TIOL-DDT 2732 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2732</font><br> 26 11 2015<br> Thursday</strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Strengthening Exporters' Confidence - CBEC Initiative </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has requested Central Excise formations processing brand rate applications to suggest measures or steps that can further strengthen exporters' confidence with the brand rate mechanism and make it easier to work with. The suggestions should be within the principles that guide drawback based on actual duty and have the traits of reliability, simplicity and workability without compromising revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For this, initiative should be taken by the Commissioners to approach the brand rate applicants for consultation and the points which, according to their examination, can be considered for implementation may be forwarded to the Board with reasons as what situation they shall ameliorate and the specific changes that would be required. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also wants a report on the following: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Seeking yearly audited accounts for inventory verification thereby delaying the fixation of brand rate till yearly audit is complete. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Difficulty faced in providing bill of entry for determining the basic customs duty portion where the imported duty paid inputs are procured by exporter from ‘independent' registered dealer or importer. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board also wants all Export Promotion Councils to inform their <strong><em>concerned</em></strong> members to approach the jurisdictional Commissioners of Central Excise with their points and solutions. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg3OTM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. 609/105/2015-DBK., Dated: November 24, 2015 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Latest Supreme Court Cases</font></strong></em></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#623094" span="span"><strong>CENTRAL </strong>Excise - Section 3A - Omission" being tantamount to a "deletion" is a form of repeal - Interest and Penalty provisions of Rules 96 ZO, ZP,ZQ quashed: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a case that only has academic value. Section 3A which empowered the Central Government to charge Excise Duty on the basis of capacity of production in respect of notified goods, was omitted on 11.5.2001 and the question was whether it was saved or not as the Section was omitted and not repealed. The consequent question was whether the Rules 96ZO, 96 ZP and 96 ZQ under Section 3A, even if they were saved could survive after the death of the parent section. The Supreme Court ruled that<strong> “<em>Omission</em>" being tantamount to a <em>"deletion</em>" is a form of repeal:</strong> On a conjoint reading of the three expressions "<em>delete</em>", "<em>omit</em>", and "<em>repeal</em>", the Supreme Court held that "<em>delete</em>" and "omit" are used interchangeably, so that when the expression <em>"repeal</em>" refers to "delete" it would necessarily take within its ken an omission as well. This being the case, the Supreme Court did not find any substance in the argument that a "<em>repeal</em>" amounts to an obliteration from the very beginning, whereas an "<em>omission</em>" is only in futuro. Once Section 3A is saved, the Rules too survive, but can there be interest and penalty under the rules 96ZO, 96 ZP and 96 ZQ? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court declared that the interest and penalty provisions under the Rules 96ZO, ZP, and ZQ of the Central Excise Rules, 1994 are invalid as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. since Section 3A which provides for a separate scheme for availing facilities under a compound levy scheme does not itself provide for the levying of interest, Rules 96 ZO, 96 ZP and 96 ZQ cannot do so and therefore on this ground the appellant has to succeed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A penalty can only be levied by authority of statutory law, and Section 37 of the Act, does not expressly authorize the Government to levy penalty higher than Rs.5,000/. This further shows that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make rules 96ZO, 96 ZP and 96 ZQ without authority of law. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A large number of appeals was involved in this case and the Supreme Court held in favour of the assessee as far as interest and penalty were concerned. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25316" target="_blank">Breaking News</a></strong> and <em>Shree Bhagavati Steel Rolling Mills vs Commissioner of Central Excise</em><strong> - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4NjIw" target="_blank">2015-TIOL-283-SC-CX</a></strong></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#623094" span="span">Central Excise - EOU - goods manufactured wholly out of indigenous raw materials - Valuation - Central Excise Valuation and not Customs FOB applicable: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 8/1997 and 23/2003-CE, as they stood then, the duty payable by EOUs for clearance to DTA,when the goods are manufactured wholly out of indigenous raw materials, was equal to the excise duty payable by non EOUs on like goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case at hand, the goods were not sold but cleared to a sister unit and so the department felt that the value has to fixed based on the export price of similar goods and not 115% of the cost of production. The Tribunal had set aside the orders of the lower authority by reasoning that since the exemption notifications would apply and since what has to be determined under the said notifications is excise duty payable in India, such duty could only be arrived at by applying Rule 8 in cases of captive consumption and that therefore the basis of the show cause notice and the decisions by the original and appellate authorities was incorrect. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue appealed to the Supreme Court and the Apex Court agreed with the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sold or allowed to be sold - What is the difference</strong>? One of the earliest confusions created by our experienced all knowing babus was the usage of certain unnecessary words while drafting the Law related to EOUs about 35 years ago. The duty payable by the EOUs for goods <strong>allowed</strong> to be sold in the DTA was defined under Section 3. It became farce that goods allowed to be cleared had to suffer the Customs duty, but goods clandestinely removed were allowed a concessional excise duty. After all round litigation, this Section was amended. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this “<em>allowed to be sold</em>” has again appeared before the Supreme Court. And the Supreme Court has observed, “<em>The test to be applied under the said notification is whether the goods in question are “allowed to be sold” in India. The aforesaid expression is obviously different from the expression “sold” and does not require any actual sale for the notification to be attracted.</em>” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And nobody told the Supreme Court what this “allowed to be sold” is. This is the problem when you are careless with law drafting and forget history when it takes decades for a case to be decided by the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case also has only academic importance. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25317" target="_blank">Breaking News</a></font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> and</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Commissioner of Central Excise vs Nestle India Ltd </em><strong><em>- </em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4NjE5" target="_blank">2015-TIOL-282-SC-CX</a></strong></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#623094" span="span">Central Excise - Branded Chewing Tobacco - exemption to unbranded chewing tobacco - Not relevant whether the brand is own or not::</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee was manufacturing <a></a>branded Gutkha under the brand name "Crane Gutkha". As per Exemption Notification 8/2001-CE, unbranded chewing tobacco was exempted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee's plea is that since this is the home brand name that brand name belongs to the assessee itself which has to be treated as unbranded. This contention proceeds on the premise that the branded goods belonging to third party only would be treated as branded and insofar as goods sold under brand name belonging to the assessee are concerned, they have to be treated as unbranded. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court found this contention is clearly misconceived and untenable. The definition of ‘brand name' does not limit the brand name to third party brand name. Therefore, the irresistible conclusion would be that once the goods are sold under any brand name, whether that belongs to the assessee or the third party the goods would be treated as branded . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue had an emphatic win. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25315" target="_blank">Breaking News</a> </strong>and <em>Commissioner of Central Excise vs Virat Crane Industries Ltd </em><strong>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4NjIx" target="_blank">2015-TIOL-284-SC-CX</a></strong> </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Customs - Exemption to Materials used for Ships/Vessels </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present, raw materials and parts for use in the manufacture of ships/vessels are exempted from Customs duty subject to the condition that the ships are to be manufactured under Customs warehouse. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the requirement of manufacturing of ships/vessels in a custom bonded warehouse under the provisions of Section 65 of the Customs Act, 1962 for availing duty benefits, is removed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar notification is issued for Central Excise also. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg3ODg=" target="_blank">Notification No. 54/2015-Cus., Dated: November 24, 2015</a> and <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg3OTA=" target="_blank">Notification No. 44/2015 - Central Excise, Dated: November 24, 2015</a></strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - EOUs eligible for exemption on raw materials even when ships are exempt</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a complicatedly worded Notification an amendment is made to Notification No.52/2003-Cus, dated 31.03.2003. This amendment reads as: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Provided that where such finished goods (including rejects, waste, scrap, remnants and by-products) are either non excisable or such finished goods (including rejects, waste, scrap remnants and by-products) other than goods falling under heading/tariff item 8901, 8902 00 10, 8905 10 00 or 8906 if imported, are leviable to nil rate of duty of customs specified under First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and nil additional duty leviable under section 3 of the said Customs Tariff Act, read with exemption notification in this regard, if any, no exemption in respect of inputs utilized for the purpose of manufacture of such finished goods (including rejects, waste, scrap, remnants and by-products) shall be available under this notification”. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This perhaps means that:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EOUs are now eligible for duty exemption on raw materials/parts consumed in manufacture of certain specified ships/vessels and cleared to DTA, even if such ships/vessels are exempt from basic customs duty and central excise/CV duty. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar notification is issued for Central Excise also. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg3ODk=" target="_blank">Notification No. 55/2015-Cus., Dated: November 24, 2015</a> and <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg3OTE=" target="_blank">Notification No. 45/2015 - Central Excise, Dated: November 24, 2015 </a></strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Indian corporates benefit from strong domestic fundamentals, despite external pressures</font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MOODY'S </strong>Investors Service says that most non-financial corporates it rates in India (Baa3 positive) will benefit from strong domestic growth and accommodative monetary policy, although weak global growth and a potential US rate hike will weigh on businesses. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It also says: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Healthy 7.5% GDP growth for India for the fiscal year ending March 2017 (FY2017) and a pick-up in manufacturing activity will be broadly supportive of business growth. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the corporates remain vulnerable to the volatile Indian rupee as against the US dollar and to low commodity prices, which has in turn led to a sharp decline in external trade. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But despite these overall supportive domestic conditions for the country's corporates, potential headwinds loom from a loss of reform momentum. The Modi administration so far this year has been unable to enact legislation on key reforms, including a unified goods and services tax and the Land Acquisition Bill. It seems highly unlikely that the major reforms will get enacted by the upper house of the Indian parliament where the ruling coalition is in minority. A failure to implement these reforms could hamper investment amid weak global growth. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Parliament starts today - any chance for GST?</font></strong></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><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">vijaywrite@tiol.in </a></font></p> </body> </html>