CLARIFICATION REGARDING ADMISSIBILITY OF EXEMPTION UNDER AREA-BASED NOTIFICATIONS NO. 49/2003-CENTRAL EXCISE AND 50/2003-CENTRAL EXCISE

Circular No.: 968/02/2013-CX

Date: 01/04/2013

In the circular No. 960/03/2012-CX dated 17.02.2012 admissibility of exemption under Notification Nos. 49/2003-CE and 50/2003-CE, both dated 10.06.2003, in certain specified situations was clarified.

In the said circular, it was clarified that expansion of an eligible unit by acquiring an adjacent plot of land and installing new plant and machinery on such land, is akin to expansion by way of installing new plant and machinery inside the existing plot/premises and that in such cases, the exemption should continue to be available for the residual period of exemption.

Representations have been received from the Trade seeking further clarifications as to whether the term ‘adjacent’ used in the said clarification would also include a plot which is not immediately adjoining the existing plot but at some distance away from the existing plot.

For the removal of doubts, it is therefore clarified that the units which undertake expansion by acquiring the adjoining plot with at least one common boundary with the existing plot and merge it with the existing plot/premises to make it one unit.

Installing of new plant and machinery in a plot which is away from the existing plot is not akin to the situation mentioned in the said circular. Installation of plant and machinery on such a plot would tantamount to setting up another unit by the manufacturer, the eligibility of exemption of which is independent of the eligibility of exemption to the existing unit.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769 

Website: www.caaga.co.in