Minutes of RAC Meeting for Organised, SSI and Service Tax Sectors  held on 28.10.03 at 11.00 AM at the Office of the Commissioner of Central Excise, Head Quarters, Trichy-1.

            The  Regional Advisory Committee meeting of Trichy  Central Excise Commissionerate  for  Organised, SSI and  Service Tax Sectors was held on 28.10.03 at 11.00 AM at Head Quarters Office, Trichy. Shri. MATHEW  JOHN, Commissioner of Central Excise, Trichy presided over the meeting.

      The following members of the Trade attended the meeting.





K.A. Menon

Kiran Pondy – SSI  Representative


N. Madhu

BHEL, Trichy.


M. Sivakannan

Karur Textile manufacturers Exporters Association, Karur


R. Jaganathan,

Sri. Renga Vilas Tobacco, Tiruvarur.


S. Punniyamoorthi

TDTSSIA,  Trichy


S. Abdul Rasheed

TDTSSIA,  Trichy


R.M. Bairavan

Karaikal  Industries  Forum Karaikal


K. R. Giridharan

M/s Kali  MHS., Kumbakonam


T.G. Venkatachalam

Sundaram Paints, Thanjavur


V. Rajappan

Government Representative  from Department of Industries


S. Sridharan

Pharmaceutical Manufacturers  Association,  Trichy.


L.  Roose Velt

Leevi Publicities (P) Ltd, Trichy


V. Chellamuthu

Karur District Civil Engineers Association, Karur

The following Departmental Officers attended the Meeting.





4.  R. VIJENDRAN,  SUPERINTENDENT (T), Hqrs.,  Trichy.

At the outset,  the Chairman welcomed all the  Members of newly constituted Regional Advisory Committee and  the following points were taken up for discussion as per agenda.


1.         Whether  finished products can be procured by an  Exporter  registered under  Rule 9  of  Central Excise  Rules,  2002,  without payment of Duty.  This goods can not be removed directly to the port from the supplier’s  premises,  but will be brought to the  Exporter’s  premises  for  checking and packing for export along with other items  manufactured by him.  If it is acceptable what is the procedure to be followed ?.

Reply: There is no provision for procurement of finished goods by an  exporter  (Manufacturer  exporter) registered under Rule 9  of  Central Excise  Rules,  2002  without payment of duty and bring the same to the exporters premises for checking and packing and for subsequent export along with other items manufactured by him.  However,  the goods can be removed directly to the Port from the suppliers’  premises.

2.         Polythene sheets, bags, carton boxes etc.,  are not raw-materials to be used in the manufacture of excisable finished products to be exported.  They are only  packing materials.  What is the procedure for procuring them without payment of duty.  Whether,  these goods can be procured against  Annexure – I ?

Reply:  The said packing materials used for  packing of  finished goods can be procured without payment of duty under  Notification No. 43 / 2001 – CE  dated: 26.6.2001  read with Rule 19  (2) of  Central Excise Rules, 2002  subject to the observance of conditions stipulated therein. 

3.           Notification No. 29 / 2003,  permits  different premises which fall within the jurisdiction of one  Commissionerate  to get  only one registration.  We seek the following  clarification in this regard.  If  the units fall under different Ranges,  with whom  the  Assessee should correspond,  file returns?

Reply:              The returns can be filed with the jurisdictional Range where common registration certificate was issued.  If more than one premises is already registered separately  registration for the  unit  from which returns are to be filed may be retained and registration for other units got cancelled by writing letters to the  Assistant Commissioner  enclosing the Registration Certificates  to be cancelled.

4.           Necessary instruction may be given to jurisdictional authority to issue  certificate regarding non availment of  CENVAT  for those exporters who are not availing any input credit and not utilizing  the Annexure – I  scheme.  Such certificates are  asked for while sanctioning drawback.

 Reply:   Non-availment of  CENVAT  credit certificate is not necessary in terms of  Ministry’s  letter  F.No.609/162/2002 – DBK  dated: 17.2.2003  (Circular  No.8 / 2003 – Cus ) for manufacturer exporters who are not registered with Central Excise or such merchant exporters whose supporting manufacturer are not registered with C.EX.  As regards manufacturer exporters and supporting manufacturers who are registered with C.EX., the fact of non-availment of CENVAT can be confirmed from ARE 1.

POINTS  SPONSORED BY  Shrin A. Moghan, RAC member

1.         An  SSI  manufacturer  manufacturers  goods claiming  exemption under  Notification No. 8 / 2003  dated: 1.3.2003.  Whether  such  assessee can do  trading activity  for goods  other than  the goods manufactured in the same  premises,  in a  separate  distinct  area ?  Whether  a  registered  SSI  unit  availing  exemption under  Notification No. 8 / 2003  dated: 1.3.2003  intending   to  export goods  have to file  A.R.E  1  with the department  for the exports done ?  Whether  there is any  alternate  simple procedure.

Reply: The  assessee may  conduct trading activity  involving  sale of goods,  other  than  the goods manufactured and   inputs used by them in the manufacturing activities in the premises by them,  in a separate  distinct area.  They may be advised to issue separate  invoices and maintain accounts separately  for the trading goods. 

               There is no need to follow the  ARE – 1  procedure.  However  they have to follow the simplified procedure stipulated in  Part – III  of  Chapter  7  of  Central Excise  Manual  (Available  in  R.K. Jain’s,  Central Excise Manual  34th  Edition,  Page 7.75) 

2.         With regard to  Mandap Keeper Services,  many  mandaps  are collecting   charges for the occupation of the  mandapam for  functions,  which include,  mandap rent, chair rentals,  electricity,  generator charges,  interior decoration   charges,  charges  for utensils, charges for amenities such as provision of floor mats, pillows etc., Gas charges / firewood charges,  cleaning of mandap before and after the function etc.,  However  certain charges such as expenses towards  gas,  cleaning  charges etc., are in turn used in the function are paid to the servants who clean the  Mandap.

Whether  such charges which in turn are passed on to others, are to be taken in to account for service tax purposes  or whether  there is any exemption for such charges.

Reply:  As per section 67 of the Finance Act, 1944  the value of any taxable service shall be the gross amount charged by the service provider for  such service rendered by him.   It is seen that no exclusion has been provided in the explanation for “ Mandap Keeper” service.   In other  words, the tax is payable on  “ gross amount”  charged by the  Mandap keeper. 

3.         Whether  Service  Tax  Registration has to be taken out with the  Central Excise  Authority voluntarily or whether the service provider can  wait for intimation letter from the authority concerned.  For any changes in the Rate of Service Tax and any other changes whether written intimation has to be received from the  R.O.’s  or whether  we have to note the changes automatically and comply with the procedures.

Reply:   It is  mandatory  for the Service providers to take registration with the Jurisdictional Central Excise Authority, as per rule 4 of Service Tax Rules 1994 and service providers should not wait for intimation letter from the authority concerned.   The changes in  the rate of service tax has been notified by the Govt. in  the official gazette and also made to known to the public by way of Trade Notices and Newspaper publications etc.   Further, it is the obligation of the service providers to make note of the changes automatically and comply with the procedure.

            After  discussion of the above points the members were  asked to raise any relevant point for  clarification.  The representative of  Karur Textile Manufacturers  Exporters Association  had stated that it is very difficult to give input output ratio for each of the  raw material / final product.  It was clarified that  one of the mandatory  condition,  for availing benefit of  Notification 43 / 2001  is to declare  input output ratio, for    procurement of duty  free raw material on the basis of  Annexure – I.  However, specific cases where  difficulties  may arise due to frequent changes in the product profile will be looked into  and suggestions for standard norms will be forwarded to Ministry if found viable.  The association may make specific proposal in this regard explaining the basis on which the norms are worked out.

Then Commissioner highlighted  various  simplified procedures adopted by the Government  in Excise and explained that the department has been constantly engaged in dismantling controls and initiating various trade facilitation measures.  However  these measures have not helped in changing the perception of the Trade and Industry that the department is a  Police type of Organisation.  Chairman called for suggestions regarding measures to improve perception.  One of the member  suggested that  there must be a finality of assessment at one stage.  It was replied to him that now-a-days  demand cannot be raised for a period  over 5 years and  various checks are being prescribed by the Government,  so that there wont  be any loss of revenue to the exchequer.

Another member suggested that  more delay is happening at  Customs  side and it was explained to him that the delay is not on account of Customs  but  by the  various agencies  like  Customs House Agent, Port Trust  etc.

Another member wanted to know whether  Kalyan Mandaps  in the  precincts of religious places of worship have to pay  Service Tax.  It was clarified that   as per  Notification No. 14 / 2003 – Service Tax  dated: 20.6.2003 such premises are  exempted from Service Tax.

Another member stated he is receiving Bills from  All India Radio  for broad casting of  advertisement  from 1.4.2003  and wanted to know whether exemption available to  Prasar Bharathi  earlier  is available or not.  It was explained to him  that the exemption available to Prasar Bharathi was not available from  1.4.2003  and Service Tax has to be paid.


       Finally the Chairman thanked all the members who attended the meeting.



//ATTESTED//                                                         (MATHEW  JOHN)







Trade Notice No.147 /2003                                                                                                                 Dated:   12 .11.2003


                        (Issued from file C.No.IV/16/20/2003- CX.POL)


As per mailing list  I, II, III

Copy to All Officers/ Sections in  Hqrs. Trichy.

Copy submitted to:

The Chief Commissioner of C.EX.,  Coimbatore.

The Under Secretary, CBEC, CX-9 section,

North Block, New Delhi.