TRADE NOTICE NO. 04/2010-CENTRAL EXCISE

DATED SHILLONG, THE 2ND MARCH, 2010.

            Trade and all concerned are informed that the Finance Minister has introduced the Finance Bill 2010 in the Lok Sabha on 26th February 2010. Some changes in Central Excise duty have been made through the Finance Bill and through Notification numbers 03/2010-CE to 18/2010-CE all dated 27.02.2010 and Notification numbers 05/2010-CE(NT) to 11/2010-CE(NT) all dated 27.02.2010. Salient features of some of these proposals in respect of Central Excise duty are indicated below. For full details, relevant provisions of the Finance Bill and the above mentioned notifications should be referred to, which are available in the following websites:

1.                  http//www.cbec.gov.in

2.                  http//www.indiabudget.nic

3.                  http//www.finmin.nic.in

GENERAL

Enhancement  of  Standard  Rate:  -   The  standard  rate  of  excise  duty,  which  was  reduced  to  8%  in  February 2009 as a part of the Stimulus package on non-petroleum products is now being enhanced from 8% to 10% witha few exceptions.  Consequent to the increase  in  the  standard rate, rates of excise  duty  on certain  products like Cement, Large Cars etc. are also being suitably enhanced. Chapter wise changes in excise duty rates, other than enhancement of standard rate from 8% to 10%, are given below:  

Chapters 1 to 10

No change.

Chapter 11 11.1  Excise  duty  exemption  on Tapioca Starch & Maize Starch  is  being withdrawn and these products  will now  attract  excise  duty  at  4%.  (S.No.  3  of  Notification 3/2006-CE as  amended  by the  notification  9/2010-CE dated 27.02.2010 refers)  

11.2  Excise  duty  on potato starch is  being  reduced from 8% to 4 %.( S.No.  3  of  Notification 3/2006-CE  as amended by the notification 9/2010-CE dated 27.02.2010 refers)  

Chapters 12 to 20  

No change. 

Chapter 21   

21.1  Excise  duty  on  Betel  nut  product  known  as  „Supari   is  being  fully  exempted  from  excise  duty. However, Scented Supari will continue to  attract duty  at applicable rates.  (S.No. 27Aof Notification 3/2006-CE as amended by the notification 9/2010-CE dated 27.02.2010 refers)  

21.2  Pan  Masala  Packing  Machines  (Capacity  Determination  and  Collection  of  Duty)  Amendment  Rules, 2010  have  been  issued  to  amend  Pan  Masala  Packing  Machines  (Capacity  Determination  and  Collection  of Duty) Rules, 2008  to  effect certain technical changes in the  said rules  (Notification  No.  8/2010-Central Excise

(N.T.), dated 27.02.2010 refers).   

Chapter 22 & 23  

No change.    

Chapter 24  

24.1  The  existing  slab of filter cigarettes  of length not  exceeding  70 mm is being broken up  into two slabs: filter  cigarettes  of  length  not  exceeding  60  mm     ;  and   filter  cigarettes  of  length  exceeding  60  mm  but  not exceeding 70 mm  (Clause 74 of  the Finance Bill refers). Suitable rates are being prescribed for these slabs. The basic excise duty (BED) on  other cigarettes is also  being  revised.     The  revised  rates of excise duty including basic excise, additional excise and NCCD on cigarettes are as under:

S. No. 

Description

Present Rate 

Proposed Rate

 

Non-filter length in mm 

   (Rs. per 1000)

 

1.

  Not exceeding 60  

819

669(509 BED+70 AED+90 NCCD)

2.

Exceeding 60 but not exceeding 70

1323

1473(1218 BED+110 AED +145 NCCD)

 

Filter length in mm                 

 

 

 

3.

Not exceeding 60

 

819

669(509 BED+70 AED +90 NCCD)

4.

Exceeding 60 but not exceeding 70 

  969(809 BED+70 AED +90 NCCD) 

5. 

Exceeding 70 but not exceeding 75 

1323

1473(1218 BED+110 HC+145 NCCD)

 

6. 

Exceeding 75 but not exceeding 85 

1759

1959(1624 BED+145 AED +190 NCCD)

 

7.

Others

2163

2363(1948 BED+180 HC+235 NCCD)

8. 

Cigarettes of tobacco substitutes 

1208

1408(1258 BED +150  NCCD)

 Note:  BED,  AED  and  NCCD  stands  for  Basic  Excise  Duty,  Additional  Excise  Duty  and  National  Calamity Contingent Duty respectively.   

Effective  rate  of  basic  excise  duty  for  cigarettes  (both  filter  and  non-filter)  of  length  not  exceeding  60  millimeters is being prescribed separately. (Notification No. 18/2010-Central Excise dated 27.02.2010 refers)

24.2  At present, cigars, cheroots and cigarillos of tobacco attract ad valorem rate of basic excise duty (BED) of 8% plus health cess of 1.6%.   These rates are now being replaced with a composite rate of “10% or Rs.1227  per  thousand,  whichever  is  higher”  (BED)  and  “1.6%  or  Rs.246  per  thousand  whichever  is  higher”  (AED). Cigars,  cheroots  and  cigarillos  of  tobacco  substitutes  will  now  attract  BED  of  “10%  or  Rs.1473/1000”  whichever is higher                         

24.3   Basic excise duty on branded unmanufactured tobacco and tobacco refuse is being increased from 42% to 50%. 

 24.4  Basic  excise  duty  on  chewing  tobacco,  preparations  containing  chewing  tobacco,  zarda,  scented tobacco, snuff and its preparations, tobacco extracts and essences etc. is being increased from 50% to 60%. The rates  of  abatement  of  the  commodities  are  also  being  accordingly  revised.  (Notification  No.  9/2010-Central Excise (N.T.) dated 27.02.2010 refers).  

24.5  Basic  excise  duty  on  branded  homogenized  or  reconstituted  tobacco  is  being  increased  from  50%  to 60%.  

24.6  Basic excise duty on items of other smoking tobacco (branded) is being increased from 34% to 40%.  

24.7  Basic excise duty on smoking mixtures of pipes and cigarettes is being increased from 300% to 360%.    

24.8  Basic excise duty on cut tobacco is being increased from Rs.50 per kg. to Rs.60 per kg. 

24.9  Basic  excise  duty  on  manufactured  tobacco  other  than  chewing  tobacco,  preparations  containing chewing  tobacco,  zarda  scented  tobacco,  snuff  and  its  preparations,  tobacco  extracts  and  essences  etc  and  is being increased from 50% to 60%.

(Clause 74 of the Finance Bill 2010 refers for changes in 24.1 to 24.9 above)  

24.10  The  duty  on other Pan Masala  is  being increased from 8% to 10%.  (Entry no.  29A of  Notification no. 3/2006-Central Excise as amended by Notification no. 9/2010- Central Excise dated 27.02.2010 refers). 

24.11  Basic  excise  duty  on branded  „hookah  or  „gudaku   tobacco  is  being  increased  from 8%  to  10%. (Entry no. 33 of Notification no. 3/2006- Central Excise   as amended by Notification no. 9/2010- Central Excise dated 27.02.2010 refers).   

24.12  The  duty  on other smoking  tobacco (unbranded)  is  being  increased  from  8%  to  10%. (Entry no. 35  of Notification  no.  3/2006-  Central  Excise  as  amended  by  Notification  no.  9/2010-  Central  Excise  dated 27.02.2010 refers).  

24.13  The  duty  on  other  manufactured  tobacco  and  manufactured  tobacco  substitutes  (unbranded)  is  being increased from 8% to 10%. (Entry no. 40 of Notification no. 3/2006- Central Excise as amended by Notification no. 9/2010- Central Excise dated 27.02.2010 refers)

24.14  The  AED  on cigars, cheroots and cigarillos  of tobacco  is  being revised  from 1.6% to “ 1.6%  or Rs.246 per thousand whichever is higher” (Entry  no.  4&5 of Notification no.  6/2005-  Central  Excise    as amended by Notification no. 8/2010- Central Excise dated 27.02.2010 refers) 

 24.15  Unmanufactured tobacco,  bearing a  brand name, falling under tariff heading  2401 of  the  Excise Tariff and  chewing  tobacco  falling  under  tariff  item  2403  99  10  of  the  said  Tariff,  manufactured  with  the  aid  of packing  machine  and  packed  in  pouches  have  been  declared  as  “notified  goods”  under  Section  3A  of  the Central Excise Act, and, accordingly, these shall be levied to duty of excise in accordance with the provisions of the section 3A (Notification No. 10/2010-Central Excise (N.T.), dated 27.02.2010 refers). The rate of duty to be levied on these goods under Section 3A  per machine per month for different denomination of Retail Sale Price (RSP)  of  poucheshas  been  specified  in  notification  No.  16/2010-Central  Excise,  dated  27.02.2010.  Further, Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection  of Duty)  Rules,  2010  are  also  being  issued  for  administration  of  the  new levy.  This  new  levy  shall  be  effective from 08.03.2010. (Notification No. 11/2010-Central Excise (N.T.) dated 27.02.2010 refers).  

24.16  Pan  Masala  Packing  Machines  (Capacity  Determination  and  Collection  of  Duty)  Amendment  Rules, 2010  have  been  issued  to  amend  Pan  Masala  Packing  Machines  (Capacity  Determination  and  Collection  of Duty) Rules, 2008  to  effect certain technical changes in the  said rules  (Notification  No.  8/2010-Central Excise (N.T.), dated 27.02.2010 refers).   

Chapter 25:  

25.1      Consequent to enhancement  in  the standard rate  of duty from  8% to 10%, the specific rates  of duty  on cement and cement clinker is also being revised upwards as follows: 

Mini cement plant:

 

Cement                                   

Present rate 

proposed rate

1

Cleared in packaged form,-

(i)                     of retail sale price not exceeding Rs. 190 per  50  kg  bag  or  of per                                        tonne  equivalent  retail  sale price not exceeding Rs. 3800;

(ii)                   of retail sale price not exceeding Rs. 190 per  50  kg  bag  or  of per                                        tonne  equivalent  retail  sale price  exceeding Rs. 3800;                                                   

Rs.145 per tonne

 

 

Rs. 250 per tonne           

Rs. 185 per tonne

 

 

Rs. 315 per tonne

2

Cleared other than in packaged form

Rs. 170 prt tonne

Rs. 215 per tonne

 Other than mini cement plant

 

Cement                                   

Present rate 

proposed rate

1

Cleared in packaged form,-

(i)                 of retail sale price not exceeding Rs. 190 per  50  kg  bag  or  of per tonne  equivalent  retail  sale price not exceeding Rs. 3800;

(ii)               of retail sale price not exceeding Rs. 190 per  50  kg  bag  or  of per tonne  equivalent  retail  sale price  exceeding Rs. 3800;                                                  

Rs.230 per tonne

 

 

8 % of retail sale price           

Rs. 290 per tonne

 

 

10 % of retail sale price

2

Cleared other than in packaged form

8 % or Rs. 230 per tonne whichever is higher

10 % or Rs. 290 per tonne whichever is higher

 

Cement Clinker

Rs. 300 per tonne

Rs. 375 per tonne

 

                                                                   

    

 

 

 

 

 

 C

(S.No. (i) to (v) of notification No. 10/2010- Central Excise dated 27.02.2010 refers).

Chapter 26:

No change.    

Chapter 27:

27.1  A new  cess to be called „ Clean Energy Cess   is being imposed on  Coal, Lignite and peat (CETH 2701, 2702, & 2703) produced in India. This will come into  force  from the date  to be  notified after  the  enactment of the Finance Bill, 2010. (Clause 82 & 83 of the Finance Bill, 2010 read with the Tenth schedule refers)

27.2  Excise exemption on Avgas is being withdrawn and 4% excise duty is being imposed on it. (S.No.16 of the Notification  No.  4/2006-CE dated  the  1       March 2006  as  amended  vide  notification  no.     10/2010-  Central  st Excise dated 27.02.2010 refers).

27.3   The  rates  of  excise  duty  on  Motor  Spirit  (commonly  known  as  petrol)  and  HSD  (diesel)  are  being increased by Re.1 per litre.  The revised rates of duty on these items are as under:   

Description

  Intended for sale without Brand Name 

Intended for sale with Brand Name

Motor Spirit 

*Rs.14.35 per litre 

*Rs.15.50 per litre

HSD

**Rs.4.60 per litre 

**Rs.5.75 per litre

Note:   *Includes Rs.2 additional excise duty and Rs.6 special additional excise duty. **  Includes  Rs.2 additional excise duty.  

 (S.No.17 & 19  of the Notification  No.  4/2006-CE dated  the  1         March  2006 as  amended vide notification  No.  s t 10/2010- Central Excise dated 27.02.2010 refers).

27.4  Sub-heading 2712 20, tariff items 2712 20 10 and 2712 20 90 have been substituted by tariff item „2712 20 00   covering the item „Paraffin wax containing by weight less than 0.75% of oil .  Tariff item „2712 90 40   is being inserted to cover „Paraffin wax containing by weight 0.75% of oil or more. There is no change in the duty structure.  

Chapter 28 to 32.  

No change. 

Chapter 33  

33.1  Excise  duty  is  being  exempted  on  security  ink  manufactured  by  Bank  Note  Press,  Dewas  (Madhya Pradesh) and supplied  to  Bank Note Press, Dewas, Currency  Note Press,  Nashik, India  Security Press, Nashik, Security  Printing  Press,  Hyderabad,  Bhartiya  Reserve  Bank  Note  Mudran  Limited,  Mysore  and  Bhartiya Reserve Bank Note Mudran Limited, Salbony. (S.No. (xvii) of notification No.  10/2010- Central Excise dated 27.02.2010 refers).  

33.2  Excise  duty  is  being  exempted  on  Fractionated/  De-terpenated  Mentha  oil  (DTMO),  De-mentholised Oil (DMO), Spearmint oil, Mentha Piperita oil  and any other by products/ intermediate arising in the course  of manufacture of Menthol (S.No. (xviii) Of notification No.  10/2010- Central Excise dated 27.02.2010 refers).  

Chapter 34 to 39  

No change.  

 Chapter 40   

40.1  Excise duty on latex rubber thread of tariff  item 4007 00 10 is being reduced from 8% to 4%  (S.No. 82 of  the  notification  No.  4/2006-Central  Excise  as amended  vide notification No.   10/2010-Central  Excise dated 27.02.2010 refers).  

40.2  Excise  duty  on  Toy  Rubber  Balloons  of  Natural  Rubber  Latex  falling  under    heading  40  is  being reduced from  8%  to Nil (S.No. 85A of the notification No. 4/2006-Central Excise as  inserted vide Notification No. 10/2010- Central Excise dated 27.02.2010 refers). 

Chapter 41-47

No change.  

Chapter 48  

48.1   Excise  duty  at  10%  is  being  imposed  on  Baby  and  clinical  diapers,  which  were  fully  exempt  so  far.  (Relevant  bill  entries  read  with  S.No.  96B  of  the  notification  No.  4/2006-Central  Excise  as  inserted  vide Notification No. 10/2010- Central Excise dated 27.02.2010 refers).

48.2   Excise  duty  exemption  on  Sanitary  napkins  is  also  being  withdrawn  and these  goods  will  now  attract standard  rate  of  duty at  10%  (Relevant bill entries  read with S.No. 96C  of the notification  No. 4/2006-Central Excise as inserted vide Notification No. 10/2010- Central Excise dated 27.02.2010 refers).  

48.3  Excise  duty  on  Cartons,  boxes  and  cases,  of  corrugated  paper  or  paperboard  manufactured  by Standalone  manufacturers  is  being  reduced  from 8%  to  4% (S.No.  96E of  the  notification No. 4/2006-Central Excise as inserted vide Notification No. vide notification No. 10/2010-Central Excise dated 27.02.2010 refers).  

Chapter 50 to 62  

No change.  

Chapter 63  

63.1  Excise  duty  exemption  on Mosquito nets impregnated  with  insecticide is  being  withdrawn and duty @ 4% is being imposed (S. No.3  of notification No. 5/2006- Central Excise, dated 01.03.2006 as  amended vide S. No. (iv) of notification No. 11/2010-Central Excise, dated 27.02.2010 refers).

63.2    Excise  duty  exemption  on  umbrella  panels  is  being  withdrawn  and  duty  @  4%  is  being  imposed.  (S. No.79  of  notification  No.  3/2005-  Central  Excise,  dated  24.02.2005  omitted  vide  notification  No.  7/2010- Central Excise, dated 27.02.2010 refers). 

Chapters 64 & 65     

 

No change.  

Chapter 66  

66.1.  Excise  duty on all  parts of umbrellas and sun umbrellas including  umbrella panels, irrespective of their classification in the Excise Tariff, is being unified at 4% (S. No.5C of notification No.  5/2006- Central Excise, dated  01.03.2006  as  inserted  vide  S.  No.  (v)  of  notification  No.  11/2010-Central  Excise,  dated  27.02.2010 refers;  S.  No.79 of  notification No. 3/2005- Central Excise, dated 24.02.2005 is being omitted notification No. 7/2010-Central Excise, dated 27.02.2010).  

Chapter 67  

No change.  

Chapter 68  

68.1.  A  Chapter  Note  is  being  inserted  in  Chapter  68  to  the  effect  that  in  relation  to  products  of  headings 6802 and 6810, the process of cutting or sawing or sizing or polishing of stone blocks or any other process, for converting of blocks  into  slabs or tiles, shall amount to “manufacture” (clause  73  of Finance Bill,  2010 refers). Accordingly,  the  slabs  or  tiles  classifiable  under  CETH  6802  or  6810  manufactured  out  of  blocks  of  natural stone  or agglomerated  artificial  are  now excisable.   However, marble slabs  and tiles classifiable under  chapter 25 and marble tiles falling under chapter 68 attract the same specific rate of Rs. 30 per square metre (S. No. 2 of Notification  4/2006-C.E.,  dated  1    March  2006  refers)  and  as  such  finishing  processes  like  cutting,  sawing, polishing  etc.  on duty paid  slabs or tiles  of  marble  will (if  not resulting in change  of  classification)  not  attract any further excise duty. 

Chapter 69  

69.1.  S. No.  13 of notification No. 5/2006- Central Excise,  dated  01.03.2006 prescribing concessional excise duty  rate  of  8%  on  ceramic  tiles,  manufactured  in  a  factory  not  using  electricity  for  firing  the  kiln,  is  being omitted.  Consequently,  all  ceramic  tiles,  whether  manufactured  by  using  electricity  for  firing  the  kiln  or  not, will  attract  a  single  excise  duty rate  of  10% with  cenvat  credit.  (S.  No.13  of  notification No. 5/2006-  Central Excise,  dated  01.03.2006  as  omitted  vide  S.  No.  (vii)  of  notification  No.  11/2010-Central  Excise,  dated 27.02.2010 refers)  

Chapter 70 

70.1.  S. No.  20 of notification No. 5/2006- Central Excise,  dated  01.03.2006 prescribing concessional excise duty rate  of 4% on  rough  ophthalmic blanks, for manufacture  of optical lenses  is  being omitted as such blanks already  attract  a „nil   excise  duty vide  S.  No.10  of notification  No.  10/2006 -Central Excise,  dated  01.03.2006 (S.  No.20  of  notification  No.  5/2006-  Central  Excise,  dated  01.03.2006  as  omitted  vide  S.  No.  (xi)  of notification No. 11/2010-Central Excise, dated 27.02.2010 refers)  

Chapter 71  

71.1.  Gold  bars,  other  than  tola  bars,  manufactured  in  a  factory  starting  from  the  stage  of  gold  ore  or concentrate  and  bearing  manufacturer s  engraved  serial  number  &  weight  expressed  in  metric  units,  will  be levied excise duty at the rate of Rs.280 per 10gm, with full Cenvat credit facility. Primary gold including  in bar form  manufactured  or  refined  with  the  aid  of  power  from  any  form  of  gold  shall  continue  to  be  exempt.  (S. No.21A of notification No. 5/2006- Central Excise, dated 01.03.2006 as inserted vide S. No. (xii) of notification No. 11/2010-Central Excise, dated 27.02.2010 refers).   

71.2.  Excise  duty  rates  applicable  to  the  DTA  (Domestic  Tariff  Area)  clearances  of  plain  gold  and  silver jewellery manufactured by an EOU (Export Oriented Unit) have been increased, in case of gold jewellery, from Rs.500 per  10gm  to  Rs.750  per 10gm, and in case of  silver jewellery, from  Rs.1000 per Kg to Rs.1500 per Kg (S. No.8 and 10 of notification No. 23/2003- Central Excise, dated 31.03.2003 as substituted vide S. No. (iv) & (v) of notification No. 5/2010-Central Excise, dated 27.02.2010, respectively, refers).  

71.3  Excise  duty is being exempted on Circulation Coins, Blanks, Weights  & Measures Standards and scrap generated  in  manufacture  of  Blanks  by  IGM  Mumbai,  IGM  Kolkata,  IGM  Hyderabad  and  IGM  Noida (Notification No. 3 /2010- Central Excise dated 27.02.2010 refers).  

Chapter 72  

No change.  

Chapter 73  

73.1  Excise  duty  on Open  Top  Sanitary (OTS)  Cans is  being  increased  from 4%  to  10% (S.No. 31A  of the notification  No.  5/2006-Central  Excise  as  amended  vide  notification  No.11  /2010-Central  Excise  dated 27.02.2010 refers).  

Chapters 74 & 75  

No change.  

Chapter 76 

76.1      Chapter  Note  2  is  being  inserted  in  Chapter  76  to  declare  the  process  of  drawing  or  redrawing  of aluminium tubes and pipes as amounting to “ manufacture”  (clause 73 of Finance Bill, 2010 refers).  

Chapter 77 to 83  

No change.  

Chapter  84   

84.1  Nil  duty  of  excise  on  specified  plantation  machinery,  which  was  valid  up  to  1.5.09,  is  being reintroduced  from  27.2.10  up  to  31.3.11.  (Proviso  in  the  preamble  of  the  notification  No.  06/2006-CE  as substituted by notification No. 12/2010-CE dated 27.02.2010 refers.)  

84.2  Excise duty exemption on specified items intended to be used for the installation of a cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport of agricultural produce is being extended to other sectors like apiary,  horticulture, dairy, poultry, aquatic and marine produce and meat and their processing. (S. No. 5 of notification No. 6/2006-CE amended vide notification No. 5/2010-CE dated 27.02.2010 refers).   

84.3  Excise  duty  on replaceable  kits of  all domestic water filters except those  operating  on reverse  osmosis technology  is  being  reduced  from  8%  to  4%  (S.  No.  8C  of  notification  No.  6/2006-CE  substituted  vide notification No. 12/2010-CE dated 27.02.2010 refers).  

Chapter 85  

85.1  An  excise  duty  @  4%  is  being  imposed  on  specified  IT  products  like  microprocessor  other  than motherboards,  floppy  disc  drives,  CD-Rom  drive  etc  when  these  items  are  meant  for  external  use  with  a computer  or  laptop  as  a  plug-in  device.  However,  these  items  meant  primarily  for  use   inside  the  CPU housing/laptop body would continue  to  be exempt from  excise duty.  (S. No.  17 of  notification No.  6/2006-CE substituted vide notification No. 12/2010-CE dated 27.02.2010 refers).

85.2  Excise  duty  exemption  on  parts,  components  and  accessories  of  mobile  handsets  including  cellular phones  is  being  extended  to  parts  of  two  accessories  namely,  battery  chargers  and  hands-free  headphones  of these  devices.  (S.  No.  31  of  notification  No.  6/2006-CE  amended  vide  notification  No.  12/2010-CE  dated 27.02.2010 refers).  

85.3  Packaged  software  or  canned software,  is  at present  exempted from so  much  of  the excise  duty,  as  is equivalent to the duty  payable  on the  portion of the value  of Packaged  software determined  under section  4 of the  Central  Excise  Act,  or  the  rules  made  thereunder,  which  represents  the  consideration  paid  or  payable  for transfer  of  the  right  to  use  such  goods  provided  that  the  transfer  of  the  right  to  use  shall  be  for  commercial exploitation.  The  condition  of  commercial exploitation is being  removed. Consequently, the exemption would be available on packaged software in all cases. (Notification 17/2010-Central Excise dated 27.02.2010 refers).  

85.4  Excise  duty exemption  is being provided on goods supplied to mega power projects from  which supply of  power  has  been  tied  up  through  tariff  based  competitive  bidding  or  a  mega  power  project  awarded  to  a developer  on the basis of  such bidding subject  to  specified  conditions.  (S.  No. 91B  of notification No. 6/2006-CE inserted vide notification No. 12/2010-CE dated 27.02.2010 refers).  

85.5  Excise  duty  exemption  on  specified  list  of  goods  used  for  the  manufacture  of  rotor  blades  for  wind operated electricity generators is being extended to some items.  (List 6  of notification  No. 6/2006-CE amended vide notification No. 12/2010-CE dated 27.02.2010 refers).  

85.6  Excise  duty  exemption  is  being  provided  on  specified  goods  required  for  initial  setting  up  of  solar power generation project or facility. (Notification No. 15/2010-CE dated 27.02.2010 refers).  

Chapter 86      

No change.   

Chapter 87  

87.1.  Excise  duty  at the rate  of 4%  is being imposed  on all  electrically operated vehicles, including two and three wheeled electric motor vehicles and battery operated cars. The concessional rate of 4% would apply to all electric  vehicles  including  electric  motor-assisted  cycle  rickshaw  even  if  the  batteries  for  such  vehicles  are recharged  using  solar  power  (S.  No.35  of  notification  No.  6/2006-  Central  Excise,  dated  01.03.2006  as substituted  vide  S.  No.  (xiv)  of  notification  No.  12/2010-Central  Excise,  dated  27.02.2010  dated  27.02.2010 refers).  

87.2.  The following parts, irrespective of their classification in the Excise Tariff, for use in manufacture of an electrically  operated  vehicle  shall  attract  a  excise duty of  4%  on  end-use  basis,  namely:-  (i)  Battery  Pack (ii) Battery  Charger (iii)  AC or DC Motor (iv) AC or  DC Motor  Controller. The concessional duty rate of 4% shall remain in force till 31   March, 2013.  Consequent to this, the full  excise  duty  exemption available to specified  s t arts  of battery operated cars is being withdrawn (S. No.35A of notification No. 6/2006- Central Excise, dated 01.03.2006 as inserted vide S. No. (xv)  of notification No. 12/2010-Central Excise, dated 27.02.2010 refers; S. No.35B of notification  No.  6/2006-  Central  Excise,  dated  01.03.2006  omitted  vide  S.  No.(xvi)  of notification No. 12/2010-Central Excise, dated 27.02.2010 refers).  

87.3.  Ad-valorem  component  of  excise  duty  on  large  cars,  SUVs,  etc.  and  their  chassis  is  being  increased from 20% to 22%.  There is no change in the specific component of Rs. 15000  and the same will continue to be levied  as  applicable.  (S.  No.41  &  41A  of  notification  No.  6/2006-  Central  Excise,  dated  01.03.2006  as substituted vide S. No. (xix) & (xx) of notification No. 12/2010-Central Excise, dated 27.02.2010 refers).   

87.4.  Excise  duty  on self-loading or self-unloading trailers and  semi-trailers for agricultural purposes  (Tariff Item    8716  20  00)  is  being  fully  exempted  (S.  No.53A  of  notification  No.  6/2006-  Central  Excise,  dated 01.03.2006 as inserted vide S. No. (xxxiii) of notification No. 12/2010-Central Excise, dated 27.02.2010 refers).    

87.5.  “Parts,  components  and  assemblies  of  automobiles”,  falling  under  any  chapter,  are  notified  for assessment  of  duty  with  reference  to  their  retail sale  price  under  Section 4A of the Central  Excise  Act,  1944, vide  S.  No.108 of notification  No.49/2008-CE (N.T.), dated  24.12.08.  The current entry against S.  No. 108  is now  being  substituted  with  “Parts,  components  and  assemblies  of           vehicles  (including  chassis  fitted  with engines)  falling under Chapter  87 excluding vehicles falling  under  headings  8712, 8713, 8715  and  8716”         . (S. No.108 of notification No. 49/2008-CE (N.T.), dated 24.12.08 as substituted vide S. No. (iii) of notification No. 9/2010-Central Excise (N.T.), dated 27.02.2010 refers).   

Chapters 88 & 89  

No change.   

Chapter  90   

90.1  Excise duty of 10% is being imposed on goggles other than those used for correcting vision. (S. No. 27 of  notification  No. 10/2006-CE  amended  vide notification No.  13/2010-CE dated 27.02.2010 and  S. No.  57 of notification No. 6/2006-CE amended vide notification No. 12/2010-CE dated 27.02.2010 refers).  Sunglasses or Goggles meant for correcting vision will continue to attract 4% concessional  duty while spectacles continue to be exempt.  

90.2  Specified  list  of  medical  equipment  and  other  goods,  and  their  parts  and  accessories  attracting concessional  4%  /  nil  excise  duty  respectively  is  being  omitted.  (S.  No.  26  of  notification  No.  10/2006-CE omitted  vide  notification  No.  13/2010-CE  dated  27.02.2010  and  S.  No.  60  of  notification  No.  6/2006-CE omitted vide notification No. 12/2010-CE dated 27.02.2010 refers).  

90.3  Specified list of medical equipment and other goods, and their parts and accessories attracting nil excise duty is being omitted. (S. No. 61, S. No. 62 to S. No. 64 of notification No. 6/2006-CE omitted vide notification No. 12/2010-CE dated 27.02.2010 refers). 

90.4  An  excise  duty  @  4%  is  being  imposed  on  blood  glucose  monitoring  system  (Glucometer)  and  test strips. (S.  No. 65 of  notification No. 6/2006-CE  amended  vide notification  No.  12/2010-CE  dated  27.02.2010 refers).  

90.5  An  excise  duty  @  4%  is  being  imposed  on  patent  ductus  arteriosus/  atrial  septal  defect  occlusion devices.  (S.  No.  68A  of  notification  No.  6/2006-CE  amended  vide  notification  No.  12/2010-CE  dated 27.02.2010 refers).  

Chapters 91 to 93  

No change.    

Chapter  94    

94.1  Excise duty on products wholly made of quilted textile materials falling under heading 9404 of the first schedule of the Central  Excise Tariff Act, 1985  is being exempted.  (S. No.  71A of notification No.  6/2006-CE inserted vide notification No. 12/2010-CE dated 27.02.2010 refers).  

94.2  Excise  duty  on  LED  lights/  lighting  fixtures  falling  under  heading  9406  of  the  first  schedule  of  the Central Excise  Tariff  Act,  1985  is  being  reduced from  8% to  4%.  (S.  No. 71B of notification  No.  6/2006-CE inserted vide notification No. 12/2010-CE dated 27.02.2010 refers).  

Legislative, Procedural  & Miscellaneous changes  

M.1   Central Excise Act, 1944 :   

 (i)    An  Explanation is being inserted in sub-section (2B) to Section 11A of the Central Excise Act, 1944 to clarify that penalty shall  not be  imposed in case duty short paid and interest thereon is paid before service of show cause notice.  

(ii)    Section  32  of  the  Central  Excise  Act,  1944,  dealing  with  Settlement  Commission  is  being amended  so  as  to  restore  certain  provisions  as  they  obtained  prior  to  the  enactment  of  the Finance  Bill, 2007.  Accordingly,  the  prohibition on  filing of  applications  for  the  settlement  of cases  where  an assessee admits  short-levy  for goods in respect  of which he has  not maintained proper  records  (i.e.  cases  of  mis-declaration,  clandestine  removal  etc.)  is  being  removed.  Similarly,  the  restriction  that  an  assessee  may  seek  only  one-time  settlement  is  also  being relaxed.    The  Commission  is  being  empowered  to  extend  the  time  limit  of  nine  months  for disposal of applications by another three months, for reasons to be recorded in writing.   

The above changes will come into effect on enactment of the Finance Bill.        (Clause 57, 58 and 59 of the Finance Bill 2010 refers).    

M.2. Central Excise Rules, 2002:   The Central Excise Rules, 2002 are being amended to provide for :  

 (i)    Dispensing with the pre-authentication of invoices;

(ii)    Payment of Central  Excise Duty on  quarterly basis  by the unit  which  are eligible for availment of exemption under Notification No. 8/2003-Central Excise; and

(iii)    Filing of return by such units on 10  of the month following the end of quarter. 

The  facilities  of  quarterly  payment  and  quarterly  return  will  be  available  to  the  eligible  unit  even  if  it  is  not availing  of  the  SSI  exemption in  the  current  financial  year.  These  facilities  will  be  available  to  such  eligible units for whole of the financial year.  These changes will come into effect from 1   April 2010.  s t Notification no. 5/2010-Central Excise (N.T.) dated 27.02.2010 refers)  

M3. CENVAT Credit Rules, 2004 :   

(i)      CENVAT Credit Rules are being amended to :  

 (a)   allow  credit of Cenvat  duty paid on  Capital  Goods in the year of receipt itself to the manufacturers eligible to avail of the exemption under notification no. 8/2003-Central Excise dated 01.03.2003;  

(b)  allow accelerated reduction in  cenvat credit required to be reversed on clearance of used computers and computer peripherals; 

(c)    allow availment of credit on jigs, fixtures, moulds and dies sent to a vendor;

allow  cenvat  credit  on  inputs  used  in  the  manufacture  of  goods  supplied  to  mega  power  projects from which power has been tied up through tariff based competitive bidding or the project has been awarded through tariff based competitive bidding

(d)    create parity in penal provisions for wrong availment of credit in respect of goods and services 

(Notification No.  6/2010-CE (N.T.) dated 27.02.2010 refers)  

(ii)     Central Excise Rules 1944, Cenvat Credit Rules 2001, Cenvat Credit Rules 2002 and Cenvat Credit Rules 2004 are being amended retrospectively from 1      September 1996 to 31   March 2008 to provide for reversal of credit or payment of equivalent amount attributable to the inputs used in or in relation to the excisable goods on which no  central  excise duty is  payable. These changes will take effect on  enactment of the Finance Bill 2010. The  provisions  would  apply  only  to  such  manufacturers  where  the  disputes  are  pending  as  on  the  day  the Finance Bill 2010 is enacted.    

M.4.  SSI  Exemption:   Brand  name  exception  under  notification  no.  8/2003-Central  Excise  dated  01.03.2003, presently  available  to  packing  materials  bearing  a  brand  name  of  another  person    is  being  extended  to  such plastic containers  and  plastic  bottles also, provided the same are  used as  packing  material by the person  whose brand name such containers or bottles bear.  (Notification No.  4/2010  dated 27.02.2010 refers)  

Explanatory Notes on changes in levies Medicinal & Toilet Preparation Act  

M&TP 1.  Section 3 of the M & TP (Excise Duties) Act, 1955 is being amended to exclude goods manufactured in  a  special  economic  zone.  (Clause  84  of  Finance  Bill  2010  refers).  This  change  will  come  into  effect  on enactment of Finance Bill 2010.   

M&TP 2.  Excise duty on medicinal and toilet preparations covered under M & TP (Excise Duties) Act, 1955, is being reduced from 16% to 10% ad valorem.(Notification No.1 /2010- M&TP, dated 27.02.2010 refers).  

M&TP  3.    The  rate  of  abatement  on toilet  preparations  covered under  M  &  TP  (Excise Duties) Act,  1955, in being revised from 40% to 35%. (Notification No.2 /2010- M&TP dated 27.02.2010 refers). 

Authority :     CBEC’s Explanatory Notes (Central Excise), 2010.                       

Disclaimer :    Though care has been taken to reproduce

the text in its original form, we cannot entirely

rule out some inadvertent omission/mistake

which might have crept in. For the purpose of

authenticity, CBEC’s explanatory notes may be

referred to.

 

 

(A.K. JAIN)

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