Assessment of intermediate goods — arising during the manufacture of Chaddars - Central Excise - F. No. 63/V

Assessment of intermediate goods — arising during the manufacture of Chaddars. Instruction dt. 14.8.2007 vide F. No. 63/V issued by Ministry of Finance and Company Affairs It is directed to say that representations have been received from the Solapur Zilla Yantramag Dharak Sangh to grant exemption to intermediate yarns arising during the manufacture of Chaddars. 2. It has been reported that the manufacturer of chaddars buys the cotton yearn and carries out processes like dyeing, printing, bleaching, etc on such yearn. These activities are chargeable to duty in terms of Chapter Note to Chapter 52. However, the chaddar was eligible for exemption SSI notification No. 8/2003 for clearance upto Rs. 1 crores. As there was no exemption to the said intermediate yearns, duty had become payable on such yearn. Prior to 01.03.2003, dyed printing bleached yarn of Chapter 52 were exempted provided duty has been paid on base yarn (Sl. No.95 of Notfn. No. 6/2002). Therefore, prior to 1.3.2003, problem of payment of duty on such intermediate yarn by chaddar manufacturers did not arise. However, for the subsequent period, chaddar was eligible for Rs. 1 crore exemption under Notfn. No. 8/ 2003 (SSI Notification). Further, all intermediate goods manufactured and used captively within the factory were also exempted in the same notification. But these intermediate goods should also be. specified in the notification and goods of chapter 52 were not covered by the said SSI notification. Therefore, duty liability on these intermediate yearns existed even thought the final product namely chaddars was exempted. 3. It has, therefore, been decided to float a survey to ascertain the assessment practice of intermediate yearns, arising during the manufacture of Chaddars falling under the Chapter 63 which were exempted under SSI notification for the period from 01.03.2003 to 08.07.2004 for consideration of issuance of notification under section 11C for the Central Excise Act, 1944. 4. It is requested that necessary information in respect of intermediate yearns undertaken for the manufacturing of Chaddars may be provided as per the Annexure - 'A' (inclosed). If no duty has been paid on said intermediate yarn, a nil report may be sent. 5. It is requested that the above information may please be furnished to the Board by 5.09.07 positively as a VIP reference is pending on the issue, it is requested to send the reply on priority basis. Annexure - 'A' Chief Commissionerate Zone Sl. No. Data Required (unitwise) 1. No. of units involved in manufacture of intermediate Yam used for manufacture of chaddars during the period 01.03.2003 to 08.07.2004, which availed SSI exemption under notification under 8/2003 2 (a) Number of units which paid duty on such input yarns even though Chaddars were exempted (b) The amount of duty paid by such unit at (a) above. 3. (a) Number of units which did not pay duty during the period 01.03.2003 to 08.07.2004. (b) Approximate amount of duty involved. 4. Details of SCNs issued indicating the No. date of issuance, period covered and the amount of duty involved in each SCN, the demand confirmed and date of confirmation 5. Amount of duty realised on confirmation of demand raised from each unit. 6. Total amount realised 7. Amount of duty pending realisation 8. Details of Appeal, Audit objection, Court cases, if any. 9. Any other relevant information