TIOL-DDT 2534 · the untouched capture
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<p align="justify"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><s><strong><font size="2"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s>TIOL-DDT 2534</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
09 02 2015 <br>
Monday </font></strong></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3">EOU Scheme - Procedures and Verifications - Instructions </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner of Customs (Export), 100% EOU, Air Cargo Complex, Mumbai in a Public Notice, notes, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>
"The facility of duty exemption is available to the EOU/STPS/EHTP as per the Letter of Permission (LOP) issued by the Development Commissioner. However, quantity and goods of such class and description eligible for duty exemption are to be restricted as per the particulars mentioned in each Procurement Certificate (PC) issued by the Central Excise authorities. Hence, it becomes necessary to verify the genuineness of the PCs received from the <strong>concerned</strong> authorities, as these amounts to special authorizations based on which the duty exemption is allowed. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instances have come to the notice that procurement certificate have been issued even for those items which were not mentioned in the LOP. Further, many times import details do not correspond with the goods particulars mentioned in the PCs in terms of description and quantity. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that there is a common perception that there is no revenue implication in respect of the clearance made under EOU scheme which had led to laxity in terms of the procedures to be followed and cautions to be exercised. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, it is decided that a random check of PCs will be conducted as to verify their genuineness from the <strong>concerned</strong> issuing authorities. In case of first time importers under EOU scheme, the verification of PC will be compulsory. However, to facilitate the smooth clearance of the imports under the EOU scheme, the Procurement Certificate issued from jurisdiction Central Excise/Customs authorities, recommending for duty free import to the EOUs, will be accepted by hand only if they are brought in sealed cover. Fax copy of the P.C. will also be entertained under special circumstances. The same will also be cross verified with the copy received by registered post." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner continues, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the import of goods are allowed without payment of duty on the basis of the particulars in the Procurement Certificate, the fulfillment of the conditions of duty exemption under EOU will become complete only when Re-warehousing Certificates (RWCs) are received from the concerned jurisdictional Central Excise Authorities. The Board vide Circular No. 14/98 dated 10.03.1998 had prescribed maximum period of 90 days from the date of issuance of Procurement Certificate (PC) for the submission of the RWC. Also, the Board vide Circular No. 07/06 - Cus dated 13.01.2006 and Circular No. 19/2007-Cus dated 03.05.2007 has prescribed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In spite of the time limit of 90 days prescribed by the Boards Circular No. 14/98-Cus dated 10.03.1998, RWCs are not submitted by the Exporters operating under the EOU scheme. In the absence of RWCs, the jurisdictional Central Excise Authorities on being advised by the Customs are under obligation to issue Demand Notices to the concerned EOUs to safeguard the interest of revenue. This office from time to time has been reminding the concerned Central Excise/Customs Authorities to issue and forward the RWCs if goods were already warehoused properly, or to issue Demand Notice to the concerned EOU. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">However, it seems that the desired response is not forthcoming. It also appears that the EOUs have also become oblivious to the fact that it is their responsibility to produce the RWC from the <strong>concerned</strong> authorities regarding the duty free imported goods, failing which they will be liable for payment of Customs duties but for the exemption contained in the EOU Notification issued by the Board. Time limit of submission of RWCs from the jurisdictional authorities is 90 days from the day of P.C. issued as per the Boards Circular No. 14/98-Cus dated 10.03.1998 failing which SCNs will be issued against them for recovery of government revenue. No unit having a pendency of more than 10 RWC of more than 6 months age will be allowed duty free clearance expect with the approval of ADC/ JC for one time clearance beyond which they will be required to execute a full B.G. covering the duty of the goods intended to be imported. No duty exemption will be allowed until the authenticity of the warehousing of the goods is proved by the concerned EOUs by way of submitting the required RWCs . </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not all enforcement - the Commissioner has offered some facility too: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To facilitate the importers operating under EOU to close their RWCs pendencies, it has also been decided to accept now onwards, by hand, the RWCs submitted by the EOUs/their authorized CHAs only in cases where the same are brought in sealed cover from Jurisdictional Central Excise/Customs authorities and entries in the Transit Allow Register (TAR) /Procurement certificate register (PCR) may be closed accordingly. The signature on the PC & RWC shall be verified with the specimen signature. In case of specimen signature is not available due to transfer of officer, the officer on duty may accept the same after confirming from the jurisdictional Central Excise authority. In case of unusual deviation, PC/RWC may be verified prior to any further action. Further, it is also decided that the entries in TA Register, for previous pendencies will be closed upon receipt of the copies of pending RWCs duly certified by jurisdictional Central Excise/Customs Authority in Sealed Cover or a Certified Copy of the pending RWC authenticated by the Authorized Signatory of the unit submitted along with original copy of the RWC, forwarded to the unit from Central Excise/Customs . </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner has also detailed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NTQ=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner of Customs (Export), Air Cargo Complex Public Notice No.02/2015-16, Dated: January 21 2015 </font></strong></a></p>
<p align="center"><strong><font size="3" face="Georgia, Times New Roman, Times, serif"><em><font color="#006600">Employees suffering with disability - No Need to Quit </font></em></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MANY</strong> Government servants seek voluntary retirement on medical grounds. Sec 47 of the <em>Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation)</em> Act, 1995 (PWD Act) lays down that no establishment shall dispense with the services of an employee who acquires a disability during the course of service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue had come up in <em>Bhagwan Dass & Anr Vs Punjab State Electricity Board</em>, decided by the Supreme Court where the employee who had during his service suffered from blindness had applied for voluntary retirement. The Supreme Court had observed that he was not aware of any protection that the law afforded him and apparently believed that the blindness would cause to lose his job, the source of livelihood of his family. In those circumstances it was the duty of superior officers to explain to him the correct legal position and to tell him about his legal rights. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is proposed that any Government servant seeking voluntary retirement on medical grounds may be apprised of the above provisions of PWD ACT, in order that he can take a considered decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government plans to issue an OM in this regard. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NTU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DoPT Office Memorandum in F. No. 25012/01/2015-Estt (A.IV), Dated: February 06 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP - Reduction in Minimum Export Price (MEP) on export of edible oils </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MINIMUM </strong>Export Price (MEP) on export of edible oils in branded consumer packs of up to 5 Kgs has been reduced to USD 900 per MT. Earlier it was USD 1100 per MT. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NDg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 108 (RE - 2013)/2009-2014, Dated: February 6, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP - Minimum Import Price (MIP) of Cardamom </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> minimum import price (MIP) of Cardamom with HS code 0908 31 of Chapter 09 of ITC (HS), 2012 - Schedule - 1 (Import Policy) is fixed at Rs.500/- per Kg., </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NDk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 109 (RE - 2013)/2009-2014, Dated: February 6, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP - Prohibition on export of Shark fins of all species of Shark </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORT</strong> of Shark fins of all species of Shark has been prohibited. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NTI=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 110 (RE - 2013)/2009-2014, Dated: February 6, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP - Import of 'Shark fins'- prohibited </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORT</strong> policy of the item 'Shark fins' covered under EXIM Code 0305 71 00 is changed from ‘free' to 'prohibited'. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NTM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 111 (RE - 2013)/2009-2014, Dated: February 6, 2015 </font></strong></a></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3">Govt grants petticoats to female canteen employees</font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE </strong>is an elaborate procedure in providing uniforms to employees working in the canteens of the Government Departments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per a 2002 Office Memorandum, female canteen employees are entitled to 2 sets of Sarees (Mem Sahib Light Blue Terene Cotton), Blouse and Fall for Sarees OR Salwar Kameez (Light Blue Terene Cotton), per year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this does not include petticoats. Totally against the principles of equality - other Government lady employees like Peons, Sweepers, Staff Car Drivers, Despatch Riders etc. are entitled to petticoats. And please note that ‘fall' is provided for the sari, but no provision for the petticoat under. How unjust! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The massive Government machinery has moved and this lapse is rectified. Now, female canteen employees of the Government are assured of a respectable inner wear. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An Office Memorandum issued recently states: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> "The matter regarding issue of uniforms to entitled female canteen employees has been reviewed and it has been decided to authorise issue of petticoat to entitled female canteen employees who wear saree and Dupatta to those who wear Salwar Kameez in addition to already authorized articles of uniform."</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The uniforms are to be got stitched by the Canteen Managing Committees directly. Unstitched cloth or cash will not be given to the employees under any circumstances. The charge allowed for stitching a petticoat is Rs.30/- and for a blouse it is Rs. 45/-.In this age of ready-mades, should stitching be made mandatory? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This has not come that easily; both the Home Ministry and the Finance Ministry have agreed to this petticoat project. Just imagine the number of papers, files, note sheets and the large army of officers who must have worked on this project. And still there is ambiguity - they have not specified the colour of the petticoat and whether the petticoats will be supplied now for the saris already supplied or will the petticoats be supplied only along with the next batch of saris. Maybe other undergarments will also follow. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A petticoat costs about Rs. 120/- and this female employee of the canteen gets a salary of about Rs. 20,000/-; she can certainly afford to buy a petticoat for her sari instead of the whole Government machinery moving in to buy cloth and getting <a></a>a petticoat stitched for her. This is how Government is busy. Just imagine the cost of sending this circular to all the Central Government offices in India - with half the cost, perhaps you can gift her a silk sari - with a satin petticoat! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And you thought only tax notifications are complicated! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NTY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dept. of Revenue O.M in F. No.O-21030/4/2015-Coord, Dated: January 23, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Info on Black Money - Door for Dialogue with Switzerland open </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SWITZERLAND'S</strong> Federal Department of Finance last week published the <em>Report on international financial and tax matters 2015. </em>An extract from the report: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's finance minister, Arun Jaitley, took up office on 26 May 2014. He has joined the government at a time when India is stepping upits fight against tax evasion and fraud, with the creation of a Special Investigation Team (SIT) entrusted with shedding light on the assets held abroad by Indian residents. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Relations with Switzerland remain tense due to the refusal to exchange information when a request is based on data obtained illegally. Despite the difficult environment, the door for dialogue nevertheless remains open. A meeting was thus held in Bern on 15 October 2014 on Switzerland's initiative. The meeting took place in a positive atmosphere and ended with a joint statement identifying the basis for solutions concerning the bilateral issues under discussion. </font></em></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Live issues in Litigation </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> bring you some live issues which are at various stages of litigation. Perhaps the CBEC can try to bring some clarity on these issues and avoid wasteful litigation. Budget may be a good time for this. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Requirement of reversing Cenvat Credit availed on the inputs while allowing the remission of Central Excise Duty on the damaged goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Simultaneous availment of SSI exemption and credit on inputs used in manufacture of branded goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The issue involved is regarding interest on <em>suo-moto</em> credit taken by the party of excess duty paid by them. The correct option according to the Department was for them was to apply for refund of duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Whether the Commission paid to the Commission Agent by an EOU is includable in the assessable value of DTA sale by the EOU for the purpose of levy of duty on such supplies. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Availing Cenvat Credit on zerox copies of bill of entry and invoices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Whether the credit of Service Tax taken at the time of purchase of inputs is required to be reversed with the amount of Excise duty at the time of clearance of inputs as such without being used in the manufacture of final product? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Admissibility of Cenvat Credit of additional customs duty discharged through DEPB credit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. The department enforced Bank Guarantee of the party for the recovery of duty liability; however the departmental order was struck down in CESTAT. The amount was refunded to the party. The issue pertains to the admissibility of claim of the party for interest on the amount so refunded by the department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The Tribunal offered the assessee an option to deposit the amount of interest and penalty within 30 days of its order to avail the benefit of reduced penalty of 25%, even while the quantum of penalty was not redetermined by the tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. <u>Should the department bear the expenses of the accused to attend prosecution case? </u></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Whether Service Tax on the overseas commission on account of service rendered by the foreign based commission agent is not leviable on the recipient of service w.e.f.1.1.05 in the light of Rule 2(1)(d)(iv) of the Service Tax Rules, 1944 which were framed by the Central Govt. in exercise of the power conferred u/s 94 (1)&(2) of the Finance Act,1994 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. Whether Cenvat credit is admissible on molasses contained in rectified spirit which is an exempted product. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. Admissibility of Cenvat Credit on steel and cement used in the construction of storage tank in the factory premises. Department's contention was that storage tank wasn't movable and thus not excisable. Therefore, cement and steel used for civil construction of tank was not admissible. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. Whether Education Cesses levied and collected under Section 91 of Finance Act, 2004 can be considered as a duty of excise for the purpose of grant of refund in cash or by way of self credit under Notification No. 56/2002-CE dated 14.11.2002 (as amended) as the said notification grants exemption only to the specified goods from (a) Basic Excise Duty, (b) Additional duties of Excise leviable under Sub-Section (3) of Section 3 of the Additional Duty of Excise (Goods of Special Importance) Act, 1957 (58) of 1957) and (c) The Additional Duties of Excise (Textile and Textile Articles) Act, 1978 leviable under Sub-Section (3) of Section 3 of the said Act, mentioned in the said notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. Whether the confessional statement recorded by the Authority of Directors, authorized signatory, admitting the guilt of clandestine removable of goods can be held not to be the basis for deciding aspect of clandestine removal of goods by the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Whether tribunal erred in not appreciating the aspect that statement recorded under Section 14 of the Central Excise Act, 1944 are admissible and binding to party. </font></p>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are some of the issues on which there are orders favourable to the assesses, but which the CBEC would like to take to the Supreme Court, but could not because of monetary limitation. We will bring you some more such issues soon. </font></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"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></strong></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@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p>
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