Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
*****
Circular No.977/01/2014
New Delhi, the 3rd January, 2014
To,
Chief Commissioners of Central Excise (All),
Chief Commissioners of Central Excise and Customs (All),
Director General, Directorate General of Central Excise Intelligence,
Commissioners of Central Excise (All),
Commissioners of Central Excise and Customs (All).
Madam/Sir,
Subject: Availability of excise duty exemption to the units which have already
availed of exemption under New Industrial Policy for another 10 years by way of
2nd substantial expansion in the State of Jammu & Kashmir – Clarification –
Regarding.
Representations have been received from trade and industry associations and
field formations seeking clarification as to whether an existing unit which has
availed of excise duty exemption under
notification No.56/2002-CE &
57/2002-CE,
both dated 14.11.2002 by way of substantial expansion can avail of excise duty
exemption under
notification No.1/2010-CE, dated 06.02.2010, again by way of
second substantial expansion.
- The matter has been examined by the Ministry. In pursuance of the New
Industrial Policy and other concessions for the State of J&K announced by the
Department of Industrial Policy and Promotion (DIPP) in June 2002,
notification
No.56/2002-CE (location specific exemption to all goods other than the exclusion
list) &
No.57/2002-CE (non-location specific exemption to specified industries
other than the exclusion list), both dated 14.11.2002 were issued to provide
exemption from excise duty equivalent to the duty payable on value addition
undertaken in the manufacture of the goods to the new units and units
undertaking substantial expansion, for a period of ten years from the date of
commencement of commercial production. The exemption operates through a refund
mechanism.
2.1 Subsequently, pursuant to a review of the exemption,
notification
No.1/2010-CE was issued so as to extend the excise duty exemption to all goods
barring the exclusion list to units located anywhere in the State of J&K subject
to the same conditions and modalities as are applicable to the existing
area-based exemptions for the State. Thus,
notification No.1/2010-CE was
basically an extension of the existing special package of incentives for the
State of J&K with certain modifications.
2.2
Notification Nos.56/2002-CE &
No.57/2002-CE and
notification No.1/2010-CE
does not specifically provide any cut-off date (sunset clause) for setting up of
new units or for units undertaking substantial expansion. Further, notification
No.1/2010-CE does not debar an existing unit which has availed of excise duty
exemption under
notification No.56/2002-CE &
57/2002-CE, both dated 14.11.2002
by way of substantial expansion, to avail of excise duty exemption again by way
of substantial expansion.
- It is, therefore, clarified that an existing unit which has availed of excise
duty exemption under
notification No.56/2002-CE &
57/2002-CE, both dated
14.11.2002 by way of substantial expansion can avail of excise duty exemption
under notification No.1/2010-CE, dated 06.02.2010 again by way of second
substantial expansion so long as it satisfies the conditions stipulated under
notification No.1/2010-CE, dated 06.02.2010.
- Trade Notice/Public Notice may be issued to the field formations and
taxpayers.
- Difficulties faced, if any, in implementation of this Circular may be brought
to the notice of the Board.
(P.K. Mohanty)
Joint Secretary (TRU)
F.No.332/09/2013-TRU