Case of Authority for Advance Rulings, October 17, 2006 (case In Re: Bell Packaging (India) Pvt. Ltd. Vs)

PresidentSyed Shah Mohammed Quadri, J. (Chairman) and B.A. Agrawal, Member
Resolution DateOctober 17, 2006


(Central Excise, Customs And Service Tax)

Syed Shah Mohammed Quadri, J. (Chairman)

  1. This application, by M/s. Bell Packaging (India) Pvt. Ltd., a resident private limited company is under Section 23C of the Central Excise Act, 1944 (for short "the Act"). The applicant is carrying on the business of designing and manufacturing plastic packaging of retail products using polyester, polypropylene, polyvinyl-chloride films and other polymers, like Diwali gift boxes and clear tubes for single flowers as presents. It proposes to set up a joint venture with a non-resident company, M/s. Bell Packaging Ltd., Luton, United Kingdom, to design and manufacture plastic packaging of retail products with polyester, polypropylene, etc. In the joint venture the foreign equity would be 97% and remaining equity of 3% will be held by the applicant. On these facts, the applicant set forth the following two questions to seek advance ruling of the Authority:

  2. Is the applicant entitled for concession under provision C.E. Notification No. 8/2003 dated 1-3-2003 despite of the fact that proposed equity of a Foreign Corporate Body is 96.875% (greater than 25%) and cannot be considered as a Small Scale Industrial Unit in view of Paragraph 2.5 page 9 of the Booklet of Foreign Direct Investment issued by Ministry of Commence and Industry?

  3. Since the machinery is imported can we start claiming the Credit of the Counter Vailing Duty and Special Additional Duty the moment we pay excise duty at the factory gate on our production? Can we accumulate credit of the CVD & SAD paid on the machinery till we complete clearances of Rs. 100 lakhs?

  4. The Jurisdictional Commissioner (for short "the Commissioner") submitted his comments stating that Notification No. 8/2003 dated March 1, 2003 as amended by Notification No. 8/2006 dated 1-3-2006 exempts specified goods whose aggregate value of clearances by a manufacturer from one or more factories or from a factory by one or more manufacturers does not exceed Rs. four hundred lakhs in the preceding financial year. It is added that the Notification as amended subsequently allows the exemption to all the units whether they are registered as SSI or not with the Directorate of Industries. The version of the applicant that it will lose the status of a small scale industry will make no difference and it can avail of the benefit of Notification as amended subject to fulfilment of the conditions therein. In so far as question...

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