TIOL-DDT 602 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place w:st="on"><st1:country-region w:st="on"></st1:country-region></st1:place></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 602</font><br>
27.04.2007<br>
Friday</b></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place w:st="on"><st1:country-region w:st="on"><b><font color="#006600">Sikkim</font></b></st1:country-region></st1:place><font color="#006600"><b> Celebration – Back in Action – Exemption revived </b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5265" target="_blank">DDT 585</a></u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5265"> dated <u>3rd April, 2007</u> </a>reported that the Sikkim exemption had expired on 31.03.2007 and Government had announced a North East Industrial and Investment Promotion Policy, 2007 under which the excise exemptions were to be continued. We had reported that the Revenue Ministry is yet to notify the exemptions. Finally they have done it. Now there is a general exemption for all the North Eastern States. The benefits of the notification are applicable from 1.4.2007 that is 27 days before the notification is issued. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exemption is not available to</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Goods falling under Chapter 24;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Pan masala falling under Chapter 21;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Plastic carry bags of less than 20 microns as specified by the Ministry of Environment;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Goods falling under Chapter 27 and which are produced by petroleum oil or gas refineries.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further the exemption will not be available to such goods which have been subjected to only one or more of the following processes, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) preservation during storage, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) cleaning operations, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) packing or repacking of such goods in a unit container or labeling or re-labelling of containers, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) sorting, declaration or alteration of retail sale price and have not been subjected to any other process or processes amounting to manufacturer </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=30&filename=notification/excise/2007/etariff07_20.htm" target="_blank">Notification No. 20/2007-C.E. Dated April 25, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place w:st="on"><st1:country-region
w:st="on"><b><font color="#006600">Sikkim</font></b></st1:country-region></st1:place><font color="#006600"><b> Celebration – Back in Action consequential amendments</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To make the above changes applicable to the existing notifications, consequential amendments have been made in Notifications 32/99, 33/99, 56/2003 and 71/2003 Central Excise.</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=30&filename=notification/excise/2007/etariff07_21.htm" target="_blank">Notification No. 21/2007-C.E. Dated April 25, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Refund of CENVAT Credit – Northeast exemption – CENVAT Credit Rules Amended</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5265" target="_blank">DDT 585 </a></u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5265">dated <u>3rd April, 2007</u> ,</a> had reported the proposal to grant refund of the unutilized credit </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Under NEIIPP, 2007, 100% excise duty exemption will be continued as at present on finished products made in the North Eastern Region. However, in cases, where the CENVAT paid on the raw materials and intermediate products going into the production of finished products (other than the products which are otherwise exempt or subject to nil rate of duty) is higher than the excise duties payable on the finished products, ways and means to refund such overflow of CENVAT credit will be separately notified by the M/O Finance.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now they have notified this.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CENVAT Credit Rules have been amended to insert a new Rule 5A to provide for refund of unutilised Cenvat Credit to units in the North Eastern States. This is akin to Rule 5 which gives refund of unutilised credit in respect of exports.</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=30&filename=notification/excise/2007/exnt07_24.htm" target="_blank">Notification No. 24/2007 – C. E. (N.T.), Dated April 25, 2007 </a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Refund of CENVAT Credit - North Eastern States - Procedure</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has prescribed the procedure for claiming refund of the unutilised Cenvat Credit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The manufacturer has to file a declaration with his AC/DC describing the finished goods, duty rate, manufacturing formula with reference to quantity and quality of the raw materials. If any changes take place with regard to the facts declared, a fresh declaration has to be filed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A monthly statement by the 7<sup>th</sup> of the Month has to be filed giving details of opening balance, receipts, value, duty, amount of credit taken and quantity of inputs used during the month, final products manufactured, inputs lying in stock, credit utilised and the amount of credit lying in balance.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The AC/DC after verification will refund the unutilised credit within three months from the date of receipt.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. If there is likely to be any delay in granting the refund, the AC can grant 80% of the amount claimed on a provisional basis by the 30<sup>th</sup> day of the month following the month under consideration.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is an apparent contradiction between 2 and 3 above. The AC is required to grant the refund within three months, but if there is any delay in verification he is required to grant 80% refund by the end of the month. That is for the refund pertaining to say April, 2007, the assessee files the statement on 7<sup>th</sup> May, 2007 the AC is required to give refund by 6<sup>th</sup> August, 2007. However if there is delay in verification he is required to give 80% refund by 30<sup>th</sup> May, 2007. When does he take this decision on delay? Apparently by the 29<sup>th</sup> May, 2007!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead of giving the details that the assessee is required to give, it would have been better if a form had been prescribed like they have done for refunds under Rule 5.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And how is the refund going to be given? Should not the facility of crediting it directly to the bank account of the assessee be adopted?</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=30&filename=notification/excise/2007/exnt07_25.htm">Notification No. 25/2007 – C. E. (N.T.), Dated April 25, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exchange rates announced for imported goods and export goods</b></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=24&filename=notification/custom/2007/cnt07_032.htm">Notification Nos. <u>32/2007</u></a> <u></u><b><u>and </u></b><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2007/cnt07_033.htm" target="_blank">33/2007-Cus., (N.T.), Dated April 25, 2007</a></u> fix the exchange rates for imports and exports respectively with effect from 1<sup>st</sup>May, 2007. Notifications 23 and 24/2007-NT-Customs, dated the 26<sup>th</sup> March, 2007 are superseded.</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=24&filename=notification/custom/2007/cnt07_032.htm">Notification Nos. 32</a> <strong>&</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2007/cnt07_033.htm">33/2007-Cus. (N.T.), Dated April 25, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>EOU – rate of duty – Supreme Court order – there was no need for remand at all</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we are reporting a Supreme Court judgment relating to clearances made by an EOU in DTA against foreign exchange. The assessee paid duty on Texturised Polyester Yarn at the rate of 30% (equivalent to domestic excise duty) and the department argued that the assessee has to pay full aggregate duties of Customs ( BCD, CVD etc,). The Supreme Court ruled that the duty liability is as per proviso to Section 3 read with Notification 2/95 CE. Notification 2/95 CE during the material period exempted duty in excess of the amount calculated at the rate of fifty per cent of each of the duties of customs, which would be leviable under section 12 of the Customs Act <strong><font color="#FF0000">(OR under any other law for the time being in force from 16.9.99)</font></strong>read with any other notification for the time being in force issued under sub-section (1) of section 25 of the said Customs Act on the like goods produced or manufactured outside India if imported into India.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
In the Fabworthcase, it was held that entire duty in excess of 50% of BCD was exempted under 2/95, though as per section 3, the levy is aggregate of all customs duties. This resulted in adding " under any other law for the time being in force” later in 2/95<br>
<br>
So 50% of 35% BCD on texturised yarn will be 17.5% . Since the domestic excise duty was 30% and the duty liability under 2/95 shall not be less than 30%, the assessee had paid 30% correctly. Had this been brought to the notice of their Lordships, may be the assessee could have avoided the remand. </font></p>
<p align="justify"></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5391">Breaking News</a></u></b> for more details.</font></p>
<p align=justify><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Can Service Tax on GTA be paid from your excise cenvat credit? </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, <b>DDT</b> asked this question. In <b><u>DDT 342 - 17 04 2006<U1:P></U1:P><U2:P></U2:P>,</u></b>the issue was explained in detail. We had also carried an article <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3916" target="_blank">Output service - does deletion of explanation in Rule 2(p) changes the intention of the Rule? </a></u></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had opined that it is permissible. Now the CESTAT has confirmed this view. So you can pay this tax from your credit account, which means, you need not pay any tax at all. In effect, a manufacturer paying excise duty and taking cenvat credit will not be paying any tax on GTA.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5390">Breaking News</a></u></b> for more details.</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Unauthorised Buildings – No Service Tax? </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Service Tax law,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">91a) “residential complex” means any complex comprising of— </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) a building or buildings, having more than twelve residential units; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) a common area; and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">located within a premises and the <b>layout of</b> <b>such premises is approved by an authority under any law</b> for the time being in force</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So if the layout is not approved, you don’t need to pay Service Tax? Please let us know your views. We have some interesting information, which we will tell you on Monday.</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 Weekend. </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"> <u><a href="vijaywrite@taxindiaonline.com%20">vijaywrite@taxindiaonline.com</a></u> </font></p>
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