An Existing Unit in J&K under Notification No. 56/2002-CE &
57/2002-CE by Way of Substantial Expansion can Avail of Excise Duty Exemption
under Notification No. 1/2010-CE dated 06.02.2010 again by Way of Second
Substantial Expansion
[CBEC Circular No. 977 dated 3rd
January 2014]
Subject: Availability of excise duty exemption to
the units which have already availed of exemption under New Industrial Policy
for another 10 years by way of 2nd substantial expansion in the State
of Jammu & Kashmir – Clarification.
Representations
have been received from trade and industry associations and field formations
seeking clarification as to whether an existing unit which has availed of
excise duty exemption under notification No.56/2002-CE & 57/2002-CE, both
dated 14.11.2002 by way of substantial expansion can avail of excise duty
exemption under notification No.1/2010-CE, dated 06.02.2010, again by way of
second substantial expansion.
2. The matter has
been examined by the Ministry. In pursuance of the New Industrial Policy and
other concessions for the State of J&K announced by the Department of
Industrial Policy and Promotion (DIPP) in June 2002, notification No.56/2002-CE
(location specific exemption to all goods other than the exclusion list) &
No.57/2002-CE (non-location specific exemption to specified industries other
than the exclusion list), both dated 14.11.2002 were issued to provide
exemption from excise duty equivalent to the duty payable on value addition
undertaken in the manufacture of the goods to the new units and units
undertaking substantial expansion, for a period of ten years from the date of
commencement of commercial production. The exemption operates through a refund
mechanism.
2.1 Subsequently,
pursuant to a review of the exemption, notification No.1/2010-CE was issued so
as to extend the excise duty exemption to all goods barring the exclusion list
to units located anywhere in the State of J&K subject to the same
conditions and modalities as are applicable to the existing area-based
exemptions for the State. Thus, notification No.1/2010-CE was basically an
extension of the existing special package of incentives for the State of
J&K with certain modifications.
2.2 Notification
Nos.56/2002-CE & No.57/2002-CE and notification No.1/2010-CE does not
specifically provide any cut-off date (sunset clause) for setting up of new
units or for units undertaking substantial expansion. Further, notification
No.1/2010-CE does not debar an existing unit which has
availed of excise duty exemption under notification No.56/2002-CE&
57/2002-CE, both dated 14.11.2002 by way of substantial expansion, to avail of
excise duty exemption again by way of substantial expansion.
3. It is,
therefore, clarified that an existing unit which has availed of excise duty
exemption under notification No.56/2002-CE & 57/2002-CE, both dated
14.11.2002 by way of substantial expansion can avail of excise duty exemption
under notification No.1/2010-CE, dated 06.02.2010 again by way of second
substantial expansion so long as it satisfies the conditions stipulated under
notification No.1/2010-CE, dated 06.02.2010.
4. Trade
Notice/Public Notice may be issued to the field formations and taxpayers.
5. Difficulties
faced, if any, in implementation of this Circular may be brought to the notice
of the Board.
F.No.332/09/2013-TRU