Whether articles intended to become permanent magnets could be granted the exemption meant for permanent magnets, as per notification No. 160/86-C.E., dated 1-3-1986 - Regarding - Central Excise - 20/88

Whether articles intended to become permanent magnets could be granted the exemption meant for permanent magnets, as per notification No. 160/86-C.E., dated 1-3-1986 - Regarding Circular No. 20/88 Dated 8-9-1988 [From F. No. 148/1/88-CX.4] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject: Whether articles intended to become permanent magnets could be granted the exemption meant for permanent magnets, as per notification No. 160/86-C.E., dated 1-3-1986 - Regarding. A doubt has been raised as to whether articles intended to become permanent magnets after magnetisation should be treated on par with permanent magnets and be granted the exemption meant for permanent magnets, as per notification No. 160/86-C.E., dated 1-3-1986. 2. During the period prior to 28-2-1986, the expression 'permanent magnets' covered some specified articles intended to become permanent magnets after magnetisation, as per statutory description of erstwhile Tariff Item 66. With the introduction of the new CET w.e.f. 28-2-1986, permanent magnets and articles intended to become permanent magnets after magnetisation have got classified under heading No. 85.05 of the new CET, permanent magnets and articles intended to become permanent magnets after magnetisation have been separately mentioned. There is also no section note or chapter note to support the view that articles intended to become permanent magnets after magnetisation should be treated on par with permanent magnets. Attention is also invited to the HSN Explanatory Notes under the corresponding HSN Heading No. 85.05 (Page 1340) where also such goods have not been treated on the same footing. It is accordingly clarified that articles intended to become permanent magnets after magnetisation cannot be treated on par with permanent magnets under the new CET and, therefore, the exemption meant for permanent magnets cannot be granted to articles intended to become permanent magnets after magnetisation. 3. The trade interests may also be suitably advised. 4. All pending assessments may be finalised on the above basis.