Corrections in Explanatory Notes issued along with Budget papers – TRU's Clarification
REFERENCE is invited to the Explanatory Notes to changes in Central Excise duties circulated along with budget papers. In para 61.2 of these notes, wherein changes in the excise duty rate on readymade garments and made up articles of textile were discussed, it has inadvertently been mentioned that the excise duty of 10% is being imposed on such goods without CENVAT credit facility.
TRU clarifies that CENVAT credit of the duty paid on inputs and capital goods as well as service tax paid on input services is available to the manufacturers of readymade garments and textile made ups. In case the liability to pay duty on these items rests with the person who gets them manufactured on job-work basis (merchant manufacturer), the facility of CENVAT credit would also be available to him. For this purpose, a suitable amendment has been made in the definition of 'manufacturer' or 'producer' appearing in clause (naa) of rule 2 of the CENVAT Credit Rules, 2004.
Also minor errors in some notifications [namely, 5/2011-CE, 6/2011-CE, 14/2011-CE, 7/2011-CE (NT), 21/2011-Cus., 25/2011-Cus. and 27/2011-Cus.] dated 01.03.2011 were observed. These have since been corrected and corrected versions of the notifications have been hosted on the CBEC website: www.cbec.gov.in. The Gazette copies of the notifications published on 01.03.2011 also reflect the correct versions of these notifications [Refer to March 24, 2011 for the Errata published by Directorate of Publicity and Public Relations, CBEC]
Central excise duty of 1% was imposed on vaccines (other than those specified under the National Immunization Program) by virtue of S. No.39 of notification No. 1/2011-CE dated 01.03.2011. The policy intent was to retain full exemption from excise duty on vaccines specified under National Immunization Program. In order to reflect this clearly, an entry prescribing full exemption for such vaccines has been inserted at S. No. 62AA of notification No. 4/2006-CE dated 01.03.2006. This amendment has been carried out by notification No.19/2011-CE dated 03.03.2011.
D.O.F.No.334/3/2011-TRU, Dated: 4th March, 2011