NTF. NO. 14/2002-CE, DT. 01/03/2002

Seeks to prescribe effective duty of excise and additional duty ofexcise in respect of specified processed textile fabrics.

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act,1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of SpecialImportance) Act, 1957 (58 or 1957) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 11/2001-Central Excise, dated the 1st March, 2001, published in the Gazette of India vide number G.S.R. 136 (E), dated the 1st March, 2001, except as respects things done or omitted to be done before such supersession, the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), specified in the corresponding entry in column (2) of the said Table, from so much of the aggregate of, –

(a) the duty of excise specified in the First Schedule to the said Central Excise Tariff Act; and

(b) the duty of excise specified in the First Schedule to the said Additional Duties of Excise (Goods of Special Importance) Act,

(hereinafter referred to as the ‘aggregate duty’) as is in excess of an amount calculated at the rate specified in the corresponding entry in column (4) of the said Table, subject to the relevant conditions specified below the said Table, and referred to in the corresponding entry in column (5) of the said Table:

Provided that the aggregate duty of sixteen per cent. ad valorem leviable on the excisable goods specified in S. No. 9 of the Table below shall be apportioned equally between the duty leviable under the said Central Excise Act and the said Additional Duties of Excise (Goods of Special Importance) Act:

Provided further that-

(a) during the period commencing from the 1st day of March, 2002 and ending on the 28th day of February, 2005, the aggregate duty in respect of the goods specified against S.Nos. 2, 3, 4, 5, 6, 7, 8, 11, 13, 15, 16 and 17, shall be further exempted in excess of three-fourths of the rate specified in the corresponding entry in column (4) of the said Table; and

(Bold words in clause (a) has been substituted vide Ntf. No. 40/2002-CE, Dt. 14/08/2002)

(b) during the period specified in clause (a) above, the duty leviable on the excisable goods specified therein, shall be apportioned in the ratio 2:1 between the duty leviable under the said Central Excise Act and the said Additional Duties of Excise (Goods of Special Importance) Act.

OMITTED - [OLD - Provided also that during the period commencing from the date of issue ofthis notification and ending on the 28th day of February, 2005, the aggregate duty inrespect of the goods specified against S.No. 5A shall be further exempted in excessof fifty per cent. of the rate specified in the corresponding entry in column (4) of thesaid Table, and shall be apportioned in the ratio of 1:1 between the duty leviableunder the said Central Excise Act and the said Additional Duties of Excise (Goods ofSpecial Importance) Act.

(In this Notification 3 proviso has been inserted vide Central Excise Notification No.26/2002-CE, dated 27-4-2002) ]

OMITTED - [OLD - Provided also that the exemption specified against S.No. 4A of the said Table, shall be effective upto and inclusive of the 31st day of March, 2003.”;

(Above proviso has been inserted vide Ntf. No. 33/2002-CE, Dt.18/06/2002) ]

(Above third & fourth Proviso has been Omitted vide Ntf. No. 47/2002-CE, Dt. 06/09/2002)

Explanation I.- For the purposes of this notification, the rates specified in column (4) of the said Table are ad valorem rates, unless otherwise specified.

Explanation II.- For the purposes of the conditions specified below, textile yarns or fabrics shall be deemed to have been duty paid even without production of documents evidencing payment of duty thereon.

Explanation III.- For the purposes of the exemption under S.No. 5 of the Table,-

(i) the expression “independent processor” means a manufacturer who is engaged exclusively in the processing of fabrics with the aid of power and who has no proprietary interest in any factory engaged in the spinning of yarn of cotton or weaving of cotton fabrics; and

(ii) the value of the fabrics shall be equal to 40% of the value determined under section 4 of the Central ExciseAct, 1944.

OMITTED - [OLD- Explanation IV.- For the removal of doubt, it is hereby clarified that the exemptionunder S.Nos. 4A and 5A of the Table shall apply only if the said woven fabrics of cotton have been already subjected to bleaching, dyeing or printing or any one or more of theseprocesses without the aid of power or steam.

(In Explanation IV bold word and figures has been substituted vide Ntf. No. 33/2002-CE, Dt.18/06/2002) ]

(Above Explanation IV has been Omitted vide Ntf. No. 47/2002-CE, Dt. 06/09/2002)

Explanation V.- For the removal of doubt, it is hereby clarified that once amanufacturer opts to pay duty in respect of goods specified against S.No. 2, 11, 13 or15, as the case may be, of the Table below, he shall do so in respect of all theclearances of the said goods from his factory or warehouse, as the case may be,specified against each of the aforesaid S.No. till such time he opts not to pay duty.

Explanation VI.- For the removal of doubt, it is hereby clarified that Condition No. 1or 3, as the case may be, shall be deemed to have been fulfilled even if CENVATcredit in respect of capital goods, which are not used exclusively in the manufactureof exempted goods, is availed under the CENVAT Credit Rules, 2002.

(Explanation IV, V, VI has been inserted vide Central Excise Notification No.26/2002-CE, dated 27-4-2002)

Explanation VII.-In this notification,-

(1) for the removal of doubt, it is hereby clarified that in Explanation II and in condition Nos.1 and 2 specified below the Table, the expression “textile yarns” is intended to include therein “textile fibres” also:

(2) for the purposes of the exemption to processed textile fabrics, specified in the Table against any of the S.Nos. 3,4,6,7,8,13 and 16, manufactured by a composite mill (i.e., a manufacturer engaged in processing of fabrics along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the same factory), or by a manufacturer engaged in processing of fabrics along with weaving or knitting or corchetting of fabrics within the same factory, the condition specified in column (5) against each of the said respective S.Nos. is intended to have been satisfied if the said processed fabrics are manufactured from textile fibres or yarns, as the case may be, on which the appropriate duty of excise leviable under the First or the Second Schedule to the said Central Excise Tariff Act read with any notification for the time being in force or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid;

(3) this Explanation shall have effect as if it had always been the part of this notification.

(Explanation VII has been inserted vide Central Excise Notification No.37/2002-CE, dated 3-07-2002)

S.No.	Chapter or heading No., or sub-heading No.	Description	Rate of duty	Condition
(1)	(2)	(3)	(4)	(5)
1	5110.10, 5111.10, 5207.20, 5208.20, 5209.10, 5406.10, 5407.10, 5511.10, 5512.10, 5513.10, 5514.10, 5801.11 or 5802.51	Woven fabrics, not subjected to any process	Nil	1
2	5110.10, 5111.10, 5207.20, 5208.20, 5209.10, 5406.10, 5407.10, 5511.10, 5512.10, 5513.10, 5514.10, 5801.11 or 5802.51	Woven fabrics, not subjected to any process	16%	2
3	5207.10 or 5208.10	Denim fabrics, whether or not processed	16%	2 and 5
4	51.10, 51.11, 52.07, 52.08, 52.09, 54.06, 54.07, 55.11, 55.12, 55.13, 55.14, 5801.12, 5801.22, 5801.32, 5802.22, 5802.32, 5802.52	Woven fabrics, subjected to any process	16%	5
OMITTED [OLD- “4A	52.07, 52.08 or 52.09	Woven fabrics of cotton subjected to the process of stentering by a processor with the aid of an open-air stenter, on job work basis or on his own behalf, in a factory which does not have the facilities (including plant and equipment) for carrying out bleaching dyeing, or printing or any one or more of these processes with the aid of power or steam	Nil	6”; ]
(Sl.No.4A has been omitted vide Ntf. No. 47/2002-CE, Dt. 06/09/2002)
(Sl.No. 4A has been inserted vide Ntf. No. 33/2002-CE, Dt.18/06/2002)
5	52.07,52.08 or 52.09	Cotton fabrics woven on handlooms and processed with aid of power or steam by an independent processor approved in this behalf by the Government of India on the recommendation of the Development Commissioner for Handlooms.	16%	-
OMITTED [OLD- 5A	52.07, 52.08 or 52.09	Woven fabrics of cotton subjected to stentering with the aid of an open-air stenter, singeing, cropping or butta-utting, curing or heat-setting, or expanding, or any one or more of these processes with the aid of power or steam, subject to the condition the said fabrics are processed in a factory which does not have the facilities (including plant and equipment) for carrying out bleaching dyeing, or printing or any one or more of these processes with the aid of power or steam. Explanation.- For the purposes of this notification, “open-air stenter” meansstenters commonly known as open-air stenters and includes a stenter with a simple outer cover to prevent loss of heat but does not include any stenter which runs on steam or a hot-air stenter.	16%	- ]
(Sl.No.5A has been omitted vide Ntf. No. 47/2002-CE, Dt. 06/09/2002)
(Sl.No.5A has been inserted vide Central Excise Notification No.26/2002-CE, dated 27-4-2002)
6	5801.21, 5801.31, 5802.21 or 5802.31	Woven fabrics, whether or not subjected to any process	16%	2 and 5
7	58.03	All goods	16%	2 and 5
8	5804.11 or 5804.12	All goods	16%	2 and 5
9	59.01	All goods	16%	-
10	6001.11, 6001.21, 6001.91, 6002.42 or 6002.92	Knitted or crocheted fabrics of cotton, not subjected to any process	Nil	1
11	6001.11, 6001.21, 6001.91, 6002.42 or 6002.92	Knitted or crocheted fabrics of cotton, not subjected to any process	16%	2
12	6001.11, 6001.21, 6001.91, 6002.42 or 6002.92	Knitted or crocheted fabrics of cotton, subjected to any process	Nil	3
13	6001.11, 6001.21, 6001.91, 6002.42 or 6002.92	Knitted or crocheted fabrics of cotton, subjected to any process	16%	4
14	6001.12, 6001.22, 6001.92, 6002.10, 6002.20, 6002.30, 6002.43 or 6002.93	Knitted or crocheted fabrics, other than of cotton, not subjected to any process	Nil	1
15	6001.12, 6001.22, 6001.92, 6002.10, 6002.20, 6002.30, 6002.43 or 6002.93	Knitted or crocheted fabrics, other than of cotton, not subjected to any process	16%	2
16	6001.12, 6001.22, 6001.92, 6002.10, 6002.20, 6002.30, 6002.43 or 6002.93	Knitted or crocheted fabrics, other than of cotton, subjected to any process	16%	5
17	52, 54 or 55	Woven fabrics subjected to the process of calendering or decatising or both, on job-work basis, in a factory which does not have the facilities (including plant and equipment) for carrying out any other process, provided no credit under rule 3 or 11 of the CENVAT Credit Rules, 2002 has been taken. Explanation.- For the purposes of this exemption, the value of such fabrics shall be the job-work charges for calendaring or decatising or both, as the case may be, in respect of such fabrics.	16%	-”.
(S.No. 17 has been inserted vide Ntf. No. 40/2002-CE, Dt. 14/08/2002)

Condition No.	Conditions
(1)	(2)
1	If made from textile yarns on which the appropriate duty of excise leviable under the First Schedule or the Second Schedule to the said Central Excise Tariff Act read with any notification for the time being in force or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid and no credit of the duty paid on inputs or capital goods has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.
2	If made from textile yarns on which the appropriate duty of excise leviable under the First Schedule or the Second Schedule to the said Central Excise Tariff Act read with any notification for the time being in force or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid.
3	If no credit of the duty paid on inputs or capital goods has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002. (Condition No. 3 has been substituted vide Ntf. No. 03/2003-CE, DT. 06/01/2003) [OLD -If made from knitted or crocheted textile fabrics of cotton, whether or not processed, on which the appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act and the Additional Duties of Excise (Goods of Special Importance) Act, read with any notification for the time being in force , or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid and no credit of the duty paid on inputs or capital goods has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.]
4	If made from knitted or crocheted textile fabrics of cotton, whether or not processed, on which the appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act and the Additional Duties of Excise (Goods of Special Importance) Act, read with any notification for the time being in force , or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid.
5	If made from textile fabrics, whether or not processed, on which the appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act and the Additional Duties of Excise (Goods of Special Importance) Act, read with any notification for the time being in force or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid.
OMITTED [OLD- “6.	The exemption shall apply only upto that much quantity of cotton fabrics cleared by a processor from his factory in respect of which the aggregate amount of job-charges for such stentering does not exceed fifteen lakh rupees as computed in the manner specified in the Explanation below: Provided that if a processor has more than one open-air stenter in his factory or has more than one factory engaged in the process of open-air stentering, the exemption shall apply to the aggregate quantity of cotton fabrics cleared therefrom. Explanation.- For the purposes of this condition, for computing the limit of fifteen lakh rupees on account of the aggregate amount of job-charges, the amount of job-charges for open-air stentering in respect of the clearances of cotton fabrics from a factory or more than one factory of a processor, as the case may be, already effected during the period commencing from the 1st day of April, 2002 and ending with the 17th day of June, 2002, shall be taken ino account; but in case, the textile processor does not undertake any job work and subjects the said fabrics to open-air stentering on his own behalf, the exemption shall be available as if he has undertaken stentering on job-work basis and for the purposes of computing the limit of fifteen lakh rupees, the job-charges shall be deemed to be the difference between the value of the stentered fabrics and the value (cost) of grey fabrics.” ]
(Condition No. 6 has been Omitted vide Ntf. No. 47/2002-CE, Dt. 06/09/2002)
(Sl.No. 6 has been inserted vide Ntf. No. 33/2002-CE, Dt.18/06/2002)

2. This notification shall have effect upto and inclusive of 31st day of March, 2003.

(Above 2. has been added vide Ntf. No. 16/2003-CE, Dt. 01/03/2003)

F. No. 334/1/2002 -TRU


(T.R. Rustagi)
Joint Secretary to the Government of India

(Please refer Cir No. 700/16/2003-CX, Dt. 06/03/2003 - Deemed Credit and Credit of Addl. Duty –Some Clarifications)

(Please refer Circular No. 680/71/2002-CX. Dt. 10/12/2002 for Excise duty on woven textile fabrics manufactured by a composite mill or a manufacturer engaged in processing of fabrics along with weaving of fabrics in the same factory- Clarification- regarding.)

(Pl. refer Cir. No. 660/51/2002-CX, Dt. 09/09/2002 for Restoration of excise exemption to the hand processing sector and restoration of SSI exemption for ball & roller bearing industry )

(Pl. refer Cir. No. 649/40/2002-CX., Dt. 25/07/2002 for Woven fabrics of cotton subjected to the process of open-air stentering by a textile processor)

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