I. CENTRAL EXCISE
I.1 Rate structure
As a consequence of changes in the ad valorem rates of Central Excise duty for non-petroleum products on the 24th of February, 2009, a dual rate structure - with rates of 4% and 8% ad valoremwas put in place. This rate structure for non-petroleum products has been retained but the rate of duty on several items attracting 4% has been restored to 8%. Among the important sectors/ items where such an increase has occurred are the manmade textile sector (the details of which are discussed in subsequent paras), ceramic tiles manufactured in a factory not using electricity for firing the kiln; plywood, flush doors and articles of wood; writing ink and other ink used in writing instruments; zip fasteners; and MP3/MP4 or MPEG4 players etc. On the other hand, the major items on which the 4% rate has been retained are:

 food items such as sugar confectionary, biscuits with retail price exceeding Rs.100/kg, cakes and pastries, sherbets, scented supari etc.;
 Paraxylene;
 drugs and pharmaceutical products of chapter 30;
 paper, paperboard and articles made therefrom;
 footwear of retail price exceeding Rs.250 per pair but not exceeding Rs.750 per pair;
 Pressure cookers
 power –driven pumps designed for handling water;
 water filtration/ purification equipment;
 specified textile machinery;
 compact fluorescent lamps (CFL) and vacuum and gas filled bulbs of retail price not exceeding Rs.20 per bulb; and

 medical equipment

These lists are not exhaustive and the relevant notifications/ Explanatory Notes may be referred to for details.

Consequent upon increase in excise duty rate from 4% to 8%, abatement rates have been revised suitably on items covered under RSP (Retail Sale price) based assessment.

I.2 Textile and textile intermediates:
Broadly speaking, the excise duty regime applicable to textiles, both manmade and natural, prior to the reductions made on the 7th of December, 2008 is being restored. The important changes in this sector are:

i. In respect of cotton textiles, not containing any other material, the rate of duty has been enhanced from Nil to 4% on optional basis. Full exemption would now be available only if a manufacturer does not avail of Cenvat credit of the duty paid on inputs. If he does not fulfill this condition, he would be required to pay a duty of 4% ad valorem.

ii. The rate of duty on manmade fibre and yarn has been enhanced from 4% to 8% on mandatory basis. Beyond the fibre/ yarn stage, the optional levy of 8% ad valorem has been restored (instead of the pre-budget rate of 4%).

iii. Similarly, textile items manufactured from natural fibres other than cotton such as silk, wool, flax etc. would now bear an optional levy of 8% ad valorem instead of 4% beyond the fibre stage. The enhanced rate of 8% would also apply to blended fabrics and products.

iv. Corresponding changes have also been made in the rates of duty applicable to Export Oriented Units (EOU) that use only indigenous raw materials when they make clearances of textile items into the Domestic Tariff Area (DTA).

v. Full exemption from excise duty has been provided to tops manufactured from duty paid tow of manmade fibre using the tow-to-top process on the condition that the manufacturer availing of this exemption does not have the facility to manufacture tow in his factory.

vi. Excise duty on some important textile intermediates has also been enhanced from 4% to 8% ad valorem. These are:
a. Polyester chips
b. Di-methyl terephthalate (DMT)
c. Pure Terephthalic Acid (PTA); and
d. Acrylonitrile

As far as possible, the enhanced rates are being prescribed through the Tariff Schedule. In many cases, however, these rates have been prescribed by notification as the tariff ra

Source: allindiantaxes.com