Confusing, Complicated and Controversial Notifications - Storm in the Teacup blows over - DDT Effect - Board amends
THE Board has finally acted. Just after we uploaded today's DDT, we have come to know that the CBEC has issued three notifications and a circular to control the damage they created on Friday.
The Board Circular clarifies that the whole exercise was an offshoot of the Supreme Court judgement in the case of SRF Ltd and ITC Ltd (), wherein the Supreme Court had allowed the benefit of exemption in CVD on imported goods, based on excise exemptions, as we mentioned in 21 07 2015.
According to the Board, "The implication of the Hon'ble Supreme Court judgment was that all such final products when imported by manufacturer importer would have attracted concessional excise duty as CVD, while the domestic manufacturer of such final products had to forgo input tax credit to be eligible for such concessional rate. This would put the domestic manufacturers at a disadvantage vis-a-vis imports and would adversely impact the Make in India Policy of the Government."
So, with the concurrence of the Ld. Attorney General, notifications No.34/2015-CE.No.35/2015-CE and No.36/2015-CE all dated 17.7.2015 were issued amending the conditions in notifications No.30/2004-CE dated 09.07.2004, No.1/2011-CE dated 01.03.2011 and No.12/2012-CE dated 17.03.2012 respectively.
Blame it on AG!
Board has realised that apprehensions have been raised about the use of the phrase of “appropriate duty”. So, Explanations have been inserted in the notifications No.30/2004-CE dated 09.07.2004. No.1/2011-CE dated 01.03.2011 and No.12/2012-CE dated 17.03.2012 so as to clarify that the appropriate duty or appropriate additional duty or appropriate service tax for the purposes of the said notifications / entries includes nil duty or lax or concessional duty or tax whether or not read with any relevant exemption notification for the time being in force.
Board finally clarifies that, the domestically manufactured goods covered under these notifications / entries continue to be exempt from excise duty or subject to concessional rate of excise duty, as the case may be as they were prior to 17th July, 2015.
Now, an explanation is added to all these notifications to the effect that: appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.
Section 66B brought back: In - 20 07 2015, we mentioned that Board seems to be unaware of the Section 66B, to charge Service Tax, as the notifications mentioned Section 66. Board has amended this lapse also inserting "for the word and figures "section 66", the word, figures and letter "section 66B" shall be substituted ".
Massive confusion conceived over the last few months, delivered last Friday, causing a catastrophe in the trade circles, has finally been sorted out.
Still there seems to be a question - when I have to prove to you that the goods are to be duty paid, which includes nil duty, how do I prove that it is duty paid? Anyway the Board has made a hasty retreat and corrected some of the blunders - they can now leisurely study the notifications again and reassure themselves that everything is fine.
The notifications 34, 35 & 36-CE came into effect on 17 July 2015 and the amending notifications 37, 38 & 39 came into effect yesterday, 21 July 2015. If so, what would be the legal position for the interregnum period - does the Board wish to deal with it?
Notification No. 37, 38 and 39 - CE of 2015 dated July 21, 2015 and Circular No. , Dated: July 21, 2015