(This Notification has been rescinded vide Ntf No.16/2002 -CE.,Dt.1/3/2002)

Notification No. 32/2001-CE, dt. 28/06/2001

Processed textile fabrics or processed textile fabrics of cotton or man-made fibres
G.S.R. (E).-In exercise of the powers conferred by rule 15 of the Central Excise (No. 2)Rules, 2001, (hereinafter referred to as “the said Rules”) the Central Government, hereby,specifies the processed textile fabrics falling under heading Nos. 52.07, 52.08, 52.09, 54.06,54.07, 55.11, 55.12, 55.13 or 55.14, or processed textile fabrics of cotton or man-made fibres,falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12,6001.22, 6001.92, 6002.20, 6002.30, 6002.43, or 6002.93 (hereinafter in this section referred toas the “said goods”) of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986),manufactured or produced by an independent textile processor exclusively with the aid of a hot-airstenter (hereinafter referred to as “independent textile processor”), and notifies the rate ofexcise duty as-
(a) in the case of a processing factory whose average value of processed fabric is upto andincluding Rs. 30 per sq. mtr., Rs. 2.5 lakhs per chamber per stentor per month; and

(b) in the case of a processing factory whose average value of processed fabric exceeds Rs. 30 persq. mtr., Rs. 3 lakhs per chamber per stentor per month,

installed in the processing factory, irrespective of whether such stentor or chamber is in use ornot, or is in working condition or not.2. For the purpose of payment of duty of excise,-

1. in the case of a processing factory, existing as on 1st May, 2001, of an independenttextile processor, the number of chambers of the hot air stentor installed in suchprocessing factory as on 1st March, 2001 or 1st May, 2001, whichever is higher ,shall be taken into account;
   
   
2. in the case of new processing factory coming into existence after 1st May, 2001, thenumber of chambers of the hot air stentor installed in such processing factory as onthe date the application was made under rule 96ZNA of Central Excise Rules, 1944,and if not, then as on the date the application under paragraph 7 of this notificationhas been made, as the case may be, shall be taken into account,

subject to the other provisions contained hereinafter.

3. The average value of the said goods (per square meter) for the factory of the independenttextile processor shall be arrived at by dividing the total value of the said goods cleared from thesaid factory in the immediately preceding financial year by the total quantity of the said goodscleared during that preceding financial year:

Provided that where the said goods are manufactured or produced by a new unit or aclosed unit of such factory for which the average value as specified above cannot be calculated,the average value of such goods shall be the average value declared by the independent textileprocessor at the time of making the application under rule 96ZNA of the Central Excise Rules,1944 or under this notification; but the amount of duty payable on the said goods shall be re-workedat the end of the financial year on the basis of actual average value of the said goodsmanufactured or produced in that financial year.

4. The duty levied and collected on the said goods shall be the aggregate of the duty leviableunder the Central Excise Act, 1944 (1 of 1944) and the Additional Duties of Excise (Goods ofSpecial Importance) Act, 1957 (58 of 1957) and shall be apportioned in the ratio of 1:1 betweenthe duty leviable under both the aforesaid Acts.

5. In case the independent textile processor proposes to make any change in the installedmachinery or any part thereof which tends to change the number of chambers in the hot-airstenters installed in his factory, he shall intimate, about the proposed change, to theCommissioner of Central Excise in writing, with a copy to the Deputy Commissioner of CentralExcise or the Assistant Commissioner of Central Excise, as the case may be, one month inadvance of such proposed change, and shall obtain the written approval of the Commissioner ofCentral Excise before making such change, whereafter the Commissioner of Central Excise shalldetermine the date from which the change in the number of chambers shall be deemed to beeffective:

Provided that where any change in the installed machinery or any part thereof during afinancial year results in the reduction in the number of chambers in a hot-air stentor or in thenumber of hot-air stentors, installed in the processing factory, no account of such reduction shallbe taken into account for computing the duty payable under this notification during that financialyear and the duty of excise shall be payable during that financial year as if no such reduction inthe number of chambers or hot air stentors had taken place.

6. For the purposes of this notification,-

1. a chamber (of a hot-air stenter), having a rail length of upto 3.05 meter on each side,installed in the factory of the independent textile processor shall be construed as one chamberand any fraction exceeding such rail length of any such chamber shall be computed on a pro ratabasis;
   
   
2. a float drying machine or any other equipment, except the galleries, of a length 3.05meters installed in or attached to a stenter for aiding the process of heat-setting or drying of thefabrics shall be deemed to be one chamber of a stenter and any fraction of such length shall becomputed on a pro rata basis.

7. (1) The independent textile processor, who is engaged exclusively in the manufacture orproduction of the said goods, shall make an application prior to the commencement ofcommercial production, in the form specified in the APPENDIX to this notification, to theCommissioner of Central Excise for the purpose of availing of the special procedure for paymentof excise duty as contained in this notification. The Commissioner of Central Excise, on suchapplication being made, shall grant permission, subject to such conditions and limitations as laiddown in this notification, so as to cover the period commencing from the date of making theapplication and ending on the 31st March, 2002. Pending grant of such permission by theCommissioner of Central Excise, the independent textile processor may avail the provisions ofthis notification on a provisional basis. But if such application is rejected by the Commissioner ofCentral Excise, then the independent textile processor shall not be eligible to avail of theprovisions of this notification from the date of making the application and shall discharge theduty liability as per the provisions contained elsewhere than in this notification and the duty, ifany, paid under the provisions of this notification, shall be adjusted against the duty payable onsuch goods.

Explanation I.-For the purposes of this notification, “ independent textile processor”means a manufacturer who undertakes bleaching, dyeing or printing or any one or more of theseprocesses with the aid of power or steam and who also has the facility in his factory (includingplant and equipment) for carrying out heat setting or drying, with the aid of power or steamexclusively in a hot air stentor and who has no proprietory interest in any factory primarily andsubstantially engaged in the spinning of yarn or weaving or knitting of fabrics, on or after the 1stday of May, 2001.

Explanation II.-For the removal of doubt, it is hereby declared that the provisions of thisnotification shall not apply to an independent processor who carries out heat setting or dryingwith the aid of an open-air stenter installed in his factory.

(2) Notwithstanding anything contained in sub-paragraph (1), in respect of a processingfactory existing as on 1st May, 2001, the application made by an independent textile processor,on or before the 20th May, 2001, to the Commissioner of Central Excise under sub-rule (2) ofrule 96ZNA for availing the special provisions contained in section E-XA of the Central ExciseRules, 1944, for the period on and from 1st May, 2001 to 31st March, 2002, shall be deemed tobe an application made under sub-paragraph (1). If such application had been granted by theCommissioner of Central Excise on a date prior to 1st day of July, 2001, the same shall bedeemed to have been granted under sub-paragraph (1), subject to all the conditions andlimitations as laid down in this notification. Otherwise, the Commissioner shall dispose of theapplication as if it is an application made under sub-paragraph (1).

Explanation.- For the removal of doubts, it is hereby declared that a processing factory,of an independent textile processor, existing on 1st May, 2001 and in respect of which noapplication was made under rule 96ZNA of the Central Excise Rules, 1944, on or before 20thMay, 2001, shall not be eligible to avail of the benefit of this notification.

Provided further that an application made prior to the commencement of commercialproduction by an independent textile processor, commencing production for the first time in anew processing factory coming into existence after the 1st May, 2001 but prior to 1st July, 2001,under the proviso to sub-rule (2) of rule 96ZNA of the Central Excise Rules, 1944, so as to coverthe period upto the 31st March, 2002, shall also be deemed to be an application under sub-paragraph(1) and shall be disposed of under that sub-paragraph. If such application had beengranted by the Commissioner of Central Excise under rule 96ZNA of the Central Excise Rules,1944, so as to cover the period upto 31st March, 2002, such disposal shall be deemed to be thedisposal of the application under sub-paragraph (1), subject to all the conditions and limitationsas laid down in this notification.

8. (1) The original value of the investment in the plant and machinery installed in thefactory of the independent textile processor of the said goods, as on the 1st March, 2001 or onthe 1st of May, 2001, whichever is higher, for a factory existing as on 1st May, 2001, of theindependent textile processor or on the date of making the application under rule 96ZNA of theCentral Excise Rules, 1944 or paragraph 7 of this notification, as the case may be, in the case ofan independent textile processor commencing production for the first time in a new factorycoming into existence after the 1st of May, 2001, shall not exceed three crore rupees, irrespectiveof whether such plant and machinery is in use or not, or in working condition or not, and theindependent textile processor shall declare the original value of investment in such plant andmachinery installed in his factory, on the dates mentioned above, in the prescribed format dulycertified by a Chartered Accountant or Cost Accountant. The Commissioner of Central Excisemay require any such documentary evidence as he considers appropriate in respect of suchoriginal value before granting the application.

Explanation.- For the removal of doubt, it is hereby clarified that "the original value of the investment in the plant and machinery installed in the factory of the independent textile processor", shall be the original value as determined in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India on Accounting for Fixed Assets.

(Above Explanation has been inserted vide Ntf. No. 41/2001-CE, dt. 28/6/2001)

(2) If any additional plant and machinery is installed by the independent textile processorat any point of time, he shall intimate the same to the Commissioner of Central Excise withinseven days of such installation and the original value of investment in plant and machinerytogether with the original value of investment in such additional plant and machinery shall notexceed three crore rupees. Where such original value of investment exceeds the limit of threecrore rupees, the provisions of this notification shall not apply from the first day of the month inwhich such investment exceeded the said limit of three crore rupees.

Provided that if an independent textile processor, in respect of his processing factory, existing as on the 1st May, 2001, has made the application under rule 96ZNA of the Central Excise Rules, 1944, by the 20th May, 2001 and has been permitted to avail of the special procedure for payment of excise duty in accordance with this notification, makes a further investment in any additional new plant and machinery installed in his processing factory, then the value of that investment in such additional new plant and machinery shall not be taken into account for determining the original value of the investment in the plant and machinery installed in the factory of the said independent textile processor in accordance with sub-paragraph (1).

Explanation.- For the removal of doubt, it is hereby clarified that where the installation of such additional new plant and machinery in the factory of the independent textile processor results in the increase in the number of chambers in a hot-air stentor or in the number of hot-air stentors, installed in the processing factory, such increase shall be taken into account for computing the duty payable under this notification.

(In para. 8. - above provision & explanation has been inserted vide Ntf. No. 53/2001-CE, dt. 13/11/2001)

(3) The independent textile processor shall not remove any unstentored textile fabricsfrom his factory.

(4) An independent textile processor of the said goods who has made the applicationunder paragraph 7 to pay the duty of excise in accordance with this notification shall not beallowed any abatement on account of closure of factory, except as provided under paragraph 10.

(5) The independent textile processor opting for the provisions of this notification shallnot be eligible to avail of any credit of duty paid on inputs or capital goods under the CENVATCredit Rules, 2001.

(6) The provisions of this notification shall apply to the said goods which aremanufactured or produced on or after the 1st day of May, 2001.

(7) Nothing contained in this notification shall apply to-

1. the said goods which are manufactured or produced prior to the 1st day of May, 2001and cleared on or after that date;
   
   
2. a composite mill, that is, a manufacturer or processor, who is engaged in the processingof fabrics with the aid of power along with the spinning of yarn from fibres and weavingor knitting or crocheting of fabrics within the factory and includes a multi-locationalcomposite mill, that is, a public limited company which is engaged in the processing offabrics with the aid of power along with the spinning of yarn from fibres and weaving orknitting or crocheting of fabrics in one or more factories owned by the same publiclimited company; or
   
   
3. fabrics other than the said goods produced or manufactured by the independent textileprocessor.

9. (1) An independent textile processor of the said goods whose application has beengranted under paragraph 7 shall pay an amount of duty calculated at the rate specified in thisnotification and subject to the conditions and limitations as laid down in this notification, suchpayment shall be a full discharge of his liability for duty leviable on his production of the saidgoods during the period for which the said amount of duty has been paid:

Provided that if there is any alteration in the rates of duty, the amount of duty payableshall be recalculated on the basis of the revised rates, from the date of alteration and liability forduty leviable on the production of the said goods from that date shall not be discharged unless thedifferential duty is paid, and where the amount of duty so recalculated, is less than the amountpaid, the balance shall be refunded to the manufacturer:

(2) The amount of duty payable under sub-paragraph (1) shall be debited by theindependent textile processor in the account current required to be maintained by him under thesaid Rules.

(3) Fifty per cent. of the duty payable for a calendar month under sub-paragraph (1) shallbe paid by the 20th of that month and the remaining amount shall be paid by the 5th of theimmediately succeeding month.

(4) The independent textile processor shall maintain records, and file returns, pertainingto production or manufacture, clearance, storage, delivery or disposal of goods, including thematerials received for or consumed in the manufacture of the said goods or other goods, thegoods and materials in stock with him and the duty paid by him, as prescribed under the saidRules or any notification issued thereunder:

Provided that the independent textile processor of the said goods shall further declare inthe monthly return required to be filed under the said Rules or notification issued thereunder thatthe original value of investment in the plant and machinery installed in his factory for the monthto which the said return pertains has not exceeded three crore rupees.

Provided further that the independent textile processor shall also declare the original value of any further investment in any additional new plant and machinery installed in his processing factory in the aforesaid monthly return.

(In para. 9. - above provision has been inserted vide Ntf. No. 53/2001-CE, dt. 13/11/2001)

(5) If an independent textile processor fails to pay the amount of duty under sub-paragraph(1) or any part thereof by the date specified in sub-paragraph (3), he shall be liable to,-

1. pay the outstanding amount of duty along with interest at the rate of twenty-four percent. per annum calculated for the outstanding period on the outstanding amount; and
   
   
2. a penalty equal to the amount of duty outstanding from him for a month payable bythe 5th of the succeeding month or rupees five thousand, whichever is greater.

(6) If an independent textile processor removes the said goods without complying withany of the requirements contained in sub-paragraph (4), then, the said goods shall be liable toconfiscation and the independent textile processor shall be liable to a penalty not exceeding tenthousand rupees.

10. (1) Where an independent textile processor does not produce or manufacture the saidgoods during any continuous period of not less than fifteen days, he may claim abatement of theduty payable by him under this notification, and such abatement shall be allowed by an orderpassed by the Joint Commissioner of Central Excise or the Additional Commissioner of CentralExcise, as the case may be, of such amount as may be specified in such order, subject tofulfilment of the following conditions, namely:-

1. the abatement shall be applicable only on complete closure of the factory and not onclosure of any one or more hot-air stenters;
   
   
2. during the period of closure no manufacturing activity, whatsoever, includingbleaching, dyeing or printing, in respect of the said goods shall be undertaken and noremoval of the said goods shall be effected by the independent textile processor;
   
   
3. the independent textile processor shall inform, in writing, about the closure of thefactory to the Deputy Commissioner of Central Excise or the AssistantCommissioner of Central Excise, as the case may be, with a copy to theSuperintendent of Central Excise, at least three days prior to the date of closure;
   
   
4. the stenter or stenters shall be sealed in such manner as may be prescribed by theCommissioner of Central Excise;
   
   
5. the independent textile processor, when he starts production again, shall inform inwriting about the date of starting of production to the Deputy Commissioner ofCentral Excise or the Assistant Commissioner of Central Excise, as the case may be,with a copy to the Superintendent of Central Excise, at least three days prior to thedate of starting production, and get the seal opened in such manner as may bespecified by the Commissioner of Central Excise before recommencing production;
   
   
6. the independent textile processor shall, while sending information under condition(e), declare that his factory remained closed for a continuous period starting from thehour and date to the hour and date, such hours and dates to be specified in thedeclaration;
   
   
7. when the claim for abatement by the independent textile processor is for a period ofless than one month, he shall be required to pay the duty, as applicable, for the entireperiod of the month and may subsequently seek such claim after payment of suchduty;
   
   
8. where the claim for abatement by the independent textile processor is for a period ofone month or more, he shall not be required to pay the duty for that period inadvance;
   
   
9. if the claim for abatement by the independent textile processor has been disallowedby the Joint Commissioner of Central Excise or the Additional Commissioner ofCentral Excise, as the case may be, by a written order made in this regard, theindependent textile processor shall pay the amount of duty, and interest if anyapplicable, prior to getting the stenter or stenters sealed under condition (d )reopened for resuming production;

Provided that the Joint Commissioner of Central Excise or the AdditionalCommissioner of Central Excise, as the case may be, where he is satisfied that the delayin giving information under condition (c) was caused due to unavoidable circumstances,may, for reasons to be recorded in writing, condone such delay.

11. This notification shall come into force on the 1st day of July, 2001.

APPENDIX

Original
Duplicate
Triplicate

FORM A. S. P.

Application for permission to avail of the special procedure relating to processed textile fabrics

Name of factory/ factories……………….. Address…………………………….

I/ We………….. manufacture( s) of processed textile fabrics residing at…….. and holder (s) of Central Excise Licence No. ……. dated…….. herebyapply to avail myself/ ourselves, during the period beginning with….. 200…… and ending with…… 200…. of the special procedure for payment ofexcise duty contained in the notification issued under rule 15 of the Central Excise Rules, 2001, in respect of the production or manufacture ofprocessed textile fabrics with the aid of power or steam at my/ our above- mentioned factory/ factories.

2. I/ We declare below the particulars of processed textile fabrics produced or manufactured in my/ our above- mentioned factory: -

S. No.	Description of processed textile fabrics	Classification of processed textile fabrics
(1)	(2)	(3)

3. I/ We declare below the particulars of each of the plant and machinery installed in my/ our above- mentioned factory:-

Number of plant and machi- nerysepa- rately foreach type	Name ofmanu- facturer of plantandmachinery	Brand name andother identi- fyingparti- culars of plantand machinery	Serial Number/Identi- ficationNumber of theplant andmachinery	Date andyear ofpurchase	Date andyear ofinsta- llation	Original value ofinvest- ment in each ofthe plant andmachinery, as on 1- 3-2001 and 1- 5- 2001 incase of existingfactory / on the dateof making thisapplication in case ofnew factory (Deletewhichever is notapplicable)	Total value ofinvest- ment in theplant and machinery,as on 1- 3- 2001 and 1-5- 2001 in case ofexisting factory / onthe date of makingthis application incase of new factory(Delete whichever isnot applicable)
1	2	3	4	5	6	7	8

4. I/ We declare below the particulars of each hot- air stenter installed in my/ our above- mentioned factory: -

Number ofhot- air stenters installed as on1- 3- 2001 and1- 5- 2001 incase ofexistingfact- ory/ onthe date ofmaking thisappli- cation incase of newfactory (Deletewhich- ever isnot appli- cable)	Name ofmanufa- cturer ofeach ofthe hot-airstenter	Brandname and otheridenti- fyingparti- cularsof the hot-air stenters	SerialNumber/Identi- fication Numberof the hot-air stenters	Date andyear ofpur- chase	Date andyear ofinsta- llation	Number and size(both length and width incenti- meters) ofchambers in eachof the hot- airstenters, as on 1- 3-2001 and 1- 5- 2001in case of existingfactory / on the dateof making thisapplication in caseof new factory(Delete whicheveris not applicable)	Total value andquantity ofpro- cessedtextile fabricspro- duced/ manufactured in thepre- cedingfinancial year	Total valueandquantity ofpro- cessedtextilefabricscleared inthepre- cedingfinancialyear	Averagevalue ofpro- cessedtextilefabricscleared inthepre- cedingfinancialyear
1	2	3	4	5	6	7	8	9	10

5. I/ We hereby declare that the particulars furnished above are true and correct in all respects. In case any of the particulars are found to beuntrue/ incorrect, I/ We undertake to pay any additional amount of excise duty on the processed textile fabrics manufactured by me/ us as per theprovisions of the Central Excise Act, 1944 (1 of 1944) or the rules or notifications issued thereunder.

6. I/ We further declare that the original value of investment made in the above- mentioned factory is Rs…… in support of which thefollowing documents and the Certificate of the Chartered Accountant/ Cost Accountant is enclosed herewith.

7. I/ We hereby agree to abide by the terms, conditions and limitations of the said Rule 15 or any notification issued thereunder throughoutthe said period.

Signature of manufacturer( s) or his/ their
authorised agent( s).

Place:
Date:

COUNTERSIGNED

………. of Central Excise
Range……..
Circle…….

Place:
Date:
Permission granted for the financial year
Place:
Date:

the period
beginning with...........
and ending with..........
Commissioner of Central Excise..................

F. No. 357/ 8/ 2001- TRU

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

(Note :- see Rule 96ZNA of the Central Excise Rules, 1944)

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