GOVERNMENT OF KARNATAKA

No. FD 16 PES 2002                                          Karnataka Government Secretariat,

                                                                             Vidhana Soudha, Bangalore

                                                                            Dated 16th July, 2003

NOTIFICATION

Whereas the draft of the following rules further to amend the Karnataka Excise (Excise Duties and Fees) Rules, 1968, was published as required by Sub Section (1) of Section 71 of the Karnataka Excise Act, 1965 (Karnataka Act 21 of 1966) in Notification No. FD 16 PES 2002 dated 21.6.2003 in Part-IV-A of the Karnataka Gazette (Extraordinary), inviting objections and suggestions from all persons likely to be affected thereby within fifteen days from the date of its publication in the official Gazette.

 And whereas, the said Gazette was made available to the public on 21.6.2003.

And whereas, no objection and suggestion have been received in respect of the said draft by the State Government.

Now, therefore, in exercise of the powers conferred by Section 71 of the Karnataka Excise Act, 1965 (Karnataka Act 21 of 1966) the Government of Karnataka hereby makes the following rules namely:

1.                 Title and commencement:

(1)   These rules may be called the Karnataka Excise (Excise Duties and Fees) (Second Amendment) Rules, 2003

(2)         They shall come into force at once. 

2.                 Insertion of new Rule 2D: 

After Rule 2-C of the Karnataka Excise (Excise Duties and Fees) Rules, 1968, the following new rule shall be inserted, namely:-

“2D: Fee on Rectified Spirit Supplied to 100% Export Oriented Alcohol Based Industrial Units:- Notwithstanding anything contained in Rule 2-C, in respect of rectified spirit supplied to alcohol based industries which are 100% export oriented units and licensed under the Karnataka Excise (Rectified Spirit) Rules, 1967, earlier to 16.2.2001 and which were exempted from paying sales tax on rectified spirit under the Karnataka Sales Tax Act, 1957, there shall be levied a fee of rupees four per bulk litre subject to the following conditions and restrictions namely:-

(i)  Such rectified spirit is put to use by the 100% export oriented unit in the manufacture of goods for export;

(ii)  The 100% export oriented unit shall export its entire production of goods subject to relaxation permitted by the Government of India from time to time.

(iii)  Where for any reason the 100% export oriented unit fails to comply with the condition in clause (ii) above, it shall forthwith cease to be eligible for the benefit under this rule;

(iv)  Where for any reason the restriction or conditions stipulated under clauses (i) and (ii) above is contravened or not complied with, either wholly or partly, the 100% export oriented unit shall be liable to pay an amount equal to the fee payable at the rates specified under Rule 2-C, on the rectified spirit purchased in respect of which such contravention or non compliance has taken place; and

(v)  The distillery effecting the sales to 100% export oriented unit shall produce before the distillery officer, the certificate signed and submitted by the licensee under the Karnataka Excise (Rectified Spirit) Rules, 1967 who is purchasing rectified spirit that the rectified spirit purchased will be used in the manufacture of goods for export out of the Territory of India.

Provided that while issuing rectified spirit to such licensee, the distillery officer shall satisfy himself that the unit is 100% export oriented unit and the license under the Karnataka Excise (Rectified Spirit) Rules, 1967 was granted earlier to 16.2.2001 and the unit is exempted from payment of Sales Tax under the Karnataka Sales Tax Act, 1957”.

By order and in the name of the

Governor of Karnataka

Sd/-

(L. Sreenivasan)

Under Secretary to Government,

Finance Department (Excise)