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TRADE NOTICE NO. 19
/2006
OFFICE OF THE
COMMISSIONER OF CENTRAL EXCISE DELHI-1
C.R.BUILDING : I.P
ESTATE : NEW DELHI-110002
C.No. IV(16)05/TECH/D-1/2007
Dated : 31.01.07
TRADE NOTICE NO. 19 /2006
Sub: Exemption from Central
Excise Duty to parts falling under any Chapter, when used within the
factory of production for manufacture of goods of heading 8701
All the members of trade & industry are hereby informed that there was a
dispute as to exemption from Central Exicse Duty to parts falling under
any Chapter when used within the factory of production for manufacture
of goods of heading 8701 The said issue has since been decided by the
Board.
2. Doubts were raised by the field formations as to whether parts
falling under Chapters other than 87, when used within the factory of
production for manufacture of goods of heading 8701 are eligible for the
exemption under Notification No.6/2002-CE dated 01.03.2002(Sr.No.296)
and Notification No.6/2006-CE dated 01.03.2006 (Sr.No.92).
3. For the purpose of classification, goods excluded by Note 2(e) of
Section XVII cannot be classified as parts under Chapter 87. For
example, Internal Combustion (IC) Engines are liable to be classified
under chapter heading 8407 or 8408. If IC engines are used as a part for
manufacturing tractors falling under heading 8701, then there was a
possibility of classifying such engines under heading 8708, which reads
"Parts and accessories of the motor vehicles of heading 8701 to 8705".
However, the effect of Note 2(e) of Section XVII is to ensure that such
IC engines used in manufacturing tractors do not get classified as
"parts / parts & accessories" under heading 87.08. Instead, such IC
engines would remain classified under heading no. 8407 or 8408.
(Sr.No.92).
3. For the purpose of classification, goods excluded by Note 2(e) of
Section XVII cannot be classified as parts under Chapter 87. For
example, Internal Combustion (IC) Engines are liable to be classified
under chapter heading 8407 or 8408. If IC engines are used as a part for
manufacturing tractors falling under heading 8701, then there was a
possibility of classifying such engines under heading 8708, which reads
"Parts and accessories of the motor vehicles of heading 8701 to 8705".
However, the effect of Note 2(e) of Section XVII is to ensure that such
IC engines used in manufacturing tractors do not get classified as
"parts / parts & accessories" under heading 87.08. Instead, such IC
engines would remain classified under heading no. 8407 or 8408.
4. Notification NO.6/2002-CE dated 01.03.2002(Sr.No.296) and the
Notification No. 6/2006-CE dated 01.03.2006(Sr. No. 92) exempt parts,
falling under any chapter, used within the factory of production for
manufacture of goods of heading 8701. In view of this specific
provision, goods falling under any chapter, so long as they are parts of
goods of heading 8701, will be covered by the said notifications subject
to fulfillment of other conditions prescribed in the said notifications.
For example, IC Engines, when used within the factory of production for
manufacture of tractors falling under heading 8701, will be classifiable
under Chapter 84, and will be covered by the said notifictions subject
to fulfillment of other conditions.
(RAJ. K. SINGH)
COMMISSIONER
Copy to all as per mailing list.
Authority: Board's Circular No. 839/16/2006-CX dated 16.11.06.
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