Exemption from excise duty on goods manufactured from duty paid goods - Regarding - Central Excise - 125/36/95-CX

Exemption from excise duty on goods manufactured from duty paid goods - Regarding Circular No. 125/36/95-CX Dated 15-5-1995 [From F. No. 341/26/95-TRU] Government of India Ministry of Finance (Department of Revenue) Tax Research Unit, New Delhi Subject : Exemption from excise duty on goods manufactured from duty paid goods - Regarding. I am directed to say that doubts have been raised regarding the interpretation of certain notifications under which exemption from excise duty has been given on certain goods manufactured from duty paid goods. 2. There are a number of notifications which exempt specified goods provided such goods have been made from other goods on which the appropriate duty of excise has already been paid. To illustrate, Notification No. 35/95-C.E., dated 16-3-1995 exempts specified yarn, if made from yarn on which appropriate excise duty has been paid. Similarly, Notification No. 28/95-C.E., dated 16-3-1995 exempts twine, cardage, rope etc. made from duty paid yarn, monofilament yarn. The above illustrations are not exhaustive, and there are similar other notifications as well. 3. Board has issued instructions from time to time that in such cases, even if the inputs are exempted from excise duty, the exemption on the finished goods cannot be denied on that ground. Still, cases have been brought to notice where exemption is being denied on the ground that the inputs did not bear any excise duty. 4. In this context, a copy of the instructions issued by the Board in F. No. 339/6/80-TRU in the context of Notification No. 180/61, dated 23-11-1961 is enclosed. It was clarified by the Board that in the case of S.O. dyes made from exempted dyes, the exemption cannot be denied on the ground that the inputs were exempted from the whole of the duty of excise. This logic would apply to other similar cases also where exemption has been given on the consideration that the finished products have been made from inputs on which appropriate duty of excise has already been paid. 5. Receipt of this letter may please be acknowledged. 6. Hindi version of the circular will follow in due course. Copy of Board F.No. 339/6/80-TRU Government of India Ministry of Finance (Department of Revenue) New Delhi, the 6th December, 1980 To The Collector of Central Excise, (All). Subject : Central Excise - Interpretation of Notification No. 180/61 dated 23-11-1961-Clarification regarding- I am directed to state that a doubt has been raised whether the benefit of concession of duty in respect of the four specified dyes in Notification No. 180/61, dated 23-11-1961 would be available when they are made from primary dyes which have availed full exemption of duty under the Notification 71/78 dated 1-3-1978 since superseded by Notification No. 80/80, dated 19-6-1980. The doubt has arisen in this case on account of the fact that while the primary dyes have availed full exemption of duty, Notification 180/61 allows the exemption to the specified secondary dyes only when the primary dyes are such "on which excise duty or countervailing customs duty has already been paid". The matter was referred to the Ministry of Law who have opined that the specified secondary dyes manufactured from primary dyes in this case are entitled to exemption under Notification No. 180/61 even though the primary dyes had availed full exemption of duty under Notification No. 71/78 or 80/80. An extract of the opinion of the Ministry of Law is enclosed. The Board has accepted the opinion of the Ministry of Law. The receipt of this letter may please be acknowledged.