TIOL-DDT 115 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000FF" size="3">TIOL-DDT 115</font><br> 16 05 2005<br> Monday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Budget enacted – several notifications issued – no impact really</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#FF6666">Sidelights</font></b><br> <br> <b>1. Is AED on sugar reduced?<br> <br> 2. Is NCCD reduced?<br> <br> 3. Exemption to Tea & Tea waste withdrawn?<br> <br> 4. Review committee – Chief Commissioners or files to fly?<br> <br> 5. Committee of Commissioners – Board’s list of Commissioners is not updated.<br> <br> 6. Commissioner of Central Excise (Appeals) Hyderabad-III is final authority. No appeal against his orders.<br> <br> 7. No Commissioner in Guntur for last seven years but he finds a place in the committee.<br> <br> 8. No appeal against orders passed by Commissioners of Central Excise (Appeals) in their capacity as Commissioner Customs (Appeals) as no committee is constituted.<br> <br> 9. Exemption from education cess on 4% additional Customs duty withdrawn?</b><br> <br> <b>See Details Below.</b><br> <br> <br> <font color="#006633"><b>Central Excise</b></font><br> <br> <br> 1. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_020.htm">NOTIFICATION NO. 20/2005-Central Excise, Dated: May 13, 2005</a></b><br> <br> <b>AED(GSI)</b><br> <br> This notification exempts certain goods from Additional Duties of Excise (Goods of Special Importance). There is no real change. The First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 which specifies the rates of additional duty has been replaced by a new schedule in the Finance Bill by clause 116 of the Finance Bill. This would come into effect only after the Budget is enacted. Now that the Finance Bill is Finance Act, certain exemptions are to be given to retain the old position. The whole exercise is to align with the new 8 digit tariff. To understand the issue better, take item No. 1 of this notification which is levy sugar which will now attract an AED(GSI) of Rs. 21/-. This was the same rate as per the old schedule to the Act. But the new schedule as given in the tenth schedule to the Finance Bill gives this rate as Rs. 37/ for all kinds of sugar except palmyra sugar. Now to retain the existing rate of Rs. 21/- an exemption notification is given.<br> <br> <b>Net effect – NIL.</b> Don’t worry about the notification and let life go on as usual.<br> <br> 2. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_021.htm">NOTIFICATION NO. 21/2005-Central Excise, Dated: May 13, 2005</a></b><br> <br> <font color="#006633"><b>NCCD</b></font><br> <br> This is also similar to Notification No. 20/2005 discussed above. NCCD was levied at rates specified in the Seventh Schedule to the Finance Act, 2001. This schedule has been replaced by the twelfth schedule to the Finance Bill 2005, mainly to align with the 8 digit tariff. Now this exemption notification is given to give effect to the new schedule in tune with the 8 digit tariff.<br> <br> 3. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_022.htm">NOTIFICATION NO. 22/2005-Central Excise, Dated: May 13, 2005</a></b><br> <b><font color="#006633"> <br> Another consequential amendment:</font></b><br> <br> In certain notifications, with reference to certain changes made in the budget, which had immediate effect, mention was made in the notifications about certain clauses in the Finance Bill and their immediate effect. Now this notification amends certain notifications to delete those references as the Bill has become Act.<br> <br> <b>NET EFFECT – NIL.</b><br> <br> 4. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_023.htm">NOTIFICATION NO. 23/2005-Central Excise, Dated: May 13, 2005</a></b><br> <br> <b>Exemption from additional duty on captive consumption of certain tobacco products:-</b> This has been allowed by Notification No. 12/2005 dated 1.3.2005. Now a new notification is issued to allow the same exemption. Then What happens to Notification No. 12/2005?. Please see next para.<br> <br> 5. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_024.htm">NOTIFICATION NO. 24/2005-Central Excise, Dated: May 13, 2005</a></b><br> <br> <b>Notification No. 12/2005 and 7/2005 rescinded. Tea waste – exemption withdrawn?</b><br> <br> As mentioned in para 4 above, Notification 12/2005 is replaced by Notification No. 23/2005. Then what about 7/2005? Notification 7/2005 dated 1.3.2005, exempted tea and tea waste from the additional duty levied under Section 157 of the Finance Act 2003. Now this exemption is withdrawn. What does it mean? Is tea and tea waste subject to the additional duty? Happily, NO. As per Section 122 of the Finance Act, 2005, Section 157 of the Finance Act 2003 is omitted. That means there is no additional duty on tea and tea waste now. Even before the Finance Act 2005 came into force the Government had exempted it by notification No. 7/2005. Now that the Finance Bill has become Act, there is no need for this notification and hence it is rescinded.<br> <br> 6. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/exnt05_022.htm"><b>Notification No 22/2005-CX (NT), Dated: May 13, 2005</b></a><b>:</b><br> <b><font color="#006633"><br> Cenvat Credit Rules amended</font></b><br> <br> References to the clauses of the Finance bill 2005 are removed as they are no more needed in view of the enactment of the Finance Bill.<br> <br> 7. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/exnt05_023.htm">Notification No 23/2005-CX (NT), Dated: May 13, 2005:</a></b><br> <br> <b>Chief Commissioners of Customs to act as Chief Commissioner of Central Excise, for the review committee. And vice versa</b><br> <br> As per Section 35(1B) inserted vide Section 79 of the Finance Act 2005, the Board is to constitute a committee for reviewing the orders of Commissioners and Commissioners (Appeals). Now by this notification Board has empowered Chief Commissioners of Customs to be Chief Commissioners of Central Excise for the purpose of constituting the committee.<br> <br> A similar notification is issued under Customs to empower a Chief Commissioner of Central Excise to act as Chief Commissioner of Customs. Refer <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2005/cnt05_038.htm">Notification No. 38/2005-Cus (N.T.), dated 13-05-2005.<br> </a><br> 8. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/exnt05_024.htm">Notification No 24/2005-CX (NT), Dated: May 13, 2005</a></b>:<br> <br> <b>Committee of Chief Commissioners - Board notifies jurisdiction</b><br> <br> As per Section 35E amended by Section 80 of the Finance Act 2005, orders passed by Commissioners are to be reviewed by a committee of two Chief Commissioners. Now the Board has notified the committees and their jurisdictions. While Jurisdictional Commissioner is invariably the first member of the committee a neighbouring Chief Commissioner is made the second member. <b>In most of the cases for review there is lot of flying to be done either by the files or the Chief Commissioners. For example the committee for Chennai constitutes the Chief Commissioner Chennai with the Chief Commissioner Mangalore. Why the second member could not have been the Chief Commissioner of Customs, Chennai is known only to the Board. May be Chief Commissioner in out of the way Mangalore should have a chance to visit Chennai for the purpose of this review.</b><br> <br> A similar notification is issued under Customs to specify the jurisdiction of Chief Commissioners of Customs under Section 129B of the Customs Act. Refer <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2005/cnt05_039.htm">Notification No. 39/2005-Cus (N.T.), dated 13-5-2005.</a><br> <br> 9. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/exnt05_025.htm">Notification No 25/2005-CX (NT), Dated: May 13, 2005</a></b>:<br> <br> <b>Committee of Commissioners - Board notifies jurisdiction</b><br> <br> As per Section 35B(2) amended by Section 79 of the Finance Act 2005, orders of Commissioner (Appeals) are to be reviewed by a committee of two Commissioners. It is not known why the orders of Commissioner (Appeals) are to be reviewed by a committee of Commissioners when the orders of Jurisdictional Commissioners are to be reviewed by a committee of Chief Commissioners. <b>Is the Commissioner (Appeals) in any way less important than the Jurisdictional Commissioner that his orders require only a lower level of scrutiny?</b> Leaving that at that, the Board’s list of Commissioners is not updated. As per Notification No. 1/2005-C.E. (N.T.), dated 4-1-2005, a new post of Commissioner (Appeals) Hyderabad-III had been created. But the Board’s list of committee of Commissioners to review the orders of Commissioner (Appeals), does not contain Commissioner (Appeals) Hyderabad-III. This means the orders of the Commissioner (Appeals) Hyderabad-III will not be reviewed and there cannot be any appeal against the orders of this Commissioner (Appeals).<br> <br> There is even a more appalling error in the notification. For the last seven years the post of Commissioner of Central Excise, Guntur is lying vacant and at present the Commissioner of Central Excise, Tirupati is holding additional charge of this Commissionerate. As per serial No. 26 of the notification, the orders of Commissioner of Central Excise (Appeals), Guntur is to be reviewed by a committee consisting of Commissioners of Central Excise, Guntur and Tirupati. As mentioned earlier there is no Commissioner, Guntur or rather Commissioner, Tirupati is also Commissioner, Guntur. So the committee in effect will consist of only one member, namely the Commissioner Tirupati. That is Commissioner Tirupati will review the orders of the Commissioner (Appeals) Guntur! There may be several such instances. The Committology is bound to cause trouble!<br> <br> Similar notification is issued under Customs for appointment of committee of Commissioners to review the orders of Commissioners of Customs (Appeals). <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2005/cnt05_040.htm">Notification No. 40/2005-Cus (N.T), dated 13-5-2005</a>. But there is a problem here also. A Commissioner of Central Excise (Appeals) is also a Commissioner of Customs (Appeals) within his jurisdiction. Now who will review the orders of a Commissioner of Central Excise (Appeals) passed in his capacity as a Commissioner of Customs (Appeals)? Obviously the same committee!. No this committee of Commissioners of Central Excise is not vested with the powers of a committee of Commissioner of Customs. There should have been notifications issued similar to Notification Nos. 23-C.E. (N.T.) & 38/2005-Cus (N.T.) dated 13-5-2005 to empower with the committee of Commissioners of Central Excise with the powers of committee of Commissioner of Customs.<br> <br> <font color="#006633"><b>Customs</b></font><br> <br> 10. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2005/ctariff05_042.htm">Notification No 42/2005-Cus, Dated: May 13, 2005:</a></b><br> <br> <b>4% Additional duty</b><br> <br> Notification No. 19/2005-Cus, 1-3-2005 imposing the 4% Additional duty is amended to remove references to the Finance Bill and Provisional Collection of Taxes Act 1931, consequent to the enactment of the Finance Bill.<br> <br> 11. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2005/ctariff05_043.htm">Notification No 43/2005-Cus, Dated: May 13, 2005:</a></b><br> <b><br> Exemption to parts and accessories of Mobile handsets </b><br> <br> Notification No. 39/2005 is amended to delete the references to Finance Bill and Provisional Collection of Taxes Act 1931, consequent to the enactment of the Finance Bill.<br> <br> 12. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2005/ctariff05_044.htm">Notification No 44/2005-Cus, Dated: May 13, 2005:</a></b><br> <br> <b>Notification Nos. 13/2005, 17/2005 & 20/2005-Cus, dated 1-3-2005 rescinded</b><br> <br> <b>Notification No. 13/2005 reduced the peak rates of Customs duty to 15%</b> for most of the commodities. This notification is now rescinded. What happens? Are the reduced peak rates going to be increased? Nothing is going to happen as the peak rates were reduced in the Tariff too but as the reduction in the tariff would be applicable only from the date of enactment of the Finance Bill. A notification was issued to give effect to the reduction. Now that the Finance Bill is Act, the notification become redundant and is rightly rescinded.<br> <br> <b>Notification No. 17/2005 - exemption from additional duty on tea and tea waste.</b> This exemption notification is rescinded as the additional duty itself, imposed under Section 128 of the Finance Act 2003, is withdrawn by Section 123 of the Finance Act 2005.<br> <br> <b>Net Effect -NIL. </b><br> <br> <b>Notification No. 20/2005 exempted education cess on the 4% additional duty</b> imposed in the 2005 budget. This notification is now withdrawn. Does it mean that importers have to pay education cess on the newly imposed additional duty also? No! As per Section 94 of the Finance (No.2) Act 2004, for calculating the education cess, the safeguards duty, countervailing duty, Anti-dumping duty and the education cess on imported goods are not included. Now to this list of exclusions, the 4% additional duty imposed under the new Section 3(5) of the Customs Tariff Act is added by Section 72 of the Finance Act 2005. As the Finance Act is effective only from 13-5-2005, this facility was allowed by the Notification No. 20/2005-Cus, dated 1-3-2005. Now that the Finance Bill is Act, this notification is no more required and is rightly withdrawn.<br> <br> <font color="#006633"><b>Service tax</b></font><br> <br> 13. <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2005/stnot05_14.htm">Notification No. 14/2005-ST, dated 13-5-2005</a></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006633">Help centre for SSI Units</font></b><br> <br> As per the Finance Minister’s statement in Parliament, the Board wants a Help Centre to be set up in each Commissionerate under an Additional Commissioner/Joint Commissioner with representatives from trade, professional bodies and even retired officers to help the honest tax payer. These help centres are to be located near the industries and not in the Central Excise offices. Board wants wide publicity to be given to this scheme in the print and electronic media and as with everything else wants a monthly report to be sent. Now every Commissionerate will send a monthly report and a Committee with a busy additional commissioner who has no time for anything other than reports will be formed. And that will be the end of the story. Several schemes announced with fanfare earlier had died unceremoniously. There were tax payers’ assistance cells, SSI guidance cells and a host of other cells created with much publicity. What happened to all of them? A cell to assist SSI units is supposed to be existing in every division. Perhaps even monthly reports are being sent about their working. Do we really need one more report?<br> <br> <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2005/excircular815.htm">Circular No. 815/2005-CE, dated 13-5-2005.</a></b><br> <br> <font color="#006633"><b>DGFT Corner</b></font><br> <br> <b>Supplies from EOUs under EPCG Scheme – counted for the purpose of fulfillment of positive NFE</b> – but not really exempted from excise duty. DGFT clarifies that EOUs can clear goods under EPCG licence at concessional rate of duty and there is no requirement for any other separate exemption notification in this regard.<br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir005.htm">POLICY CIRCULAR NO. 5 (RE-2005)/2004-2009, Dated : May 13, 2005</a> <br> <br> SION Norms for more than 50 items revised - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2005/dgft05pn009.htm">PUBLIC NOTICE NO. 9/ (RE: 2005)/2004-2009 Dated: May 13, 2005</a><br> <br> <font color="#FF6666"><b>Until Tomorrow with more DDT<br> <br> Have a Nice Day.<br> <br> Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b></font></p> </body> </html>