Embroidered Fabrics, Introduction, Duty Payable under Special Procedure, Conditions, Application Special Procedure, Transitional Provision.
Duty payable under special
Application to avail of
Opting out of the special
of liability for duty on payment of certain sum
Default in payment of duty
Returns and intimations
Exemption from certain provisions
condone failure to apply for special procedure
Confiscation and penalty
1.1 The Central Government has specified under rule 15 of the Central Excise
(No. 2) Rules, 2001 (hereinafter referred to as the ‘said Rules’) rate of
duty and special procedure for embroidery in the piece, in strips or in
motifs on cotton fabrics, man made fabrics, silk fabrics or woollen fabrics
by notification No. 33/2001-(Central Excise) dated 28th June, 2001. This
notification is effective from 1st July, 2001.
- Duty payable under special procedure
2.1 An assessee shall have the option to pay the duty of excise on
the basis of meter length of the machine per shift and fixes a rate of duty
of Rs. 45 per meter length of the machine (i.e. the distance between the
points provided for the first needle and the last needle of only one roller
of the machine) per shift (i.e. a period not exceeding eight hours working
in a day, exclusive of rest interval, provided the work of the same kind is
carried out by the same set of workers), for embroidery machines utilised
for manufacture of the said goods subject to certain conditions.
3.1 The conditions to be complied with for availing the special
procedure are, as follows:
- No credit of duty paid on inputs used in the manufacture of the
embroidery and capital goods used within the factory of manufacture of
such embroidery shall be taken under the CENVAT Credit Rules, 2001, and
- The procedure mentioned in the notification is followed.
- Application to avail of special procedure
4.1 A manufacturer of embroidery in the piece, in strips or in motifs
(hereinafter referred to as "the embroidery") shall make an application in
the form specified in Annexure 30 to the said notification to the
Superintendent of Central Excise in this behalf.
4.2 The application shall be made so as to cover a period of not less than
six consecutive calendar months, but may be granted for a shorter period,
for reasons to be recorded in writing by the Assistant Commissioner or the
Deputy Commissioner, as the case may be.
4.3 If the manufacturer desires to avail himself of the special procedures
contained herein on the expiry of the period for which his application was
granted, he shall, not later than a week before such expiry, make an
application to the Deputy/Assistant Commissioner of Central Excise; and on
his failure to do so, he shall, except as provided herein, be precluded from
availing himself of such procedures for a period of six months from the date
of such expiry.
- Opting out of the special procedure
5.1 If, at any time during the period of availment of the special
procedure, the manufacturer desires to opt out, he shall give a notice in
writing to the Deputy/Assistant Commissioner of Central Excise in charge of
the factory of his intention at least one week in advance. Once the
manufacturer has ceased to avail himself of such special provisions, from
any date, he shall be precluded from availing himself of such procedure for
a period of six months from that date.
- Transitional provision
6.1 Notwithstanding anything contained in sub-paragraph (1), an
application made by a manufacturer before the commencement of this
notification under erstwhile sub-rule (1) of rule 96ZH of the Central Excise
Rules, 1944, shall be deemed to be an application made under sub-paragraph
(1) and the same shall be deemed to have been granted under sub-paragraph
(1) and where such application has not been granted, the Assistant
Commissioner or the Deputy Commissioner shall dispose of the same as if it
is an application under sub-paragraph (1).
Discharge of liability for duty on payment of certain sum
7.1 If a manufacturer whose application has been granted pays
before the commencement of any shift a sum calculated according to such
rate, in the manner and subject to the conditions herein laid down, such
payment shall be in full discharge of his liability for the duty leviable on
his production of the embroidery during the said shift.
7.2 If there is revision in the rate of duty, the sum payable shall be
recalculated on the basis of the revised rates from the date of revision and
liability for duty leviable on the production of the embroidery from that
date shall not be discharged unless the differential duty is paid, and in
case the amount of duty so recalculated is less than the sum paid, the
balance shall be refunded to the manufacturer:
7.3 The sum payable shall be calculated by application of the appropriate
rate to the meter length of each of the machines intended to be employed by
the manufacturer during the shift.
7.4 The sum shall be paid by such manufacturer by debit in the
account-current maintained under these provisions before commencement of the
- Default in payment of duty
8.1 If the payment of duty is not made in the prescribed manner and
within the specified time-limit, the manufacturer shall, unless otherwise
directed by the Deputy/Assistant Commissioner of Central Excise, and in
exceptional circumstances, be liable to pay duty on his entire production of
the embroidery during the shift or shifts, in respect of which the payment
was to be made, at the rate specified in the First Schedule to the Central
Excise Tariff Act, 1985 (5 of 1986). However, where the period of delay is
upto five days, the decision will be taken by the Superintendent of Central
- Manufacturer’s accounts
9.1 The manufacturer shall keep account-current with the
Commissioner, of the sums payable by him under the special procedure. Such
account-current shall be maintained in triplicate by using indelible pencil
and double sided carbon and the assessee shall periodically make credit in
such account-current by cash payment into the treasury so as to keep
sufficient balance in such account-current to cover the sums payable.
9.2 The manufacturer shall maintain a Daily Stock Account in the form
specified in Appendix II to the said notification.
- Returns and intimations
10.1 The manufacturer shall file a monthly return in proper form
prescribed under rule 12 of the said Rules appending therewith two carbon
copies of the Daily Stock Account duly signed.
10.2 The manufacturer shall intimate the Superintendent of Central Excise in
writing of any change in the number, meter length and speed of the machines
installed by him; and
- Exemption from certain provisions
11.1 During the period in respect of which a manufacturer has been permitted
to avail himself of the special procedure under the said notification, he
shall be exempt from the operation of the provisions of rule 8 of the said
11.2 Except in accordance with such terms, conditions and limitations as the
Central Government may by notification specify in this behalf, no rebate of
excise duty shall be paid under rule 18 of the said Rules, in respect of any
embroidery exported out of India out of the stock produced by such
manufacturer during such period.
Power to condone failure to apply for special procedure
12.1 Notwithstanding anything contained in the aforesaid
notification, the Additional/Joint Commissioner of Central Excise may, at
his discretion and subject to such conditions as he may deem fit, apply the
provisions contained in the said notification to a manufacturer who has
failed to avail himself of the special procedure, or to comply with any
condition, laid down in the said notification.
- Confiscation and penalty
13.1 If any manufacturer contravenes any provision of the said
notification in respect of any excisable goods, then all such goods shall be
liable to confiscation, and the manufacturer shall be liable to penalty
under rule 25 of the said Rules.