Exemption to small scale units - 175/86 - Central Excise - Tariff

Exemption to small scale units

Notification No. 175/86-C.E.

Dated 1-3-1986

In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 85/85-Central Excises, dated the 17th March, 1985, the Central Government hereby exempts the excisable goods of the description specified in the Annexure below and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the "specified goods"), and cleared for home consumption on or after the 1st day of April in any financial year, by a manufacturer from one or more factories,—

(a) in the case of the first clearances of the specified goods up to an aggregate value not exceeding rupees seven and a half lakhs,—

(i) in a case where a manufacturer avails of the credit of duty paid on inputs used in the manufacture of the specified goods under rule 57A of the said Rules, from so much of the duty of excise leviable thereon which is specified in the said Schedule [read with any relevant notification issued under sub-rule (1) of rule 8 of the said Rules and in force for the time being] as is equivalent to an amount calculated at the rate of 75% of such duty, or an amount calculated at the rate of 10% ad valorem, whichever is higher;

(ii)  in any other case from the whole of the duty of excise leviable thereon ;

(b) in the case of clearances (being clearances of the specified goods of an aggregate value not exceeding rupees seven and a half lakhs) immediately following the said clearances of the value specified in clause (a), from so much of the duty of excise leviable thereon which is specified in the said Schedule [read with any relevant notification issued under sub-rule (1) of rule 8 of the said Rules and in force for the time being] as is equivalent to the amount calculated at the rate of 75% of such duty or an amount calculated at the rate of 10% ad valorem, whichever is higher :

Provided that the amount of duty of excise payable on the specified goods under sub-clause (i) of clause (a), or as the case may be, under this clause shall not be less than an amount calculated at the rate of 2½% ad valorem;

(c) in the case of clearances (being the clearances of the specified goods of an aggregate value not exceeding rupees sixty lakhs) immediately following the said clearances of the value specified in clause (b), from so much of the duty of excise leviable thereon which is specified in the said Schedule [read with any relevant notification issued under sub-rule (1) of rule 8 of the said Rules and in force for the time being] as is equivalent to an amount calculated at the rate of 10% ad valorem:

Provided that the amount of duty of excise payable on the specified goods in terms of this clause, shall not be less than an amount calculated at the rate of 5% ad valorem.

2. The aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year under clauses (a), (b) and (c) of paragraph 1, shall not exceed rupees seven and a half lakhs, seven and a half lakhs and sixty lakhs respectively.

3. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption,—

(a) by a manufacturer, from one or more factories, or

(b)  from any factory, by one or more manufacturers,

had exceeded rupees one hundred and fifty lakhs in the preceding financial year.

4. The exemption contained in this notification shall be applicable only to a factory which is an undertaking registered with the Director of Industries in any State or the Developmental Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulations) Act, 1951 (65 of 1951):

Provided that nothing contained in this paragraph shall be applicable,—

(a) in a case where the value of clearances from a factory during the preceding financial year or in the current financial year did not exceed or is not likely to exceed rupees seven and a half lakhs; or

(b) in a case where a manufacturer has been availing of the exemption under this notification or any of the notifications specified below, during the preceding financial year :—

(i) 166/72-Central Excises, dated the 13th July, 1972.

(ii) 39/73-Central Excises, dated the 1st March, 1973.

(iii) 158/77-Central Excises, dated the 18th June, 1977.

(iv) 74/78-Central Excises, dated the 1st March, 1978.

(v) 70/81-Central Excises, dated the 25th March, 1981.

(vi) 43/82-Central Excises, dated the 28th February, 1982.

(vii) 44/82-Central Excises, dated the 28th February, 1982.

(viii) 148/82-Central Excises, dated the 22nd April, 1982.

(ix) 77/83-Central Excises, dated the 1st March, 1983.

(x) 83/83-Central Excises, dated the 1st March, 1983.

(xi) 77/85-Central Excises, dated the 17th March, 1985.

(xii) 85/85-Central Excises, dated the 17th March, 1985.

5. Notwithstanding the exemption granted by this notification, in respect of the specified goods which are subjected to concessional rate of duty (other than those specified goods which are wholly exempted from the duty of excise leviable thereon), under this notification, and used as inputs in the manufacture of final products in terms of the provisions of SECTION AA of Chapter V of the said Rules, the credit in respect of such inputs shall be allowed under rule 57B of the said Rules, at the rate of duty otherwise applicable, but for this notification.

Explanation I. - For the purposes of this notification, the expression 'value' means either the value as determined in accordance with the provisions of section 4 of the Central Excises and Salt Act, 1944 (1 of 1944) or, as the case may be, according to the tariff values fixed or altered under section 3 of the said Act.

Explanation II. - For the purposes of computing the aggregate value of clearances under this notification, the clearances of any excisable goods, which are exempted from the whole of the duty of excise leviable thereon by any other notification (not being a notification where exemption from the whole of the duty of excise leviable thereon is granted based upon the value or quantity of clearances made in a financial year) issued under sub-rule (1) of rule 8 of the said Rules, 1944, shall not be taken into account.

Explanation III. - Where any specified goods (hereinafter referred to as inputs) are used for further manufacture of specified goods within the factory of production of inputs, the clearances of such inputs for such use shall not be taken into account for the purposes of calculating the aggregate value of clearances under this notification.

Explanation IV. - For the purposes of this notification, where the specified goods manufactured by a manufacturer, are affixed with a brand name or trade name (registered or not) of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader.

Explanation V. - For the purposes of this notification, where the specified goods are manufactured in a factory, belonging to or maintained by the Central Government or by a State Government, or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account.

Explanation VI. - For the purposes of determining the value of clearances under this notification, in respect of Chinaware or Porcelainware or both, where a manufacturer gets such Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or Porcelainware or both, belonging to the said manufacturer and fired in such a kiln, shall be taken into account.

Explanation VII. - For the purposes of this notification, the expression "powered cycle" or "powered cycle-rickshaw" means a mechanically propelled cycle or, as the case may be, mechanically "propelled cycle-rickshaw, which may also be pedalled, if any necessity arises for so doing.

ANNEXURE

1. All goods falling under heading Nos. 37.01, 37.02, 37.06, 72.14, 73.05, 73.06, 73.08, 74.05, 74.11, 74.12 and 74.13 of the said Schedule.

2. All goods falling under sub-heading Nos. 5102.90, 5105.00, 5108.00, 5301.10, 5303.10, 5304.00, 5308.00, 5601.00, 5603.00, 5604.00, 5605.20, 5607.90, 5608.00, 5907.00, 5909.00, 6202.00, 6301.00, 7210.20, 7212.60 and 7302.20 of the said Schedule.

3. Powered cycles and powered cycle-rickshaws falling under Chapter 87 of the said Schedule.

4. All other goods specified in the said Schedule, other than the following, namely :—

(i) all goods falling under Chapters 9, 24, 37, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 72, 73 and 74 ;

(ii) all goods falling under heading Nos. 21.06, 25.04, 36.03, 40.11, 40.12, 40.13, 87.01, 87.02, 87.03, 87.04, 87.05, 87.06, 87.11, 91.01, 91.02 and 96.13 ;

(iii) all goods falling under sub-heading Nos. 2101.10, 2101.20, 3304.00, 3305.90, 3307.00, 4005.00, 4006.10, 4008.21 and 9605.10 ; and

(iv) sandalwood oil; strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam ; broadcast television receiver sets; refrigerating and air-conditioning appliances and machinery, and parts and accessories thereof.