excise registration on conditionally exempted goods

[Guest]

Respected Sir,

          My friend has a factory divided in two sections in one plot. In one part dutiable (narrow woven fabrics) items were manufactured and in other part other excisable items (non woven fabric) were manufactured subject to condition of availment of Cenvat Credit on inputs under Notification No. 30/2004-CE dated 09.07.2004 amended. Now availment of Cenvat Credit on inputs in second part has been discontinued and goods thus have become exempted. Total turnover of both products was more than Rs 4 crores during last year 2009-10.Both items are textiles on which SSI notification, no. 8/2003 CE dated 01.03.2003 is not applicable. Now my friend wants to manufacture Non woven fabric in the same unit without Excise registration and  but manufacture Narrow woven fabric with Excise registration .But excise officers are asking him to work non woven fabrics under Excise registration and however he may not pay Excise duty on the non woven same and also file ER-1 of the same . Are  excise officers are right in their contention ?.My question is whether excise registration is compulsory for both dutiable  and conditionally exempted goods manufactured in the different parts of the same factory ? Can conditionally exempted goods like non- woven fabric   are exempted from registration  under Central Excise Rule. (Rule 9(2)) ?

Thanks and regards,

Harish Kumar 

[Surender Gupta]

When the factory premises are same, you have no option but to declare activities of manufacturing in that factory premises in central excise registration. There is no concept of part of factory for the purpose of central excise.

Yes, you can divide the whole factory into two separate premises, if feasible, with independent entry and independent to each other, in that case, you may not be required to bring the exempted goods (manufactured in one factory) within the scope of other dutiable goods (manufactured in other factory) for the purpose of excise registration for that other factory.

[NEERAJ KUMAR, RANCHI]

 I may seek your attention to rule 6 of the cenvat credit rules. You may get your reply there.

AI Summary

Factory Owner Queries Dual Excise Registration for Textiles; Rule 9(2) and Cenvat Credit Rule 6 Discussed A factory owner is inquiring about excise registration requirements for two types of textile products manufactured in separate sections of the same facility. One product is dutiable, while the other is conditionally exempt due to discontinued Cenvat Credit. The excise officers insist on registering both products, but the owner questions this necessity, citing Central Excise Rule 9(2). A respondent clarifies that the entire factory must be registered as a single entity unless physically divided into separate premises. Another suggests consulting Rule 6 of the Cenvat Credit Rules for further guidance.