Excise

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CENTRAL EXCISE TARIFF CHANGES Original Notification / Section Changes Amended vide Notification No. 83/1994 -Central Excise dt. Additions for exemption of Notification No. 7/200911th April, 1994 as amended goods manufactured on Central Excise dt. 7th July, job-work basis by job- 2009 worker for the item EVA compound

Notification No. 84/1994 -Central Excise dt. Additions for exemption of 11th April, 1994 as amended goods manufactured by the supplier and cleared to job-worker for manufacture on job-work basis for the item EVA compound

Comments Full exemption has also been provided to EVA compound manufactured by job-worker on job-work basis and used in manufacture of specified goods under Chapter Headings 6401 to 6405 i.e. footwear. In addition to use of the said goods in manufacture of the specified goods, the condition to be fulfilled is that the supplier undertakes to pay the duty on the final products incase this actual user condition is not complied. Notification No. 7/2009- In line with the above change, Central Excise dt. 7th July, similar exemption has been 2009 granted to EVA compound manufactured by a supplier and cleared to job-worker for manufacture on job-work basis subject to the actual user condition that the specified goods on return will be used by the supplier in manufacture of specified goods under Chapter Headings 6401 to 6405 i.e. footwear and in the event

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of failure to do so, the supplier undertakes to pay the duty on such goods cleared to job-worker. Notification No. 28/2002 -Central Excise dt. Exemption of Additional 13th May, 2002 as amended Duty of Excise and Special Additional duty of Excise on Bio-diesel

Notification No. 8/2003-Central Excise dt. Restriction of SSI st 1 March, 2003 exemption w.r.t. goods cleared under brand name will not be applicable to printed laminated rolls.

Notification No. 8/2009Central Excise dt. 7th July, 2009 and Notification No. 21/2009-Central Excise dt. 7th July, 2009

The exemption of Additional Duty of Excise and Special Additional duty of Excise available to High Speed Diesel Oil is extended to Bio-diesel, which is a combination of High speed diesel oil blended with alkyl esters of long chain fatty acids obtained from vegetable oils that is a blend, consisting 80% or more of high speed diesel oil and upto 20% bio-diesel. To avail this exemption, the appropriate duties of excise read with relevant exemption Notifications must have been paid on both the high speed diesel oil and bio-diesel. Notification No. 9/2009- The SSI exemption is not available Central Excise dt. 7th July, in case the goods cleared bear the 2009 brand name / trade name whether registered / not registered. However there are certain exclusions to which this clause does not apply which are in the nature of packaging material viz PP caps, crown corks, metal labels, plastic bags. Printed laminated rolls have also been

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added to this exclusion.

Notification No. 29/2004-Central Excise, dated the 9th July, 2004 / Notification No. 30/2004-Central Excise, dated the 9th July, 2004 / Notification No. 3/2006-Central Excise, dated the 1st March, 2006 / Notification No. 4/2006-Central Excise, dated the 1st March, 2006 / Notification No. 5/2006-Central Excise, dated the 1st March, 2006 / Notification No. 6/2006-Central Excise, dated the 1st March, 2006 / Notification No. 28/2002-Central Excise, dated the 13th May, 2002 / Notification No. 8/2003-Central Excise, dated the 1st March, 2003 / Notification No. 58/2008-Central Excise, dated the 7th December, 2008 / Notification No. 13/2007 -Central Excise, dated the 1st March, 2007 / Notification No. 10/2006-Central Excise, dated the 1st

Revision in excise duty rates of certain items as per Annexure A enclosed herewith

Notification No. 11/2009Central Excise dt. 7th July, 2009 / Notification No. 12/2009-Central Excise dt. 7th July, 2009 / Notification No. 13/2009-Central Excise dt. 7th July, 2009 / Notification No. 14/2009Central Excise dt. 7th July, 2009 / Notification No. 15/2009-Central Excise dt. 7th July, 2009 / Notification No. 16/2009-Central Excise dt. 7th July, 2009 / Notification No. 17/2009Central Excise dt. 7th July, 2009 / Notification No. 18/2009-Central Excise dt. 7th July, 2009 / Notification No. 19/2009-Central Excise dt. 7th July, 2009 /

The government has decided to stick by its own commitment of introducing the GST by 1st April, 2010 and therefore to bring convergence between the rates of excise and service tax, revised the rates of certain specified items through exemption Notifications. In majority of the items, the rates have been restored to 8% wherever they had reduced to 4% through the Notification issued in December, 2008 and February, 2009.

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March, 2006 / Notification No. 2/2008-Central Excise, dated the 1st March, 2008

Notification No. 20/2009Central Excise dt. 7th July, 2009 / Notification No. 21/2009-Central Excise dt. 7th July, 2009

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ANNEXURE A Tariff Heading

50040090, 50050021, 50050022, 50060031, 50060032, 50060033 50060039 5105 to 5113 5204 to 5212

Existing Peak Rate of Excise Duty as per First Schedule

Description of Goods

Duty Exemption in excess of (Existing) 4%

Effective rate (Existing)

Effective rate (New)

4%

Duty Exemption in excess of (New) NA

8%

All goods

8%

8% 8%

All goods All goods(i) of cotton, not containing any other textile material

4%

4%

NA

8%

NIL

NIL

4%

4%

8% 8%

(ii) others All goods

4% 4%

4% 4%

NA NA

8% 8%

8%

All goods (other than, nylon monofilament yarn of 210 deniers or in the multiples thereof, with tolerance of 6 per cent.; or nylon fish net fabrics)

4%

4%

NA

8%

and

53 (except 5301, 5303, Ramie or China grass falling under 53050090 5401, 54050000, 5407 and 5408

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5404

8%

54

8%

All goods (other than, nylon monofilament yarn of 210 deniers or in the multiples thereof, with tolerance of 6 per cent.; or nylon fish net fabrics) All filament yarns procured from outside and subjected to any process by a manufacturer who does not have the facilities in his factory (including plant and equipment) for the manufacture of filament yarns of chapter 54. Explanation.- For the purpose of this exemption, ‘manufacture of yarns’ means manufacture of filaments of organic polymers produced by ,-

4%

4%

8%

8%

4%

4%

8%

8%

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(a) polymerization of organic monomers, such as, polyamides, polyesters, polyurethenes, or polyvinyl derivatives; or

5508 to 5516 56 (except 56011000)

8% 8%

56075010, 56081110 56081190 57

8%

58

and 8%

(except

8% 8%

(b) chemical transformation of natural organic polymers (cellulose, casein, proteins or algae), such as, viscose rayon, cellulose acetate, cupro or alginates. All goods All goods of cotton, not containing any other textile material All goods of cotton, not containing any other textile material All goods (i) of cotton, not containing any other textile material

4% NIL

4% NIL

NA 4%

8% 4%

NA

8%

4%

4%

NIL

NIL

4%

4%

(ii) others All goods

4% NIL

4% NIL

NA 4%

8% 4%

-

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58043000, 5805 and 5807) 59

60

61, 62 and 63 (except 63090000 and 6310)

8% 8%

8% 8%

8% 8%

8%

(i) of cotton, not containing any other textile material; (ii) others All goods(i) of cotton, not containing any other textile material (ii) others All goods(i) of cotton, not containing any other textile material (ii) others All goods(i) of cotton, not containing any other textile material (ii) others Explanation- (1) For the removal of doubts, it is hereby clarified that 'goods of cotton, not containing any other textile material', shall include goods made from fabrics of cotton, not containing .any other textile material, even if they

4%

4%

NA

8%

NIL

NIL

4%

4%

NA

8%

4% NIL

NIL

4%

4%

4%

4%

NA

8%

NIL

NIL

4%

4%

4%

4%

NA

8%

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5506 or 5507

8%

2101

14%

2106

14%

contain sewing threads, cords, labels, elastics tapes, zip fasteners and similar items used for stitching, fastening, holding or adornment, of materials other than cotton Synthetic filament tow or artificial filament tow procured from outside and subjected to “tow-totop” process, required for spinning by a manufacturer who does not have the facilities in his factory (including plant and equipment) for producing goods of heading Nos. 5501 and 5502.”. Coffee or teapremixes Coffee or teapremixes

NA

8%

NIL

NIL No cenvat on inputs to be taken under the Cenvat Credit Rules, 2004.

NA

NA

NIL

NIL

NIL

NIL

NA

Anamoly removed since the correct classification for the coffee or tea-

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27

27

14% + Rs.15 per litre

14% + Rs.15 per litre

Naphtha or Natural Gasoline Liquid for use in the manufacture of fertilizer, if such fertilizer is cleared as such from the factory of production

NIL

Naphtha or Natural Gasoline Liquid for use in the manufacture of ammonia: Provided that such ammonia is used in the manufacture of fertilizers and the

NIL

NIL

NIL

NIL

premixes would have been under 2101 and not 2106. This entry was introduced last year in the exemption Notification NIL

NIL

Restriction is imposed and the exemption would be available if used in the factory of production for manufacture of fertilizers and if such fertilisers are cleared from factory only NIL Restriction imposed on end use of ammonia and restricted to fertilisers only – however the same may be used within the

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fertilizer so manufactured is cleared as such from the factory of production

271011

14% plus Rs.15 per litre

14% plus Rs.15 per litre 271011

271011

14% plus Rs.15 per litre 14% plus Rs.15 per litre

Motor spirit commonly known as petrol,(i) intended for sale without a brand name; (ii) other than those specified at (i) Above All goods (other than motor spirit commonly known as petrol) High Speed diesel (i) intended for sale without a brand name;

factory of production or outside subject to compliance of Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), Rules, 2001.

Rs.6.35 per litre 6% plus Rs.5 per litre 32%

Rs.6.35 litre

per

Rs.5.35 per litre

Rs.5.35 per litre

6% plus Rs.5 per litre

Rs.6.5 per litre

Rs.6.5 per litre

32%

NA

14% Amendment in First Schedule

Rs.2.60 per litre

Rs.2.60 per litre

Rs.1.60 per litre

Rs.1.60 per litre

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14% plus Rs.15 per litre 2710

14% plus Rs. 5 per litre

(ii) other than those specified at (i) above. High speed diesel oil blended with alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as bio-diesels, up to 20% by volume, that is a blend, consisting 80% or more of high speed diesel oil, on which the appropriate duties of excise have been paid and, up to 20% bio-diesel on which the appropriate duties of excise have been paid. Explanation.-For the purposes of this exemption “appropriate duties of excise” shall mean the duties of excise

6% plus Rs.1.25 per litre NA

6% plus Rs.1.25 per litre 8% plus Rs. 5 per litre

Rs.2.75 per litre

Rs.2.75 per litre

NIL

NIL

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29173600

14%

29173700

14%

29261000 32159090

14% 14%

3907 40070010

14% 14%

leviable under the First Schedule and Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), the additional duty of excise leviable under section 133 of the Finance Act, 1999 (27 of 1999) and the special additional excise duty leviable under section 147 of the Finance Act, 2002 (20 of 2002), read with any relevant exemption notification for the time being in force. Pure terephthalic acid Dimethyl terephthalate Acrylonitrile Ink for writing instruments including for markers and highlighters Polyster chips Heat resistant latex rubber thread

4%

4%

8%

8%

4%

4%

8%

8%

4% 4%

4% 4%

8% 8%

8% 8%

4% 4%

4% 4%

8% 8%

8% 8%

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400821

14%

4301 / 4302

14%

4408

14%

4410 / 4411

14%

4412

14%

44182010 5402, 5403, 5406

14% 14%

5501, 5502, 5503,

8%

Heat resistant rubber tension tape Raw, tanned or dressed fur skins All goods (sheets for veneering for plywood, similar laminated wood and other wood of thickness not exceeding 6 mm) All goods – (particle board, oriented strand board, fibre board and similar board of wood or other ligneous materials and fibre board of wood or other ligneous materials) All goods – (plywood, veneered panels and similar laminated wood) Flush doors All goods other than nylon filament yarn of 210 deniers or in the multiples thereof with tolerance of 6% All goods

4%

4%

8%

8%

4%

4%

8%

8%

4%

4%

8%

8%

4%

4%

8%

8%

4%

4%

8%

8%

4% 4%

4% 4%

8% 8%

8% 8%

4%

4%

8%

8%

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5504, 5506, 5507 68

14%

68 (except 6804, 6805, 6811, 6812 and 6813)

14%

69

14%

7113

14%

Goods in which not less than 25% by weight of flyash or phosphor-gympsum or both have been used Goods manufactured at the site of construction for use in construction work at such site

Ceramic tiles manufactured in a factory not using electricity for firing the kiln Article of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery

4%

4%

8%

8%

NIL

NIL

NIL

NIL

4%

4%

8%

Earlier this exemption was limited to Goods in which more than 25% by weight of red mud, press mud or blast furnace, slag or one or more of these materials have been used 8%

2%

2%

NIL

NIL

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732111

27101112

27101113

84 or 90

14%

14% + Rs.15 per litre

14% + Rs.15 per litre

14%

LPG Gas Stoves (with burners only without other functions such as grills or oven) Special boiling point spirits (Other than benzene, benzol, toluene and toluol) with nominal boiling point range 63 – 70 degrees C. Other special boiling point spirits (Other than benzene, benzol, toluene and toluol) The following goods, namely:-

4%

4%

8%

8%

NA

NA

NA

14% Amendment in First Schedule

NA

NA

NA

14% Amendment in First Schedule

4%

4%

8%

8%

4%

4%

8%

8%

NIL

NIL

NIL

NIL

(i) Electronic milk fat tester; and

85

14%

852352

14%

(ii) Electronic solid non-fat (SNF) tester. MP3/MP4 or MPEG 4 player, with or without radio or video reception facility Recorded smart cards

Condition

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inserted - No cenvat credit to be taken on inputs 85235910

14%

Recorded proximity cards and tags

NIL

NIL

NIL

NIL Condition inserted - No cenvat credit to be taken on inputs

8702, 8703

8704

24%

14% / 24%

(ii) Motor vehicles of engine capacity exceeding 1500 cc

Motor vehicles, other than petrol driven dumpers

20% + Rs.15,000 per unit

8%

20% + Rs.15,000 per unit

8%

20% + Rs.15,000 per unit

8%

20% + Rs.15,000 per unit Limitation w.r.t. capacity not exceeding 1999 cc removed and benefit of reduced duties extended to higher capacity motor vehicles 8% Benefit of reduced rate extended to all petrol driven motor vehicles

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87060049

848690 or 9017

24% plus 10000 per chassis

14%

90 or any other Chapter 9603 9607 44

14% 14% 14%

4820

14%

Motor chassis for vehicles of heading 8704 (petrol driven) fitted with engines, whether or not with cab Parts of drawing and mathematical instruments, used in the manufacture of such drawing and mathematical instruments Patent Ductus Arteriosus / Atrial Septal Defect occlusion device All goods All goods Articles of wood, other than articles of densified wood and flush doors All goods, other than notebooks and exercise books such as folders, file covers, manifold business forms and other articles of stationary, of paper

except dumpers 8% plus 10000 per chassis

NA

24% plus 10000 per chassis

8% plus 10000 per chassis

4%

4%

8%

8%

NIL

NIL

NA

4% 4% 4%

4% 4% 4%

8% 8% 8%

8% 8% 8%

4%

4%

8%

8%

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4821 6814 68 (except headings 6804, 6805, 6811, 6812, 6813)

•

14% 14% 14%

or paperboard All goods Articles of mica Solid or hollow building blocks, including aerated or cellular light weight concrete blocks and slabs

4% 4% 4%

4% 4% 4%

8% 8% 8%

8% 8% 8%

Effective rates for the goods falling under the following chapters have also been restored to 8% from existing rate of 4%. 5004, 5005, 5006 and 5007, 5105, 5106, 5107, 5108, 5109, 5110, 5111, 5112 and 5113, 5204, 5205, 5206, 5207, 5208, 5209, 5210, 5211 and 5212, 5302, 5305, 5306, 5308 (excluding 5308 10 10 and 5308 10 90), 5309, 5310 and 5311, 5401, 540490, 54050000, 5407 (excluding 54071015, 54071025, 54071035, 54071045, 54071095, 54072010, 54072020, 54072030, 54072040, 54072090, 54073010, 54073020, 54073030, 54073040, 54073090, 54074119, 54074129, 54074290, 54074300, 54074490, 54077110, 54077120, 54077200, 54077300, 54077400, 54078119, 54078129, 54078290, 54078300, 54078490, 54079110, 54079120, 54079200, 54079300 and 54079400) and 5408, 5508, 5509, 5510, 5511, 5512, 5513, 5514, 5515 and 5516, 5601 (excluding 56011000 and 56012200), 5602, 5603, 5604, 5605, 5606, 5607 (excluding 56075010), 5608 (excluding 56081110 and 56081190) and 5609, 57, 5801 (excluding 58012210 and 58013500), 5802, 5803, 5804 (excluding 58043000), 5806, 5808, 5809, 5810 and 5811, 5901, 5902 (excluding 59021010 and 59021090), 5903, 5904, 5905, 5906, 5907, 5908, 5909, 5910 and 5911, 60, 61, 62, 63 (excluding 63090000 and 6310), 9001300, 95044000

•

Corresponding changes w.r.t. exemptions for the Chapters covered above and mentioned under the Notification No. 23/2003 dt. 31.03.2003 as amended have been made on account of restoration of rates to 4% or 8% as the case may be at Serial number 5, 5A, 6, 7 and 7A of the Notification.

•

For arriving the assessable value of packaged / canned software for the purpose of levy of excise duty, value determined under Section 4 of Central Excise Act, 1944 for transfer of right to use the software for the purpose of commercial exploitation shall be excluded. This value will however be taxable under Service Tax. The person providing the right to use shall make a declaration to this effect to the Assistant

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Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in respect of such transfer of the right to use for commercial exploitation

NON-TARIFF CHANGES 1. Input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer - Explanation to definition of Input under the Cenvat Credit Rules, 2004 has been amended so to exclude cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods. 2. Manufacturers of excisable goods availing cenvat credit are required to reverse the credit availed in respect of inputs / capital goods, incase the same are written off / provision to write off is made in the books of accounts. Subsequently if the same are used in manufacturing, the proportionate credit can be availed by the manufacturers. This provision has now been made applicable to service providers as well and therefore any service provider making such provision for write off will be required to reverse the proportionate credit. 3. On account of reduction of rates in excise duties and service tax, the corresponding reversal of cenvat credit required by a manufacturer of excisable and exempted goods or service provider providing both taxable and exempted services and not maintaining separate books of accounts has been reduced as under: Manufacturer Service Provider

5% instead of 10% of the value of the exempted goods 6% instead of 8% of the value of the exempted services

4. New Rule 24A inserted in the Central Excise Rules, 2002. This rule makes it mandate for the Central Excise Officer to return the books of accounts / documents seized by him / produced by the assessee, within 30 days of the issue of the Notice or within 30 days of the expiry of the period for issue of said notice if the same has not relied by him in issuing the said notice. These books / documents however can be retained under the written orders of the Commissioner of Central Excise. 5. Abatement allowed w.r.t. certain specified goods falling under certain chapters have been amended.

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Chapter Heading

Description of Goods

6907 6908 7321

Vitrified tiles, whether polished or not Glazed tiles LPG gas stoves (with burners only, without other functions such as, grills or oven) MP3 Player or MPEG 4 Player Toothbrush

85 96032100

Existing Abatement Rate 40 40 30

New Abatement Rate 45 45 35

30 25

35 30

6. Following proposals are introduced vide the Finance Bill, 2009: a. Section 9A of the Central Excise Act, 1944 has been amended and the Chief Commissioner’s shall allow compounding of the offence on payment of such compounding amount and also the manner laid down by him. Further restriction of compounding has been imposed for certain offences. b. Special Audit u/s 14A and 14AA can now be conducted by Chartered Accountants as well c. Advance Ruling Authority under Section 28 F of the Customs Act, 1962 will be the Advance Ruling Authority for Excise Matters as well. d. Sections 35G and 35H have been amended so as to empower High Courts to condone delay in the filing of appeals, applications as well as the memorandum of cross objections where it is satisfied that there was sufficient cause for delay e. Note 1 of Chapter 8 in the First Schedule to the Central Excise Tariff Act, 1985 has been substituted so as to exclude ‘betel nut product known as supari’ of tariff item 2106 9030 from its purview. f. A note has been inserted in Chapter 21 so as to provide that in relation to product of tariff item 2106 90 30 the process of adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients, other than lime, katha (catechu) or tobacco to betel nut in any form shall amount to ‘manufacture