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Small Scale Sector Exemption Scheme
Notification No.
8 dated 2nd June 1998 (As amended by 18/98)
In exercise of
the powers conferred by sub-section (1) of section 5A of the Central Excise Act,
1944 (1 of 1944), the Central Government, being satisfied that it is necessary
in the public interest so to do, and in supersession of the notification of the
Government of India in the Ministry of Finance (Department of Revenue) No.
16/97-Central Excise dated the 1st April, 1997, hereby exempts
clearances, specified in column (2) of the Table below, for home consumption, of
excisable goods of the description specified in the Annexure appended to this
notification (hereinafter referred to as �the specified goods�), from so
much of the duty of excise leviable thereon which is specified in the Schedule
to the Central Excise Tariff Act, 1985 (5 of 1986), as is in excess of the
amount calculated at the rate specified in column (3) of the said Table against
such clearances.
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Sl. No.
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Value of
clearances
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Rate of duty
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(1)
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(2)
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(3)
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1.
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First clearances
upto an aggregate value not exceeding fifty lakh rupees made on or after the 2nd
day of June in the financial year 1998-99.
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Nil
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2.
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Clearances upto
an aggregate value not exceeding fifty lakh rupees immediately following the
clearances specified against Sl.No. 1 above during the financial year 1998-99.
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Five percent ad
valorem
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Note I: If any clearances for home consumption have been effected before
the 2nd day of June, 1998 under notification No.16/97-CE dated 1st
April, 1997, whether at nil rate or otherwise, the aggregate value of such
clearances shall be taken into account for computing the limit of rupees fifty
lakhs for Sl. No. 1 above.
Illustrations regarding no.1 of Table:
(In all these illustrations clearances� refer to �clearances for home
consumption�):
Illustration I: As on 1st
day of June 1998, a manufacturer was operating under notification no. 16/97-CE
dated 1st April 1997. He
made clearances worth Rs. 20 lakhs at nil rate of duty. Under this notification, he would be
entitled to additional duty-free clearances upto a value of Rs. 30 lakhs only in
the remaining part of this financial year.
Illustration II: As on 1st day of June 1998, a
manufacturer was operating under notification no. 16/97-CE dated 1st
April 1997. He made clearances
worth Rs. 30 lakhs at nil rate of duty and Rs. 5 lakhs worth of clearances at
the concessional rate of duty of 3%. Under
this notification, he would be entitled to additional duty-free clearances upto
a value of Rs.15 lakhs only in the remaining part of this financial year.
Illustration III: Starting on 1st April 1998, a
manufacturer operating under notification No. 16/97-CE dated the 1st
April 1997 effected clearances having a value of Rs. 30 lakhs. Thereafter he opted for payment of duty
under notification No. 38/97-CE dated the 27th June 1997 and cleared
goods having a value of Rs. 9 lakhs till 1st June 1998. Now he wants to switch over to
notification No. 8/98-CE in order to avail of exemption on the next clearances
upto Rs. 11 lakhs. He is not permitted to do so.
(See para 3 below).
Note II: If the aggregate value of clearances of a manufacturer has already
exceeded Rs. 50 lakhs upto 1st June, 1998, then the benefit of
exemption under S.No. 2 shall apply on clearances reduced by the value of
clearances in excess of Rs. 50 lakhs.
Illustrations regarding no.2 of Table:
A manufacturer who availed of exemption under
notification no. 16/97-CE dated 1st April, 1997 made clearances worth
Rs. 30 lakhs at nil rate of duty, Rs. 20 lakhs worth of clearances at the
concessional rate of duty of 3%, and Rs. 7 lakhs worth of clearances at the
concessional rate of 5% upto 1st June, 1998. Such a manufacturer would be entitled to
additional clearances upto a value of Rs. 43 lakhs only (at the concessional
rate of 5%) in the remaining part of this financial year.
2. The
exemption contained in this notification shall apply only subject to the
following conditions, namely: -
(i) A manufacturer has the option to not
avail the exemption under this notification and to pay the normal rate of duty
on the goods cleared by him. Such
option shall be exercised before effecting clearances at normal rate. Such option, if exercised, shall not be
allowed to be withdrawn in the remaining part of the financial year 1998-99. However, if a manufacturer had exercised
such option to pay normal duty with reference to notification No. 16/97-CE dated
1st April, 1997, the manufacturer is barred from availing of
exemption under this notification but he need not exercise a fresh option to pay
normal duty with reference to this notification.
(ii) A manufacturer who was availing of exemption
under notification No. 16/97-CE dated 1st April, 1997 prior to 2nd
June, 1998, is allowed to continue to avail of exemption under this notification
and no fresh option or its intimation is required till such time as he exercises
the option, if any, in favour of notification No. 9/98-CE dated the 2nd
June, 1998.
(iii)
(a) The manufacturer shall not avail of the credit of
duty under rule 57A or Rule 57 B of the Central Excise Rules, 1944, paid on
inputs used in the manufacture of the specified goods cleared for home
consumption, the aggregate value of first clearances of which, as calculated in
the manner specified in paragraph 1 above does not exceed rupees one hundred
lakhs in the financial year 1998-99,
(b) The manufacturer also does not utilise the credit
of duty under rule 57Q of the said rules, paid on capital goods, for payment of
duty, if any, on the aforesaid clearances, the aggregate value of first
clearances of which does not exceed rupees one hundred lakhs, as calculated in
the manner specified in paragraph 1 above, in the financial year 1998-99.
(iv) The aggregate value of clearances of all excisable
goods for home consumption by a manufacturer from one or more factories, or from
a factory by one or more manufacturers does not exceed rupees three hundred
lakhs in the preceding financial year;
(v) Where a manufacturer clears the specified goods from one
or more factories, the exemption in his case shall apply for the total value of
clearances mentioned against each of the serial numbers in the said table and
not separately for each factory.
(vi) Where the specified goods are cleared by one or more
manufacturers from a factory, the exemption shall apply for the total value of
clearances mentioned against each of the serial numbers in the said Table and
not separately for each manufacturer.
3. The exemption contained in this
notification shall not apply to a manufacturer, if he was availing of exemption
under notification no. 38/97-CE dated 27th June 1998, immediately
before 2nd June, 1997. It
shall also not apply to a manufacturer who exercises the option to avail of
exemption under notification no. 9/98-CE dated 2nd June 1998.
4. For the purpose of determining the
aggregate value of clearances for home consumption, the following clearances
shall not be taken into account, namely: -
(a) clearances, which are exempt from the whole of the excise
duty leviable thereon (other than an exemption based on quantity or value of
clearances) under any other notification or on which no excise duty is payable
for any other reason;
(b) clearances bearing the brand name or trade name of
another person, which are ineligible for the grant of this exemption in terms of
paragraph 5 below;
(c) clearances of the specified goods which are used as
inputs for further manufacture of any specified goods within the factory of
production of the specified goods. Such
clearances of specified goods used as inputs shall be deemed to be exempt from
the whole of the duty of excise leviable thereon;
(d) clearances of strips of plastics used within the factory
of production for weaving of fabrics or for manufacture of sacks or bags made of
polymers of ethylene or propylene.
5. The exemption contained in this
notification shall not apply to goods bearing a brand name or trade name,
whether registered or not, of another person, except in the following cases: -
(a) where the specified goods, being in the nature of
components or parts of any machinery or equipment or appliances, are cleared for
use as original equipment in the manufacture of the said machinery or equipment
or appliances by following the procedure laid down in Chapter X of the Central
Excise Rules, 1944. Manufacturers,
whose aggregate value of clearances of the specified goods for use as original
equipment does not exceed rupees fifty lakhs in the financial year 1998-99 as
calculated in the manner specified in paragraph 1 above, may submit a
declaration regarding such use instead of following the procedure laid down in
Chapter X of the said rules;
(b) where the goods bear a brand name or trade name of the
Khadi and Village Industries Commission or of the State Khadi and Village
Industry Board or the National Small Industries Corporation or the State Small
Industries Development Corporation or the State Small Industries Corporation.
Explanation: For the purposes of this notification, -
(A) �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;
(B) where the specified goods
manufactured by a manufacturer bear a brand name or trade name, whether
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;
(C) �value� means
(i) in respect of specified
goods which have been notified under section 4A of the Central Excise Act 1944
(1 of 1944), the value as determined in accordance with the provisions of that
section; and
(ii) in respect of specified
goods other than those referred to in sub-clause (i), the value as determined in
accordance with the provisions of section 4 of the Central Excise Act, 1944 (1
of 1944), or the tariff value fixed under section 3 of the said Act;
(D) in the determination of
the value of clearances of Chinaware or Porcelainware or both, where a
manufacturer gets Chinaware or Porcelainware 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 Porcelainware or both, belonging to the said
manufacturer and fired in such a kiln shall be taken into account.
(E) 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.
(F) where the specified goods
are chargeable to nil rate of duty or are already exempt from the whole of the
duty of excise leviable thereon under any other notification, the clearances of
specified goods used as inputs shall not be deemed to be exempt under clause (c)
of paragraph 3.
(G) Clearances for home
consumption, wherever referred to in this notification, shall include clearances
for export to Bhutan and Nepal.
(H) �normal rate of duty� means the duty of excise which is
specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)
read with any relevant notification (other than this notification or a
notification in which exemption is based on the value or quantity of clearances)
issued under sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of
1944).
ANNEXURE
1. All goods specified in the Schedule to
the Central Excise Tariff Act, 1985 (5 of 1986), other than the following,
namely,-
(i) all goods falling under heading No. 21.06 and sub-heading Nos.
2101.10 and 2101.20;
(ii) all goods falling under Chapter 24 of the
said Schedule (other than unbranded chewing tobacco and preparations containing
chewing tobacco, falling under heading No. 24.04 of the said Schedule);
(iii)
all goods falling under heading No. 25.04,;
(iv) sandalwood oil, all goods falling under
heading Nos. 33.04 and 33.05, and sub-heading Nos. 3307.10, 3307.20, 3307.31,
3307.39, 3307.50 and 3307.90,;
(v)
all goods falling under heading No. 36.05;
(vi)
all goods falling under heading Nos. 37.01, 37.02 and sub-heading No.
3703.10;
(vii) strips of plastics intended for weaving of fabrics or
sacks, polyurethane foam and articles of polyurethane foam; falling under
Chapter 39;
(viii) all goods falling under heading No. 40.05 (except rubber
solution or vulcanizing solution), and sub-heading No. 4006.10 and, plates,
sheets and strips falling under heading No. 40.08, for resoling or repairing or
retreading rubber tyres;
(ix) all goods falling under Chapter 51 of the said
Schedule other than those falling under sub-heading Nos. 5105.30 and 5105.40 and
heading Nos. 51.06, 51.07, 51.08, 51.09, 51.10 and 51.11 (except woven fabrics
of wool falling under heading Nos. 51.10 or 51.11) and under 51.12;
(x) all goods falling under Chapter 52 of the
said Schedule other than goods falling under heading No. 52.04;
(xi) all goods falling under Chapter 53 of the said
Schedule except goods falling under heading Nos. 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);
(xii) all goods falling under Chapter 54 of the said Schedule
except goods falling under heading No. 54.01;
(xiii) all goods falling under Chapter 55 of the said Schedule except
goods falling under heading Nos. 55.05, 55.08 and shoddy yarn manufactured from
used or new rags falling under heading Nos. 55.09 or 55.10;
(xiv) all goods falling under Chapter 56 of the said Schedule
except goods falling under heading Nos. 56.01, 56.02, 56.03, 56.04, 56.05 (other
than of manmade filaments), 56.07 (other than of jute), 56.08 and 56.09;
(xv)
all goods falling under Chapter 57 of the said Schedule;
(xvi) all goods falling under Chapter 58 of the said Schedule
except goods falling under heading Nos. 58.03, 58.06, 58.07, 58.08, uncut grey
(unprocessed) woven weft pile fabrics of cotton manufactured from grey
unprocessed cotton yarn falling under sub-heading No. 5801.21, fabrics of cotton
or man-made fibres falling under sub-heading No. 5802.51, and unprocessed cotton
terry towelling fabrics falling under sub-heading No. 5802.21;
(xvii) all goods falling under Chapter 59 of the said Schedule except
goods falling under heading Nos. 59.01, 59.05, 59.06, 59.08, 59.09, 59.10, 59.11
and textile fabrics coated or laminated with preparations of low-density
polyethylene;
(xviii) all goods falling under Chapter 60 of the said Schedule except goods
falling under sub-heading No. 6002.10 and fabrics of cotton man-made fibres not
subjected to any process falling under heading Nos. 60.01 or 60.02;
(xix) all
goods falling under Chapter 61 of the said Schedule;
(xx)
all goods falling under Chapter 62 of the said Schedule;
(xxi) blankets
of wool falling under Chapter 63 of the said Schedule;
(xxii) all goods falling under heading Nos. 72.06, 72.07, 72.18, 72.24 cold
rolled stainless steel pattis/ pattas falling under chapter 72; ingots and
billets of non alloy steel falling under sub-heading Nos. 7206.90 and 7207.90
and hot re-rolled products of non-alloy steel, falling under sub-heading Nos.
7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90,
7214.90, 7215.90, 7216.10 and 7216.90, on which the duty of excise is paid under
section 3A of the Central Excise Act, 1944 (1 of 1944);
(xxiii) all goods falling under heading sub-heading Nos. 74.03, (excluding
cast brass bars/rods of a length not exceeding 3 fee, and brass billets weighing
upto 5 Kilograms, falling under sub-heading No. 7403.21, 7407.11, 7407.12,
7407.11, 7408.21, 74.09, copper
circles, whether or not trimmed;
(xxiv) aluminium circles, whether or not trimmed,
falling under Chapter 76;
(xxv) all
goods falling under heading Nos. 85.21, 85.28;
(xxvi) refrigerating and airconditioning appliances and
machinery and parts and accessories thereof falling under Chapter 84, 85 or 90.
(xxvii) all goods falling under heading Nos. 87.01, 87.02, 87.03,
87.04, 87.05, 87.06 and 87.11 [other than powered cycles and powered cycle
rickshaw (powered cycle or powered rickshaw means a mechanically propelled cycle
or, as the case may be, mechanically propelled cycle rickshaw, which may also be
paddled, if any necessity arises for so doing] pnautiyal;
(xxviii) all goods falling under heading Nos. 91.01 or
91.02;
(xxix) all
goods falling under sub-heading Nos. 9605.10.
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