CIR NO.740/56/2003-CX, DT. 29/08/2003
Exemption to tobacco products (Other than cigarettes, biris, cut tobacco and smoking mixtures for pipes and cigarettes), manufactured by the units in North East
Please find enclosed a copy of
Notification No. 69 - CE dated 25th August 2003. This notification prescribed concessional rates of excise duty on certain specified tobacco products manufactured by units located in North East. The salient features of the exemption scheme, under the said notification, are as under:
a) The concession will apply only to those units who had set up their plants in pursuance to the New Industrial Policy and other Concessions for North East, 1997 and continued their operations despite withdrawal of the exemption on 01/03/2001. It will not apply to units, which came up after 01/03/2001, when the exemption was withdrawn. The concession will apply to all tobacco products (excluding cigarettes, smoking mixtures for pipes and cigarettes, cut tobacco and biris).
b) There is no exemption from National Calamity Contingent Duty (NCCD) under this notification.
c) The concessional rates would, however, be subject to the condition that the manufacturer invests, in North east, an amount at least equal to the excise duty concession, in plant and machinery in a manufacturing unit. This is how the scheme would operate. If the total duty is Rs. 100, the duty payable would be Rs. 50, provided the manufacturer invests the tax concession of Rs. 50 (Rs. 100 - Rs. 50 = Rs. 50) in the North East.
d) This investment of the excise duty concession amount during a quarter should be made within next 6 months, from the end of that quarter. The invested amount should not be withdrawn, for the next 10 years. Even if this amount is withdrawn from a particular investment before this date, it should be reinvested in the North East region only. For these purposes a quarter would mean a period of three months namely, April to June, July to September, October to December and January to March of any financial year or part thereof.
e) A Committee consisting of the Chief Commissioner of Central Excise Shillong and the Principal Secretary of Department of Industry of the State, where the unit availing of the benefit of exemption is located, will monitor the investment of the concession amount. However, in case the investment of the concession amount is made in a State other than the one where the unit availing the exemption is located, then the Principal Secretary of Department of Industry of that State will also be a member of such committee. The unit availing such concession will have to prove to the satisfaction of such Committee that the concession amount has been invested in the manner prescribed.
f) In case the amount is not invested, the unit will be liable to pay back the duty concession, along with interest at the rates applicable under the provisions of section 11AA or 11AB or the Central Excise Act, 1944, as the case may be.
g) The concessional rates under the abovementioned notification are effective form 25th August 2003.
h) The Chief Commissioner and the Commissioners are requested to give wide publicity to this notification and work out the modalities in consultation with the state Governments for giving effect to the above scheme.
The receipt of this circular may please be acknowledged.
Sd/-
(Gautam Ray)
Joint Secretry (TRU)
F. No. 356/29/2003-TRU
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