TIOL-DDT 1366 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1366 </font><br>
25.05.2010 <br>
Tuesday</strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Registration for 100% EOUs - Liberalisation or tightening up? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2001/exnt01_36.htm" target="_blank"><em>NOTIFICATION 36/2001 CE(NT) dated 26.6.2001</em></a></strong> exempted certain specified categories of assessees from obtaining registration under Rule 9 of the Central Excise Rules, 2001. Paragraph No. 2 of the Notification declares that 100% EOUs are deemed to be registered under the Rule 9 of the CE Rules, 2001. The relevant para is extracted below. </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. hereby declares that where a hundred percent export oriented undertaking or a unit in Export Processing Zone or a unit in Special Economic Zone, is licensed or appointed, as the case may be, under the provisions of the Customs Act, 1962 (52 of 1962), such undertaking or unit shall be deemed to be registered for the purposes of rule 9 of the Central Excise (No.2) Rules, 2001. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the above para has an exclusion, which is given at the bottom of the Notification. It reads: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that such hundred percent export oriented undertaking or a unit in Export Processing Zone shall not be deemed to be registered for the said purpose if such undertaking or unit procures excisable goods from the domestic tariff area or removes excisable goods to the domestic tariff area. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It means, the exemption / deemed registration is not applicable if the EOU is either procuring excisable goods from the domestic tariff area or clears the excisable goods in DTA. In such instances it requires a registration under Rule 9. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above position had been made clear in <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2002/excircular662.htm" target="_blank">Circular No 662/53/2002-CX, Dated: September 17, 2002</a></strong></em>. Paragraph 4 of this circular is reproduced below: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Furthermore, Export Oriented Units (EOUs) and units in Export Processing Zones (EPZ units) were deemed to be registered under Central Excise vide <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2001/exnt01_36.htm" target="_blank">Notification No.36/2001-CE (NT), dated 26.6.2001</a></strong>. At the same time such units which clear goods to domestic tariff area on payment of central excise duty are required to file a return with the Superintendent of Central Excise in terms of Rule 17 of Central Excise Rules, 2002. It is observed that the EOUs and EPZ units are increasingly getting linked to the domestic economy through procurement of excisable goods therefrom and sale of finished goods, scrap etc. in the domestic market. These transactions or inter-linkages have revenue implications for Central Excise administration. Hence, it is considered necessary by the Board to require such of the EOUs and EPZ units which have inter-linkage with domestic economy through procurement and/or sale of goods to get registered with the Department with 15 digit PAN-based Registration Numbers being allotted to them. Other EOUs and EPZ units would continue to be treated as deemed registered with the Central Excise authorities. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From the Notification and the Circular supra, while no registration is required if there are no DTA sales or no DTA procurements under CT 3, a registration is required either if there are any DTA sales or procurement of goods from DTA under CT 3. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, have you ever seen an EOU which does not procure goods from DTA under CT 3 or clears finished goods in DTA? What is the rationale behind requiring the EOUs procuring the goods under CT3 to get registered with Central Excise if there are no DTA sales? The units anyway obtain an approval for manufacturing and other operations in the warehouse from the jurisdictional Assistant/Deputy Commissioner of Customs/Central Excise, execute a B-17 Bond for warehousing/procurement/clearance of duty free goods (capital goods/raw materials and finished goods). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In these days of liberalisation, may be the Board can waive the requirement of registration for all those EOUs which procure duty free goods from DTA and do not clear goods into DTA and do away with this bureaucratic hassle. (If the goods are cleared in DTA, duty is required to be paid and the registration is required for making payment of duty etc) </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Impress Foreign Press</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong>, the Prime Minister addressed a large Press Conference after completing six years in office. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a questions asked by a foreign journalist. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>QUESTION :</em></strong> Foreign journalists, in India, are facing a lot of problems in getting the PIB cards. Temporary cards are issued for us and I faced a big problem in getting into this Press Conference hall. I took me about 20 minutes. I understand that issuance of permanent cards takes from six months to two years, making it impossible for us to be functional. Your Excellency, may I ask you to talk to your Government to solve this problem? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this was the PM's reply: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>ANSWER :</em></strong> I am very sorry to hear that it took you so long to enter into this building. I will certainly ask the relevant Minister or the Ministries to look into this issue. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rahul
as PM? If Rahul is ready ... </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANOTHER</strong> question the Prime Minister was asked was, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>QUESTION:</em></strong> do you see the possibility of your retiring during this present tenure and making place for Rahul Gandhi, giving him a chance to become Prime Minister of this country? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Prime Minister's answer was:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>ANSWER:</em></strong> Well, let me say that I sometimes feel that younger people should take over. As and when, I think, the Congress Party makes that judgment, I would be very happy to make place for anybody the Congress Party may choose. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Wednesay's cases </font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">An appeal is liable to be dismissed for non-compliance of pre-deposit directions and it is not necessary that same has to be disposed of on merits: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants failed to comply with the order of pre-deposit passed by the Tribunal under proviso to Section 35F of the Central Excise Act, 1944. Consequent to the failure to comply with the requirements of Section 35F in relation to deposit of the duty as well as non-compliance of the order in terms of the proviso to the said Section 35F, they were required to show cause as to why the appeals should not be dismissed on that count. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether addition can be made on mere difference in reconciliation of account even though payment are transacted through banking channel - NO, says ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is in the business of distribution of Coca Cola Products under name and style of M/s Sathish Agencies. Department conducted survey at the business premises of the assessee. During assessment proceedings the AO observed some discrepancy in account of assessee firm and M/s Hindusatan Coca Cola. AO made addition as unexplained cash credit. On appeal before CIT (A) assessee explained the entries and CIT (A) deleted the addition. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">MRP/RSP on Video Games re-labelled after import with higher price and sold in market – Differential CVD demand seems proper – CESTAT. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THESE</strong> days the easiest cases of undervaluation booked by the Customs authorities veer around the MRP conundrum. An importer imports goods which are notified under section 4A of the CEA, 1944 viz. valuation based on RSP/MRP. He declares an MRP/RSP and pays the CVD on the same. After clearance, these ‘notified goods' are re-labelled with a fresh MRP/RSP for sale in the domestic market and which obviously are higher than that on which the CVD has been paid. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs authorities issue a demand notice seeking differential duty of CVD and the same is confirmed by the adjudicating authority with loads of penalty. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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