The Taxation Laws (Amendment) Act, 2006

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....;      The Director General of Inspection for Customs and Central Excise             The Comptroller and Auditor General of India             [email protected] Subject: - The Taxation Laws (Amendment) Act, 2006. *** 1. The Taxation Laws (Amendment) Act, 2006 has come into effect from 13.07.2006. Certain amendments / insertions to section 11A, section11DDA, section 35E, section 37E of the Central Excise Act, 1944 and rule 16 of the Central Excise Rules, 2002 have been effected. 2. Section 11A of the Central Excise Act, 1944 has been amended to introduce an optional scheme for e....

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....xcise Rules, 2002 has been retrospectively amended to declare "wire drawing units" as assessees for the period 29.05.2003 to 08.07.2004, hereinafter referred to as the said period. 4.2 The process of drawing of wire from "wire rod" was held as not amounting to 'manufacture' by the Supreme Court in the case of M/s Technoweld Industries [2003-(155)-ELT-0209-SC]. Therefore, the benefit of availment of credit of duty on inputs by the "wire drawing units" was withdrawn on 29.5.2003 by a circular issued by the Board. However, certain wire drawing units continued to pay a sum representing duty, and continued to pass on the credit of amount paid as duty to the ultimate buyer of drawn wire for further manufacture. By an amendment in the Budg....

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....d as central excise duty on clearance of drawn wire. In other words, wire drawing units, which had paid a sum equal to duty leviable on drawn wire, would be eligible to avail the credit of duty paid on inputs and utilize the same for payment of duty on drawn wire for the period of amendment. The sum paid by the wire drawing unit in such cases will be treated as duty and shall be allowed as credit to the buyer of drawn wire, in terms of the amendment. This amendment would not create any additional liability on any wire drawing unit which did not pay duty on drawn wire during the period of amendment. 4.5 As the Taxation Laws (Amendment) Bill had been introduced in Parliament, Board had, vide a letter dated 20^th July 2005, directed al....