Notification No. 29 dated  3^rd September 1996 (As amended by Notification No. 4/97-C.E., (NT), dated 1-3-1997, No. 14/98-C.E., (N.T.), dated 2-6-1998, No. 28/98-C.E. (NT), dated 18-7-1998, No. 44/98-C.E. (NT), dated 10-12-1998, No. 46/98-C.E. (NT), dated 16-12-1998, No. 5/99-C.E. (NT), dated 13-1-1999, No. 19/99-C.E. (NT), dated 28-2-1999 and No. 15/2000-C.E. (NT), dated 1-3-2000)

In exercise of the powers conferred by sub-rule (5) of rule 57A of the Central Excise Rules, 1944 and in supersession of the notification of Government of India in the Ministry of Finance (Department of Revenue) No. 11/96-C.E. (NT), dated the 23^rd of July, 1996, the Central Government, hereby declares the following inputs and the final products falling within the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), namely: -

2.     The Central Government further declares that-

(i)     the duty of excise under the Central Excise Act, 1944 (1 of 1944);

(ii)    the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975); or

(iii)   the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978),(hereinafter referred to as declared duty) shall be deemed to have been paid on the inputs declared herein and the same:

(I)     in case of a composite mill, shall be equivalent to the amount calculated at the rate of-

(a) 40 per cent of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products of cotton (not containing any other textile material) declared herein,

(b) 50 per cent of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products other than those specified in sub-clause (a)

(II)    in case of a manufacturer other than a composite mill, shall be equivalent to the amount calculated at the rate of -

(a) 50 per cent of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products of cotton (not containing any other textile material) declared herein,

(b) 60 per cent of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products other than those specified in sub-clause (a), and credit of the declared duty so deemed to have been paid shall be allowed to the manufacturer of the final products, without production of documents evidencing payment of duty on the said inputs, at the time of clearance of the said final products.

3.     The credit of declared duty allowed in respect of the said inputs shall be utilised only towards payment of duty of excise leviable under the said Central Excise Act on the said final products:

Provided that the credit of declared duty in respect of inputs used in the final products cleared for export under bond shall be allowed to be utilised towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and, where for any reason, such adjustment is not possible, by refund to the manufacturer subject to such safeguards, conditions and limitations as may be specified by the Central Government in the Official Gazette:

Provided further that no such refund of credit of declared duty shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties (Drawback) Rules, 1971, or claims rebate of duty under rule 12, in respect of such duty.

4.     The provisions of this notification shall not apply to a manufacturer (other than composite mill) who avails any credit, under any notification issued under sub-rule (1) of rule 57A of the Central Excise Rules, 1944, in respect of the said inputs and the said inputs are used in the manufacture of the said final products.

5.     In respect of a composite mill, the provisions of this notification shall apply only to-

(i)     unprocessed fabrics not woven in the same composite mill and lying in stock as on 4^th day of September, 1996;

(ii)    processed fabrics manufactured from unprocessed fabrics not woven in the same composite mill and lying in stock as on 4^th day of September, 1996;

(iii)   processed fabrics manufactured from unprocessed fabrics not woven in the same composite mill.

6.     Where the final products have been removed clandestinely without payment of duty of excise leviable under the Central Excise Act, 1944 or as the case may be, the additional duty leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, at the time of clearance of such final products, nothing contained in this notification shall apply in respect of such final products even if the duty of excise or the additional duty of excise, as the case may be, leviable on such final products is paid after such removal.

7.     The provisions of this notification shall not apply to final products on which duty of excise leviable under the Central Excise Act, 1944 or as the case may be, the additional duty leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the said Central Excise Act, or of the rules made thereunder with intent to evade payment of duty.

7A.   Notwithstanding anything contained in this notification, the declared duty in respect of inputs declared herein shall be deemed to have been paid and the credit of the declared duty shall be allowed for an amount calculated at the rate of -

(a)    50% of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products of cotton (not containing any other textile material) declared herein,

(b)    60% of the duty of excise leviable under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force, on the final products other than those specified in sub-clause (a),

at the time of clearance of -

(i)     final products lying in stock in the processing factory of a multi-locational composite mill as on the 2^nd day of June, 1998; or

(ii)    final products, manufactured from unprocessed or semi-processed fabrics lying in stock in the processing factory of a multi-locational composite mill as on the 2^nd day of June, 1998:

Provided that no credit under this paragraph shall be taken where the processing factory of the said multi-locational composite mill has taken credit in respect of said inputs under any other rule or notification.

7B.   The provisions of this notification shall not be apply to an independent processor i.e., a manufacturer who is engaged primarily in the processing of fabrics with the aid of power and who also has the facility in his factory (including plant and equipment) for carrying out heat-setting or drying, with the aid of power or steam in a hot-air stenter and who has no proprietary interest in any factory primarily and substantially engaged in the spinning of yarn or weaving or knitting of fabrics, on or after the 10^th December, 1998 in respect of final products falling under heading Nos. 52.07, 52.08, 52.09, 54.06, 54.07, 55.11, 55.12, 55.13 or 55.14 or processed textile fabrics of cotton or man-made fibres, falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12, 6001.22, 6001.92, 6002.20, 6002.30, 6002.43 or 6002.93, of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) on and with effect from 16^th day of December, 1998.

7C.   Notwithstanding anything contained in paragraph 7B, the provisions of this notification shall apply in respect of, -

(a)    final products falling under heading Nos. 52.07, 52.08, 52.09, 54.06, 54.07, 55.11, 55.12, 55.13 or 55.14 of the First Schedule to Central Excise Tariff Act, 1985 (5 of 1986) manufactured or produced by an independent processor prior to the 16^th day of December, 1998 and cleared on or after that date;

(b)    processed textile fabrics of cotton or man-made fibres, falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12, 6001.22, 6001.92, 6002.20, 6002.30, 6002.43 or 6002.93, of the First Schedule to Central Excise Tariff Act, 1985 (5 of 1986) manufactured or produced by an independent processor prior to the 13^th day of January, 1999 and cleared on or after that date.

8.     This notification shall come into effect on and from the 4^th day of the September 1996.