Exemption from the Excise Duty to parts failing under any Chapter of goods failing under heading No.86.01 to 86.06 when used within the factory in the manufacture of goods failing under heading 86.01 to 86.06 .

Excise Duty Exemption Clarified for Parts Used in Manufacturing Under Headings 86.01-86.06 Since July 1996.

The circular clarifies the exemption from excise duty for parts used in manufacturing goods under headings 86.01 to 86.06, even if these parts fall under different chapters. It references the expansion of this exemption since July 23, 1996, allowing parts from any chapter to qualify when used in the production of goods under the specified headings. This includes items like IC Engines and DG Sets, which may fall under Chapters 84 and 85 but qualify for exemption when used in diesel locomotives under heading 86.02, provided other notification conditions are met. The circular instructs trade and field formations to be informed accordingly.