EXEMPTION FROM PAYMENT OF DUTY - Central Excise Practice Manual (OLD) - Central Excise

4. EXEMPTION FROM PAYMENT OF DUTY The Central Government is empowered to grant exemption, full or partial, from payment of duty either generally by issue of a Notification or in a specific case of an exceptional nature by means of a special order under Section 5A of the Act. The exemption Notifications are issued in respect of certain specified goods or certain categories of assessees or for certain specified purposes. In respect of conditional exemptions, it is imperative that the conditions specified in the relevant Notification are to be strictly adhered to. 4.1 Small scale exemption: The Notification No. 8/2003 CE dated 1-3-2003 as amended provides full exemption from payment of duty to the small scale units upto the aggregate value of clearance of Rs. 150 lakhs in a financial year. The salient features of the exemption scheme are highlighted as below: (i) The aggregate value of clearance of all excisable goods cleared for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed Rs.400 lakhs in the preceding financial year. (ii) The manufacturer should not avail the Cenvat credit of duty paid on inputs. (iii) The manufacturer should not utilize the Cenvat credit of duty paid on capital goods during the period of availment of the said exemption. (iv) The exemption is not applicable for specified goods bearing a brand name or trade name whether registered or not, of another person. The brand name restriction is, however, not applicable to the following cases: Goods cleared as Original Equipments (O.E) or parts of any machinery/ equipment/appliances cleared for use as O.E. Goods bearing the brand name or trade name of the Khadi and Village Industries Commission or a State Khadi and Village Industry Board or the National Small Industries Corporation or a State Small Industries Development Corporation or State Small Industries Corporation. Goods manufactured in a factory located in rural area (the area comprised in a village as defined in the land revenue records). Account books, registers, writing pads and file folders.