Today is Central Excise Day

By Vijay Kumar

THERE will be full page advertisements in national dailies and meetings in Commissionerates to celebrate the DAY declaring a re-dedication to serve this country.

DDT greets all the Central Excise officers and their families and wishes them all the best always. On this occasion, a serving officer who obviously wanted to remain anonymous sent us a few jokes on the department. When DDT told him that it may not be nice to spoil the birthday party, he said, "We are mature enough to laugh at ourselves". So have a good laugh and a hilarious excise day.

EXCISE DUTY ON DRUGS AND MEDICINES - abatement increased

In yesterday's DDT we carried the Board clarification that 35% abatement was justified and we had asked a question, What about the margin to the manufacturer? Is he supposed to be a charity organisation? We are happy to report that the Government has now increased the abatement to 40% instead of 35%, but the Board seems to be shy of publishing its notifications. Board is working overtime to see that notifications are not available to the public. A notification should be effective only when it is made known to the public and the Board is now bent upon hiding them from the public at least for a few days. All government websites are closed at 5 pm and any notification, of any level of importance will not be carried by the Government websites if it is issued after 5 pm and CBEC specialises in after-office-hours notifications, with the result that at least for a day, the public is denied access to the notification and its benefits, but the liabilities under the notification will visit them even if they had no access to the notification. It is really sad that in this e-age the Government is working hard to prevent information from reaching the targeted audiences.

Consignment wise payment of duty and scrutiny of returns - back

Why excise laws are subject to frequent tinkering?

The Central Excise Rules, 1944 were in action for over half a century and were more or less settled, when somebody in the Board had a bright idea that these rules had to be broken up into several pieces and confusion increased so that the assessees and the officers will not have peace of mind. So by Notification No. 9/2001-C.E. (N.T.), dated 1-3-2001, the Central Excise Rules, 2001 were notified to be effective from 1.7.2001. But these rules had a premature death, one day before birth on 30.6.2001, when the Central Excise (No. 2) Rules, 2001 were brought into force. These rules lasted less than a year when the Central Excise Rules, 2002 were brought in with effect from 1.3.2002. And these rules have undergone over a dozen amendments in the last three years, mostly to bring back the provisions the law makers forgot to include.

Somewhere down the line, the Government brought in a fortnightly and later a monthly payment of duty destroying the discipline in the industry of paying the duty before clearance. An assessee would never clear goods if he did not have enough money to pay the duty. Once he was allowed to pay duty on a monthly basis, problems started creeping in. Liquidity problems would prevent the assessee from being able to pay the whole month's duty at the end of the month and naturally there were defaults which worried the Government. There was a provision in the 2001 Rules to make defaulters pay on consignment basis and that too from PLA. Now the Government proposes to bring back the same provision.

The Government also proposes

1. to provide for scrutiny of the correctness of the duty paid by the assessee;

2. to require the assessees to make all records available to the officer when required;

3. to make available to department all records including trial balances(?) by assessees and dealers.

It has become a regular practice for the revenue to make the Finance Minister to announce all sorts of concessions and benefits and then slowly withdraw them by tactical amendments to the Rules. Why can't the department once for all decide its policy and act accordingly instead of this periodic bout of law tinkering? If you have any objection or comments on the proposed amendments, they may be sent to Neerav Kumar Mallick, Under Secretary (CX-6),CBEC, Department of Revenue, Ministry of Finance by post or by email to: neeravkr@nic.in by 21.3.2005. Not that they will be considered, for they appear to have made up their minds and now there is no going back.

Import of metal scrap - Board adds ICD Nagpur to the list

Import of metal scrap is allowed only through certain stations and this list is decided by DGFT and CBEC by separate Public Notices and Circulars. Recently DGFT had added ICD Nagpur to the list of eligible stations. In DDT 56, it was pointed out,

Shouldn't there be a co-ordination mechanism between Customs and DGFT? Notifications should be issued simultaneously or only one authority should be allowed to issue the notifications and clarifications and they should be deemed to be issued by both. No such hope. Now DGFT has come up with a new Public Notice to add ICD Nagpur to the list. This will become operational only when the CBEC also issues a circular which is sure to come within a few days. Till then? Why should two ministries issue the same order? That is how the Government works.

Exactly after a week of the DGFT Public Notice, the Board had come up with the circular adding ICD Nagpur to the list and all the while, it seems there was a container languishing in Nagpur!

CBEC CIRCULAR NO.10 /2005-Cus, Dated: February 22, 2005

Import of textiles - conditions

The DGFT imposes certain conditions for import of textile and textile articles:-

1. they shall not contain any of the hazardous dyes whose handling, production, carriage or use is prohibited by the Government of India;

2. the import consignments shall be accompanied by a preshipment certificate from a textile testing laboratory accredited to the National Accreditation Agency of the Country of Origin.

Notification No 26/2004-09, Dated: February 22, 2005