Excise duty exemption to small scale units - Difficulties regarding allowing relief in respect of goods leviable to specified rates of duty - Regarding - Central Excise - 21/01/86-TRU

Excise duty exemption to small scale units - Difficulties regarding allowing relief in respect of goods leviable to specified rates of duty - Regarding F. No. 21/01/86-TRU Dated 10-4-1986 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Excise duty exemption to small scale units - Difficulties regarding allowing relief in respect of goods leviable to specified rates of duty - Regarding. The undersigned is directed to inform you that references have been received from Collectors of Central Excise regarding determination of the amount of the exemption under Notification No. 175/86-C.E., dated 1-3-86 in respect of goods which are leviable to specific rates of duty 2. The exemption under the small scale exemption Notification No. 175/86-C.E. is based upon the clearances made by the manufacturer from a factory. As per Explanation I of the Notification the expression 'value' means the value as determined in accordance with the provisions of Section 4 of the Central Excises and Salt Act or according to the tariff values. Thus for determining the level of exemption/eligibility, the value of clearances ought to be known irrespective of the fact that whether the goods are normally leviable to specific or ad valorem rates of duties. This was the case even under the erstwhile small scale exemption notification. 3. As regards extent of exemption, this has to be determined as provided for in the opening paragraph of the notification. For the purpose of convenience, it is explained in the example below : - Example : A is a manufacturer of cement eligible to avail exemption under the small scale exemption notification. The normal duty leviable on cement is Rs. 225 per M.T. (i) In respect of the first clearance up to Rs. 15 lacs (being fully exempted) there will be no payment of excise duty. The value for this purpose would be the value as determined under Section 4. Normally it will be the whole sale price without excluding any excise duty as no duty is paid in respect of this slab; (ii) In respect of clearances beyond Rs. 15 lacs but not exceeding Rs. 75 lacs, excise duty payable would be as below. Rate of duty = Normal duty - 10% Adv. Assuming an assessable value of Rs. 1,000/- the duty payable would be Rs. 225 per MT ( - ) 10% of Rs 1,000/-, i.e. Rs. 225 ( - ) Rs. 100 = Rs. 125 Therefore, A will pay duty @ Rs. 125 per M.T. in the slab of clearances above Rs. 15 lacs but up to Rs. 75 lacs.