By TIOL News Service

MUMBAI, Mar 4, 2006 : WE agree that our kids tiffins should not be filled with biscuits but with chappati and other home made preparations, but this does not mean that even we should not have our favourite “M…brigade” biscuits with our daily cuppa of tea.

Why is that so? Read further.

Biscuits, Wafer biscuits, Pastries & cakes classifiable under Chapter heading 1905 have now been charged to a reduced duty @8% adv in terms of notification no. 3/2006 CE.

T he excise duty exemption available to biscuits manufactured without the aid of power is also withdrawn (Sr. no. 8 of notification 3/2005 CE is omitted by notification no. 7/2006 CE, dated 01.03.2006)

Earlier, these goods were specified goods under the small scale notification no. 8/2003 CE, but vide notification no. 8/2006 CE, dated 01.03.2006, the new Annexure (positive list of specified goods) which substituted the earlier one does not specify “biscuits” falling under chapter 19 as eligible for the small scale exemption benefit upto Rs. 1 crores.

Biscuits are also valued under Section 4A of the CEA’44.

Isn’t it ironical that when “hookah, gudaku, smoking tobacco etc” falling under chapter 24 are notified as excisable goods entitled for the small scale exemption and are entitled for full exemption for the clearance value up to Rs. 10 lakhs for the month of March 2006, biscuit manufacturers have to pay duty from the 1st March?.

Whether this is an un-intended omission or a purposive action – we will never know.

Incidentally, the new Annexure appearing under the small scale exemption notification omits goods falling under a couple of chapters which were earlier entitled to SSI benefits. Take a look and see for yourself.

Either way, why doesn’t someone discuss this issue over a “chai biscuit” session? As some one said, I would prefer to eat biscuits rather than gorge upon ice creams and colas all day.

We had all these questions lined up, but fortunately for the assessees, and unfortunately for us (just joking), the TRU has issued a letter F.No. 334/3/2006 dated 28th February 2006 issuing a clarification that in the notification 8/2006 CE., dated 01.03.2006, in the Annexure, against Sr. no. (iii), for number “Chapter 9”, it should be read as “Chapter 9 to 20”.

The net effect is that “Biscuits” are now entitled to SSI exemption and so are other goods of Chapters 9 to 20. WE are happy that the error and the consequences have been nipped in the bud. At the same time, we wish that the paragraph 4A inserted vide the subject notification 8/2006 CE, should have also recognized Entry (iii).

We are also happy to note that as brought out in our piece “Idli Mix, Dosa Mix is cheaper, but…”, para 21.6, to the Explanatory note has been amended accordingly.

As the saying goes, “All’s well that ends well.”