Fertilizing confusion - Board clarifies
IN the Budget 2012, effective rates of Customs duties for fertilizers are provided under the Customs Notification No 12/2012 Dt.17.03.2012. The relevant entry, Sl No. 200 in the Notification read as under:
S. No. | Chapter or Heading or sub-heading or tariff item | Description of goods | Standard rate | Additional duty rate | Condition No |
200 | 31 | Composite Fertilisers | 5% | - | - |
Further, the concessional rate of CVD @1%, hitherto available for imported fertilizers vide Customs Notification No 35/2011 does not exist as the same has been rescinded in the Budget 2012. Thus, imported fertilizers attracted CVD @ 6%(in view of the effective rate of 1% under Central Excise Notification No 12/2012 is with the condition of non-availment of CENVAT Credit which cannot be extended to the imported goods).
However, vide Corrigendum Dt.19.03.2012, the entry at Sl.No 200 is corrected as under:
S. No. | Chapter or Heading or sub-heading or tariff item | Description of goods | Standard rate | Additional duty rate | Condition No |
200 | 31 | (i) Composite Fertilisers (ii) All goods, other than those which are clearly not to be used as fertilisers | 5% - | - 1% | - - |
However, it appears that the above corrigendum did not solve the problem fully as many other entries (Sl No 197,198,199,201,202,203,204 and 205) still carried "-" (dash) in CVD column which means they will be charged CVD of 6% instead of 1%. To avoid this, another Notification No 46/2012 Cus dated 17th August has been issued to substitute "-" against these entries with 1%.
If someone wants to claim the exemption of BCD at 5% under one Sl No and CVD at 1% under 200(ii), there is a possibility of denying the same as this would amount to availing the benefit of two entries in the Notification simultaneously. Board clarifies this is permissible and the substitution of 1% vide Notification 46/2012 Cus is only for bringing more clarity (which means, even without 46/2012 Cus, 1% benefit is admissible)
Hence,CBEC has now clarified that a "Combined reading of the entries" is permissible and explains the amendment made vide Notification No 46/2012 Cus.
All fine, except the last line of the Circular, which reads:
The above position may be brought to the notice of formations under your charge, for strict compliance, especially in respect of assessments for the period prior to 17th August, 2012 .
So, how does the Board want the assessments for the period prior to 17th August 2012 be made? CVD at 1% or 6%? Why should such an important issue be limited to a vague one-liner? Can't they be more specific? If they are to be assessed at 6%, whose fault is it? Why can't they be bold enough to say, this has happened due to a defective notification, which was corrected with effect from 17 August 2012 and the Government always wanted to levy CVD at 1% only and a Notification under Section 28A is underway for the period prior to 17th August 2012?
The Circular issued by the learned Joint Secretary, TRU, states, "Even though it is true that for many S. Nos. of notification no. 12/2012-Customs pertaining to goods falling under Chapter 31(S. Nos 196 to 199 and 200 to 205) the entry indicated in column (5) is ‘-‘ …………"
196 to 199 and 200 to 205? Is it not the same as saying 196 to 205? The fact is in Sl. No. 200 (at least part of it), the entry under Column 5 is not ‘-‘.
Please also see - 21.08.2012
Circular No. , Dated: August 30, 2012