Circular No. 172/6/96-CX dated 6/2/96
Subject: Scope of Notification No. 1/93-CE as amended.
I am directed to say that certain doubts have been raised regarding the
scope of notification no. 1/93-CE dated 1.3.93 as amended relating to the option given
to a manufacturer to pay excise duty at the normal rate as per para 4 of the said
notification. The point raised is whether a manufacturer who is having two factories
and eligible for the SSI exemption under notification No. 1/93-CE can opt for payment
of duty at the normal rate in respect of one unit and avail the exemption under the
said notification in respect of the other.
2. The matter has been examined and the position is clarified as under. As per para
one of the notification, exemption (slab-wise) has been provided to a manufacturer in
respect of clearances made in a financial year. Para two of the notification
stipulates that while computing the various slabs of exemption and eligibility,
clearances, effected by a manufacturer from all his factories should be taken into
account. Para 4 of the notification gives an option to the manufacturer to pay excise
duty at normal rate subject to the condition that the sub-sequent clearances effected
by him should suffer duty at normal rate and not at the concessional rate. A combined
reading of these paras reveals that as far as a manufacturer is concerned, his
clearances from all factories should be taken into account for the purpose of paying
duty at the concessional rate or at the normal rate as per his option; otherwise the
condition stipulated in para 2 will be violated.
3. In view of the above position, it is clarified that a manufacturer does not have
an option to pay excise duty at the normal rate in respect of one unit and
simultaneously claim exemption under notification no. 1/93-CE in respect of other
unit. In other words, when a manufacturer exercises the option for payment of duty at
the normal rate, it shall be with respect to the clearance: made by him from all his
factories.
4. The Above position may be brought to the notice of all the field formations for
guidance and necessary action.
Sd/-
P. R. Cnandrasekharan
Director (TRU)
F.No. 345/5/96-TRU
Presented by eximkey.com