One of my client intends to export flat-rolled products of steel i.e. strips of widdth ranging between 8 mm to 20 mm falling under Chapter Heading 72112350. For that purpose he intends to procure strips of 300 mm widdth from the manufactures of strips. Coils of bigger widdth will be cut to required widdth and then exported. My client intends to procure the strips of 300 mm widdth from a manufacturer of strips without payment of duty against form C.T. 1
My client has no factory of his own and intends to get the slitting of strips done from a factory of another manufacturer who has required machinery.He proposes to hire the factory on shift basis .
The C.B.E.&C. New Delhi has clarified that the process of slitting strips of bigger widdth into smaller widdth does not amount to manufacture as the strips remain strips only and no new product emerges as a result of processing.
Notification Nos.42 / 2001 – C.E.( N. Y.) and 43 / 2001 C.E.( N .T.) have been issued under Rule 19 of C.E.Rules prescribing conditions, safeguards and procedure for export without payment of duty.
My clients case does not appear to be covered by these notifications.
I , therefore, seek your advice on the following points.
1. Whether my client can export the strips after slitting by bringing the strips of bigger widdth without payment of duty against form C.T. 1
2. Notification No. 43 / 2001 uses the words manufacturing or processing. Slitting of strips is a process not amounting to manufacture. Therefore whether the silted strips can be exported in terms of the provisions of Notification No. 43 / 2001 by getting registered under rule 9 of C.E. Rules as the scrap so generated in the processing has to be cleared on payment of duty. The exporter becomes a processor as also a manufacturer of scrap.
