Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit, New Delhi
Subject: Scope of Notification No. 1/93-CE as amended.
I am directed to say that certain doubts have been raised regarding the scope of notification no. 1/93-CE dated 1.3.93 as amended relating to the option given to a manufacturer to pay excise duty at the normal rate as per para 4 of the said notification. The point raised is whether a manufacturer who is having two factories and eligible for the SSI exemption under notification No. 1/93-CE can opt for payment of duty at the normal rate introspect of one unit and avail the exemption under the said notification in respect of the other.
2. The matter has been examined and the position is clarified as under. As per para one of the notification, exemption (salb-wiae) has been provided to a manufacturer in respect of clearances made in a financial year. Para two of the notification stipulates that while computing the various slabs of exemption and eligibility, clearances, effected by a manufacturer from all his factories should be taken into account, Para 4 of the notification gives an option to the manufacturer to pay excise duty at normal rate subject to the condition that the sub-sequent clearances effected by his should suffer duty at normal rate and not at the concessional rate. A combined reading of these paras reveals that as far as a manufacturer is concerned, his clearances from all factories should be taken into account for the purpose of paying duty at the concessional rate or at the normal rate as per his option; otherwise the condition stipulated in para 2 will be violated.
3. In view of the above position, it is clarified that a manufacturer does not have an option to pay at the normal rate in respect of one unit and simultaneously claim exemption under notification no. 1/93-CE in respect of other unit. In other words. when a manufacturer exercises the option for payment of duty at the normal rate, it shall be with respect of the clearances made by him from all his factories.
4. The above position may be brought to the notice of all the field formations for guidance and necessary action.