TIOL-DDT 513 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body link=blue vlink=blue> <p align="justify"><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><b>TIOL-DDT 513</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br> 15.12.2006<br> Friday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Namkeen</font></b><font color="#006600"><b>, Bhujia, PalakPanner – delicious exemptions? No more heating of palakpaneer.</b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While reporting the draft circular on paneer, in <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4469">TIOL-DDT 481 01 11 2006</a><b>, DDT </b>had asked,</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">However, if the goods are ‘ready to eat packaged food’ falling under tariff item 2106 90 99 but which are not covered by the description provided at Sr. No. 29, then the effective rate of duty will be 8% as provided at Sr. No. 30.<b>Examples of some of such items are ‘alu-mutter’, ‘palak-paneer’, etc., which are sold in packaged condition and are consumed directly after heating</b>.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now here, is the Board’s objection to heating? If I choose to eat PalakPanneer without heating, will it fall under Sl. No.29? Should I give a solemn declaration before buying the packet that for love, money or exemption, I will NOT heat the panneer?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now while issuing the final circular, Board has deleted the examples. Also see our article on this circular in our Special Column. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular841.htm">CIRCULAR NO. 841/18/2006-CX ,Dated: December 6, 2006</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Section 11B not applicable to North East refunds – Board clarifies</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exemption for goods produced in Sikkim, North-East etc, are administered by a refund scheme. First duty has be paid and then the amount of duty paid other than through the Cenvat account is refunded. Now the question is “will the provisions of Section 11 B like unjust enrichment apply to these refunds?” . Board had in Circular No. 682/73/2002, dated 19.12.2002 clarified, in relation to the J&K exemption, that </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">“Refund” envisaged in the notifications is not on account of any excess payment of excise duty by the manufacturers, but is basically designed to give effect to the exemption. In other words, the mechanism has been adopted to operationalize the exemption envisaged in these two notifications. In view of this aspect of the matter, the provisions of Section 11B of the Central Excise Act, 1944 would not apply in the case of these notifications.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the field has doubts whether the J&K clarification would apply to <st1:country-region><st1:place>Sikkim</st1:place></st1:country-region>? Board clarifies that </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is noticed that when same scheme of refund is founded for other areas, the clarification issued with reference of J & K should hold good, and there should not have been any doubt. Therefore, it is clarified that clarification issued vide para-3 of Circular No. 682/73/2002, dated 19.12.2002, will also be applicable for units availing exemption under notification No. 39/2001-CE dated 31.7.2001 (Kutch) , 71/2003-CE dated 9.9.2003 and 56/2003 dated 25.6.2003 (Sikkim),32/99-CE and 33/99-CE both dated 8.7.1999 (North East).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As rightly noticed buy the Board <b>there should not have been any doubt. </b>But doubt they did and that is what the field is for. Thank God and the Board that a clarification has been issued. Maybe the Board should issue another circular that clarification issued on a particular issue will be applicable to all identical situations and there should not be any doubts.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular842.htm">CIRCULAR NO. 842/19/2006-CX ,Dated: December 8, 2006</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Forward Contracts for the Customs Duty Component of Imports – RBI directions</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The RBI has proposed to liberalise the procedure and provide greater flexibility to hedge the economic (currency indexed) exposure of importers in respect of customs duty payable on imports. Accordingly, importers will henceforth be permitted to book forward contract for the customs duty component of the import. These contracts shall be held till maturity and cash settlement would be made on the maturity date by cancellation of the contracts. Forward contracts covering such transactions once cancelled are not eligible for rebooking. However, in case of changes in the rate of customs duties, due to Government Notifications, importers may be allowed to cancel and/or rebook the forward contracts before maturities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir021.htm">CIRCULAR NO. 21/RBI., Dated: December 13, 2006 </a></u></font></p> <p align=center> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Booking of Forward Contracts Based on Past Performance</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, banks allow importers and exporters to book forward contracts on the basis of a declaration of an exposure and based on past performance upto the average of the previous three financial years (April to March) actual import/export turnover or the previous year's actual import/export turnover, whichever is higher, subject to the specified conditions. Forward contracts booked in excess of <b>25 per cent</b> of the eligible limit shall be on a deliverable basis and cannot be cancelled. The aggregate forward contracts booked during the year and outstanding at any point of time should not exceed the eligible limit. Further, the eligible limits are to be computed separately for import and export transactions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the liberalization and flexible era, the RBI has made 25% as 50%.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir022.htm">CIRCULAR NO. 22/RBI., Dated: December 13, 2006 </a></u></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice week end. </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> </body> </html>