F.No.305/141/2001-FTT
Government
of India
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)
******
New
Delhi, 21st December, 2001
To
All
Chief Commissioners of Customs,
All
Chief Commissioners of Customs & Central Excise,
All
Commissioners of Customs & Central Excise,
All
Commissioners of Customs.
Sub: Applicability of notification No.8/97-CE, dated 1-3-97 Clarification Reg.
Sir
I
am directed to invite your attention to the Board’s
Circular No.442/8/99-CE dated the 4th March,
1999 on the above subject. The Circular clarifies that
the benefit of notification No. 8/97-CE dated 1-3-97
will be allowed to the units using imported as well
as indigenously procured raw materials provided the
unit is able to satisfy the jurisdictional officer beyond
doubt that the goods to be sold in DTA are manufactured
out of indigenous raw materials only by way of maintenance
of records, physical scrutiny/verification and the manufacturing
process etc. The Circular also provides that in cases
where the inputs/final products are common, and manufacturing
lines are not separate or if the inputs/final products
are difficult to identify, benefit of the notification
may be denied to avoid misuse of exemption notification.
The stipulation of separate manufacturing lines is reported
to have been interpreted by the field officers to mean
that to avail of the benefit of this Circular, the unit
must have a separate machinery, separate godowns and
separate branches of manufacturing process.
2. The
matter has been examined. It is reiterated that the
benefit of notification No.8/97-CE dated 1-3-97 may
be allowed to the units using imported as well as indigenously
procured raw
materials provided the unit is able to satisfy the jurisdictional
authorities beyond doubt that the goods to be sold in
DTA are manufactured out of wholly indigenous raw materials
by way of maintenance of records etc. as provided in the said Board’s Circular. Maintenance
of separate records would include, inter alia, separate
raw material registers for indigenously
procured goods and imported ones, separate finished
goods registers – one for final products manufactured
out of indigenously procured raw materials and the other
for final products manufactured out of imported materials,
batch-wise production and dispatch registers in respect
of the quantity manufactured and sold in DTA etc. The
jurisdictional officers would thus need to satisfy themselves
that the goods under DTA sale have been manufactured
wholly out of indigenous raw materials. The Circular
referred to above even enjoins the jurisdictional officers
to get the input-output norm fixed by the Cost Account
so as to ensure that imported inputs, if common, are
not used in the manufacture of the final products to
be cleared in DTA. But the intention is certainly not
to insist upon separate machinery, separate godowns
and separate branches of manufacturing process (which
would amount to establishing a separate factory within
the factory) before extending the benefit of the above-said
Circular.
3. Pending
cases/disputes may
be decided on the basis of
above instructions. Wide publicity may be given
by issue of a Public Notice in this regard.
4. Difficulties, if any, faced in the implementation
of the above instructions, may be brought to the notice
of the Board at an early date. Kindly
acknowledge receipt of this Circular.
(A.K. Sinha)
Technical Officer
(FTT)
Copy to:
PS to Chairman and Members of the CBEC
To
all Sections of the Board office.
To all Directorates under CBEC.
Joint
Secretary (EP), Ministry of Commerce.
DGFT.
(A.K. Sinha)
Technical Officer
|
