Circular No. 939 /29 / 2010-CX
F.No.102/2/2010-CX-3 Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs
New Delhi, dated the 22nd December, 2010
All Directors General All Chief Commissioners of Central Excise All Chief Commissioners of Central Excise and Customs
Subject: Scope of Notification Nos.49/2003-CE and 50/2003-CE both dated 10.06.2003
Kind attention is invited to Notification Nos. 49/2003-CE and 50/2003-CE both dated 10.06.2003 which provide full exemption from excise duties to goods cleared from industrial units in the states of Uttarakhand and Himachal Pradesh for a period of ten years from the date of commencement of commercial production. The exemption is available to new units set up or existing units which have undergone substantial expansion in terms of the said notifications and commence commercial production before the cut-off date, that is, on or before 31.3.2010
- Representations have been received from Trade and Industry Associations seeking clarification on the availability of the exemption benefit under these notifications in the following situations:
- Where a unit starts producing some new products after the cut-off date using plant and machinery installed up the said cut-off date and without any further addition to the plant and machinery.
- Where the installed capacity in a particular unit is upgraded after the cut-off date, so as to increase the efficiency of the machinery by installing ancillary machines or replacement of some parts etc but in such a way that it does not lead to increase in capacity of production.
- Where new dosage forms are manufactured after the cut-off date on the same line of production with the same machinery.
- Where a unit manufacturers a new product by installing fresh plant, machinery or capital goods after the cut-off date.
- Board has examined the matter. Under the said notifications, any new unit set up or an existing unit which has undergone substantial expansion that commences commercial production before the cut-off date is entitled to excise duty exemption in respect of excisable goods (other than those appearing in the negative list) manufactured and cleared for a period of ten years from the date of commencement of commercial production. The provisions of these notifications do not place a bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years as per the notification. Therefore, it is clarified that in all the above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible industrial units. However the period of exemption would remain ten years and would not get extended on account of such modifications or additions under any circumstances.
- Trade and industry and field formations may be suitable informed.
- Receipt of the Circular may be acknowledged.
- Hindi version will follow.
(Dr. Ravindra J Dange)
Under Secretary (CX-3)
Circular No. 960/03/2012-CX
F. No. 110/03 /2011-CX-3 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs
New Delhi, the 17th February, 2012
All Chief Commissioners of Central Excise & Customs, All Chief Commissioners of Central Excise, All Directors Generals
Subject: Clarification regarding admissibility of exemption under area-based Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 in specific situations – reg.
Your kind attention is invited to Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003 which provide full exemption from excise duties to specified goods cleared from industrial units in the states of Uttaranchal and Himachal Pradesh for a period of ten years from the date of commencement of commercial production. The exemption is available to new units set up or existing units which have undergone substantial expansion in terms of the said Notifications and commence commercial production before the cut-off date, that is, on or before 31.3.2010
- References have been received from field formations as well as from trade and industry seeking clarification regarding admissibility of benefit under area-based exemption Notifications No. 49/2003-CE and 50/2003-CE, both dated 10.06.2003, in the following situations:
- When there is a change in the ownership of a Unit already availing of the benefit of an area-based exemption Notification.
- When a Unit availing of the exemption physically shifts to a new location within the areas specified in the exemption Notification.
- When a Unit availing of the exemption under an area-based Notification expands by acquiring a plot of land adjacent to its existing premises and installing new plant/machinery on such land.
- The above issues have been examined by the Board. As the exemption is extended to a ‘Unit’, any change in its ownership would not jeopardize the admissibility of exemption for the remaining part of the ten year exemption period subject to the condition that the new owner exercises his option in writing to avail of the benefit of the exemption Notification before effecting the first clearance.
- So far as the case of an eligible unit physically shifting to a new location is concerned, it is clarified that the exemption in such cases should be available for the residual period of exemption. However, the cases of relocated units should be examined on a case – to- case basis and the exemption should be allowed to continue subject to certain safeguards like establishing through proper inventorisation and certification by a Chartered Engineer that the unit has relocated its plant, machinery, equipment, manpower etc. and relocation to areas specified in the relevant Notification only and not across States and/or Notifications.
- In the context of expansion of a Unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, attention is invited to Board’s Circular No. 939/29/2010-CX dated 22.12.2010 wherein it was, interalia, clarified that any growth in the production/output of a unit by installing fresh plant and machinery would be eligible for exemption under these area-based Notifications. The situation of expansion of an eligible unit by acquiring an adjacent plot of land and installing new plant and machinery on such land is akin to expansion by way of installing new plant and machinery inside the existing plot/premises. It is, therefore, clarified that in such cases, the exemption should continue to be available for the residual period of exemption.
- Trade, industry and field formations may be suitably informed.
Under Secretary (CX-3)