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Exemptions restore on textile article under notification no.30/2004-C.E. and notification No.01/2011-C.E. - CBEC has issued circular No.1005.

PAWAN KUMAR
CBEC Restores Excise Duty Exemptions for Textile Manufacturers with July 2015 Notifications and Circulars The Central Board of Excise and Customs (CBEC) initially imposed excise duties on textile articles through notifications in 2004 and 2011, with recent amendments in July 2015. However, CBEC restored exemptions through new notifications and a circular issued on July 21, 2015. These changes clarify that domestically manufactured goods under specified tariff headings remain exempt from excise duty or are subject to concessional rates, as they were before July 17, 2015. This move alleviates issues faced by textile manufacturers, allowing them to use duty-free inputs and claim excise duty exemptions on final products. (AI Summary)

The CBEC was imposed the duty on textile article under Notification No.30/2004-C.E. dated 09.07.2004 and on other article under Notification No.01/2011-C.E. dated 01.03.2011 by notification no.34/2015-C.E. and 35/2015-C.E. both dated 17.07.2015 substituting proviso in that original notifications.

Now the CBEC has restore exemption by issuing notification no.37/2015-C.E., 38/2015-C.E. both dated 21.07.2015 clarifying includes of nil duty in appropriate duty. In this regard, CBEC has also issued circular no.1005 dated 21.07.2015. Para 7 of the said circular is reproduced below:

7. It may, therefore, be noted that the domestically manufactured goods covered under these notifications/entries continue to be exempt from excise duty or subject to concessional rate of excise duty, as the case may be, as they were prior to 17th July, 2015.

This is a major relaxation for the textile industry.

Central Excise
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DEEPAK SHARMA on Jul 25, 2015
Sir, you mean to say that, in India if manufacturer of RMG is taking CENVAT in any kind, they should require to have registration with CE. As in last budget board directed the CED onRMG through CENVAT route. But this option has been provided in 2013 budget. Then what is mean of this recent notificatio. Please clarify me Thanks
PAWAN KUMAR on Jul 25, 2015

Dear Deepak Ji,

The goods (Textile Article) of tariff heading 50 to 63 was exempt vide notification No.30/2004-C.E. dated 09.07.2004 subject of condition that the manufacturer will not take cenvat credit on inputs used in the manufacturing of such textile articles.

Now recently the CBEC has issued the notification No.34/2015-C.E. dated 17.07.2015 replacing the old proviso by new one which prescribed used of duty paid inputs only in manufacture and also non applicability of Cenvat on such inputs and the appropriate duty of excise will not include goods chargeable to Nil duty.

It was a serious problem for the textile manufacturer, hence CBEC after three days restore the exemption by issuing notificaiton 37/2015-C.E. dated 21.07.2015 and also issue the circular No.1005 clarifying the issue that appropriate duty includes Nil duty. This mean the textile manufacturer can purchase inputs on which duty is nil and used into their manufacturing and claim excise duty exemption on their final products bearing heading from 50 to 63.

Thanks,

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