13/98-C.E., dated 2-6-1998

Effective rate of duty for specified goods manufactured in EOUs and EPZ


Notification No. 13/98-Central Excise

           In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the finished products, rejects and waste or scrap specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), produced or manufactured, in a hundred per cent. export-oriented undertaking or a free trade zone wholly from the raw materials produced or manufactured in India, from so much of the duty of excise leviable thereon under section 3 of the said Central Excise Act, as is in excess of the amount equivalent to fifty per cent. Of the aggregate of the duties of customs, which would be leviable under the Customs Act, 1962 (52 of 1962) or under any other law for the time being in force, read with any other notification for the time being in force in respect of the duty so chargeable, on the like goods produced or manufactured outside India if imported into India, subject to the following conditions, namely :-

(a)        such finished products, if manufactured and cleared by a unit other than a hundred per cent export-oriented undertaking or a unit in a free trade zone, are wholly exempt from the duties of excise or are chargeable to Nil rate of duty; and

(b)        the finished products, rejects, waste or scrap and by-product allowed to be sold in India under and in accordance with the provisions of sub-paragraphs (a), (b), (d) and (h) of paragraph 6.8 of the Export and Import Policy, 1st April, 2002 - 31st March, 2007, published by the Government of India in the Ministry of Commerce and Industry vide notification No.1/2002-07, dated the 31st March, 2007, as amended from time to time.".

Illustration. - Assuming product X has the value Rs. 100 under section 14 of Customs Act, 1962 and is chargeable to basic customs duty of 30% ad valorem, special additional duty of 4% ad valorem and not chargeable to additional duty. The computation of duty required to be paid would be as follows:-

Basic customs duty

=Rs. 30/-

Value for the purpose of special additional duty

=Rs. 100/- + Rs. 30 
Rs. 130/-

Special additional duty

=4% of Rs. 130/- 
= Rs. 5.20

Total duty payable but for this exemption

=Rs. 30 + Rs. 5.20
=Rs. 35.20

Thirty per cent. of the aggregate of the duties of customs

=30% of Rs. 35.20 
=Rs. 10.56

Duty required to be paid in accordance with this notification

=Rs. 10.56".

(Notification No. 13/98-C.E., dated 2-6-1998 as amended by Notifications No. 38/99-C.E., dated 16-9-1999, No. 11/2000-C.E., dated 1-3-2000, No. 11/2002-C.E., dated 1-3-2002 and No. 35/2002 dated 24-6-2002).

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