F.No.267/14/06-CX-8

 Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

1^st June, 2006.

Subject: Applicability of clarification given vide Circular No. 323/17/97-TRU dated 14.07.1997  on Notification No. 8/2003-CE dated 1.3.2003-reg.

                        Attention is invited to Circular No. 323/17/97-TRU dated 14.07.1997 which clarified that SSI exemption for home consumption can be availed simultaneously along with taking MODVAT/CENVAT credit for the goods that are exported. Doubts have been raised by trade and industry as well as field formations regarding the applicability of this Circular to notification No. 8/2003- CE dated 1-03-2003 and notification No. 8/2006- CE dated 1-03-2006.  

2.   The matter has been examined. It is seen that the relevant condition of the erstwhile notification No. 16/97-CE is similar to the one in notification No. 8/2003- CE dated 1-03-2003 and notification No. 8/2006- CE dated 1-03-2006, which prescribed that MODVAT/CENVAT credit paid on inputs used in the goods cleared for home consumption cannot be taken for availing the benefit of the notification. In this context, Circular No. 327/17/97-TRU dated 14.07.1997 clarified that SSI exemption for home consumption can be availed simultaneously along with taking CENVAT Credit for the goods that are exported.  Notification No. 8/2003-CE and Notification No. 8/2006- CE dated 1-03-2006 also debar availment of CENVAT Credit on inputs used in the manufacture of goods cleared for home consumption only. Thus, it is hereby reiterated that the clarification given vide Circular No. 323/17/97-TRU is applicable even in the context of the notification No. 8/2003- CE dated 1-03-2003 and notification No. 8/2006- CE dated 1-03-2006.