Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Circular No.912/02/2010-CX
New Delhi dated the 22nd January, 2010
To
All Chief Commissioners of Central Excise (including LTU),
All Commissioners of Central Excise (including LTU),
All Director Generals.
Subject: Substantial Expansion by way of increase in installed capacity for the
units availing area based exemption.
Madam/ Sir,
Area based exemption is available to the units in the specified areas in the
North-East region, Jammu & Kashmir, Himachal Pradesh and Uttarakhand under
different notifications. The exemption is applicable to the new industrial units
set up after the specified date and also to the existing units which have
undertaken substantial expansion by way of increase in installed capacity by not
less than 25%.
- References have been received regarding the units manufacturing specified
goods as well as non-specified goods as to whether the substantial expansion
should take place only for specified goods or of overall capacity of the unit.
Following two situations have arisen in such cases:
(1) 25% expansion is undertaken only in respect of specified goods, and not
overall capacity of the unit.
(2) The expansion is undertaken in respect of non-specified goods only, but
overall capacity of the unit increases by 25%.
- The issue was discussed in the Chief Commissioner's Conference held at Shillong on 30th and 31st October, 2009 and thereafter in the Boar on the basis
of inputs received from field formations.
- The matter has been examined. The exemption notification is applicable only
to the specified goods. Therefore, the condition of substantial expansion should
also be applicable to the specified goods only. Therefore, it is clarified that
only when the substantial expansion of the installed capacity of the specified
goods is undertaken, then only the benefit of notification would be applicable.
To illustrate, if a unit is making tobacco product (say- gutkha, a non-specified
goods, which is not allowed benefit of exemption) and also iron and steel
articles ( specified goods, which are lowed benefit of exemption), in that case,
only when units increase installed capacity of iron and steel articles by 25%,
benefit would be available. But if it increases production of gutkha by 100%,
then it would not get benefit.
- Trade and Industry as well as field formations may be suitably informed.
- Receipt of this Circular may kindly be acknowledged.
- Hindi version will follow.
Yours faithfully,
Sd/-
(Dr.Ravindra J Dange)
Under Secretary to Government of India (CX-3
F.No.101/22/2008-CX-3