Government of India Ministry of Finance Department of Revenue (Central Board of Excise & Customs)
New Delhi, dated the 16th February, 2010.
All Director Generals,
All Chief Commissioners of Central Excise (including LTU),
All Commissioners of Central Excise (including LTU).
Subject: Beedi cess payable under the provisions of Section 3 of Beedi Workmen Welfare Cess Act-reg.
References have been received from Trade & Industry as well as field formations, regarding leviability of beedi cess on labelled as well as unlabelled beedis. It has been stated that Notification No. S-23011/1/79-M.V. dated 19.12.1981[G.S.R. No.669(E)] as amended by [G.S.R. No. 281(E)] dated 30.03.82, issued by the Ministry of Labour, provides that when cess has been collected on unlabelled beedis, no further cess shall be collected when they are subsequently labelled. The trade has represented that despite the notification, some Commissionerates are insisting on payment of cess on labelled beedis. Differing stands are being taken by different adjudicating authorities in this regard.
2. The matter has been examined in consultation with the administrative ministry. The Ministry of Labour have confirmed that the aforesaid notification is still in operation. They have informed that the rate of cess on manufactured beedis has, however, been enhanced vide Notification No. S.O.363 (E) dated 17.03.2006. Other provisions of the Act and Rules made in this regard are still applicable.
3. On examination of the aforesaid notification dated 19.12.1981 as amended by notification dated 30.03.1982, the following position emerges with regard to the leviability of cess:-
(i) If the biris are otherwise exempted from payment of Central Excise duty, they are also exempted from payment of biri cess.
(ii) If cess has been collected on unlabelled beedis, no further cess is required to be collected, if they are subsequently labelled.
(iii) For cases covered under (i) above, if the exempted beedis are subsequently labelled, cess shall be payable on labelled beedis.
4. Trade & Industry as well as field formations may be suitably informed.
5. Receipt of this circular may kindly be acknowledged.