TIOL-DDT 1478 · 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 1478</font><br>
01.11.2010 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs – Change in Bond form - Advance License and EPCG Schemes </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong> <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2004/cuscir04_058.htm" target="_blank">Circular No. 58/2004 dated 21.10.2004</a></strong></em> prescribes a Bond Form to be furnished for availing duty exemption under Advance License and EPCG Schemes. Condition 1 of the prescribed form of bond reads as under: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“1. I / we, the obligor(s) shall observe all the terms and conditions of the said notification.” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is changed to: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“1. /we, <font color="#FF6633"><strong>the obligor(s) fulfil all the conditions of the said notification</strong></font> and shall observe and comply with all its terms and conditions.” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So earlier, they were required only to <font color="#FF6633"><em><strong>observe</strong></em></font> all the terms and conditions; now they are required to fulfill and comply with all the conditions. Now is there any difference? Is the Board afraid of some legal complication? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The reason cited is: <em>“The benefit of zero duty EPCG scheme which is governed by notification Nos. 101/09-Cus and 102/09-Cus both dated 11.09.09 is subject to the condition that the importer should not have been issued in the year of issuance of zero duty EPCG authorization, the duty credit scrips under SHIS scheme. Since there are conditions in the EPCG notification which an authorization holder should fulfil at the time of import for being eligible for duty exemption, it has been decided to change condition 1 of the prescribed form of bond” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does <font color="#FF6633"><em><strong>observe</strong></em></font> mean only watching? Black's Law Dictionary defines, 'observe' as to <em>adhere to or abide by (a law)</em>. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_040.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 40/2010 – Customs - Dated: October 28, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I/we..... the Bond</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> assessee informed us about a pathetic joke in one of the LTUs. An assessee filed a B-1, General Bond for acceptance. The Bond format starts with 'I/We ........” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee filled it up as I/We, XYZ Ltd..... The officers did not accept the bond and told the assessee that he should have written I, XYZ/We XYZ.......! This is true! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty - Bus and Truck Radial Tyres - China and Thailand - Review </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on import of Bus and Truck Radial Tyres originating in, or exported from the People's Republic of China and Thailand was imposed by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_012.htm" target="_blank">Notification No. 12/2010 – Cus dated 19.02.2010</a></strong></em>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now M/s. Weifang Huadong Rubber Co Ltd China PR (Producer), and M/s. Qingdao Autochem International Co. Ltd (exporter) have requested for review in terms of rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 in respect of exports made by them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Government has ordered provisional assessment in respect of the above parties. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_112.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 112/2010-Cus., Dated: October 28, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Complications - Board solutions? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> Member (Cus & EP) of CBEC, SK Goel, chaired a meeting of the Customs Consultative Group in Mumbai. We bring you some of the queries raised and the Member's crisp replies. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Offsetting of fuel costs to retain competitive edge for Exports:</strong> The Government of India has recently de-controlled petrol prices which will now be market to market driven and diesel prices which will be subjected to review every 20 days. The de-control would result in escalation of input costs in general and cost of fuel in particular. Moreover, CENVAT Credit Rules 2004 do no allow CENVAT Credit on High Speed Diesel (HSD) and Light Diesel Oil (LDO). In other words, High Speed Diesel and Light Diesel Oil, although, are inputs as these are used in or in relation to manufacture of dutiable goods, the facility of CENVAT credit is denied to the manufacturer. In industry, HSD and LDO is widely used as fuel for the purpose of generation of electricity and the electricity so generated is in turn used in or in relation to manufacture of dutiable final product. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is, suggested that <em>CENVAT Credit</em> may also be allowed on HSD & LDO as there appears no logic in excluding such essential inputs from the purview of Cenvatable input. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A. It was mentioned that HSD and LDO are not covered under the definition of “input” under the Rule 2(k) of the CENVAT Credit Rules, 2004. Not allowing credit on these items is a conscious decision of the Government. Hence, the suggestion of allowing credit on these items, even for exporters cannot be accepted. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Availment of CENVAT Credit of Input Stage Duty on export goods:</strong> Hitherto exporters of non-dutiable goods are making clearances as per procedure prescribed in <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2001/exnt01_42.htm" target="_blank">Notification No.42/2001-CE (NT) dated 26.6.2001</a></strong></em> and availing <em>CENVAT Credit </em>benefit of input stage duty. With the latest amendment issued vide <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_24.htm" target="_blank">Notification No.24/2010–CE (NT) dated 26.6.2010</a></strong></em>, it appears that exporters may now not be able to avail this facility. If so, exporters will be deprived of a convenient option available to them to disburden the duty incidence of inputs as well as the service tax on the input services. This would put them in disadvantageous position and would affect the exports also. This issue may be clarified in the interest of exports. It is suggested that a special Drawback rate for exempted category of export products may be introduced so that the input credit on the books can be offset by this higher Drawback Rate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">A. Though, vide <em>Notification No. 24/2010-CE</em>, facility of export under bond for exporters of non-dutiable goods has been disallowed, but they can follow the procedure prescribed in Notification No. 21/2004-CE whereby duty on input stage is rebated, based on scrutiny of input-output ratio, likely wastage, manufacturing process etc. This does not put them in any disadvantageous position. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, Drawback scheme can also be availed for exempt goods. In fact all major items of export under the DBK scheme i.e. textile, leather goods/products, handicrafts etc. are exempt/outside the CENVAT chain.</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></font> </p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MOT demands by Central Excise Authorities for Services rendered during Office Hours on working days:</strong> It has been reported that Central Excise authorities like Vapi, Daman and Baroda are demanding MOT Charges of last 4-5 years of exports for factory stuffing under Central Excise supervision during office hours and on working days only. MOT should be payable only when the services of Central Excise Officers are required for beyond office hours or on Sundays, Saturdays or Public Holidays and where there is no specific posting of officers in shifts by any Office Order. Such demands for MOT appear to be arbitrary and it would increase exporters transaction cost.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Suitable clarification/ instructions may be issued at the earliest with a view to provide relief to the exporters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">A. It was explained that, prescribed MOT charges are being collected as per Regulation 2 (c) and (d) and Regulation 3 of Customs (Fees For Rendering Services By Customs Officers) Regulations, 1998 [Notification No. 69/98-Cus. (NT) dt. 04.09.1998]. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 36 of the Customs Act, 1962 read with the above Regulations, if the services are rendered by a Customs Officer at a place beyond the Customs area, prescribed over-time charges are levied even if the service is rendered during normal working hours and on working days too. </font></strong></font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you more light and wisdom from the meeting in the next few days. </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">GST - A new Twist - J&K wants continued Special Status</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ABDUL</strong> Rahim
Rather, J&K Finance Minister wants that the state's special Constitutional
status should be protected while implementing the Goods and Services Tax.
At present, the Central Service Tax is not applicable to J&K. They have
their own Service Tax. The Minister said that his State will implement GST
but its "special Constitutional position" should not be diluted. "Our position
vis-a-vis other states is different in view of special status guaranteed
to us by the Constitution under Article 370," the minister said.</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"> – Tuesday'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">Service Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax – Appeal – Stay – CESTAT granted stay in earlier two appeals of the assessee on same issue, but refuses total waiver of pre-deposit in third appeal - Tribunal has committed gross illegality in not maintaining uniformity and consistency in exercise of its judicial discretion: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> the earlier appeals filed are not being heard by the Tribunal and the petitioner has been required to file an appeal for the subsequent years assessment the petitioner cannot be made responsible and cannot be denied the similar benefits which were earlier granted to it in the earlier two appeals involving same question. In the absence of change in the circumstances, the Tribunal should have maintained the consistency and uniformity while exercising the judicial discretion and should not have taken a different view than the view it had already taken in the petitioner's two appeals involving identical issue that too by assigning the reasons that the earlier two appeals are pending since last two and one year. </font></p>
<p><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 notice u/s 143(2) can command compliance only if it is issued in proforma ITNS 33? - NO, says ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether notice u/s 143(2) can command compliance only if it is issued in proforma ITNS-33 – Whether questionnaires amount to notice u/s 143(2). The verdict goes against the assessee. </font></p>
<p><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">Valuation - Customs authorities are bound by declaration of importer unless Revenue is able to demonstrate that invoice does not reflect correct value - matter remanded for re-examination – Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has to be kept in mind that once the nature of goods has been misdeclared, the value declared on the imported goods becomes unacceptable. It does not in any way affect the legal position that the burden is on the Customs Authorities to establish the case of misdeclaration of goods or valuation or that the declared price did not reflect the true transaction value. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice DAY.</font></p>
<p><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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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