Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Circular No. 960/03/2012-CX
New Delhi, the 17th February, 2012
To
All Chief Commissioners of Central Excise & Customs,
All Chief Commissioners of Central Excise,
All Directors Generals
Sir/Madam,
Sub : Clarification regarding admissibility of exemption under area-based
Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 in specific
situations – reg.
Your kind attention is invited to Notifications No. 49/2003-CE and 50/2003-CE,
both dated 10.06.2003 which provide full exemption from excise duties to
specified goods cleared from industrial units in the states of Uttaranchal and
Himachal Pradesh for a period of ten years from the date of commencement of
commercial production. The exemption is available to new units set up or
existing units which have undergone substantial expansion in terms of the said
Notifications and commence commercial production before the cut-off date, that
is, on or before 31.3.2010
- References have been received from field formations as well as from trade and
industry seeking clarification regarding admissibility of benefit under
area-based exemption Notifications No. 49/2003-CE and 50/2003-CE, both dated
10.06.2003, in the following situations:
- When there is a change in the ownership of a Unit already availing of the
benefit of an area-based exemption Notification;
- When a Unit availing of the exemption physically shifts to a new location
within the areas specified in the exemption Notification; and
- When a Unit availing of the exemption under an area-based Notification
expands by acquiring a plot of land adjacent to its existing premises and
installing new plant/machinery on such land.
- The above issues have been examined by the Board. As the exemption is
extended to a ‘Unit’, any change in its ownership would not jeopardize the
admissibility of exemption for the remaining part of the ten year exemption
period subject to the condition that the new owner exercises his option in
writing to avail of the benefit of the exemption Notification before effecting
the first clearance.
- So far as the case of an eligible unit physically shifting to a new location
is concerned, it is clarified that the exemption in such cases should be
available for the residual period of exemption. However, the cases of relocated
units should be examined on a case – to- case basis and the exemption should be
allowed to continue subject to certain safeguards like establishing through
proper inventorisation and certification by a Chartered Engineer that the unit
has relocated its plant, machinery, equipment, manpower etc. and relocation to
areas specified in the relevant Notification only and not across States and/or
Notifications.
- In the context of expansion of a Unit by acquiring an adjacent plot of land
and installing new plant and machinery on such land, attention is invited to
Board’s Circular No. 939/29/2010-CX dated 22.12.2010 wherein it was, interalia,
clarified that any growth in the production/output of a unit by installing fresh
plant and machinery would be eligible for exemption under these area-based
Notifications. The situation of expansion of an eligible unit by acquiring an
adjacent plot of land and installing new plant and machinery on such land, is
akin to expansion by way of installing new plant and machinery inside the
existing plot/premises. It is, therefore, clarified that in such cases, the
exemption should continue to be available for the residual period of exemption.
- Trade, industry and field formations may be suitably informed.
- Hindi version will follow.
Yours faithfully,
(Madan Mohan)
Under Secretary (CX-3)
F. No. 110/03 /2011-CX-3