Two Notifications; Two Rates; Which one Applicable?
YESTERDAY'S DDT had mentioned about two effective rates of duty for certain goods falling under Chapter 30.
The DGM of a Pharma Company wrote to us:
“On this issue, the Board has clarified when Notification 2/2008-CE was issued. In his letter addressed to all Commissioners, JS TRU has stated as follows in para 2.2 of D.O.F.No.334/1/2008-TRU New Delhi, dated the 29th February, 2008.:-
2.2 Since the reduction in the general rate has been carried out by notification, the possibility of the same product/ item being covered by more than one notification cannot be ruled out. In such a situation, the rate beneficial to the assessee would have to be extended if he fulfils the attendant conditions of the exemption.
The manufacturer-exporter particularly from Pharma sector started paying duty under 2/2008-CE for exports and under 4/2006-CE for domestic so that unutilized cenvat credit can be encashed. There is no compulsion on assessee to follow any one Notification. Unfortunately, neither the jurisdictional ACCE, nor the Commissioner of Central Excise has given findings on this aspect of the LETTER OF TRU.
They simply said that the assessee has to adopt any ONE Single Notification. Either he has to follow 4/2006-C.E else 2/2008-CE both for domestic and export clearances. The negative attitude of the departmental officers is always found in the Orders passed by them, not only in this case but practically in all the cases.
The good news for the trade is that the grounds taken by Department are foolish grounds that it becomes easy for the legal advocates to fight when the matter is heard by the GOI or the Tribunal. Anyway on this issue, we understand that the Pharmaxil have referred the matter to TRU long back and we expect the TRU to resolve the same. Let's hope the Finance Ministry take up the issue strongly and should also take proper course of action to train the ACCE to follow the instructions issued by Board. They simply cannot take it for granted and take the industry for a Long Ride”.
Sometime back, we had carried an article on this issue - Denying Rebate claims by invoking section 5A(1A) of CEA, 1944
Let us hope the Government reacts.