CIR NO.734/50/2003-CX, DT. 07/08/2003

Twisted Yarn Mfd. by Independent Units-Operationalisation of Excise Exemption Scheme

Subject: Excise duty exemption on twisted yarn (including crepe yarn) undertaken by independent units - regarding.

Notification No.66/2003-CE has been issued on 07.08.2003. This notification seeks to prescribe a duty on twisted (including crepe) yarn, which is equal to the duties of excise (or the additional duties of customs in case of imported filament yarn) paid on the inputs i.e. base filament yarns. In other words, the credit of the duties paid on the inputs would be sufficient to meet the duty liability on the final products i.e. twisted filament yarn. The exemption will be available only to twisted yarn manufactured by independents twisters, who do not undertake other processes in their factory. Further, the exemption is available only in cases where the input is procured from outside and on which appropriate duties of excise have been paid. In this regard, it may be recalled that as per the judgement of the apex court, payment of `Nil" duty does not amount to payment of appropriate duty.

2. In order to operationalise the scheme provided in the said notification, the independent twisters would be required to maintain accounts of the inputs as well as of the finished product so as to ascertain the duty liability on each consignment of the finished product by working out the duties paid on the input that have gone into its manufacture. While no standardized format for maintenance of record is being prescribed, it is requested that the jurisdictional commissioners may discuss the same with the concerned trade/trade associations to work out the modalities which should be simple and acceptable to trade while being transparent enough for audit verifications.

Sd/-
(Gautam Ray)
Joint Secretary (TRU)

F. No. 356/30/2003-TRU

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