GOVT NOTIFICATION NO 51/96-CUSTOM DATED 23/07/1996

[JOSEPH MATHEW]

We have received a certificate of registration from IIT Chennai for Excise exemption in terms of Govt Notification no 51/96-Customs dated 23/07/1996 and Central Excise duty exemption in terms of Govt.Notification No 10/97-Central Excise dated 01/03/1997 as amended from time to time.

My query is this certificate says that we have not to pay excise, however our customs says we have to pay @6% excise duty. Kindly clarify,.

regards

Joseph Mathew

[Rajagopalan Ranganathan]

Sir,

Notification No. 51/96-CUS dated 23.07.1996 states that 5% duty is leviable and exempt from whole of additional custom leviable under section 3 of Customs Tariff Act. Under Central Excise, Notification No. 10/97-CE dated 01.03.1997 exempts the said goods from the whole of excise duty leviable. Therefore any goods imported for research purupose is leviable to 5% duty and any goods procured from domestic manufactures is fully exempted.

[JOSEPH MATHEW]

Sir,

We do not keep finished goods seperate in our warehouse for goods supplied to R&D. However we take credit for raw materials purchased for production. As per tje excise officer, he is asking us to charge 6% excise for the goods sold and the party has given notification for the same.

Please guide us is this right.

[Mahir S]

Sir,

refer sub rule (6) of rule 6 of cenvat credit rules 2004, wherein 6 % reversal is not required. in all other cases, it is mandatory for the 6 % reversal under rule 6.

[GANTI SARMA]

As per the notification 10/1997, you have to maintain separate records and your are not eligible to avail credit on inputs used in exempted final goods. Other wise you have to pay 6% on assessable value.

AI Summary

Excise exemption for research goods hinges on notification scope and recordkeeping; import duties and credit reversal still apply.
Imported goods for research remain subject to customs duty under Notification 51/96-Cus while domestically procured goods used for research may be exempt from central excise under Notification 10/97-CE; an institutional certificate does not eliminate customs duty. For excise-exempt final goods, separate records must be maintained, inputs used in exempted products are not eligible for CENVAT credit, and where conditions are not met the law requires reversal of credit or payment calculated on the assessable value.