TIOL-DDT 477 · the untouched capture
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<p><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
477</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
26 10 2006<br>
Thursday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Cenvat
credit of CVD paid through Export promotion scrips – No need to amend Cenvat
Credit Rules - Board</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/guest/kumar_vijay_eic.jpg" width="60" height="75" border="1" align="left">Notification
Nos.53/2003-Cus.dated 1.4.2003 and 32/2005-Cus. dated 8.4.2005 have a <b>condition</b>
that the importer is entitled to avail of the drawback or CENVAT credit of additional
duty leviable under section 3 of the Customs Tariff Act, 1975 against the amount
debited in the certificate.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
question is “can cenvat credit be allowed by a customs notification and that
too an exemption notification?” Please see our article <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2972">DEPB
Vs Cenvat Credit - Live and kicking!</a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is
it not necessary that the Cenvat Credit Rules should provide for allowing the
Credit? Board does not think so for the following reasons:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
The Ministry of Law has observed, “it is more a matter of policy and legal administration
instead of interpretation, on which views may differ.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
However, it would be preferable to have scheme-specific concessions in the relevant
specific notification as against general amendment to the rules, which may be
amenable to wider than intended interpretation. It is seen that notification
No. 32/2005-Cus. already provides for the same.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
Notification Nos. 53/2003-Cus.dated 1.4.2003 and 32/2005-Cus. dated 8.4.2005
governing imports under DFCE and Target Plus Scheme respectively clearly stipulate
that the importer shall be entitled to avail of the drawback or CENVAT credit
of additional duty leviable under section 3 of the Customs Tariff Act, 1975
against the amount debited in the certificates issued under the said schemes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
In view of this as also taking into account the Law Ministry’s opinion, it has
been decided that amendment of CENVAT Credit Rules is not required.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
It may be mentioned here that in the case of Target Plus Scheme, apart from
the notification referred to above, vide Board’s Circular No.59/2004-Cus. dated
21.10.2004, it has been clarified that additional customs duty paid in cash
or through debit under this Scheme may be adjusted as CENVAT credit or duty
drawback.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
the Board clarifies that the additional customs duty paid in cash or through
debit in certificate issued under DFCE/Target Plus Scheme can be availed of
as CENVAT credit or duty drawback. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
amendment of the CENVAT Credit Rules, 2004 is not required for the purpose.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/cuscir06_27.htm">CIRCULAR
NO. 27/2006-Cus, Dated : October 13, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Revised
</font></strong><font color="#006600"><b>ER-1 & ER-3 returns – Board clarifies.</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As already
reported by us the ER1 and ER3 forms have been changed - <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4391">TIOL-DDT
470 - 16 10 2006</a><b>. </b>Now the Board has explained the salient features
of the changes:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The revision
of the formats has been necessitated following the setting up of the first Large
Taxpayer Unit (LTU) in Bangalore. It may, however, be noted that the revised
ER 1 return form is applicable for all assessees (large taxpayers and others),
although the additional details to be provided by a large taxpayer, have been
separately indicated with an asterix.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Two new
tables have been introduced at Sr. Nos. 4 & 5 of ER-1 return, for seeking
information from a large taxpayer who has opted for LTU. Table at Sr. No. 4
seeks information regarding the clearance details of intermediate goods without
payment of duty under sub-rule (1) of rule 12BB of the Central Excise Rules,
2002. Similarly, table at Sr. No. 5, seeks details of intermediate goods received
from other premises under sub-rule (1) of rule 12 BB of the Central Excise Rules,
2002.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The table
at Sr. no. 7 seeks the abstract of Account Current (Cash payment details) and
its utilization. This table also captures the details of self-adjustment of
excess duty paid by large taxpayers. The information sought in this table is
applicable to all central excise assessees.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Certain
changes have been introduced in the table at Sr. No. 8, which gives details
of the CENVAT Credit taken and utilized.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Similar
changes have also been made in the ER-3 return, which are applicable to all
SSI Units filing quarterly returns.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The new
format of ER-1 return is applicable from the month of October 2006, i.e. in
respect of the return to be filed in November 2006.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants
the field to give wide publicity <i>so that the assessees are aware of the changed
requirements of the law.</i></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But we had
raised a question – </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>And incidentally,
is the Finance Ministry not aware of the enactment of the Finance Bill 2005?
</b>ADE is defined in the forms as <b>ADE levied under clause 85 of Finance
Bill, 2005. </b>Hasn’t the Finance Bill become the Finance Act? Are they aware
that Finance Bill 2005 simply dopes not exist now? <b> </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No answer
yet to this. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular836.htm">CIRCULAR
NO. 836/13/2006-CX., Dated: October 25, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Import
of metallic waste – Only direct imports from April 2007</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salient
features of the changed procedure:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ all
import consignments of Metallic Waste and Scrap must accompany a Pre-shipment
Inspection Certificate stating that:</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The consignment
does not contain any type of arms, ammunition, mines, shells, cartridges, radio
active contaminated or any other explosive material in any form either used
or otherwise.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The imported
item(s) is actually a metallic waste/scrap/ seconds/defective as per the internationally
accepted parameters for such a classification. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Only
direct imports from registered suppliers will be allowed. However, in all
documents relating to import transactions, name of importer as well as exporter
will be indicated. No high sea sale would be allowed</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The
new system of import from registered sources will come into effect from 1st
April, 2007. However, in cases where Bill of Lading is dated 31st March, 2007
or before, imports will be allowed on the basis of Pre-Shipment Inspection
regime till the new system of import from registered sources comes into effect.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn066.htm">PUBLIC
NOTICE NO.
66 (RE-2006)/2004-2009, Dated: October 23, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">IAS</font></strong><font color="#006600"><strong>
officer surrenders before IRS</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The IAS
officer wanted in connection with the seizure of Rs. 2.8 Crores from a hotel
chain chief last week in Hyderabad surrendered before the Income Tax authorities.
The Mizoram cadre IAS officer had disappeared from his hotel room after the
cash was seized, but IT officers recovered Rs. 53 Lakhs from his hotel room.
Income Tax authorities had sealed the IAS officer’s Delhi residence as well
as a Vijaya Bank locker. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day. </font></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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p>
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