Notification No. 32 dated 28^th June 2001 (As amended vide notification no. 41 dated 21^st September 2001, 53 dated 13^th November 2001)

In exercise of the powers conferred by rule 15 of the Central Excise (No. 2) Rules, 2001, (hereinafter referred to as �the said Rules�) the Central Government, hereby, specifies the processed textile fabrics falling under heading Nos. 52.07, 52.08, 52.09, 54.06, 54.07, 55.11, 55.12, 55.13 or 55.14, or processed textile fabrics of cotton or man-made fibres, falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12, 6001.22, 6001.92, 6002.20, 6002.30, 6002.43, or 6002.93 (hereinafter in this section referred to as the �said goods�) of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), manufactured or produced by an independent textile processor exclusively with the aid of a hot-air stenter (hereinafter referred to as �independent textile processor�), and notifies the rate of excise duty as -

(a)    in the case of a processing factory whose average value of processed fabric is upto and including Rs. 30 per sq. mtr., Rs. 2.5 lakhs per chamber per stentor per month; and

(b)    in the case of a processing factory whose average value of processed fabric exceeds Rs. 30 per sq. mtr., Rs. 3 lakhs per chamber per stentor per month,

installed in the processing factory, irrespective of whether such stentor or chamber is in use or not, or is in working condition or not.

2.     For the purpose of payment of duty of excise, -

(i)     In the case of a processing factory, existing as on 1^st May, 2001, of an independent textile processor, the number of chambers of the hot air stentor installed in such processing factory as on 31^st March, 2001 or 1^st May, 2001, whichever is higher, shall be taken into account;

(ii)    In the case of new processing factory coming into existence after 1^st May, 2001, the number of chambers of the hot air stentor installed in such processing factory as on the date the application was made under rule 96ZNA of Central Excise Rules, 1944, and if not, then as on the date the application under paragraph 7 of this notification has been made, as the case may be, shall be taken into account,

subject to the other provisions contained hereinafter.

3.     The average value of the said goods (per square meter) for the factory of the independent textile processor shall be arrived at by dividing the total value of the said goods cleared from the said factory in the immediately preceding financial year by the total quantity of the said goods cleared during the preceding financial year:

Provided that where the said goods are manufactured or produced by a new unit or a closed unit of such factory for which the average value as specified above cannot be calculated, the average value of such goods shall be the average value declared by the independent textile processor at the time of making the application under rule 96ZNA of the Central Excise Rules, 1944 or under this notification; but the amount of duty payable on the said goods shall be re-worked at the end of the financial year on the basis of actual average value of the said goods manufactured or produced in that financial year.

4.     The duty levied and collected on the said goods shall be the aggregate of the duty leviable under the Central Excise Act, 1944 (1 of 1944) and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and shall be apportioned in the ratio of 1:1 between the duty leviable under both the aforesaid Acts.

5.     In case the independent textile processor proposes to make any change in the installed machinery or any part thereof which tends to change the number of chambers in the hot-air stenters installed in his factory, he shall intimate, about the proposed change, to the Commissioner of Central Excise in writing, with a copy to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, one month in advance of such proposed change, and shall obtain the written approval of the Commissioner of Central Excise before making such change, hereafter the Commissioner of Central Excise shall determine the date from which the change in the number of chambers shall be deemed to be effective:

Provided that where any change in the installed machinery or any part thereof during a financial year results in the reduction in the number of chambers in a hot-air stentor or in the number of hot-air stentors, installed in the processing factory, no account of such reduction shall be taken into account for computing the duty payable under this notification during that financial year and the duty of excise shall be payable during that financial year as if no such reduction in the number of chambers or hot air stentors had taken place.

6.     For the purposes of this notification,-

(a)    a chamber (of hot-air stenter), having a rail length of upto 3.05 meter on each side, installed in the factory of the independent textile processor shall be construed as one chamber and any fraction exceeding such rail length of any such chamber shall be computed on a pro rata basis;

(b)    a float drying machine or any other equipment, except the galleries, of a length 3.05 meters installed in or attached to a stenter for aiding the process of heat-setting or drying of the fabrics shall be deemed to be one chamber of a stenter and any fraction of such length shall be computed on a pro rata basis.

7.

(1)    The independent textile processor, who is engaged exclusively in the manufacture or production of the said goods, shall be make an application prior to the commencement of commercial production, in the form specified in the APPENDIX to this notification, to the Commissioner of Central Excise for the purpose of availing of the special procedure for payment of excise duty as contained in this notification. The Commissioner of Central Excise, on such application being made, shall grant permission, subject to such conditions and limitations as laid down in this notification, so as to cover the period commencing from the date of making the application and ending on the 31^st March 2002. Pending grant of such permission by the Commissioner of Central Excise, the independent textile processor may avail the provisions of this notification on a provisional basis. But if such application is rejected by the Commissioner of Central Excise, then the independent textile processor shall not be eligible to avail of the provisions of this notification from the date of making the application and shall discharge the duty liability as per the provisions contained elsewhere than in this notification and the duty, if any, paid under the provisions of this notification, shall be adjusted against the duty payable on such goods.

(2)    Notwithstanding anything contained in sub-paragraph (1), in respect of a processing factory existing as on 1^st May, 2001, the application made by an independent textile processor, on or before the 20^th May, 2001, to the Commissioner of Central Excise under sub-rule (2) of rule 96ZNA for availing the special provisions contained in section E-XA of the Central Excise Rules, 1944, for the period on and from 1^st May, 2001 to 31^st March, 2002, shall be deemed to be an application made under sub-paragraph (1). If such application had been granted by the Commissioner of Central Excise on a date prior to 1^st day of July, 2001, the same shall be deemed to have been granted under sub-paragraph (1), subject to all the conditions and limitations as laid down in this notification. Otherwise, the Commissioner shall dispose of the application as if it is an application made under sub-paragraph (1).

Provided further that an application made prior to the commencement of commercial production by an independent textile processor, commencing production for the first time in a new processing factory coming into existence after the 1st May, 2001 but prior to 1^st July, 2001, under the proviso to sub-rule (2) of rule 96ZNA of the Central Excise Rules, 1944, so as to cover the period upto the 31^st March, 2002, shall also be deemed to be an application under sub-paragraph (1) and shall be disposed of under that sub-paragraph. If such application had been granted by the Commissioner of Central Excise under rule 96ZNA of the Central Excise Rules, 1944, so as to cover the period upto 31^st March, 2002, such disposal shall be deemed to be the disposal of the application under sub-paragraph (1), subject to all the conditions and limitations as laid down in this notification.

8.

(1)    The original value of the investment in the plant and machinery installed in the factory of the independent textile processor of the said goods, as on the 1^st March, 2001 or on the 1^st of May, 2001, whichever is higher, for a factory existing as on 1^st May, 2001, of the independent textile processor or on the date of making the application under rule 96ZNA of the Central Excise Rules, 1944 or paragraph 7 of this notification, as the case may be, in the case of an independent textile processor commencing production for the first time in a new factory coming into existence after the 1^st of May, 2001, shall not exceed three crore rupees, irrespective of whether such plant and machinery is in use or not, or in working condition or not, and the independent textile processor shall declare the original value of investment in such plant and machinery installed in his factory, on the dates mentioned above, in the prescribed format duly certified by a Chartered Accountant or Cost Accountant. The Commissioner of Central Excise may require any such documentary evidence as he considers appropriate in respect of such original value before granting the application.

(2)    If any additional plant and machinery is installed by the independent textile processor at any point of time, he shall intimate the same to the Commissioner of Central Excise within seven days of such installation and the original value of investment in plant and machinery together with the original value of investment in such additional plant and machinery shall not exceed three crore rupees. Where such original value of investment exceeds the limit of three crore rupees, the provisions of this notification shall not apply from the first day of the month in which such investment exceeded the said limit of three crore rupees.

        Provided that if an independent textile processor, in respect of his processing factory, existing as on the 1^st May 2001 has made the application under rule 96ZNA of the Central Excise Rules, 1944 by the 20^th May 2001 and has been permitted to avail of the special procedure for payment of excise duty in accordance with this notification, makes a further investment in any additional new plant and machinery installed in his processing factory, then the value of that investment in such additional new plant and machinery shall not be taken into account for determining the original value of the investment in the plant and machinery installed in the factory of the said independent textile processor in accordance with the sub-paragraph (1).

(3)      The independent textile processor shall not remove any unstentored textile fabrics from his factory.

(4)    An independent textile processor of the said goods who has made the application under paragraph 7 to pay the duty of excise in accordance with this notification shall not be allowed any abatement on account of closure of factory, except as provided under paragraph 10.

(5)    The independent textile processor opting for the provisions of this notification shall not be eligible to avail of any credit of duty paid on inputs or capital goods under the CENVAT Credit Rules, 2001.

(6)    The provisions of this notification shall apply to the said goods which are manufactured or produced on or after the 1^st day of May, 2001.

(7)      Nothing contained in this notification shall apply to -

(a)   The said goods which are manufactured or produced prior to the 1^st day of May, 2001 and cleared on or after that date;

(b)    A composite mill, that is, a manufacturer or processor, who is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the factory and includes a multi-locational composite mill, that is, a public limited company which is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics in one or more factories owned by the same public limited company; or

(c)   Fabrics other than the said goods produced or manufactured by the independent textile processor.

9.

(1)    An independent textile processor of the said goods whose application has been granted under paragraph 7 shall pay an amount of duty calculated at the rate specified in this notification and subject to the conditions and limitations as laid down in this notification, such payment shall be a full discharge of his liability for duty leviable on his production of the said goods during the period for which the said amount of duty has been paid:

Provided that if there is any alteration in the rates of duty, the amount of duty payable shall be recalculated on the basis of the revised rates, from the date of alteration and liability for duty leviable on the production of the said goods from that date shall not be discharged unless the differential duty is paid, and where the amount of duty so recalculated, is less than the amount paid, the balance shall be refunded to the manufacturer:

(2)    The amount of duty payable under sub-paragraph (1) shall be debited by the independent textile processor in the account current required to be maintained by him under the said Rules.

(3)    Fifty per cent. of the duty payable for a calendar month under sub-paragraph (1) shall be paid by the 20^th of that month and the remaining amount shall be paid by the 5^th of the immediately succeeding month.

(4)    The independent textile processor shall maintain records, and file returns, pertaining to production or manufacture, clearance, storage, delivery or disposal of goods, including the materials received for or consumed in the manufacture of the said goods or other goods, the goods and materials in stock with him and the duty paid by him, as prescribed under the said Rules or any notification issued thereunder:

Provided that the independent textile processor of the said goods shall further declare in the monthly return required to be filed under the said Rules or notification issued thereunder that the original value of investment in the plant and machinery installed in his factory for the month to which the said return pertains has not exceeded three crore rupees.

Provided further that the independent textile processor shall also declare the original value of any further investment in any additional new plant and machinery installed in his processing factory in the aforesaid monthly return.

(5)    If an independent textile processor fails to pay the amount of duty under sub-paragraph (1) or any part thereof by the date specified in sub-paragraph (3), he shall be liable to,-

(i)     pay the outstanding amount of duty along with interest at the rate of twenty-four per cent. per annum calculated for the outstanding period on the outstanding amount; and

(ii)    a penalty equal to the amount of duty outstanding from him for a month payable by the 5^th of the succeeding month or rupees five thousand, whichever is greater.

(6)    If an independent textile processor removes the said goods without complying with any of the requirements contained in sub-paragraph (4), then, the said goods shall be liable to confiscation and the independent textile processor shall be liable to a penalty not exceeding ten thousand rupees.

10.   Where an independent textile processor does not produce or manufacture the said goods during any continuous period of not less than fifteen days, he may claim abatement of the duty payable by him under this notification, and such abatement shall be allowed by an order passed by the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, of such amount as may be specified in such order, subject to fulfilment of the following conditions, namely:-

(a)    the abatement shall be applicable only on complete closure of the factory and not on closure of any one or more hot-air stenters;

(b)    during the period of closure no manufacturing activity, whatsoever, including bleaching, dyeing or printing, in respect of the said goods shall be undertaken and no removal of the said goods shall be effected by the independent textile processor;

(c)    the independent textile processor shall inform, in writing, about the closure of the factory to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three days prior to the date of closure;

(d)    the stenter or stenters shall be sealed in such manner as may be prescribed by the Commissioner of Central Excise;

(e)    the independent textile processor, when he starts production again, shall inform in writing about the date of starting of production to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three days prior to the date of starting production, and get the seal opened in such manner as may be specified by the Commissioner of Central Excise before recommencing production;

(f)     the independent textile processor shall, while sending information under condition (e), declare that his factory remained closed for a continuous period starting from the hour and date to the hour and date, such hours and dates to be specified in the declaration;

(g)    when the claim for abatement by the independent textile processor is for a period of less than one month, he shall be required to pay the duty, as applicable, for the entire period of the month and may subsequently seek such claim after payment of such duty;

(h)    where the claim for abatement by the independent textile processor is for a period of one month or more, he shall not be required to pay the duty for that period in advance;

(i)     if the claim for abatement by the independent textile processor has been disallowed by the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, by a written order made in this regard, the independent textile processor shall pay the amount of duty, and interest if any applicable, prior to getting the stenter or stenters sealed under condition (d ) reopened for resuming production;

Provided that the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, where he is satisfied that the delay in giving information under condition (c) was caused due to unavoidable circumstances, may, for reasons to be recorded in writing, condone such delay.

11.   This notification shall come into force on the 1^st day of July, 2001.

APPENDIX

FORM A. S. P.

APPLICATION FOR PERMISSION TO AVAIL OF THE SPECIAL PROCEDURE RELATING TO PROCESSED TEXTILE FABRICS

(Original/ Duplicate/ Triplicate)

Name of factory/ factories _______________________________________________________

Address: ____________________________________________________________________

I/ we __________________ manufacture(s) of processed textile fabrics residing at __________________ and holder (s) of Central Excise Licence No.___________________ dated ________________ hereby apply to avail myself/ ourselves, during the period beginning with ________________ 20___ and ending with _________ 20__ of the special procedure for payment of excise duty contained in the notification issued under rule 15 of the Central Excise Rules, 2001, in respect of the production or manufacture of processed textile fabrics with the aid of power or steam at my/ our above-mentioned factory/ factories.

2.     I/ we declare below the particulars of processed textile fabrics produced or manufactured in my/ our above- mentioned factory:

3.     I/ we declare below the particulars of each of the plant and machinery installed in my/ our above- mentioned factory:

4. I/ we declare below the particulars of each hot- air stenter installed in my/ our above- mentioned factory:

5.     I/ we hereby declare that the particulars furnished above are true and correct in all respects. In case any of the particulars are found to be untrue/ incorrect, I/ we undertake to pay any additional amount of excise duty on the processed textile fabrics manufactured by me/ us as per the provisions of the Central Excise Act, 1944 (1 of 1944) or the rules or notifications issued thereunder.

6.     I/ we further declare that the original value of investment made in the above-mentioned factory is Rs________________ in support         of which the following documents and the Certificate of the Chartered Accountant/ Cost Accountant is enclosed herewith.

7.     I/ we hereby agree to abide by the terms, conditions and limitations of the said Rule 15 or any notification issued thereunder throughout the said period.

Signature of manufacturer(s) or his/ their authorised agent(s)

Place:
Date:

COUNTERSIGNED

_________________ of Central Excise

Range ___________________

Circle ___________________

Place:
Date:

Permission granted for the financial year

Place:
Date:

The period beginning with____________________

and ending with ___________________

Commissioner of Central Excise ___________________