TIOL-DDT 304 · the untouched capture
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<p><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
30</font></b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><b>4</b></font><font color="#000000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
16 02 2006<br>
Thursday</b></font></p>
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<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service
Tax on Goods Transport – Clearance to depot – eligible for credit.
</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax on Goods Transport has raised several doubts and quite a few doubts
have been created by the Commissioners and the big boss the DG and
Board usually takes its own time (normally a year or two) to clarify.
The service tax paid on transporting goods to the depot is eligible
as credit because input service includes 'outward transportation up
to the <b>place of removal'</b>. Now, <i>place of removal</i> is not
defined under the Cenvat Credit Rules. So Section 4 of the Central
Excise Act which defines place of removal is to be used. But that
Section 4 is applicable only for goods assessed to ad valorem duty.
So somebody had a brilliant doubt - whether a manufacturer manufacturing
and clearing goods on payment of duty at specified rates (for example
cement) or on the basis of valuation with reference to retail sale
price (for example refrigerators), and selling the goods from a depot,
is also eligible to take credit of service tax paid on transportation
of goods up to such depot. The doubt appears to be based on reasoning
that since such goods are not charged to duty on the basis of valuation
under section 4 of the Central Excise Act, the definition of the expression
'place of removal' given in that section would not apply in case of
such goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
has now clarified that <b>in case of depot sales of goods, the credit
of service tax paid on the transportation of goods up to such depot
would be eligible, irrespective of the fact, whether the goods were
chargeable to excise duty at specific rates or ad valorem rates on
the basis of valuation under section 4 or 4A of the Central Excise
Act.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
are certain other serious doubts, like can Service Tax on Goods Transport
be paid from Cenvat account? Can credit be taken for transport from
depot? Eventually Board will come up with clarifications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally
has the Board stopped issuing circulars? This important clarification
is contained in a letter addressed to Chief Commissioners and Commissioners
and so does not get the wide publicity it should. Clarifications meant
for the trade should be made available to the trade , not hidden from
them.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2006/serinstruct01.htm">Board’s
F.No. 137/3/2006-CX.4 Dated : February 2, 2006</a></b></font></p>
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<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No
Import of re-conditioned computer monitors without licence </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Re-conditioned
computer monitors were classified under EXIM Code No.847160. DGFT clarifies
that this classification has been done with the intention that such re-conditioned
computer monitors are not components of computers and are hence not freely
importable. A license will be required for their import. </font></p>
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<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir049.htm">CIRCULAR
NO. 49(RE-2005)/2004-09, Dated: February 14, 2006</a></u></strong></font></p>
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<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Warehousing
– Waiver of interest on Customs duty on warehoused goods – Board issues
a benign circular</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
a change here comes a Board circular that is clear and benevolent. Even
before the warehoused goods can be put to use, there is a demand for interest.
Now Board has given a consolidated list of instruction on waiver of interest.
Board had been kind enough to accept Supreme Court’s order that interest
liability accrues only when there is duty liability. Board has further instructed
the field not to enforce the demand for interest immediately as most often,
interest merits waiver and the importer should be spared the hardship of
first paying the interest and then, on waiver, seeking refund. Great CBEC!
The Board should exist for this kind of clarification and not for confusion.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gist
of the instructions;</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Don’t refer to Board unnecessarily</b>:- Chief Commissioners can waive
interest up to Rs. 2 Crores. Requests for waiver should be received and
examined in the Commissionerates first.</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Board recognizes the fact that in certain cases finally no duty is payable
and in ship building, power generation etc, imported goods have to be generally
retained for a longer period of time.</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Waiver is to be considered in the following cases:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(i) Goods supplied as ship stores/aircraft stores <b>(waiver to be considered
only after ex-bond clearance of goods)</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(ii) Goods supplied to diplomats <b>(waiver to be considered only after
ex-bond clearance of goods)</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(iii) Goods used in the units operating under manufacture-in-bond scheme</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(iv) Goods imported by 100% EOUs <b>( on completion of export obligation)</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(v) Goods warehoused and sold through duty free shops</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(vi) Machinery, equipment and raw materials imported for building and fitment
to ships <b>(the waiver of interest shall be considered only after the imported
goods have indeed been cleared from the warehouse for actual use for building
and fitment to ships)</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(vii) Petroleum products</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(viii) Plant and Machinery imported for projects</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(ix) Machinery, equipment and raw-materials imported for manufacture and
installation of power generation units</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(x) Goods imported under OGL and warehoused for subsequent clearance against
valid advance licences/Import-Export Pass Book Scheme or any similar scheme</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(xi) Goods imported in bulk by canalizing agencies/public sector trading
or service agencies and warehoused for subsequent release for export production</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(xii) Imports under EPCG Scheme</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(xiii) Import of Capital Goods by Public Sector Undertakings</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>The interest on warehoused goods is merely an accessory of the principal
and, if the principal is not recovered/payable, so is the interest on it.
The interest under Section 61 (2) of the Customs Act, 1962 has, thus, no
independent or separate existence.</b> </font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
the demand for interest are to be raised when due</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
The same are, however, not to be enforced, and on fulfillment of the purpose
of import, the waiver of interest is to be decided within six months. In
other words, the activity of the importers is to be allowed to continue,
which includes clearance of the goods from the warehouse for the purpose
of use, and only at the last stage after the goods have been cleared or
at the time of de-bonding in cases of 100% EOUs, the waiver of interest
issue is to be decided</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
This approach is necessary since, by and large, the interest demanded may
finally merit waiver and the importer should be spared the hardship of first
paying the interest and then, on waiver, seeking refund</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Cases which are not covered by the guidelines should be referred to the
Board for decision</font></p>
<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Cases relating to interest accrued on scrap generated during the manufacturing
activity of 100% EOU should not be decided by the Chief Commissioners. These
should be referred to the Board for decision.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/cuscir06_10.htm">CIRCULAR
NO. 10/2006-Cus., Dated: February 14, 2006</a></u></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Issue
notice before selling seized goods – Board tells the field</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Often
Customs offices sell seized goods, especially the perishable ones immediately
after the seizure. Later the victims go to appellate authorities and get
the seizure/confiscation vacated and then they are offered the sale proceeds.
But they find that the sale proceeds are too low and the courts often ask
the government to pay much higher amounts than the sale proceeds. In the
whole exercise, the government ends up with a huge loss because some bright
intelligent officer on the basis of <i>intelligence</i> <i>gathered</i>
had seized some goods. So now Board cautions the field , “It is impressed
upon field formations that where any goods, not being confiscated goods,
are to be sold under any provision of the Customs Act, they shall be sold
by public auction or by tender or in any other manner after notice to the
owner of the goods” Prevention is better than seizure.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/instruct02.htm">F.NO.711/4/2006-
Cus(AS) Dated : February 14, 2006</a></u></strong></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Tariff
Values Crude Palmolein increased</b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The existing
and the new rates are as follows</font></p>
<div align=center>
<table border=1 cellspacing=0 cellpadding=3 width=450 id=table1>
<tr>
<td width=50 > <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S.No.</font></strong></p></td>
<td width=108 > <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter
heading or sub-heading</font></strong></p></td>
<td width=246 > <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description
of goods</font></strong></p></td>
<td width=73 > <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff
value<br>
US$<br>
(Per Metric Tonne)</font></strong></p></td>
<td > <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New
tariff values</font></strong></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1)</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2)</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3)</font></p></td>
<td width=73 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4)</font></p></td>
<td > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>5</b></font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
10 00</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Palm Oil</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">412</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">426</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 10</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD
Palm Oil</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">427</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">441</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 90</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others
– Palm Oil</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">420</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">434</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
10 00</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Palmolein</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">434</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">448</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 20</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD
Palmolein</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">437</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">451</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 90</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others
– Palmolein</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">436</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">450</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1507
10 00</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Soyabean Oil</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">484</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">501</font></p></td>
</tr>
<tr>
<td width=50 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8</font></p></td>
<td width=108 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7404
00 22</font></p></td>
<td width=246 > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Brass
Scrap (all grades)</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201(i.e.
no change)”</font></p></td>
</tr>
</table>
<p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_009.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Notification
No. 9/2006-Cus., (N.T.), Dated: February 15, 2006</b></font></a></p>
</div>
<P class=section1 style="TEXT-ALIGN: center" align=center><B><IMG height=62 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_txt.jpg" width=375></B></P>
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<TD><IMG height=67 hspace=5 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle vspace=5><B><I> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>bona
fide - </b>Made or carried out in good faith</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">;</font></I></B> <O:P></O:P></TD>
</TR>
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<td>
<div >
<p> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Burden
to prove defence of <b>bona fide</b>s on assessee who failed to
discharge it - </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2005/2005-TIOL-75-SC-CX-LB.htm">2005-TIOL-75-SC-CX-LB</a></font></p>
</div>
</td>
</tr>
</table>
<br>
<div >
<div align="center"><font color="#660000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">"To
live outside the law you must be honest."</font> -- <font color="#000000"><i>Bob
Dylan</i></font></b></font></div>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6666">Until
tomorrow with more DDT</font></b></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Have
a nice day. </b></font></p>
<font face="Verdana, Arial, Helvetica, sans-serif">
<p align="justify"><font color="#FF6666" size="2"><b>Mail your comments to</b></font><font size="2">
<a href="mailto:vijaywrite@taxindiaonline.com"><b>vijaywrite@taxindiaonline.com</b></a></font></p>
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