Dear Member,
As you are aware, CBEC had issued Notification No.34/2015 dated 17th July, 2015 to amend Notification No. 30/2004 – Central Excise dated 9th July 2004.
The matter was taken up with the Ministry requesting for a clarification in this regard. We are glad to inform you that the Ministry has sent a communication to the Council clarifying the above issue.
As per Notification No. 30/2004 provides for exemption to Yarn and Textiles Fabrics subject to the condition that no credit is taken on corresponding inputs. That is to say that a manufacturer of Yarn or Fabric could either opt for payment of duty under the CENVAT scheme or opt for exemption from paying duty. The option not to pay duty was subject to the following proviso.
“Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules, 2002”.
The Notification No. 30/2004 has been amended vide notification No. 34/2015 – Central Excise Dated 17th July, 2015 to replace the above mentioned proviso by the following proviso.
“Provided that the said excisable goods are manufactured from inputs on which appropriate duty of excise leviable under the First Schedule to the Central Excise Tariff Act or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) has been paid and no credit of such excise duty or additional duty of customs on inputs has been taken by the manufacturer of such goods (and not the buyer of such goods), under the provisions of the CENVAT Credit Rules, 2004”.
An apprehension had been raised by the industry that both the condition are not possible to full filled since when inputs are procured from the market it is not possible to ascertain whether they are duty paid or not.
Since notification No. 37/2015-CE dated 21st July 2015 has been issued to further amend notification No. 30/2004 Central Excise dated 9th July 2004 and to clarify that "For the purpose of this notification, appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force". Therefore the status quo-ante prior to issue of Notification No. 34/2015 has been restored.
Members are requested to make a note of the above amendment.
You may refer the following Notification for detailed information.
Notification No. 37/2015-CE dated 21st July 2015
Thanking you,
V.ANIL KUMAR
EXECUTIVE DIRECTOR
