detailed clarification on excise tariff notification no.34/2015, 35/2015,&36/2015, dated:17/07/2015

[Asked by Guest]

dear experts,

can any one pls explain the clarification in detailed ..?

regards,

Manan Pandya

[CSSANJAY MALHOTRA]

Central Board of Excise and Customs has issued Notification No. 34/2015-CE dated 17.07.2015 thus amending Notification No. 30/2004-CE dated 09.07.2004, which provides for Excise Duty exemption on Textile Goods PROVIDED no CENVAT Credit has been availed on Inputs.

Recently notified Notification No. 34/2015-CE dated 09.07.2015 provides that Exemption benefit would be available to finished goods as per Notification No. 30/2004-CE dated 09.07.2004, if the "appropriate duty leviable has been paid" on Raw Material and NO CENVAT Credit has been availed on Inputs.

Supreme Court in the case of Dhiren Chemical Industries and by CBEC in its Circular No. 667 dated 26.09.02 has stated that the phrase "appropriate duty has been paid" does not include the goods chargeable to NIL Duty or EXEMPTED goods. In case of Cotton yarn, the raw material i.e. cotton is exempted from duty payment and in lieu of amended notification, the benefit of Excise Duty exemption shall not be available on Cotton yarn.

Further the CBEC has earlier clarified in 2002 vide Notification No. 14/2012 dated 01.03.2012 as amended by Notification No. 37/2002 dated 10.12.2002 that the Raw Material bought from market shall be considered as DUTY PAID goods, which again has not been mentioned in the recent amended Notification.

CBEC has to issue clarification for phrase "appropriate duty of excise leviable/ paid", but till the clarification comes in, present amended notification attracts Duty of Excise on Textile Goods under Notification No. 30/2004-CE dated 09.07.2004 if the raw material is exempted from duty payment or attracts NIL rate of duty. The same is applying the ratio of Supreme Court decision in Dhiren Chemicals case and following CBEC Circular No. 667 dated 26.09.12.

thank you so much sir,

i really , really very thankful to you for giving clarification ..

regards,

Manan Pandya

Dear Sanjay Sir,

Greetings for the day.

Sir, we are footwear manufacturers, and we have not taken excise registration because our MRP is less than ₹ 500/-.

So, can u pls tell me if this notification has any impact on us?

We use raw material both chargeable to duty & not chargeable to duty.

[CSSANJAY MALHOTRA]

Dear,

Please note that Footwear has condition No. 15 attached to it for Duty exemption and the same has not been changed in the Notification No. 36/2015-CE dated 17.07.15. Hence NO CHANGE to footwear.

Thank you sir. Your opinion is highly appreciated.

Dear Mr Malhotra,

Import items under 5004, primarily silk yarn, were exempted from CVD under 30/2004...these product are out of excise purview & hence producers are not registered under Central Excise.

Customs still continued charging importers CVD though paid under protest.

What is the stand of this product after new CE 34/2015 & 37/2015?

Thank you

Vivek

[CSSANJAY MALHOTRA]

Dear Mr. Vivek,

Appreciate that you come out with very good issue..

Please refer to Para 2 CBEC Circular No. 1005 dated 21.07.2015, wherein it has been clarified the purpose of amendments (Notification No. 34/2015-CE dated 17.07.15 as corrected by Notification No.37/2015-CE dated 21.07.2015) was to put the Importers at disadvantage position as compared to Indian manufacturers for the FINAL PRODUCT to sustain the idea of Make in India.

Hence, it is evident that the goods ( for e.g FABRICS) manufactured by the domestic manufacturers enjoys duty exemption and they will not be eligible for CENVAT on Inputs and Inputs services, whereas the Manufacturers Importing the final products will have to pay CVD and is entitle for CENVAT credit but does not avail the benefit of Notification No. 30/2004-CE as amended by Notifcation No. 34/2015-CE & 37/2015-CE.

Hope above resolves your issue.

Dear Mr Malhotrathank you for your reply This implies an industry which is not covered under CE & has no obligation under this Act, is now supposed to bear CVD ..For instance silk products under HTC 5004 to 5007?Pl give your opinion Many thanks Vivek

AI Summary

Appropriate duty paid requirement restricts excise exemption for finished textile goods when inputs are duty exempt, altering eligibility.
Notification No. 34/2015-CE amends the exemption under Notification No. 30/2004-CE by making exemption available only where the appropriate duty leviable/paid on raw materials is satisfied and no CENVAT credit has been availed on inputs. Judicial and CBEC precedents have been interpreted to exclude inputs that are duty exempt or subject to NIL rate from qualifying as "appropriate duty paid," so finished goods made from such inputs are presently not eligible for the exemption absent further CBEC clarification; sectoral conditions not amended (e.g., footwear condition) continue to apply.