TIOL-DDT 20 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#0000FF" size="3">TIOL-DDT
20</font><br>
31 12 2004<br>
Friday</b></font></p>
<p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Why
no excise exemption for relief to Tsunami victims?</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Government
exempt the goods supplied for Tsunami victims, from payment of excise duty?
<br>
<br>
<b>DDT</b> has been receiving queries from various quarters, as to whether
the Government of India has issued any notification exempting various goods,
including medicines supplied to the Tsunami affected area. <b>DDT</b> hopes
that the Government will soon come out with such exemption notifications,
as it was done during the Gujarat Earth Quake.<br>
<br>
A little history here, though a very recent one. The devastating Gujarat Earthquake
happened on the 26th of January 2001. On 27th of January, the Government issued
Notification No. 2/2001 exempting <i>all goods donated or purchased out of
cash donations, for the relief and rehabilitation of the people affected by
the earthquake in the State of Gujarat from the whole of the duty of excise
leviable thereon.</i><br>
<br>
Even though 26th January was a holiday, the first thing that the Revenue Administration
in North Block did on the next day was to issue an exemption notification
for the relief of the victims. Our Board can really work fast in an emergency.
<br>
<br>
But what happened now? We are already into five days of the tsunami tragedy
and there is no sign of an excise exemption anywhere in sight? Is the Board
waiting for a representation from somebody? <br>
<br>
The exemption will be given in due course. But will it not be ‘sooner
the better’?<br>
<br>
And this unfortunately raises another important question. If these goods meant
for relief are exempted, should they pay 10% of the price as per Rule 6 of
the Cenvat Credit Rules 2004? If so, where is the exemption? If the goods
are supplied free where is the question of paying 10% of the <b>price</b>
when there is no price at all? But this is not how Central Excise works even
in a tragedy!<br>
<br>
The last time around, when the Government was double quick to grant the exemption,
it took its sweet time to administer the bitter pill. In F. No. 332/1/2001-TRU,
dated 16-2-2001, the Board clarified that in relation to relief material for
the quake victims, </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>the manufacturer
can either maintain separate record or reverse amount equivalent to 8% in
the first case i.e. the sale to relief agency who purchase the goods out of
cash donations. However, in the second case since there is no sale, the manufacturer
cannot avail the option of reversing amount equivalent to 8% of the sale price,
and the only option left with him for availing the benefit of the notification
is to maintain separate records of inputs, and to not take credit in respect
of inputs which have been used in or in relation to the manufacture of the
exempt goods.</i></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Will any goods
move from any factory under such impossible conditions?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DDT</b>
suggests that when an exemption notification is issued for the goods supplied
to the Tsunami victims, it should be specifically mentioned that the fetters
of Rule 6 of the Cenvat Credit Rules will not bind this exemption.<br>
<br>
If the Government does not come up with that kind of notification, the benevolent
hearts, despatching the goods to the victims can boldly go for the suggestion
made in <b>DDT-15</b> – you need not pay 10%, you need not maintain
separate accounts and you can take cenvat credit - citing the decision of
the Bangalore bench of the Tribunal in the case of A.P. Mills Vs CCE - reported
in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2004/2004-TIOL-1056-CESTAT-BANG.htm">2004-TIOL-1056-CESTAT-BANG</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">.
<br>
<font color="#FF0000"><b>Let donations not be hampered by bad laws. </b></font></font></p>
<p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>Government amends a dead notification</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
As we wrap up the year, the last customs tariff notification of the year provides
us with the tragically humorous parting shot. By Notification No. 116/2004
dated 24.12.2004, the Government seeks to amend the Notification No. 83/2000
dated 6.6.2000. Nothing wrong – except for the fact that this notification
No. 83/2000 had been superseded by Notification No.10/2001-Cus., dated 31-1-2001.
The Government is trying to amend a dead notification and dead four years
ago. If this is the way notifications are manufactured at the top, can you
blame the field for ineptitude? Of course it is really difficult to keep track
of the hundreds of live and dead notifications, especially with the kind of
facilities (or the lack of them) provided to the very important sections of
the department. Fortunately the amendment does not cause any damage and this
notification No. 116/2004 can be withdrawn after the officers return in the
New Year.</font></p>
<p align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ANYWAY</b></font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">People
are unreasonable, illogical and self centred - <b>Love them anyway</b><br>
<br>
If you do good, people will accuse you of selfish ulterior motives - <b>Do
good anyway</b><br>
<br>
If you are successful you win false friends and true enemies - <b>Succeed
anyway</b><br>
<br>
The good you do today will be forgotten tomorrow - <b>Do good anyway</b><br>
<br>
Honesty and frankness will make you vulnerable - <b>Be honest and frank anyway</b><br>
<br>
People favour underdogs but follow only top dogs - <b>Fight for underdogs
anyway<br>
</b><br>
What you spend years building may be destroyed overnight. - <b>Build anyway</b><br>
<br>
People who really need help may attack you if you help them- <b>Help people
anyway</b><br>
<br>
Give the world the best you have and you will get kicked in the teeth - <font color="#006633"><b>Give
the world the best you have ANYWAY</b></font></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<b>The TIOL team wishes you a very</b> <b><font color="#0000FF" size="4">happy
new year</font></b> <b>and we promise to make your taxing days more enjoyable.
</b><br>
<br>
<font color="#FF0000"><b>In the next year with more of DDT<br>
<br>
Have a Nice Day </b></font></font> </p>
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