transitional provisions shall apply for the period from 1^st March, 2001 to 31^st March 2001, both days inclusive, in respect of the manufacturers of woven pile fabrics and chenille yarn i.e the goods specified in clause (a) of the second proviso, against Sl No 1, in column(2) :-

(1) notwithstanding anything contained in paragraph 1, the aggregate value of clearances of woven pile fabrics or chenille yarn, or both that shall be allowed to be cleared at nil rate of duty shall be determined in accordance with clauses 2) to 5) ;

(2) a manufacturer whose aggregate value of clearances for home consumption, as on 28^th February , 2001 does not exceed rupees ninety lakhs is only entitled to make clearances for home consumption of an aggregate value not exceeding ten lakhs, at nil rate of duty ;

(3) a manufacturer whose aggregate value of clearances for home consumption as on 28^th February , 2001, exceeds rupees ninety lakhs , is only entitled to make clearances for home consumption, at nil rate of duty , of an aggregate value equal to the difference between hundred lakhs and the aggregate value of clearances for home consumption as on the 28^th of February, 2001;

(4)a manufacturer whose aggregate value of clearances for home consumption as on 28^th February , 2001 exceeds rupees one hundred lakhs , is not entitled to make any clearances for home consumption at nil rate of duty ;

(5) for the purposes of these transitional provisions, the aggregate value of clearances shall mean the aggregate value of clearances of woven pile fabrics or chenille yarn, as the case may be, determined in accordance with the provisions of paragraph 3 above

Illustration 1.- As on 28^th February, 2001, a manufacturer of woven pile fabrics or chenille yarn has made clearances for home consumption of an aggregate value of rupees eighty five lakhs. He is entitled to clearances of an aggregate value of rupees ten lakhs at nil rate of duty.

Illustration 2.- As on 28^th February, 2001, a manufacturer of woven pile fabrics or chenille yarn has made clearances for home consumption of an aggregate value of rupees ninety five lakhs. He is entitled to clearances of an aggregate value of rupees five lakhs at nil rate of duty.

4B. The following transitional provisions shall apply for the period 1^st March, 2001 to 31^st March 2001,both days inclusive, in respect of the manufacturers of goods specified in clause(b) of the second proviso, against Sl No 1, in column(2) :-

(1) notwithstanding anything contained in paragraph 1, the aggregate value of clearances of any one or more of the goods specified in clause(b) of the second proviso, against Sl No 1, in column(2) , ,that shall be allowed to be cleared at nil rate of duty shall be determined in accordance with clauses (2) and (3) below

(2) a manufacturer is only entitled to make clearances for home consumption, of an aggregate value not exceeding rupees ten lakhs, at nil rate of duty.

(3) for the purposes of these transitional provisions, the aggregate value of clearances shall mean the aggregate value of clearances of any one or more of the goods specified in clause(b) of the second proviso, against Sl No 1, in column(2) , determined in accordance with the provisions of paragraph 3 above.

1.     This notification shall come into force of the 1st day of April, 2000.

Explanation.- For the purposes of this notification.-

1.     “brand name” or “trade name” means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or with out any indication of the identity of that person;

2.     where the specified goods manufactured by a manufacturer bear a brand name or trade name, whether registered or not, of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader;

3.     “value” means

1.     in respect of specified goods which have been notified under section 4A of the Central Excise Act 1944(1 of 1044), the value as determined in accordance with the provisions of that section, and

2.     in respect of specified goods other than those referred to in sub clause (i), the value as determined in accordance with the provisions of section 4 of the Central Excise Act, 1944 (1 of 1944), or the tariff value fixed under section 3 of the said Act;

1.     in the determination of the value of clearances of Chinaware or Porcelainware or both, where a manufacturer gets Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Center run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or Porcelainware or both, belonging to said manufacturer and fired in such kiln shall be taken into account;

2.     where the specified goods are manufactured in a factory belonging to or maintained by the Central Government or by a State Government, or by a State industries Corporation, or by a State Small Industries Corporation or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account;

3.     “normal rate of duty” means the aggregate of duty of excise specified in the First Schedule to the said Central Excise Tariff Act, 1985 (5 of 1986) and the special duty of excise specified in the Second Schedule to the said Central Excise Tariff Act read with any relevant notification (other than this notification or a notification in which exemption is based on the value or quantity of clearance) issued under sub-section (1) of section 5A of the said Central Excise Act, 1944;

4.     “clearances for home consumption”, wherever referred to in this notification shall include clearances for export to Bhutan and Nepal.

5.     ” rural area” means the are comprised in a village as defined in the land revenue records excluding-

1.     the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, or

2.     any area that may be notified as an urban area by the Central Government or a State Government.

1.     refund of duty paid at the concessional rate of five per cent on any clearances made before the 1st day of September 2000 on the ground that such clearances are included in the aggregate value of clearances under Sl.No.1 of the TABLE, shall not be admissible.

I. “retail sale price” means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight , transport charges, commission payable to dealers and all charges towards advertisement, delivery, packing , forwarding and the like, as the case may be, and the price is the sole consideration for such sale.

ANNEXURE

1.     All goods specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely:-

1.     all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon;

2.     all goods falling under heading No. 09.02;

3.     all goods falling under heading No. 21.06 and sub-heading Nos. 2101.10 and 2101.20;

4.     all goods falling under Chapter 24 of the said Schedule (other than unbranded chewing tobacco and preparations containing chewing tobacco, falling under heading No. 24.04 of the said Schedule);

5.     all goods falling under heading No. 25.04;

6.     sandalwood oil;

7.     all goods falling under heading No. 36.05;

8.     all goods falling under heading Nos. 37.01, 37.02, and sub-heading No. 3703.10;

9.     strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyulrethane foam; falling under Chapter 39;

10.   all goods falling under Chapter 51 of the said Schedule other than those falling under sub-heading Nos. 5105.30 and 5105.40 and heading Nos. 51.06, 51.07, 51.08, 51.09, 51.10, and 51.11 (except woven fabrics of wool falling under heading Nos. 51.10 or 51.11) and under 51.12;

11.   all goods falling under Chapter 52 of the Schedule other than goods falling under heading No. 52.04;

12.   all goods falling under Chapter 53 of the Schedule except goods falling under heading Nos. 53.01, 53.02, 53.04, 53.05, 53.08 (other than goods falling under sub-heading No. 5308.14), 53.11 (other than woven fabrics of ramie);

13.   all goods falling under Chapter 54 of the Schedule except goods falling under heading Nos. 54.01,

14.   all goods falling under Chapter 55 of the Schedule except goods falling under heading Nos. 55.05, 55.08 and shoddy yarn manufactured from used or new rags falling under heading No. 55.09, 55.10;

15.   all goods falling under Chapter 56 of the Schedule except goods falling under heading Nos. 56.01, 56.02, 56.03, 56.04, 56.05, (other than of man-made filaments), chenille yarn falling under sub-heading No. 5606.00, 56.07 (other than of jute), 56.08, and 56.09;

16.   all goods falling under Chapter 57 of the said Schedule;

17.   all goods falling under Chapter 58 of the said Schedule except goods falling under heading Nos. 58.03, 58.06, 58.07, 58.08, uncut grey (unprocessed) woven weft pile fabrics of cotton manufactured from grey unprocessed cotton yarn falling under sub-heading No. 5801.21,  unprocessed woven pile fabrics of cotton falling under sub-heading No. 5801.21 and unprocessed woven pile fabrics of man-made fibres falling under sub-heading No. 5801.31, fabrics of cotton or man-made fibres falling under sub-heading No. 5802.51, and unprocessed cotton terry towelling fabrics falling under sub-heading No. 5802.21;

18.   all goods falling under Chapter 59 of the Schedule except goods falling under Heading Nos. 59.01, 59.05, 59.06, 59.08, 59.09, 59.10, 59.11 and textile fabrics coated or laminated with preparations of low-density polyethylene;

19.   all goods falling under Chapter 60 of the Schedule except goods falling under Heading Nos. 6002.10 and fabrics of cotton man-made fibres not subjected to any process falling under heading Nos. 60.01 or 60.02;

xixa. all goods falling under chapter 62;

xx.   blankets of wool falling under Chapter 63 of the said Schedule;

xxi.  aluminium circles, whether or not trimmed, falling under Chapter 76;

xxii. (A) All goods falling under-

1.     heading No. 74.03, excluding the following goods falling under sub-heading No. 7403.21, namely-

1.     cast brass bars/rods of a length not exceeding 3 feet,

2.     cast brass bars/rods of a length not exceeding 10 feet used in the factory of production for making wires falling under sub-heading No. 7408.29,

3.     copper flats of a weight not exceeding 2 kilograms used for making copper strips falling under heading No. 74.09,

4.     brass billets weighing upto five kilograms.

1.     heading No. 74.09 (excluding copper strips produced from copper flats of a weight not exceeding 2 kilograms),

2.     sub-heading Nos. 7407.11, 7407.12, 7408.11, 7408.21; and

(B) copper circles, whether or not trimmed.”(C) ball or roller-bearings falling under chapter 84

(xxiii) all goods falling under heading Nos. 87.01, 87.02, 87.03, 87.04, 87.05, 87.06 and 87.11 [other than powered cycles and powered cycle rickshaw (“powered cycle” or powered rickshaw means a mechanically propelled cycle or, as the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so doing];(xxiv) all goods falling under heading Nos. 91.01 or 91.02;

(xxiv-a) all goods falling under chapter 93;

(xxv) all goods falling under sub-heading Nos 9605.10.

(T.R.RUSTAGI)

JOINT SECRETARY TO THE GOVERNMENT OF INDIA

F.No 334/1/2000