Circular No.977/01/2014 dated 3.1.2014
Subject: Availability of excise duty exemption to the units which have already
availed of exemption under New Industrial Policy for another 10 years by way of
2nd substantial expansion in the State of Jammu & Kashmir – Clarification –
Regarding.
Representations have been received from trade and industry associations and
field formations seeking clarification as to whether an existing unit which has
availed of excise duty exemption under notification No.56/2002-CE & 57/2002-CE,
both dated 14.11.2002 by way of substantial expansion can avail of excise duty
exemption under notification No.1/2010-CE, dated 06.02.2010, again by way of
second substantial expansion.
2. The matter has been examined by the Ministry. In
pursuance of the New Industrial Policy and other concessions for the State of
J&K announced by the Department of Industrial Policy and Promotion (DIPP) in
June 2002, notification No.56/2002-CE (location specific exemption to all goods
other than the exclusion list) & No.57/2002-CE (non-location specific exemption
to specified industries other than the exclusion list), both dated 14.11.2002
were issued to provide exemption from excise duty equivalent to the duty payable
on value addition undertaken in the manufacture of the goods to the new units
and units undertaking substantial expansion, for a period of ten years from the
date of commencement of commercial production. The exemption operates through a
refund mechanism.
2.1 Subsequently, pursuant to a review of the exemption, notification No.1/2010-CE was issued so as to extend the excise duty exemption to all goods barring the exclusion list to units located anywhere in the State of J&K subject to the same conditions and modalities as are applicable to the existing area-based exemptions for the State. Thus, notification No.1/2010-CE was basically an extension of the existing special package of incentives for the State of J&K with certain modifications.
2.2 Notification Nos.56/2002-CE & No.57/2002-CE and notification No.1/2010-CE does not specifically provide any cut-off date (sunset clause) for setting up of new units or for units undertaking substantial expansion. Further, notification No.1/2010-CE does not debar an existing unit which has availed of excise duty exemption under notification No.56/2002-CE & 57/2002-CE, both dated 14.11.2002 by way of substantial expansion, to avail of excise duty exemption again by way of substantial expansion.
3. It is, therefore, clarified that an existing unit which has availed of
excise duty exemption under notification No.56/2002-CE & 57/2002-CE, both dated
14.11.2002 by way of substantial expansion can avail of excise duty exemption
under notification No.1/2010-CE, dated 06.02.2010 again by way of second
substantial expansion so long as it satisfies the conditions stipulated under
notification No.1/2010-CE, dated 06.02.2010.
4. Trade Notice/Public Notice may be issued to the field formations and
taxpayers.
5. Difficulties faced, if any, in implementation of this Circular may be brought
to the notice of the Board.
(P.K. Mohanty)
Joint Secretary (TRU)
F.No.332/09/2013-TRU
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