TRADE NOTICE NO.    65   /2003

Dated:

    01 .05.2003

Subject:- Finance Bill passed by Lok Sabha - communication of salient features - reg.

********

The Finance Bill, 2003 has been passed by the Lok Sabha on 30.04.03. Consequent to the changes announced by the Hon'ble Finance Minister while moving the said bill for passing, notification Nos. 67 to 69/2003-Customs, 34 to 38/2002-Central Excise and 40 to 41/2003-Central Excise(Non Tariff) all dated 30.4.2003 have been issued. The salient features of the post-budget 2003-04 changes are indicated below (changes through notifications are effective from 30.4.2003):

Copy of Notification Nos. 34 to 36 - Central Excise and 40 & 41 - Central Excise (Non-Tariff) all dated 30.04.03 have been communicated vide Trade Notice No. 64/2003 dated 01.05.2003. Notification Nos. 37 & 38 - Central Excise both dated 30.04.2003 are communicated below.

          The contents of  the Trade Notice may be brought to the notice of all concerned.

(Authority: Letter F.No. B-3/5/2003-TRU dated the 30th April, 2003 from

Jt. Secy., TRU)

(Issued from file C.No. IV/16/1/2003 CX. Pol )

                                                                                     

                                              Sd/-

                                                           (V.V. HARIHARAN)

                  ADDITIONAL COMMISSIONER (PREV.)

To

As per Mailing List (Both Department & Trade)

__________________________________________________________

Amendments to the Finance Bill:  

1.1 A new clause has been introduced in the Finance Bill, 2003 so as to increase the tariff rates of basic customs duty on vanaspati, margarine and other similar edible preparations and preparations of animal or vegetable fats and oil, falling under chapter headings 1516, 1517 and 1518, from 30% to 100%. However, there is no change in the effective rate of the customs duty applicable in respect of the said products.

 1.2 Clause 129 which seeks to amend section 4A so as to enable the Government to ascertain the retail sale price (RSP), in cases where either RSP is not declared or incorrect RSP is declared, has been amended so as to provide that the RSP in such cases shall be determined in the manner prescribed by the Government. Consequently, the Government will only need to prescribe the manner for ascertaining the RSP, while the actual ascertainment of RSP is delegated to the field officers.

 1.3 In this year's budget, the service tax on authorized automobile services has been sought to be extended to multi-utility vehicles and accordingly, in clause 151, the definition of ' authorized service station ' was sought to be expanded to include ' maxicabs '. As per the Motor Vehicle Act, ' maxicab ' means a vehicle capable of carrying upto twelve persons, excluding the driver, for hire or reward. Vehicles for personal use may not come under this category. However, the intention was to cover the service tax on all such motor vehicles capable of carrying upto twelve persons excluding the driver. Hence ' light motor vehicle ' has now been defined in clause 151 and the service tax on ' authorized service station ' will now be extended to repair or service of light motor vehicles.

 1.4 Amendments have also been made to clause 150 and the Fifth Schedule to bring out the legislative intent clearly.

 Customs:

 2.1 Basic customs duty on RBD palm oil and RBD palmolein has been reduced from 85% to 70% (S.No. 434 of notification No. 21/2002-Customs as inserted by notification No. 67/2003-Customs dated 30.4.2003 refers). They have been exempted from SAD also (S.No. 5A of notification No. 23/2002-Customs as inserted by notification No. 68/2003-Customs dated 30.4.2003 refers).

 

2.2 Basic customs duty has been reduced from 25% to 15% on decorative transfer films and dyestuffs used in the manufacture of writing instruments (S.No. 396 of notification No. 21/2002-Customs as amended by notification No. 67/2003-Customs dated 30.4.2003 refers).

 2.3 Basic customs duty has been reduced on fine and coarse animal hair and flax from 15% to 5% (S.Nos. 435 & 436 of notification No. 21/2002-Customs as inserted by notification No. 67/2003-Customs dated 30.4.2003 refer) and on rags from 25% to 5% (S.No. 437 of notification No. 21/2002-Customs as inserted by notification No. 67/2003-Customs dated 30.4.2003 refers).

 2.4 Lists 45 and 46 of notification No. 21/2002-Customs, prescribing a concessional basic customs duty of 5% for specified textile machinery/equipment and their parts for manufacture of the corresponding textile machinery/equipment, have been expanded (notification No. 67/2003-Customs dated 30.4.2003 refers) to cover more specified capital goods for the synthetic/artificial fibre/yarn industry and technical textiles, specified woolen textile machinery, electronic dobby and jacquard.

 2.5 The concessional basic customs duty of 10% available for two for one or three for one twisters and rewinding machines used in the silk sector, has been extended to such twisters and rewinding machines irrespective of the sector of use. Parts for manufacture of and spares for maintenance of such twisters and rewinding machines will also attract a concessional basic customs duty of 10% (changes in List 32 and S.No. 426A of notification No. 21/2002-Customs vide notification No. 67/2003-Customs dated 30.4.2003 refer).

 2.6 Basic customs duty has been reduced from 15% to 10% on specified capital goods for IT/electronics sector (notification No. 25/2002-Customs as amended by notification No. 69/2003-Customs dated 30.4.2003 refers).

 2.7 Nickel oxide sinter and unwrought nickel for manufacture of steel, and metcoke for manufacture of pig-iron or steel using a blast furnace or COREX technology or for manufacture of ferro-alloys have been exempted from the special additional duty of customs (SAD) subject to end-use condition (S.Nos. 8A, 41A and 41B of notification No. 23/2002-Customs as inserted by notification No. 68/2003-Customs dated 30.4.2003 refers refer).

 2.8 S.No. 373 of notification No. 21/2002-Customs has been amended (vide notification No. notification No. 67/2003-Customs dated 30.4.2003) so as to extend the concessional rate of 5% to spare parts of hearing aids irrespective of their classification.

 Central Excise:

 Textiles

 3.1 The following turn over based exemptions have been given to textile sector:-

 (i) Knitted and woven readymade garments or clothing accessories have been fully exempted from excise duty upto their first clearance of Rs.25 lakhs per annum provided such garments do not bear the brand name of other manufacturer and if the annual clearances of these goods do not exceed Rs.30 lakhs. (notification No.34/2003-CE, dated 30.4.2003 refers). The manufacturer should keep the purchase documents of inputs i.e. fabrics. This exemption is given with a presumption that fabrics used in such garments/accessories are duty paid. There should be no checking of such units opting for this exemption, unless authorized by the Commissioner. For purposes of this notification, clearances, if any, made in the financial year 2003-04, prior to the issue of the notification, will be excluded.

 (ii) Similarly, unprocessed fabrics made by power looms have been fully exempted from excise duty upto their first clearance of Rs.20 lakhs per annum provided the annual clearances of these goods do not exceed Rs.25 lakhs (notification No. 35/2003-CE, dated 30.4.2003 refers). The manufacturer should keep the purchase documents of inputs i.e. yarns. This exemption is given with a presumption that such yarns are duty paid. There should be no checking of such units opting for this exemption, unless authorized by the Commissioner. For the purposes of the notification, clearances, if any, made in the financial year 2003-04, prior to the issue of the notification, will be excluded.

 (iii) Rubberised textile fabrics, Cotton belting woven/unprocessed and round mesh mosquito net fabrics have been fully exempted from excise duty upto their first clearance of Rs.25 lakhs per annum provided annual clearances of such goods do not exceed Rs.30 lakhs (notification No. 36 /2003-CE, dated 30.4.2003 refers).

 3.2 Excise duty on hand processed fabrics of pure cotton, which after having undergone bleaching, dyeing or printing without the aid of power or steam have been subjected to certain specified finishing processes (with the aid of power or steam), has been reduced to 5% and 8% respectively (notification No. 38/2003-CE, dated 30.4.2003 refers). In this case, the processors should certify that the fabrics in respect of which the 5% or 8% duty is being claimed has been subjected to the process of bleaching, printing or dyeing or one or more of these processes without the aid of power or steam. In other words, if the fabrics have been bleached or printed or dyed, and if power or steam is used in any of these processes, 5% or 8% rate will not apply.

 3.3 Full exemption from excise duty has been provided to fully finished ready made garments, which subsequent to their clearance and sale, have undergone processes like labeling, re-labeling (such as putting price tag, bar code, sellers name, instruction regarding usage etc.), repacking from bulk packs to retail packs, alteration or any other process to make the product marketable. However, the process of affixing of a brand name on such garments will continue to attract central excise duty. The exemption will be subject to condition that the retailers keep the purchase document (notification No. 38/2003-CE, dated 30.4.2003 refers)

3.4 Rule 9A of the CENVAT Credit Rules, 2002 has been further amended so as to change the relevant date for input stock declaration from 31.03.2003 to 01.04.2003. Consequently, the stock of inputs lying as on 01.04.2003 (instead of 31.03.2003) would now be eligible for one time credit under Rule 9A of the CENVAT Credit Rules, 2002. (Notification No. 40/2003-CE (NT), dated 30.4.2003 refers)

Other changes:

3.5 The 8% central excise duty on refined edible oils has been replaced by a specific duty of Re. 1/- per kg. Similarly, the 8% duty on vanaspati and bakery shortening has been replaced by a specific duty of Rs. 1.25 per kg. Margarine has been exempted from central excise duty. The duty is leviable on all refined edible oils and vanaspati and bakery shortening irrespective of whether the same is branded and packed or not, at the stage of clearance from refinery / vanaspati factory. Refined edible oil and vanaspati manufactured respectively from duty paid refined edible oil and vanaspati shall be exempt from central excise duty (S.Nos. 244, 245 & 246A of notification No. 6/2002-CE as amended by notification No. 37/2003-CE, dated 30.4.2003 refer). However, for removal of doubts, it is clarified that payment of Nil duty shall not be taken as duty payment for the purposes of this exemption as clarified in Boardıs Circular No. 667/58/2002-CX, dated 26.9.2002.

 3.6 Nicotine Polacrilex gum, presently attracting 8% central excise duty, has been fully exempted from excise duty (S.No. 254 of notification No. 6/2002-CE as amended by notification No. 37/2003-CE, dated 30.4.2003 refers).

 3.7 Hand pumps and parts have also been exempted from central excise duty (changes in S.No. 35 and S.No. 52 of notification No.10/2002-CE as amended by notification No. 37/2003-CE, dated 30.4.2003refer).

 3.8 Central excise duty on ceramic tiles manufactured by units not using electricity/petroleum fuel for firing the kiln has been reduced from 16% to 8% (S.No. 275 of notification No. 6/2002-CE as amended by notification No. 37/2003-CE, dated 30.4.2003 refers).

 3.9 Central excise duty on wafer biscuits, cakes and pastries has been reduced from 16% to 8% (S.Nos. 273 & 274 of notification No. 6/2002-CE as amended by notification No. 37/2003-CE, dated 30.4.2003 refer).

 ------------------------------------------------------------------------------------------------------------------

 

COPY OF NOTIFICATION   No. 37/2003-Central Excise  DATED April 30, 2003.

 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), the Central Government, being satisfied that it is necessary in the public interest so to do,  hereby directs that each of the notifications of the Government of India, specified in column (2) of the Table below, shall be amended or further amended, as the case may be,  in the manner specified in the corresponding entry in column (3) of the said Table.

 TABLE

 

S. No.

Notification No. and date

Amendments

(1)

(2)

(3)

1.

6/2002-Central Excise, dated the 1st March, 2002

In the said notification, in the Table,-

(i)                  for S.No. 244 and the entries relating thereto, the following shall be substituted, namely:-

 

(1)

(2)

(3)

(4)

(5)

(6)

" 244.

15.02 or 15.03

The following goods namely:-

(A)   All goods other than refined edible oils

 

(B)   Refined edible oils

 

 

 

Nil

 

Re. One per kilogram

 

 

-

 

-

 

 

-

 

-

   

S. No.

Notification No. and date

Amendments

(1)

(2)

(3)

 

 

(1)

(2)

(3)

(4)

(5)

(6)

 

 

 

(C)   Refined edible oils, if manufactured out of refined edible oils on which the appropriate duty of excise under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or as the case may be, the additional customs duty under the Customs Tariff Act, 1975 (51 of 1975) has already been paid.

 

Explanation.- For the purposes of this exemption, 'refined edible oil' means fixed vegetable oils, which subsequent to their expression or extraction, have undergone any one or more of the following processes, namely:-

a) treatment with alkali or acid;

(b) bleaching; and

(c) deodorisation,

and conforms to the standards of 'refined vegetable oil'  read with the standards for the specified edible oils, as prescribed in the Prevention of Food Adulteration Act, 1954 (37 of 1954) and rules made thereunder

 

 

Nil

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

-"

 

 

 

 

 

 

 

 

 

 

(ii) for S.No. 245 and the entries relating thereto, the following shall be substituted, namely:-

 

(1)

(2)

(3)

(4)

(5)

(6)

 

" 245.

15.04

The following goods namely:-

 

(A)   All goods (other than (a) partially or wholly hydrogenated vegetable fats and oils and fractions thereof, commonly known as 'Vanaspati', and

     (b) bakery shortening)

 

 

 

 

Nil

 

 

 

-

 

 

 

-

 

 

 

 

(B)   Bakery shortening, or partially or wholly hydrogenated vegetable fats and oils and fractions thereof, commonly known as 'Vanaspati'

 

Rs. 1.25 per kilogram

 

-

-

 

. No.

Notification No. and date

Amendments

(1)

(2)

(3)

 

 

(1)

(2)

(3)

(4)

(5)

(6)

 

 

 

 

 

(C)   Bakery shortening, or partially or wholly hydrogenated vegetable fats and oils and fractions thereof, commonly known as 'Vanaspati', if manufactured out of bakery shortening or 'Vanaspati' on which the appropriate duty of excise under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or as the case may be, the additional customs duty under the Customs Tariff Act, 1975 (51 of 1975) has already been paid

 

 

 

Nil

 

 

 

-

 

 

-

(iii) after S.No. 246 and the entries relating thereto, the following shall be inserted, namely:-

" 246A.

1508.90

Margarine

Nil

 

-

-"

(iv) against S.No. 254, for the entry in column (4), the entry ' Nil ' shall be substituted;

 

 

 

 

 

 

(v) after  S. No. 272 and the entries relating thereto, the following shall be added, namely:-

" 273.

1905.20

All goods

8%

-

-

274.

1905.39

Wafer biscuits

8%

-

-

275.

69

Ceramic tiles, manufactured in a factory not using electricity, or petroleum products falling under heading Nos. 27.09, 27.10, 27.11 or 27.13, for firing the kiln

8%

-

-"

2.

10/2003-Central Excise,

dated the 1st March, 2003

In the said notification, in the Table,-

(i) against S.No.35, for the entries in column (2), the entries  ' 8413.11, 8413.12, 8413.13 or 8413.14 ' shall be substituted;

(ii) after S.No. 51 and the entries relating thereto, the following shall be inserted, namely:- 

(1)

(2)

(3)

(4)

"52.

8413.20 or 8413.91

All goods

Nil"

                       

 

[F. No.B-3/5/2003-TRU]

  

(V.Sivasubramanian)

  Deputy Secretary to the Government of India

COPY OF NOTIFICATION   No. 38 /2003-Central Excise  DATED April 30, 2003.

            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 Special Importance) Act, 1957 (58 of 1957), the Central Government, being  satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance and Company Affairs (Department of Revenue) No. 7/2003- Central Excise, dated 1st March, 2003, namely,-

            In the said notification, in Table, after S. No. 45 and entries relating thereto, the following S. Nos. and entries shall be inserted, namely,-

(1)

(2)

(3)

(4)

(5)

"46.

52.07, 52.08 or 52.09

The following goods, namely:-

(a) Woven fabric of cotton not containing any other textile material;

(b) Other woven fabrics of cotton;

when subjected to any one or more of the following processes, namely:-

(1) Calendering (other than clandering with grooved rollers);

(2) Flanellette raising;

(3) Stentering;

(4) Damping on grey and bleached sorts;

(5) Back filling on gray and bleached sorts;

(6) Singeing, that is to say, burning away of knots and loose ends in the fabrics;

(7) Scouring, that is to say, removing yarn size and natural oil found in cotton;

(8) Cropping and butt cutting;

(9) Curing or heat setting;

(10)               Padding, that is to say, applying starch or fatty material on one or both side of fabric;

(11)               Expanding; or

(12)               Hydro extraction with the aid of power, that is to say, mechanical extracting or mechanical squeezing out water from fabric:

  

 Provided that process of bleaching, dyeing  or printing or any one or more of these processes have been carried out on such fabrics without the aid of power or steam.

 

Explanation.- For the purposes of the woven fabrics of cotton, calendering shall include processing of cotton fabrics with the aid of zero-zero machine without a stenter attachment.

 

5%

 

8%

 

Nil

 

Nil

47.

51.10 or 51.11

Woven fabrics of wool when subjected to any one or more of following processes, namely:-

(a) Calendering with plain rollers;

(b) Blowing (steam pressing):

 

Provided that process of bleaching, dyeing or printing or any one or more of these processes are carried out on such fabrics without the aid of power or steam. 

8%

Nil

           

 

(1)

(2)

(3)

(4)

(5)

48.

54 or 55

Woven fabrics of man made fibres subjected to any one or more of the following processes, namely:-

(1) Calendering with plain rollers;

(2) Singeing, that is to say, burning away knots and loose ends in fabrics;

(3) Padding, that is to say, application of natural starch to one or both sides of fabrics;

(4) Back filling, that  is to say, application of starch to one side of the fabrics;

(5) Cropping, that is to say, cutting away mechanically of loose ends from the fabrics;

(6) Hydro-extraction, that is to say, mechanically squeezing out water from the fabrics; or

(7) The process of blowing (steam pressing) carried on woven fabrics of acrylic fibre:

Provided that process of bleaching, dyeing or printing or any one or more of these processes are carried out on such fabrics without the aid of power or steam.

 

8%

Nil

49

59

Interlining fabrics

10%

Nil

 

50

61 or 62

Article of apparel or clothing accessories when subjected to any one or more of the following processes, other than the process of affixing a brand name or trade name, subsequent to purchase, namely:-

(1) labeling or   relabeling, that is to say, attaching or affixing price tag, name of seller of such goods or instruction regarding usage;

(4)      repacking from bulk packs to retail packs;

(4)    alteration; or

(4)    any other process to make the product marketable.

 

Explanation.- For the purposes of this  notification,

' brand name ' or ' trade name '  means a name or a 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.

Nil

-

           

  

F.No B3/5 /2003-TRU

                                                                                                                                    Sd/-

 

(V. SIVASUBRAMANIAN)

DEPUTY SECRETARY TO THE GOVERNMENT OF INDIA