Clarification on Excise Notification No. 34/2015, 35/2015 & 36/2015 all Dtd. 17.07.2015

[Tejas Shah]

Sir,

CBEC has issued Excise Notification No. 34/2015, 35/2015 & 36/2015 all Dtd. 17.07.2015 vide which finished goods have been exempted subject to duty has been paid on inputs and no credit of such excise duty has been taken by the manufacture. Noti. No. 34/2015 amend Noti. No. 30/2004, Noti. No. 35/2015 amend Noti. No. 01/2011, Noti. No. 36/2015 amend Noti. No. 12/2012.

As per new notification, all textile articles mentioned in Noti. No. 30/2004 & 01/2011 are exempted subject to duty has been paid on inputs and no credit has been taken.

For textile fabrics/articles, Tex. Yarn is inputs.

At present Texturised Yarn manufacturer simultaneously avail option to manufacture exciseable and non-exciseable goods. Excisable at the tariff rate of duty & exempted under Noti. No. 30/2004,

Now, please clarify how textile fabrics/articles manufacture comply with the Noti. No. 34/2015, 35/2015 and whether Tex.Yarn manufacturers have compulsory registered them self with excise and have to issue excise invoice or otherwise. Pls. advice. - Tejas Shah 09712772601 - [email protected]

[CSSANJAY MALHOTRA]

Dear Tejas,

In reference to your issue, please go through my article published today. The same will give you clarity as to the present position as the circular is complicated one and invites litigation...... CBEC will come up with circular against the same shortly.

You may please refer to CBEC Circular 667 & 680 issued in year 2002, which will clear your doubts.

[Tejas Shah]

Sir,

Thank You very much for prompt reply and update me.

[pawan singhal]

IF manufacture of grey fabrics have to pay excise duty after this notification of 34/2015. will trader of grey fabrics have to take excise registration who purchases grey fabric from weaver and sold to their customer to pass . Customer will done further process on this grey fabrics as dyeing bleaching and process job before sold it to final customer in market

[Rakesh Bansal]

Sir, what would be the fate of the units manufacturing yarn from pure cotton and mix( i.e.cotton and synthetics).

[CSSANJAY MALHOTRA]

Dear Mr. Pawan / Mr. Rakesh,

CBEC clarification is awaited in reference to Notification No. 34/2015 dated 17.07.15 as the same is complicated and lacks clarity.

If CBEC clarifies that the Raw material bought from market will be treated as "deemed to be duty paid" then Cotton Yarn qualifies for duty exemption, even if the cotton is chargeable to NIL rate of duty. Till then present Notification as is worded now means the Cotton yarn is chargeable to duty. Matter has been taken with CBEC and clarification is expected to be issued shortly.

Secondly, if the duty comes in then Trader sourcing grey fabrics has to be registered with excise for claiming cenvat and passing on the same to his buyer.

Hope above clarifies.

[Guest]

Dear Sir,

We do job work for Readymade Garment and also we export the readymade garment. In this Job work we do cutting, stitching, Finishing and Packing. Are these process is liable to excise and do we need to pay excise.

[CSSANJAY MALHOTRA]

Dear Bhavin,

Please go through the article " Finished goods exempt provided Raw Material Duty Paid". You will get better clarity.

Job Work is exempted from Excise duty as the process you undertake does not amount to manufacture and further the same is also exempted under service tax as per Notification No. 25/2012.

There is not intention of Govt of put duty on RMG but recently amended Notification No. 34/2015-CE dated 17.07.15 has been worded wrongly and attracts duty of excise. CBEC will come out with clarification soon that no duty leviable on FG even if the Raw material is exempted from duty.

[pawan singhal]

today one news came that this notification issued for something decision related to srf textiles . And no excise levied on textiles sector as per finance secy of GOI. Is it possible to issue notification related to only one co..

[CSSANJAY MALHOTRA]

Dear Pawan,

Basis for Issuance Notification No. 34, 35, 36/17.07.2015 is the Supreme Court Judgement in SRF Limited case, but that does not mean the amendments are applicable to SRF only, the same is applicable to all goods specified in that Notification.

Department intention is not to put other players in trouble, but the wrongly worded / carelessness in drafting notification has made others life uneasy also.

AI Summary

Excise exemption conditionality: finished textiles exempt only if inputs duty paid and no credit taken, raising registration questions. The Notifications exempt specified finished textile goods only if duty was paid on inputs and no excise credit taken; this raises whether yarn manufacturers and grey-fabric traders must register, issue excise invoices, and pay duty when inputs are not 'deemed duty paid.' CBEC clarification is awaited; absent deeming, yarn and grey-fabric units may be chargeable and traders may need registration to claim or pass on cenvat. Job work for readymade garments is presently characterised as non-manufacture and exempt, though drafting confusion has provoked queries.