Budget 2011-12 — Clarifications relating to readymade garments and vaccines - Central Excise - F. No. 334/3/2011-TRU

Instruction Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi dated 4-3-2011 Kindly refer to the Explanatory Notes to changes in Central Excise duties circulated alongwith budget papers. In para 61.2 of these notes, wherein changes in the excise duty rate on readymade garments and made up articles of textile were discussed, it has inadvertently been mentioned that the excise duty of 10% is being imposed on such goods without Cenvat credit facility. It clarified that Cenvat credit of the duty paid on inputs and capital goods as well as service tax paid on input services is available to the manufacturers of readymade garments and textile made ups. In case the liability to pay duty on these items rests with the person who gets them manufactured on job-work basis (merchant manufacturer), the facility of Cenvat credit would also be available to him. For this purpose, a suitable amendment has been made in the definition of manufacturer or producer appearing in clause (naa) of rule 2 of the Cenvat Credit Rules, 2004. 2. I would also like to inform you that minor errors in some notifications [namely, 5/2011-C.E. , 6/2011-C.E. , 14/2011-C.E. , 7/2011-C.E. (N.T.) , 21/2011-Cus ., 25/2011-Cus. and 27/2011-Cus. ] dated 1-3-2011 were observed. These have since been corrected and corrected version of the notifications have been hosted on the CBEC website : www.cbec.gov.in. The Gazette copies of the notifications published on 1-3-2011 also reflect the correct versions of these notifications. 3. Central excise duty of 1% was imposed on vaccines (other than those specified under the National Immunization Program) by virtue of S. No. 39 of Notification No. 1/2011-C.E., dated 1-3-2011. The policy intent was to retain full exemption from excise duty on vaccines specified under National Immunization Program. In order to reflect this clearly, an entry prescribing full exemption for such vaccines has been inserted at S. No. 62AA of Notification No. 4/2006-C.E., dated 1-3-2006. This amendment has been carried out by Notification No. 19/2011-C.E., dated 3-3-2011. 4. The above changes may kindly be brought to the notice of all the field formations under your charge as well as trade. May I once again remind you to urgently send us comments/suggestion, if any, for carrying out amendments/corrections in any of the provisions of Finance Bill, 2011 or The budget notifications positively by Monday, the 7th March, 2011. [F. No. 334/3/2011-TRU]