Central Excise Circular No. 660 dated 9^th September 2002

Notification Nos. 46/2002-Central Excise, 47/2002-Central Excise and 29/2002-Central Excise (N.T.), all dated 6th September, 2002 have been issued so as to restore the excise exemption in respect of the hand processing of textile fabrics and the Rs. 1 crore exemption limit for ball or roller bearing industry.

Restoration of the exemption in respect of hand processors

2.      It may be recalled that prior to this year�s Budget, woven fabrics of cotton and man-made fibres, subjected to 12 and 7 specified processes respectively with the aid of power were exempt from excise duty, subject to the condition that the said fabrics were processed in a factory which does not have the facilities (including plant and equipment) for carrying out bleaching, dyeing or printing or any one or more of these processes with the aid of power or steam.

3.      Notification No. 47/2002-CE seeks to, inter alia, amend notification Nos. 9/96-CE, dated 23-7-2002 and 6/2002-CE, dated 1-3-2002, so as to restore the pre-Budget exemption [both basic and additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957] in respect of woven fabrics of cotton and man-made fibres subjected to the 12 and 7 specified processes respectively with the aid of power. This exemption would, however, be available subject to the condition that the aforesaid specified processes are carried out in a factory which does not have the facilities (including plant and equipment) for carrying out bleaching, dyeing or printing or any one or more of these processes with the aid of power or steam (S.No. 1 and 2 refer).

4.      Consequently, notification Nos. 14/2002-CE and 6/2002-CE (NT), both dated 1-3-2002, have also been amended vide notification Nos. 47/2002-CE (S.No. 5 refers) and 29/2002-CE (NT), both dated 6-9-2002 so as to delete the provisions pertaining to leviability of excise duty in respect of woven fabrics of cotton subjected to open-air stentering by an independent textile processor and the admissibility of deemed credit thereon.

Restoration of the Rs. 1 crore exemption limit for ball or roller bearing industry

5.      The eligibility of the ball or roller bearings industry for the general SSI exemption was removed in the 2001 Budget. Subsequently vide notification 24/2001-CE dated 30-4-2001, a special scheme having a full exemption of Rs 25 lakhs was formulated for this industry.

6.      Notification 46/2002-CE dated 6-9-2002 seeks to rescind notification 24/2001-CE. Simultaneously, vide notification 47/2002-CE dated 6-9-2002, the Annexure to Notifications 8/2002-CE and 9/2002-CE both dated 1-3-2002 has been amended so as to make ball or roller bearings eligible for the general SSI exemption. Suitable amendments have also been made so that the clearances already made during this financial year are taken into account when computing the exemption limit of Rs 1 crore and also to stipulate that no refund can be claimed with respect to any clearances on payment of duty, made prior to 6-9-2002.

7.      Trade may be suitably informed.