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Finished Goods Exempt Provided the Inputs are Duty paid and No CENVAT Credit availed- CBEC to issue clarification to avoid unwanted Litigation

Central Excise - By: - CS SANJAY MALHOTRA - Dated:- 20-7-2015 Last Replied Date:- 30-10-2015 - Textile Goods (Chapter 50 to 63) - Ref: Notification No. 34/2015-CE dated 17.07.2015 (Amendment to Notification No. 30/2004-CE dated 09.07.2004) CBEC has recently issued Central Excise Notification No. 34/2015-CE dated 17.07.2015 thus amending the Notification No. 30/2004-CE dated 09.07.2004 by substituting the Provisions as below. There exists divergent views as to whether the amendment has resulted i .....

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additional duty of customs on inputs has been taken by the manufacturer of such goods (and not the buyer of such goods), under the provisions of the CENVAT Credit Rules, 2004. Extracts from Notification No. 30/2004-CE dated 09.07.2004:- Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules DIVERGENT VIEWS- CBEC CLARIFICATION REQUIRED FOR IMPACT OF AMENDMENT IN NOTIF .....

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RAL EXCISE duty or attract NIL Rate of Duty as per Central Excise Tariff Act 1985 will not be eligible for DUTY EXEMPTION, as appropriate duty of Excise does not include the goods exempted from duty or chargeable to Nil rate of Duty . (Refer Apex Court decision in the case of CCE Vadodra Vs Dhiren Chemical Industries) & CBEC Circular No. 667 dated 26.09.2002. Refer Citations : COLLECTOR OF C. EX., VADODARA Versus DHIREN CHEMICAL INDUSTRIES [2001 (12) TMI 3 - SUPREME COURT OF INDIA] Circular .....

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been paid on the raw material, then such exemption shall not be available when the raw material is not liable to excise duty or such duty is nil. [Would the above bar is applicable for Notification No. 34/2015-CE dt. 17/07/15] What would be the treatment of Raw Material purchased directly from market???? Would that be considered as Deemed to be duty paid irrespective of whether the Excise Duty has NIL rate in Tariff or enjoys Exemption by virtue of any Notification????? In the earlier Notificat .....

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ertakes activity of Spinning of Yarn, Grey Fabrics and then processing of textile fabrics and sales afterwards? Do they have to pay Duty as per Notification No. 34/2015-CE dated 17.07.15 as their intermediate goods i.e. Yarns, Grey fabrics are subject to Nil Duty as per Notification No. 30/2004-CE dated 09.07.2004. Hope CBEC would come out with clarifications timely and avoid unwanted litigations and divergent business practices…. In continuation to my article on Notification No. 34/2015- .....

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rtue of some Notification, but the wrongly worded phrase Appropriate Duty of Excise leviable has been paid has put them in trouble as the same as clarified by CBEC in Circular No. 667 dated 26.09.2002. Commissioners at various jurisdictions are of the view that Excise Duty has been imposed on Textile Goods if the raw material is exempted from Duty, but still some are of the view that Industry players misinterpretation is wrong. To bring the facts of Department's interpretation, please go thr .....

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to check whether the manufacturer from whom he is buying his input had availed CENVAT on not. It will be going to high litigation issue. Expect more clarification on this. - Reply By CS SANJAY MALHOTRA - The Reply = Dear Hetal, Addition to article will be published shortly. Agreed with you that Notifications issued are controversial and moreover due to lack of clarity from CBEC, industry has hold the clearances for the past 2 days. Hopefully CBEC would come over the amendment without further de .....

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not enjoy Duty Exemption. Mr. Akshay Joshi (Under Secretary Finance) has clarified in meeting with Association at Rajasthan that the Notification does not put Textile mills goods chargeable to duty and the Notification has been misinterpretated. http://epaper.patrika.com/c/5943309 WHOSE COMMENTS (WRITTEN TRADE NOTICE OF COMMISSIONER - SURAT OR VERBAL CLARIFICATION FROM REPRESENTATIVE OF MOF) ONE SHOULD FOLLOW FROM THE SAME NOTIFICATION NO 34/2015-CE DATED 17.07.15 Adding to more confusion. Lets .....

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