SSI exemption scheme effective from 1.4.2001 for units availing Cenvat credit.
1st March, 2002
Notification No.9/2002 -Central Excise
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) and in
supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 9/2001-
Central Excise, dated the 1st March, 2001, published in the Gazette of India vide number G.S.R. 134 (E), dated the 1st March,
2001, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances,
specified in column (2) of the Table below (hereinafter referred to as the said Table), for home consumption of excisable goods
of the description specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from
so much of each of the duties of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of
1986) or the Second Schedule to the said Central Excise Tariff Act, as the case may be, as is in excess of the amount
calculated at the rate specified in the corresponding entry in column (3) of the said Table:
Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under
notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565
(E) dated the 31
st
July, 2001, in the same financial year.
T able
S.No. Value of Clearances Rate of duty
(1) (2) (3)
1.
First clearances upto an aggregate value not exceeding one hundred lakh rupees made
on or after the 1
st
day of April in any financial year.
Sixty per cent. of normal
rate of duty
2.
All clearances of the specified goods which are used as inputs for further manufacture of
any specified goods within the factory of production of the specified goods.
Nil
2. The exemption contained in this notification shall apply only subject to the following conditions, namely:-
(i) a manufacturer who intends to avail the exemption under this notification shall exercise his option in writing for availing
the exemption under this notification before effecting the first clearances and such option shall be effective from the date of
exercise of the option and shall not be withdrawn during the remaining part of the financial year;
(ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the jurisdictional Deputy
Commissioner or Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the
following particulars, namely:-
(a) name and address of the manufacturer;
(b) location /locations of factory /factories;
(c) description of specified goods produced;
(d) date from which option under this notification has been exercised;
(e) aggregate value of clearances of specified goods (excluding the value of clearances referred to in para 3 of this
notification) till the date of exercising the option;
(iii) where a manufacturer opts for availing the exemption under this notification in terms of condition (i) above, the
clearances of specified goods already made during the financial year, prior to the exercise of such option, shall be taken into
account for computing the aggregate value of clearances, as specified in the said Table;
Illustration1 .- A manufacturer who has been paying the normal duty on any goods during a financial year opts to avail of this
exemption after making clearances having an aggregate value of rupees twenty lakhs. He is entitled under this notification to
additional clearances of an aggregate value of rupees eighty lakhs at the concessional rate of sixty per cent. of normal duty .
Illustration 2 .- A manufacturer who has been availing of full exemption on any goods during a financial year under notification
No. 8/2002-Central Excise , dated the 1st March, 2002, opts to avail of this exemption after making clearances having an
aggregate value of rupees twenty lakhs. He is entitled under this notification to additional clearances of an aggregate value of
rupees eighty lakhs at the concessional rate of sixty per cent. of normal duty .
(iv) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to
the aggregate value of clearances mentioned against each of the serial numbers in the said Table, and not separately for each
factory;
(v) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the
aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each
manufacturer;
(vi) the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more
factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding
financial year.
3. For the purposes of determining the aggregate value of clearances for home consumption, the following clearances
shall not be taken into account, namely :-
(a) clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on
quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason ;
(b) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of exemption under
this notification in terms of paragraph 4 ;
(c) clearances of specified goods which are used as inputs for further manufacture of any specified goods within the factory
of production of the specified goods;
(d) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or
bags made of polymers of ethylene or propylene:
Provided that the clearances for home consumption of goods, whether on payment of duty or otherwise, falling under Chapter
62 of the said First Schedule, between 1st April, 2001 and 30th April, 2001 (both days inclusive) shall be taken into account
while computing the aggregate value of clearances for the financial year 2001-2002.
4. The exemption contained in this notification shall not apply to the specified goods bearing a brand name or trade
name, whether registered or not, of another person, except in the following cases, namely :-
(a) where specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are
cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the
procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable
Goods) Rules, 2001:
Provided that manufacturers, whose aggregate value of clearances for home consumption of such specified goods for use as
original equipment does not exceed rupees one hundred lakhs in the financial year 2001-2002, as calculated in the manner
specified in paragraph 1 , may submit a declaration regarding such use instead of following the procedure laid down in the
said Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001;
(b) where the goods bear a brand name or trade name of-
(i) the Khadi and Village Industries Commission; or
(ii) a State Khadi and Village Industry Board; or
(iii) the National Small Industries Corporation; or
(iv) a State Small Industries Development Corporation; or
(v) a State Small Industries Corporation;
( c) where the specified goods are manufactured in a factory located in a rural area.
5. This notification shall come into force on the 1st day of April, 2002.
Explanation .- For the purposes of this notification, -
(A) "brand name" or "trade name" mean a brand name or trade name, whether registered or not, that is to say a name or
a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified
goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and
some person using such name or mark with or without any indication of the identity of that person ;
(B) where specified goods manufactured by a manufacturer bear a brand name or trade name, whether registered or
not, of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been
manufactured by such other manufacturer or trader ;
(C) "value" means,-
(i) in respect of specified goods which have been notified under section 4A of the Central Excise Act, 1944, as determined in
accordance with the provisions of that section, and
(ii) in respect of specified goods other than those referred to in sub-clause ( i ) the value as determined in accordance with
the provisions of section 4 of the Central Excise Act, 1944, or the tariff value fixed under section 3 of the said Act ;
(D) in the determination of the value of clearances of Chinaware or Porcelainware or both, where a manufacturer gets
Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the
Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or
Porcelainware or both, belonging to the said manufacturer and fired in such kiln shall be taken into account ;
(E) where the specified goods are manufactured in a factory belonging to or maintained by the Central Government or by
a State Government, or by a State Industries Corporation, or by a State Small Industries Corporation or by the Khadi and
Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account ;
(F) "normal rate of duty" means
(i) in the case of goods leviable to duty under the First Schedule to the Central Excise Tariff Act, 1985, at the rate specified
for such goods in that Schedule read with any relevant notification (other than this notification or a notification in which
exemption is based on the value or quantity of clearances) issued under sub-section (1) of section 5A of the Central Excise
Act, 1944.
(ii) in the case of goods leviable to duty under the Second Schedule to the Central Excise Tariff Act, 1985, at the rate
specified for such goods in that Schedule read with any relevant notification (other than this notification or a notification in which
exemption is based on the value or quantity of clearances) issued under sub-section (1) of section 5A of the Central Excise
Act, 1944.
(G) "clearances for home consumption" shall also include clearances for export to Bhutan and Nepal;
(H) "rural area" means the area comprised in a village as defined in the land revenue records excluding-
(i) the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified
area committee, or
(ii) any area that may be notified as an urban area by the Central Government or a State Government.
(I) for the purpose of goods falling under Chapter 61 or 62 of the said First Schedule, the expression "manufacturer" shall
include a person who is liable to pay the duty of excise leviable on such goods under sub-rule (3) of rule 4 of the Central Excise
Rules, 2002.
ANNEXURE
All goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other
than the following , namely:-
(i)
all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable
thereon;
(ii)all goods falling under heading No. 09.02;
(iii)all goods falling under heading No. 21.06 and sub-heading Nos. 2101.10 and 2101.20;
(iv)
all goods falling under Chapter 24 of the First Schedule (other than unbranded chewing tobacco, preparations
containing chewing tobacco and tobacco extracts and essences, falling under heading No. 24.04 );
(v)all goods falling under heading No. 25.04 and granite slabs and tiles, falling under heading No. 68.07;
(vi)sandalwood oil;
(vii)all goods falling under heading No. 36.05;
(viii)all goods falling under heading Nos. 37.01, 37.02, and sub-heading No. 3703.10;
(ix)
strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam,
falling under Chapter 39 of the First Schedule;
(x)
all goods falling under Chapter 51 of the First Schedule other than those falling under sub-heading Nos. 5105.30
and 5105.40 and heading Nos. 51.06, 51.07, 51.08, 51.09, 51.10 and 51.11 ( except woven fabrics of wool falling
under heading Nos. 51.10 or 51.11) and 51.12;
(xi)all goods falling under Chapter 52 of the First Schedule other than goods falling under heading No. 52.04;
(xii)
all goods falling under Chapter 53 of the First Schedule except goods falling under heading Nos. 53.01, 53.02,
53.04, 53.05,53.08(other than goods falling under sub-heading No. 5308.14), 53.11(other than woven fabrics of
ramie);
(xiii)all goods falling under Chapter 54 of the First Schedule except goods falling under heading Nos. 54.01;
(xiv)
all goods falling under Chapter 55 of the First Schedule except goods falling under heading Nos. 55.05, 55.08 and
shoddy yarn manufactured from used or new rags falling under heading No. 55.09 or 55.10;
(xv)
all goods falling under Chapter 56 of the First Schedule except goods falling under heading Nos. 56.01, 56.02,
56.03, 56.04, 56.05, chenille yarn falling under sub-heading No. 5606.00,56.07( other than of jute), 56.08 and
56.09;
(xvi)all goods falling under Chapter 57 of the First Schedule;
(xvii)
all goods falling under Chapter 58 of the First Schedule except goods falling under heading Nos. 58.03, 58.06,
58.07, 58.08, uncut grey (unprocessed) woven weft pile fabrics of cotton manufactured from grey unprocessed
cotton yarn falling under sub-heading No.5801.21, unprocessed woven pile fabrics of cotton falling under sub-
heading No.5801.21 and unprocessed woven pile fabrics of man-made fibres falling under sub-heading
No.5801.31, fabrics of cotton or man-made fibres falling under sub-heading No.5802.51, and unprocessed cotton
terry towelling fabrics falling under sub-heading No.5802.21;
(xviii)
all goods falling under Chapter 59 of the First Schedule except goods falling under Heading Nos. 59.01, 59.05,
59.06, 59.08, 59.09 59.10, 59.11 and textile fabrics coated or laminated with preparations of low-density
polyethylene;
(xix)
all goods falling under Chapter 60 of the First Schedule except goods falling under sub-heading No.6002.10 and
fabrics of cotton man-made fibres not subjected to any process falling under heading Nos. 60.01 or 60.02;
(xx)blankets of wool falling under Chapter 63 of the First Schedule;
(xxi)aluminium circles, whether or not trimmed, falling under Chapter 76 of the First Schedule;
(xxii)(A) All goods falling under -
(a) heading No. 74.03, excluding the following goods falling under sub-heading No. 7403.21,namely:-
(i) cast brass bars/rods of a length not exceeding three feet;
(ii) cast brass bars/rods of a length not exceeding ten feet used in the factory of production for making wires falling
under sub-heading No. 7408.29;
(iii) copper flats of a weight not exceeding two kilograms used for making copper strips falling under heading No.
74.09;
(iv) brass billets weighing upto five kilograms;
(b) heading No. 74.09 (excluding copper strips produced from copper flats of a weight not exceeding two
kilograms);
(c) sub-heading Nos. 7407.11, 7407.12, 7408.11, 7408.21; and
(B) copper circles, whether or not trimmed;
(xxiii) ball or roller bearings falling under Chapter 84 of the First Schedule;
(xxiv)
all goods falling under heading Nos 87.01, 87.02, 87.03, 87.04, 87.05, 87.06 and 87.11 [other than powered cycles
and powered cycle rickshaw ("powered cycle"or powered rickshaw means a mechanically propelled cycle or, as
the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so
doing)];
(xxv) all goods falling under heading Nos 91.01 or 91.02 ;
(xxvi)
all goods falling under
a)heading Nos. 93.02, 93.03, 93.04 [except air guns, air rifles and air pistols which are exempt from the provisions
of the Arms Act, 1959 (54 of 1959)],
b) heading Nos.93.06 and 93.07 (except parts falling under heading Nos. 93.06 or 93.07);
(xxvii) all goods falling under sub-heading No. 9605.10.
T.R. Rustagi
Joint Secretary to the Government of India
F. No. 334/1/2002-TRU
(Notification No.9/2002 -Central Excise, dated 1-3-2002, as amended by Corrigendum in F.No. 334/1/2002-TRU(Pt.), dated
1-3-2002)
