TIOL-DDT 1487 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1487 </font><br> 15.11.2010 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTWZ in Sector Specific SEZ - Amendment in Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/sez09ins049.htm" target="_blank">SEZ Instruction No. 49 dated March 12, 2010</a></strong></em> while clarifying on issues related to FTWZ, at point no. (iv) it was stated that</font></p> <p align="justify"><strong><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“there are no limitation on Units set up in FTWZs located in Sector Specific SEZs to carry out Trading and Warehousing Activities in respect of any product”. </font></em></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this point no. (iv) is amended and the new amendment stipulates that </font></p> <p align="justify"><em><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">“units in FTWZ in a Sector Specific SEZ can store goods required for development of zone or setting up of units or for manufacturing and export/DTA sale of goods and services or finished products of the units in that particular zone.” </font></strong></em></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/sez09ins071.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SEZ Instruction No. 71, Dated: November 12, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amended Central Excise Tariff - Alignment to HSN needs Amendments! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Excise Tariff was amended in the year 2005 by virtue of Central Excise Tariff (Amendment) Act, 2004 (5 of 2005) to align with the HSN and the Government issued several notifications to align the existing ones with the new tariff. This was also followed by another major amendment in January 2007. Refer to <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1237" target="_blank">TIOL-DDT 62 Dated: 25 2 2005</a></strong>, <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1243" target="_blank">TIOL-DDT 63 Dated: 26.02.2005</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1250" target="_blank">TIOL-DDT 64 Dated: 28 02 2005</a></strong> and <strong>T<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4793" target="_blank">IOL-DDT 528 Dated: 09.01.2007</a></strong> for more on this. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even after a lapse of more than five years and several subsequent amendments later, the new tariff still creates lot of confusion in the minds of the stakeholders. Recently we received a mail from a vigilant netizen referring to the glitch in Sub Heading Note 8 of Chapter 48 and the description given in Chapter 4802 10. The Sub Heading Note 8 is extracted herewith for ready reference: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399"><strong>8. Sub-heading 4802 10 applies only to writing or printing paper, manufactured from pulp, and supplied directly from the factory of its manufacture against a purchase order, - </strong></font></em></font></p> <p align="justify"><strong><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) placed upon the manufacturer by a State Textbook Publication Corporation or board, or in the case of States which do not have a State Textbook Publication Corporation or Board, by an officer not below the rank of a Deputy Secretary in the Sate Government concerned, or by the National Council or Educational Research and Training; and </font></em></font></strong></p> <p align="justify"><strong><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) in which the said Corporation or Board or the said officer of the State Government concern or the said Council, as the case may be declares that the said paper shall be used for the printing of educational textbooks.</font></em></font></strong></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the description of goods in Chapter sub-heading 4802 10 refers to <font color="#663399"><em><strong>Handmade Paper and Paper Board</strong></em></font>. The Netizen wonders if there is any harmony in the Sub Heading Note and the description of goods in Chapter 4802 10 and he is absolutely right. In fact, prior to the amendment of excise tariff in 2005, Chapter 4802 10 referred to <em><font color="#663399"><strong>“writing or printing paper for printing of educational textbooks” </strong></font></em>which carried a tariff rate of Nil. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though, in the new dispensation, the said products are exempted from duty by virtue of <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=29&filename=notification/excise/2005/etariff05_003.htm" target="_blank">Notification No. 3/2005-CE dated 01.03.2005</a></strong></em>, the contradiction in the description of goods under Chapter 4802 10 with Sub Heading Note No. 8 of Chapter 48 still continues to remain on the statute book. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We hope that Board will take note of this anomaly and also make a thorough scrutiny of the Tariff for more such anomalies and take appropriate action to rectify them immediately.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SAD Refund Mechanism - Why not simplify it further? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER</strong> loads of clarifications and circulars both by the CBEC and DGFT, it appears that the SAD refunds have gained some pace and momentum. While everything seemed to be hunky dory, it appears a new problem has cropped up. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that in cases where SAD is paid by using Duty Credit Scrips (DEPB,FMS,VKUY etc), the refund is allowed by way of re-credit to the same scrip and that too by the CLA/ZDGFT concerned who has originally issued the scrips. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Imagine if these scrips are purchased from the market and used for paying duties. The Original Scrips could have been issued from any of the Zonal Offices all over India . For re-crediting to the same scrips, the assessee has to approach the ZDGFT's concerned, that too within three months from the date of issue of such credit certificates. This would only involve considerable time, apart from unwarranted transaction costs and not to speak of inordinate delays. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead, CBEC should allow the Credit Certificate itself for paying customs duties instead of the existing circuitous procedure which is unnecessarily delaying the fruits of refund. It will save a lot of time and energy for the assessees and reduce bureaucratic tape to that extent. </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">Appellant paying Service Tax on outward freight and availing credit - Audit contending that such payment was not warranted as cost of each trip was less than Rs 1500 - CENVAT credit reversed with interest and refund claim filed - Matter remanded: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> proper course on the part of the part of lower authorities would have been to give opportunity to the appellant to produce the aforesaid documents. Therefore, the matter requires to be reconsidered and re-examined in accordance with the provisions of section 11B of Central Excise Act, 1944 which provides for refund of duty collected/paid, and whether incidence of such duty has not been passed on to any other person, within a period of one year. </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">Income tax - Sec 80HHC - Whether calcined petroleum coke manufactured by assessee is 'mineral oil' within meaning of Sec 80HHC? – Yes, says Bombay HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a company involved in the manufacture of calcined petroleum coke (CPC) which is used for making pre-baked anodes or carbon paste by the aluminum smelters for production of basic aluminum metal and various other industries. A major portion of the CPC manufactured by the assessee is also exported. The issue before the HC is - Whether calcined petroleum coke manufactured by the assessee is the 'Mineral Oil' within the meaning of Section 80HHC. Yes, says the HC. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Limitation under Section 11 A of Central Excise Act, 1944 - The Tribunal has not stated whether or not there were any circumstances which would not allow revenue to invoke extended period of limitation – Matter remanded to CESTAT to examine whether revenue is justified in invoking extended period of limitation - Supreme Court. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue in this appeal relates to the valuation of aluminum castings manufactured by the respondent from the aluminum ingots supplied by M/s. Bajaj Auto Ltd., Waluk, Aurangabad , who in turn buys the finished product viz., aluminium castings manufactured by the respondent. The aluminium ingots were supplied by M/s Bajaj Auto under the cover of invoices issued under Rule 57F(2) and Rule 57(3) of the Central Excise Rules, 1994, after reversing the MODVAT credit availed on the said input. </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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>