Exempted and dutiable goods – 10% payment – Don’t pay; AP Paper flow has started
It was nearly seven months ago that we reported in DDT dated 22.12.2004 a fiscal bomb for the revenue department. We had then reported:-
Manufacturing dutiable and exempted goods? No need to maintain separate accounts, no need to pay 10% on the exempted goods and even refund can be claimed on the amounts already paid.
The Central Excise department busy with arrears clearance is soon going to be flooded with refund claims.
To refresh your memory, in ANDHRA PRADESH PAPER MILLS LTD v CCE, VISAKHAPATNAM - , the Tribunal had held that when credit is taken on inputs used in the manufacture of exempted goods and dutiable goods, and the exempted goods are cleared, the mandatory 8%(now 10%) amount need not be paid. We had suggested that the assessees need not pay this amount but also claim refund of the amounts already paid.
Now another bench of the Tribunal has followed the decision referred above and allowed the appeal. See Mumbai Bench order in 2005-TIOL- -CESTAT-MUM
Are you still paying that 10%? You need not. Have you paid 10% and 8%? You can claim refund!