Duty Exemption on Machinery for LR-SAM - Missed Missiles but ASTRA on time!
MACHINERY, equipment, instruments, components, spares, jigs, fixtures, dies, tools, accessories, computer software, raw materials and consumables required for the Long Range Surface to Air Missile (LR-SAM) Programme of Ministry of Defence, were first exempted from excise duty by Notification No. 30/2007 -CX dated 10.07.2007, by inserting a new Sl. No. 25 to the table in Notification No. 64/95-Central Excise, dated the 16th March, 1995. This was valid only till 31st May 2011.
As usual, the babus forgot all about this notification lapsing in May 2011. They woke up a little later and reintroduced this exemption by Notification No. 34/2011 - Central Excise, dated 19th July 2011 by inserting another Sl. No. 29 in the table to Notification No. 64/95-Central Excise, dated the 16th March 1995. And this was valid till 25th day of November 2011. Again, in November 2011, the experts in the Board forgot about this notification and they woke up and issued a notification in February 2012 inserting another Sl. No. 30 in Notification No. 64/95-Central Excise, with identical words and this new exemption was valid till 25th May 2012 (Notification No. 4/2012 - CE Dated 9.2.2012). As usual on (or before and after) 25th May 2012, they were sleeping.
They woke up again in October 2012 and issued Notification No. 38/2012 CE, dated October 18, 2012 inserting another Sl. No. 31 in Notification No. 64/95-Central Excise, with identical words and this new exemption was valid till 25th November 2012.
In - 22.10.2012, we had mentioned , "We can be sure it will not be extended before 25th November 2012."
You don't need to know Rocket Science to predict that CBEC cannot renew a sunset notification before sunset.
So, after three months, they issued Notification No. 4/2013-CE dated 20.2.2013 inserting a new Sl. No. 33 in Notification No. 64/95-Central Excise, with identical words and this exemption was valid till 25th May 2013. We reported this in DDT 2051.
Again in May 2013, they forgot to extend the notification. They woke up after three months and have now issued another notification inserting a new Sl. No. 35 with identical words and this exemption is valid till 1st January 2016. So, now that the period is longer; they can safely sleep for more than two years.
The position now is that in the table to the Notification No. 64/95-Central Excise, dated the 16th March 1995, there are six Sl. Numbers 25, 29, 30, 31, 33 and 35 giving the same exemption and there was no exemption during the period 01.06.2011 to 18.07.2011, 26.11.2011 to 08.02.2012, 26.05.2012 to 17.10.2012, 26.11.2012 to 19.02.2013 and 26.5.2013 to 29.8.2013
Of course, there is consistency. The Customs Notification No. 39/1996-Cus dated 23.7.1996 has been similarly messed up and now has the same exemption in Sl. Nos. 32, 35, 38, 39, 41 and 43 of the table.
Was there no public interest in giving these exemptions during these drowsy periods? Maybe the Defence Ministry should remind the Revenue Department, at least a month before expiry of these notifications.
The Board should seriously consider job work for its notification manufacturing activity.
Now, for the good news. There is a Just in Time amendment to both these notifications 64/95-CE & 39/96-Cus.
Serial no. 34 to the notification 64/95-CE grants exemption to ‘Equipment and Stores' supplied to the Project ASTRA of the GOI in the Ministry of Defence. As per the Explanation, this exemption shall NOT have effect on or after the 1st day of September, 2013.
A similar Customs duty exemption but with a larger coverage is available at Sl. No. 42 to Machinery, equipment, instruments, components, spares, jigs and fixtures, dies, tools, accessories, computer software, raw materials and consumables required for the purpose of Air-to-Air Missile System (Project ASTRA) of the Ministry of Defence. This exemption too would have lost its sheen on or after the 1st day of September, 2013.
Fortunately, someone looking after the ASTRA project was aware of this deadline and got the exemption revived before it died a natural death and that too for a longer period than the exemption available for the LR-SAM programme.
The Central Government has without much fuss and with a deft amendment extended this exemption by simply substituting the figures, letters and words "1st day of September, 2013" with the figures, letters and words "1st day of January, 2017".
Incidentally, these exemptions to the ASTRA project also shared a similar glorious past as the LR-SAM programme & which have been captured in & 2074.
Notification No. , Dated: August 30, 2013 and
Notification No., Dated: August 30, 2013