Whether GSI Act 1957 and Textile and article of textile act 1978 could be applicable simultaneously on same product

[G GOSWAMI]

We are manufacturer of synthetic wire cloth/fabric of chapter 59 whose alleged intermediateproductos wooven fabric of chapter 54,My request to opine that the whether the said two act of 1957 and 1978 could be applicable on this product simultaneously for raising demand by central excise authority. Regards. G.Goswami

[G GOSWAMI]

Whether GSI Act 1957 and Textile and article of Textile Act 1978 could be applicable simultaneously on the same product and same period.

The above query is for imposition of Additional Duty of Excise prior to 1995 on the woven fabric of Chapter 54. Kindly enlighten us by your valued opinion.

Regards,

G.Goswami

[KASTURI SETHI]

Yes. Both types of duties simultaneously remained in force up to 8.7.2004. AED (GSI) was exempted vide Notification No.32/04-CE dated 9.7.2004 and AED(T) was exempted vide Notification No.31/04-CE dated 9.7.2004. AED GSI was levied in lieu of Sale Tax. Both the duties were levied in addition to BED. In 1986 rate of AED (T) was 13.64 % (Notification No.48/86-CE dated 10.2.86) and in 1990 rate of AED(T) was 15% (Notification No.53/90-CE dated 20.3.90) Rates of both duties kept on changing but finally both were exempted w.e.f 9.7.2004.

[YAGAY and SUN]

Respected Kasturi Sir,

Your replies are amazing! You have a very rich experience and in-depth Knowledge in Indirect Tax matters. We are learning a lot from you 'Sir'.

Regards,

Team YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[KASTURI SETHI]

Respected M/s.Yagay and Sun,

Dear sirs, Thanks a lot. you are legend legal luminaries and such accolades from you is virtually a reward for me.

[Ganeshan Kalyani]

Good to see experts appreciation each other. This is an encouragement for us.

[G GOSWAMI]

Respected KASTURI SETHI Ji,

Many many thanks for your kind opinion. AED (Textile) was leviable on the Basic Excise Duty. If BED is NIL then the AED(T) will also be nil. Again whether Cenvat credit on the AED under GSI Act 1957 will be available. If available since when? I shall be obliged to have your kind opinion in the matter.

Regards,

G.Goswami

23.12.2015

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

बहुत बहुत धन्यवाद. आप ने ठीक कहा है. यह मेरी मानसिक खुराक है.यह हमारी मेहनत और ज्ञान की मान्यता है. इसमें सब से बड़ी बात विद्वानों (experts) निष्कपटता (sincereity) है.

[KASTURI SETHI]

Sh.G.Goswami Ji,

Cenvat Credit on AED(GSI) was initially allowed vide Notification No.5/02-CE (NT) dated 1.3.2002. At that time credit availed on AED(GSI) could be utilized only towards AED(GSI). Thereafter, vide Notification No.13/05-CE (NT) dated 1.3.2005 credit was allowed to be utilized towards BED or SED. Further it is pertinent to point out that Notification No.32/04-CE dated 9.7.2004 which exempted some goods (including the goods in question i.e. Heading No.54.06 & 54.07) was rescinded vide Notification No.21/06-CE dated 1.3.2006. Notification No.11/06-CE dated 1.3.2006 exempted all the goods from levy of AED(GSI).

[Ganeshan Kalyani]

Dhanyawad sir...

[G GOSWAMI]

Respected KASTURI SETHI Ji,

Many many thanks for your kind opinion. We understand from the Notification No.13/2005-CE(NT) Dated 1.3.2005 that credit of AED under 1957 Act may be utilised towards payment of Basic Excise Duty with effect from 01.4.2000 ( explanation of para 3(C) of this notification). Sir, is their any provision/clarification so that the credit of AED under 1957 Act could also be availed prior to April 2000 say 1987 to 1996. We shall be obliged to have your kind opinion in the matter.

Regards,

G.Goswani

25.12.2015

[KASTURI SETHI]

Dear Sh.G. Goswami Ji,

 

Cenvat Credit of AED(GSI) was allowed vide Notification No.8/95-CE(NT) dated 16.3.95 and credit on AED(T) was allowed vide Notification No.5/94-CE(NT) dated 1.3.94. Further amended vide Notification No.21/99-CE(NT) dated 28.2.99. Credit on both duties were not allowed prior to these notifications.But for Notification No.13/05-CE (NT) dated 1.3.05 Credit would have been restricted to the extent of utilizing the same towards these duties only.

AI Summary

Additional excise duties coexistence: both GSI and textile AEDs applied concurrently and affected cenvat credit availability.
Both the Additional Excise Duty under the GSI scheme and the Additional Excise Duty (Textile) were levied concurrently in addition to Basic Excise Duty until exemptions were notified in mid 2004. AED(Textile) was charged on Basic Excise Duty and was nil where Basic Excise Duty was nil. Cenvat credit on these AEDs was authorised by a sequence of notifications from the mid 1990s, initially limited to utilization against the same duty and later expanded to permit credit utilisation towards Basic or Special Excise Duty; credits were not available prior to those enabling notifications.