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Exemption to Small Scale Units
Notification No.
1 dated 28th February 1993 (As amended by 81/93, 84/93, 89/93, 59/94,
73/94, 87/94, 90/94, 105/94, 107/94, 125/94, 59/95, 75/95, 93/95)
In exercise of
the powers conferred by sub section (1) of section 5A of the Central Excise and
Salt Act, 1944 (1 of 1944) (hereinafter referred to as the said Act), the
Central Government, being satisfied that it is necessary in the public interest
so to do, hereby exempts the excisable goods of the description specified in the
Annexure below and falling under the Schedule to the Central Excise Tariff Act,
1985 (5 of 1986), (hereinafter referred to as the �specified goods�), and
cleared for home consumption on or after the 1st day of April in any
financial year, by a manufacturer:
(a) in the case of first clearances of the
specified goods upto an aggregate value not exceeding rupees thirty lakhs-
(i) in a case where a manufacturer avails
of the credit of the duty paid on inputs used in or for the manufacture of the
specified goods cleared for home consumption under rule 57A of the Central
Excise Rules, 1944 (hereinafter referred to as the said Rules), from so much of
the duty of excise leviable thereon which is specified in the said Schedule
[read with any relevant notification issued under sub rule (1) of rule 8 of the
said Rules or sub section (1) of section 5A of the said Act, and in force for
the time being] as is equivalent to an amount calculated at the rate of 10 per
cent ad valorem;
(ii)
in any other case from the whole of the duty of excise leviable thereon.
(b) in the case of clearances, being the
clearances of the specified goods of an aggregate value not exceeding rupees
twenty lakhs, immediately following the said clearances of the value specified
in sub-clause(a) under this clause, from so much of the duty of excise leviable
thereon which is specified in the said Schedule [read with any relevant
notification issued under sub rule (1) of rule 8 of the said Rules or sub
section (1) of section 5A of the said Act, and in force for the time being], as
is equivalent to an amount calculated at the rate of 10 per cent ad valorem, and
(c) in the case of clearances, being the
clearances of the specified goods of an aggregate value not exceeding rupees
twenty five lakhs, immediately following the said clearances of the value
specified in sub-clause (b) under this clause, from so much of the duty of
excise leviable thereon which is specified in the said Schedule [read with any
relevant notification issued under sub rule (1) of rule 8 of the said Rules or
sub section (1) of section 5A of the said Act, and in force for the time being],
as is equivalent to an amount calculated at the rate of 5 per cent ad valorem.
Provided that the amount of duty of excise
payable on the specified goods under item (i) of sub clause (a), or sub-clause
(b), or sub-clause (c), shall not be less than an amount calculated at the rate
of 5 per cent ad valorem:
Provided further that the aggregate value of
clearances of the specified goods in terms of sub-clauses (a), (b) and (c) taken
together, shall not exceed rupees seventy five lakhs.
(2)
a factory, other than a factory,-
(a)
which is specified in clause (1) of this paragraph, or
(b)
which is registered with Directorate General of Technical Development
under the provisions of the Industries (Development and Regulation) Act, 1951
(65 of 1951),-
in the case of first clearances of the
specified goods upto an aggregate value not exceeding rupees thirty lakhs from
whole of the duty of excise leviable thereon.
2. The aggregate value of clearances of
the specified goods for home consumption in a financial year-
(a)
by a manufacturer from one or more factories; or
(b)
from a factory by one or more manufacturers,-
under sub-clause (a), (b) and (c) of the
opening paragraph shall not exceed rupees thirty lakhs, twenty-lakhs and twenty
five lakhs respectively; and
3. Nothing contained in this notification shall
apply, if the aggregate value of clearances of all excisable goods for home
consumption, -
(i)
by a manufacturer, from one or more factories, or
(ii) from any factory, by one or more
manufacturers, had exceeded rupees three hundred lakhs in the preceding
financial year;
4. The exemption contained in this
notification shall not apply to the specified goods bearing a brand name or
trade name (registered or not) of another person:
Provided that nothing contained in this
paragraph shall be applicable to the specified goods which are component parts
of any machinery or equipment or appliances and cleared from a factory for use
as original equipment in the manufacture of the said machinery or equipment or
appliances and
(i) in a case where the clearances of such
specified goods are within the first clearances upto an aggregate value not
exceeding rupees thirty lakhs in a financial year, the manufacturer of the
specified goods gives a declaration that the specified goods shall be used as
mentioned above;
(ii)
in any other case, the procedure set out in Chapter X of the said Rules
is followed�;
Provided further nothing contained in this
paragraph shall be applicable to the specified goods bearing a brand name or
trade name (registered or not) of the Khadi and Village Industries Commission or
of the State Khadi and Village Industries Board, the National Small Industries
Corporation or the State Small Industries Development Corporation.
Notwithstanding the exemption contained in
paragraph 1 of this notification, a manufacturer shall have an option for not
availing of the benefit of the exemption contained in the said paragraph and to
pay duty of excise at the rate applicable to the specified goods but for the
exemption contained in the said paragraph 1, subject to the condition that such
manufacturer shall pay duty at the rate applicable for aforesaid exemption on
all subsequent clearances of specified goods made after availing such option, in
a financial year in which such date of option falls.
Explanation I:
For the purposes of this notification, the expression �value� means either
the value as determined in accordance with the provisions of section 4 of the
said Act, or, as the case may be, according to the tariff values fixed or
altered under section 3 of the said Act.
Explanation II:
For the purposes of computing the aggregate value of clearances under this
notification, the clearances of any excisable goods, which are chargeable to nil
rate of duty or, which are exempted from the whole of duty of excise leviable
thereon by any other notification (not being a notification where exemption from
the whole of duty of excise leviable thereon is granted based upon the value or
quantity of clearances made in a financial year) issued under sub-rule (1) of
rule 8 of the said Rules or sub-section (1) of section 5A of the said Act, shall
not be taken into account.
Explanation III:
For the purpose of computing the aggregate value of clearances under paragraph
1, 2 or 3, the clearances of any specified goods, bearing a brand name or a
trade name (registered or not) of another person which are not eligible for the
grant of exemption in terms of provision of paragraph 4 of this notification,
shall not be taken into account.
Explanation IV:
For the purposes of determining the value of clearances under this notification,
in respect of Chinaware or Porcelain ware or both, where a manufacturer gets
such Chinaware or Porcelain ware or both fired in a kiln belonging to or
maintained by a Pottery Development Centre run by the Central Government or a
State Government or by the Khadi and Village Industries Commission, the value of
the Chinaware or Porcelain ware or both, belonging to the said manufacturer and
fired in such a kiln, shall be taken into account.
Explanation V: For the purpose of this notification,
clearances for home consumption shall also include clearances for export to
Bhutan or Nepal.
Explanation VI:
Where any specified goods (hereinafter referred to as inputs) are used for
further, manufacture of specified goods within the factory of production of
inputs, the clearances of such inputs for such used shall not be, taken into
account for the proposes of calculating the aggregate value of clearances under
this notification.
Explanation VII:
For the purposes of determining the aggregate value of clearances under this
notification, in respect of the specified goods, namely, sacks and bags made of
polymers of ethylene or propylene, the value of clearances of strips of plastics
used within the factory of production for weaving of fabrics or manufacture of
the said sacks and bags shall not be taken into account.
Explanation VIII:
For the purposes of this notification, where the specified goods are
manufactured in a factory, belonging to or maintained by the Central Government
or by a State Government, or by a State Industries Corporation, or by a State
Small Industries Corporation or by the Khadi and Village Industries Commission,
then the value of excisable goods cleared from such factory alone shall be taken
into account.
Explanation IX: �Brand name� or �trade name�
shall mean a brand name or trade name, whether registered or not, that is to say
a name or a mark, such as symbol, monogram, label, signature or invented word or
writing which is used in relation to such specified goods for the purpose of
indicating, or so as to indicate a connection in the course of trade between
such specified goods and some person using such name or mark with or without any
indication of the identity of that person.
Explanation X:
For the purposes of this notification, where the specified goods manufactured by
a manufacturer, bear a brand name or trade name (registered or not) of another
manufacturer or trader, such specified goods shall not, merely by reason of that
fact, be deemed to have been manufactured by such other manufacturer or trader.
Explanation XI:
For the purposes of this notification, the expression �powered cycle� or
�powered cycle-rickshaw� means a mechanically propelled cycle or, as the
case may be, mechanically propelled cycle-rickshaw, which may also be pedalled,
if any necessity arises for so doing.
ANNEXURE
(1) All goods falling under Heading Nos. 51.06,
51.07, 51.10 (other than woven fabrics of wool), 51.11 (other than woven fabrics
of wool), 51.12, 52.05, 52.06, 53.01, 53.02, 53.04, 53.05, 53.08 (other than
goods falling under sub-heading No. 5308.14), 53.11 (other than woven fabrics of
ramie), 54.01, 55.05, 55.08, 55.09, 55.10, 56.01, 56.02, 56.04, 56.07 (other
than of jute), 56.08, 58.06, 58.07, 59.01, 59.06, 59.11, 63.01 (other than
blankets of wool) or 63.05 of the said Schedule.
(2) All goods falling under sub-heading Nos.
5105.30, 5105.40, 5108.00, 5109.00, 5204.00, 5402.31, 5402.32, 5402.39, 5403.20,
5603.00, 5605.00 (other than of man-made filaments), 5609.00, 5801.21, 5801.31,
5802.21, 5802.31, 5803.00, 5808.00, 5905.00, 5908.00, 5909.00, 5910.00, 6002.10,
6302.00, 6303.00, 6304.00, 6306.00 or 6307.00 of the Schedule�;
(3) Rubber solution or vulcanizing solution;
textile fabrics coated or laminated with preparations of low density
polyethylene; powered cycles and powered cycle rickshaws; side cars of motor
cycles (including scooters); evaporative type of coolers and parts of such
coolers, cigarette lighters;
(4) Chewing tobacco and preparations containing
chewing tobacco, other than those having a brand name, falling under heading No.
24.04; fabrics of cotton or man-made fibres falling under sub-heading No.
5802.51 or fabrics of cotton or man-made fibres, not subjected to any process,
falling under heading No. 60.01 or 60.02;
(5) All other goods
specified in the said Schedule other than the following namely: -
(i)
all goods falling under Chapters 24, 51, 52, 53, 54, 55, 56, 57, 58, 59,
60, 61 or 62;
(ii) all goods falling under heading Nos. 25.04,
33.04, 33.05, 36.05, 37.01, 37.02, 40.05, 72.06, 72.07, 72.18, 72.24, 84.71,
85.21, 85.28, 87.01, 87.02, 87.03, 87.04, 87.05, 87.06, 87.11, 91.01, 91.02 or
96.13;
(iii) All goods falling under heading Nos. 2101.10,
2101.20, 3307.10, 3307.20, 3307.30, 3307.90, 3703.10, 4006.10, 4008.21 or
9605.10;
(iv) all goods falling under heading No. 2106.00 put up
in unit containers and ordinarily intended for sale and bearing a brand name;
sandalwood oil; strips of plastics intended for weaving of fabrics or sacks;
polyurethane foam and articles of polyurethane foam; and refrigerating and
air-conditioning appliances and machinery and parts and accessories thereof
falling under Chapter 84, 85 or 90.
5. This notification
shall come into force on the 1st day of April 1995.
6. This notification
shall remain in force upto and inclusive of the 31st day of March
1997.
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