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Circular No. 939 /29 / 2010-CX
F.No.102/2/2010-CX-3
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
New Delhi, dated the 22
nd
December, 2010
To
All Directors General
All Chief Commissioners of Central Excise
All Chief Commissioners of Central Excise and Customs
Sir/Madam,
Subject: Scope of Notification Nos.49/2003-CE and 50/2003-CE both dated 10.06.2003
Kind attention is invited to Notification Nos. 49/2003-CE and 50/2003-CE both dated 10.06.2003 which provide full exemption
from excise duties to goods cleared from industrial units in the states of Uttarakhand and Himachal Pradesh for a period of ten
years from the date of commencement of commercial production. The exemption is available to new units set up or existing
units which have undergone substantial expansion in terms of the said notifications and commence commercial production
before the cut-off date, that is, on or before 31.3.2010
2. Representations have been received from Trade and Industry Associations seeking clarification on the availability of the
exemption benefit under these notifications in the following situations:
(i) Where a unit starts producing some new products after the cut-off date using plant and machinery installed up the
said cut-off date and without any further addition to the plant and machinery.
(ii) Where the installed capacity in a particular unit is upgraded after the cut-off date, so as to increase the efficiency of
the machinery by installing ancillary machines or replacement of some parts etc but in such a way that it does not lead to
increase in capacity of production.
(i) Where new dosage forms are manufactured after the cut-off date on the same line of production with the same
machinery.
(ii) Where a unit manufacturers a new product by installing fresh plant, machinery or capital goods after the cut-off date.
3. Board has examined the matter. Under the said notifications, any new unit set up or an existing unit which has undergone
substantial expansion that commences commercial production before the cut-off date is entitled to excise duty exemption in
respect of excisable goods (other than those appearing in the negative list) manufactured and cleared for a period of ten yeas
from the date of commencement of commercial production. The provisions of these notifications do not place a bar or
restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after
the cut-off date and during the exemption period of ten years as per the notification . Therefore, it is clarified that in all the
above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible
industrial units. However the period of exemption would remain ten years and would not get extended on account of such
modifications or additions under any circumstances.
4. Trade and industry and field formations may be suitable informed.
5. Receipt of the Circular may be acknowledged.
6. Hindi version will follow.
Yours faithfully
(Dr. Ravindra J Dange)
Under Secretary (CX-3)
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