Excise duty on woven textile fabrics manufactured by a composite mill or a manufacturer engaged in processing of fabrics along with weaving of fabrics in the same factory- Clarification- regarding

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..... Department of Revenue Tax Research Unit Subject: Excise duty on woven textile fabrics manufactured by a composite mill or a manufacturer engaged in processing of fabrics along with weaving of fabrics in the same factory- Clarification- regarding. I am directed to state that clarifications have been sought from the field formation on whether woven textile fabrics manufactured by a composite mi .....

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..... lable if the inputs are exempted from excise duty or are subject to nil rate of excise duty. Since textile yarns, which emerge at the intermediate stage of production, are exempt from excise duty under the captive consumption notification No. 22/96-CE, dated 23-7-1996, it has, therefore, been argued that processed woven textile fabrics manufactured by the aforesaid units in a continuous process wo .....

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..... . As per Explanation II (as amended by Explanation VII, inserted vide notification No. 37/2002-CE), textile fibres, yarns and fabrics bought from the market have been deemed to have been duty paid. Thus, a composite mill, i.e., a manufacturer engaged in the processing of fabrics along with spinning of yarn from fibres and weaving of fabrics within the same factory, manufacturing processed textile .....

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..... would be textile fibres while in the case of a manufacturer engaged in processing of fabrics along with weaving of fabrics within the same factory, the principal raw material would be textile yarns. In both the situations, the raw materials, bought from the market, have been deemed to be duty paid by a specific Explanation. Thus, the above referred Board's Circular would not be applicable to these .....

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