Exemption of excise duty on tow arising during course of manufacture of polyester staple fibre (PSF) or polyester filament yarn (PFY) - CBEC Clarifies
AS per Sl. No. 172A of notification No. 12/2012-Central Excise, dated 17.03.2012 excise duty on polyester staple fibre (PSF) or polyester filament yarn (PSY), manufactured from plastic waste including waste polyethylene terephthalate bottles, is exempted.
As per Board's Circular No. 19/MMSF/88-CX.1 dated 26.5.1998, tow arising during the course of manufacture of such PSF/PSY is chargeable to excise duty since the final product is exempt. Tow arising during the manufacture of such PSF/PFY contributes to 90% of the value of such PSF/PSY defeats the purpose of granting exemption from excise duty to such PSF/PSY.
Representations have been received requesting for granting exemption from excise duty on tow arising during the manufacture of such PSF/PFY.
The Board informs the Chief Commissioners that the matter is under consideration in the Ministry and the field formations are requested to keep the show cause-cum-demand notices on the above issue, if any, in the Call Book pending further instructions from the Ministry.
CBEC Letter in F.No. 345/2/2013-TRU, Dated: March 14, 2014