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Matter regarding Notification No. 132/94-CE, 133/94-CE, 60/94-CE (NT) to
63/94-CE (N.T.), all dated 21.10.1994
Circular
No. 72 dated 2nd November 1994
I
am directed to forward herewith copies of Notification Nos. 132/94-CE,
133/94-CE, 60/94-CE (N.T.) to 60/94-CE (N.T.) issued in the context of solving
the difficulties in availing of Modvat credit in respect of certain textile
inputs.
2.
Under the Modvat scheme, credit of duty paid on the specified input, is
allowed as credit for payment of duty on the specified outputs. In some cases,
in the process of manufacture, certain intermediate products come into
existence. Modvat benefits are not denied so long as such intermediates are also
specified. But, if the intermediate product is not specified in the Modvat
Scheme, no input duty credit is allowed even though both the inputs and the
outputs are covered under the Modvat Scheme. For example carded or combed
cotton, containing synthetic staple fibre and falling under heading No.52.02 is
used for spinning blended yarns. It has been represented that though both
synthetic fibres and the yarn are specified, the credit of duty paid on
synthetic staple fibre being denied in some Collectorates for the reason that
heading No. 52.02 does not find mention as input/output in various notifications
under the Modvat Scheme. There have been similar problems in respect of some
other inputs also.
3.
To obviate the difficulties, following changes have now been made:
(i)
Scoured wool falling under heading No. 51.01 and carded wool falling
under heading 51.02 used in their manufacture of woollen yarn have been
specified as input and output under rule 57A and as output under rule 57Q;
(ii)
Carded/ Combed cotton falling under heading No. 52.02 and waste of
heading No.52.01used in the manufacture of spun yarns have been specified as
input and output under rule 57 A and as an output under rule 57Q.
(iii)
Unprocessed woollen fabrics falling under heading No.51.06 used in the
manufacture of processed woollen fabrics has been specified as input under rule
57A.
(iv)
Covered rubber thread falling under heading No.56.04 and covered spandex
yarn falling under heading No.56/06 used in the manufacture of narrow woven
fabrics have been specified as input under rule 57A.
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