Availability of benefit of exemption on goods on which an excise duty has been imposed after the expiry of sunset clause under area based exemption scheme - Regarding.

Excise Duty Exemption Clarified for Units Starting Production Before March 31, 2010, Under Notifications 49/2003-C.E. and 50/2003-C.E.

The circular addresses the availability of excise duty exemption for new or substantially expanded units under Notifications No. 49/2003-C.E. and 50/2003-C.E. The issue arises when units commenced production before the sunset date of March 31, 2010, but did not claim exemption due to nil or optional duty rates at that time. The clarification states that eligibility is based on meeting criteria before the sunset date, and units can exercise the exemption option even after this date. The ten-year exemption period starts from the commencement of production, not the option exercise date. Commissioners are advised to resolve disputes accordingly.