Central Excise - Notification Nos. 36/87-CE, dated 1-3-1987 as amended, and 124/87-C.E., dated 29-4-1987 - Difficulties in implementation - Regarding - Central Excise - 332/43/88-TRU

Central Excise - Notification Nos. 36/87-CE, dated 1-3-1987 as amended, and 124/87-C.E., dated 29-4-1987 - Difficulties in implementation - Regarding F. No. 332/43/88-TRU Dated 26-7-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Notification Nos. 36/87-CE, dated 1-3-1987 as amended, and 124/87-C.E., dated 29-4-1987 - Difficulties in implementation - Regarding. Attention is invited to Notification Nos. 36/87-C.E., dated 1-3-1987, as amended and 124/87-C.E., dated 29-4-1987, as amended and to say that representations have been received in the Board's Office that the Central Excise authorities, in different Collectorates, are denying the benefit of concessional rates prescribed under these notifications in the case of such cement units where the production of cement in the previous financial year fell below 30 per cent of annual licensed capacity as certified by the Development Commissioner for cement Industry in the Ministry of Industry. It has also come to the notice of the Board that CERA has raised objections that the term "any financial year" used in the notifications means any financial year during the period of the validity of these notifications thereby implying that if the production of cement during any financial year was less than 30% of the annual licensed capacity of a unit as certified by the Development Commissioner for cement in the Ministry of Industry, the benefit of these notifications would not be available for the remaining part of the period validity of these notifications. 2. The matter has been examined. The Government's intention in giving the concession was that in the financial year for which the exemption is claimed, the production should be atleast 30% of the annual licensed capacity. This is clear from 1987 Budget Instructions as well (para 9 of the explanatory note regarding changes in excise duty of 1987 Budget Instructions). It was clarified in the instructions that the assessment should be done on a provisional basis and should be finalised as soon as the production reaches the level of 30% of the annual licensed capacity of the factory and refund at the rate of Rs. 50 per tonne in respect of past clearances of cement should be sanctioned to the eligible factories. 3. It is hereby clarified that the term "any financial year" used in these notifications refer to the financial year for which the concession is claimed. Therefore, if during a particular financial year the actual production of a unit was less than 30% of the annual licensed capacity, such units cannot avail the benefit of either of these two notifications during that particular financial year only. The Director of Receipt Audit (INDT) has also agreed with the aforesaid views. This condition has since been withdrawn vide notifications 200/88-Central Excises and 201/88-Central Excises, both dated 16-5-1988. This may please be brought to the notice of the field formations and replies to the CERA sent accordingly.