Special Exemption Schemes – North East and J & K - Central Excise Practice Manual (OLD) - Central Excise

SPECIAL EXEMPTION SCHEME - NORTH EAST AND JAMMU KASHMIR In order to provide incentives for development of industries/ units in the North Eastern part of the country and in the state of Jammu and Kashmir, the Government of India has notified exemption scheme from excise duty by issuing various notifications. The various exemption notifications are mentioned below. The following are the common provisions for notifications from serial No. 1 to 7 mentioned below: - · The notifications provide exemption from basic duty as well as additional duties of excise to the extent the duty is paid through account current or PLA. · The exemption will be available only if the manufacturer first utilizes whole of the Cenvat credit available to him on the last day of the month under consideration, for payment of duty on goods cleared during such month and pays only the balance amount in cash. · The manufacturer shall submit a statement of duty paid from the account current (PLA), to AC/ DC of central excise, by 7 th of the next month in which duty has been paid. · The AC/ DC of central excise may after verification refund the amount of duty so paid from the PLA, by the 15 th of next month. In case of delay, the refund shall be made on provisional basis by 15 th of next month and than adjust the refund in subsequent months of refunds. · The exemption shall be applicable for a period not exceeding 10 years from the date of publication of the notification or from the date of commencement of commercial production whichever is later. · The manufacturer has also the option, to take the credit of amount of duty paid in current account and utilize the same for payment of duty for the succeeding month and such payments will be treated as payments in cash, subject to the conditions as mentioned in the notification. · The exemption shall not apply to such goods which have been subjected to only one or more of the following processes, namely, preservation during storage, cleaning operations, packing or repacking of such goods in a unit container or labeling or relabelling of containers, sorting, declaration or alteration of retail sale price amounting to manufacture in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim . [This provision is applicable only for notifications no. 1 to 5 as mentioned below] 1. Notification No. 32/99-CE: Exemption to North East States from Excise duty to goods cleared from a unit located in the Growth Centre or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estates or Industrial Area or Commercial Estates or Scheme Area - · Exemption to the goods specified in the 1 st schedule and 2 nd schedule of CEA, other than - i. Pan masala falling under Chapter 24 of the said First Schedule, ii. G oods falling under Chapter 24 of the said First Schedule, iii. Plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests Notification No. S.O. 705(E) dated the 17th of June 2003 Manufactured by a unit, and iv. Goods cleared by oil companies such as Numaligarh Refineries, Bongaigaon Refineries, Indian Oil Corporation Guwahati and Assam Oil Division Indian Oil Corporation Digboi. · For exemption, goods must be cleared from units located in the Growth Centre or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estates or Industrial Area or Commercial Estate or Scheme Area, as the case may be, as specified in Annexure appended to this notification. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 24/12/1997 but not later than 31/03/2007. ii. Industrial units existing before the 24/12/1997 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 24/12/1997 but not later than 31/03/2007. 2. Notification No. 33/99-CE: Exemption to specified goods of factories in North East ( Assam , Tripura, Meghalaya, Mizoram, Manipur, Nagaland or Arunachal Pradesh) - · Exemption to the goods specified in the schedule appended to this notification, other than - i. Pan masala falling under Chapter 21 of the said First Schedule, ii. G oods falling under Chapter 24 of the said First Schedule, iii. Plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests Notification No. S.O. 705(E) dated the 2nd of September, 1999 and S.O. 698(E) dated the 17th of June, 2003 , and iv. Goods falling under Chapter 27 of the said First Schedule and which are produced by petroleum oil or gas refineries. · For exemption, goods must be cleared from units located in the state of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh, as the case may be. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 24/12/1997 but not later than 31/03/2007. ii. Industrial units existing before the 24/12/1997 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 24/12/1997 but not later than 31/03/2007. 3. Notification No. 56/2003-CE: Exemption to the goods manufactured and cleared from the state of Sikkim - · Exemption to the goods specified in the schedule appended to this notification, other than - i. Pan masala falling under Chapter 21 of the said First Schedule, ii. G oods falling under Chapter 24 of the said First Schedule, iii. Plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests Notification No. S.O. 705(E) dated the 2nd of September, 1999 and S.O. 698(E) dated the 17th of June, 2003 , iv. Goods falling under Chapter 27 of the said First Schedule and which are produced by petroleum oil or gas refineries, v. Aerated branded beverages, and vi. Pollution causing paper and paper products. · For exemption goods must be cleared from a unit located in the State of Sikkim. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 23/12/2002 but not later than 31/03/2007. ii. Industrial units existing before the 23/12/2002 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 23/12/2002 but not later than 31/03/2007. 4. Notification No. 71/2003-CE: Exemption to Assam on the goods clearedfrom a unit located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area - · Exemption to the goods specified in the 1 st schedule and 2 nd schedule of CEA, other than - i. Pan masala falling under Chapter 21 of the said First Schedule, ii. G oods falling under Chapter 24 of the said First Schedule, iii. Plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests Notification No. S.O. 705(E) dated the 2nd of September, 1999 and S.O. 698(E) dated the 17th of June, 2003 , iv. Goods falling under Chapter 27 of the said First Schedule and which are produced by petroleum oil or gas refineries, v. Aerated branded beverages, and vi. Pollution causing paper and paper products. · For exemption, goods must be cleared from a unit located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area, as the case may be, in the State of Sikkim, as specified in Annexure - II appended with this notification. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 23/12/2002 but not later than 31/03/2007. ii. Industrial units existing before the 23/12/2002 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 23/12/2002 but not later than 31/03/2007. 5. Notification No. 20/2007-CE:Exemption to goods specified in 1 st Schedule of CEA other than those mentioned in the Annexure and cleared from a unit located in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim - · Exemption to the goods specified in the 1 st Schedule of CEA, other than those mentioned in the Annexure appended with this notification. · For exemption, goods must be cleared from a unit located in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim, as the case may be. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 1/4/2002 but not later than 31/03/2017. ii. Industrial units existing before the 1/4/2002 but which have undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 1/4/2002 but not later than 31/03/2017. 6. Notification No. 39/2001-CE: Exemption to Units located in Kutch District of Gujarat - · Exemption to the goods specified in the 1 st Schedule of CEA other than goods specified in the Annexure appended to this notification which are as follows: - i. Goods falling under Chapter 24 of the First Schedule. ii. Goods, falling under the said First Schedule, namely - (a) Candles; (b) Footwear of a retail sale price not exceeding Rs.125 per pair; (c) Tableware and kitchenware of glass; (d) Imitation jewellery; (e) Monochrome television receivers; (f) Vacuum and gas-filled bulbs of retail sale price not exceeding Rs.20 per bulb; (g) Sunglasses for correcting vision; (h) Watches and clocks of retail sale price not exceeding Rs.500 per piece; (i) Rubberised coir mattresses; (j) Toothbrushes; (k) Kerosene, that is to say, any hydrocarbon oil (excluding mineral colza oil and white spirit) which has a smoke content of 18 mm or more and is ordinarily used as an illuminant in oil burning lamps; (l) Liquefied petroleum gases and other gaseous hydrocarbons other than natural gas, ethylene, propylene, butylenes and butadiene; (m ) Compressed Natural Gas (CNG); (n) Cotton sewing thread, not containing synthetic staple fibres; (o) Cotton yarn, not containing synthetic staple fibres; (p) Diesel engines upto 10 HP; and (q) Goods specified in the Table annexed to notification no.11/2001-CE, dated the 1 st of March, 2001. iii. Goods specified in the Second Schedule. · For exemption goods must be cleared from a unit located in Kutch district of Gujarat. · Exemption will be granted, provided - - On the date of commencement of commercial production, the 'Original Value of Investment in Plant and Machinery Installed' in the factory, is below Rs.20 crore. - Exemption will be given for the first clearances upto an 'aggregate value' not exceeding twice the value of such investment from the date of commencement of commercial production, in each year. - It shall apply only to new industrial units, which are set up on or after the date of publication of this notification in the Official Gazette but not later than the 31/12/2005. Subject to the conditions, that - · The manufacturer shall produce a certificate from the committee that the unit is a new unit and has been set up within the specified time period as mentioned above. · The manufacturer shall submit a declaration and in turn obtain a certificate from the committee regarding the 'original value of investment in plant and machinery' installed in the factory as on the date of commencement of commercial production. · On the basis of certificate if the value is found to be more than 20 crore than declared, the manufacturer shall be liable to pay back the entire amount of duty exemption availed under the notification along with interest @ of 24% per annum as if no exemption were available. · The exemption shall apply for a period not exceeding five years from the date of commencement of commercial production by the unit. · This notification will not apply if the manufacturer is availing exemption under notification no.8/2003-CE and Notification no.9/2003 7. Notification No. 56/2002-CE: Exemption to units located in Industrial Growth Centres/Industrial Infrastructure/EP Indl. Parks, etc. - · Exemption to the goods specified in the 1 st Schedule and the 2 nd Schedule of CEA, other than - i. Cigarettes/ cigars of Tobacco ii. Manufactured tobacco and substitutes thereof iii. Soft drinks and their concentrates · For exemption goods must be cleared from a unit located in the Industrial Growth Centre, Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate, or Scheme Area, as the case may be, specified in Annexure - II appended with this schedule. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 14/6/2002. ii. Industrial units existing before the 14/6/2002 but which have - undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 14/6/2002, or - undertaken new investment which is directly attributable to the generation of additional regular employment of not less than 25% over and above the base employment limit, on or after the 14/6/2002, subject to the conditions that the unit shall not reduce regular employment after claiming exemption and produce a certificate to the effect that unit has created such regular employment. 8. Notification No. 57/2002-CE: Exemption to specified goods cleared from the state of Jammu Kashmir - · Exemption to the goods specified in the Schedule appended with this notification, other than - i. Cigarettes/ cigars of Tobacco ii. Manufactured tobacco and substitutes thereof iii. Soft drinks and their concentrates · For exemption goods must be cleared from a unit located in the State of Jammu and Kashmir. · The exemption contained in this notification shall apply to the following units: - i. New industrial units which have commenced their commercial production on or after 14/6/2002. ii. Industrial units existing before the 14/6/2002 but which have - undertaken substantial expansion by way of increase in installed capacity by not less than 25% on or after the 14/6/2002, or - undertaken new investment which is directly attributable to the generation of additional regular employment of not less than 25% over and above the base employment limit, on or after the 14/6/2002, subject to the conditions that the unit shall not reduce regular employment after claiming exemption and produce a certificate to the effect that unit has created such regular employment. Other Notifications w.r.t. to specific industries - 1. Notification No. 34/99-CE: Exemption to paper and paperboard manufactured by Ashok Paper Mills ( Bihar Units) - · Exemption is provided to paper and paperboard falling under chapter 48 of 1 st schedule of CEA. · Exemption from fifty per cent of the duty of excise leviable on the paper and paperboard. · Such goods shall be manufactured by Ashok Paper Mills (Bihar Unit) located at Darbangha in the State of Bihar. · The exemption shall be applicable for a period not exceeding 10 years from the date of commencement of commercial production. 2. Notification No. 14/2007-CE: Exemption to goods falling within the 1 st Schedule of CEA and manufactured and cleared from M/s Brahmaputra Cracker and Polymer Limited, located in village Lepetkata, District-Dibrugarh - · Exemption to the goods specified in the 1 st schedule of CEA. · Exemption from whole of the excise duty. · For exemption goods must be manufactured and cleared from M/s Brahmaputra Cracker and Polymer Limited, located in village Lepetkata, District-Dibrugarh, Assam. · The exemption shall be applicable for a period not exceeding 10 years from the date of commencement of commercial production.