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Budget 09-10: Changes in Excise Law

Rajesh Kumar 
on 06 July 2009

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CENTRAL EXCISE:
Tariff:
There is effort to move the overall rate towards 8% mean rate. Thus the products attracting 4% duty rate will now attract 8% duty. Such increase is there in Man Made textile, ceramic tiles, plywood and article of woods, writing ink and writing instruments, zip fasteners and MP3 players.
4% duty has been retained in products of mass consumption like food items, drugs, papers, footwear having MRP between 250 to 750, pump, water purifier, bulbs including CFL, specified textile machinery and some textile equipments.
Rate of duty has been changed in textile sector and optional duty of 4% has been introduced in cotton textile and 8% optional duty has been introduced in Man Made fabrics. Enhanced rate of 8% will also apply to blended fabrics. Changes have been made in case of 100% EOU clearance in DTA if all the raw materials are of Indian origin. Excise duty has been increased to 8% on important textile intermediaries like polyester chips, DMT, PTA and acronitrile.
Rate of duty has been unified for motor cars to 15,000 plus 20%. Petrol driven goods vehicle will now attract rate of 8%, reduced from earlier 20%. The chassis will attract duty 10,000 plus 8%.
Specific rate of duty has been introduced fully in case of Motor spirit and High Speed Diesel. In case of valuation of packaged software, the portion of value attributable to right to use has been exempted (Notification 22/2009). Branded jewellary has been exempted from payment of duty. Manufacture of good falling under Chapter 68, at site of construction, for use in construction has been fully exempted.
Changes in Law:
SSI exemption: A note has been added in the SSI exemption notification, taking the packaging material and printed laminated rolls from outside the restriction of brand name. This will nullify the earlier Kanpur Commissionerate trade notice, and these products will enjoy SSI exemption, even when they are in the brand name of some other person.
Supari: Adding ingredients to the supari (betel nut) has been made a process amounting to manufacture and has been shifted in Chaper 21 through chapter note. From tomorrow onwards sweet supari will attract Central Excise duty under Chapter 21.
Cenvat Credit Rules has been amended and now the amount payable under Rule 6 of the Cenvat Credit Rules, in cases of dutiable and exempted products has been reduced to 5%. The definition of input has been amended and now it will not include cement, angles, channels, CTD/TMT bars etc. in construction of shed.
Central Excise Rules has been amended to exclusively provide for that within 30 days of issue of Show Cause Notice, all seized records, not relied upon in the notice will be returned.
Some offences has been made non compoundable by amending Section 9A(2) of Central Excise Act. Section 14A and 14AA has been to empower Chief Commissioner to appoint Chartered Accountants for special audit. The ambit of Authority of Advanced Ruling has been expanded to include Central Excise matters.



Category Excise
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Rajesh Kumar 

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