Customs duty concession for manufacture of excisable goods – reduce the hassles
CBEC has received representations from trade and industry requesting for amendment to the procedure to avail Customs Duty Concessions under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.
(i) A manufacturer intending to avail of the benefit of an exemption notification, has to obtain a registration from the (Assistant / Deputy Commissioner of central excise) having jurisdiction over his factory. A manufacturer who manufactures excisable commodity (unless he is exempted from whole of excise duly) has to be registered with central excise authorities to take a registration again for this purpose is duplication of work and waste of time. Further, there is no time limit specified for giving the registration. Therefore, it is suggested to scrap this procedure as it does not serve any useful purpose.
(ii) A manufacturer who intends to import any goods for use in his factory at concessional rate of duty, shall make an application to this effect to the AC/DC indicating the estimated quantity and value of such goods to be imported, particulars of the notification applicable on such import and the port of import the application is required to be filed port wise - the material asked for import at a port cannot be received at any other port. Further, the manufacturer has to execute a bond under the Customs (Import Of Goods At Concessional Rate Of Duty For Manufacture Of Excisable Goods) Rule 1996, for difference of duty (normal rate of duty minus concessional rate of duty as per notification) and an annexure (iii), giving all the particulars of import consignment for each and every consignment. Though there is an option to file an application for a quarter indicating his estimated requirement, this procedure is also to be routed through the Superintendent's office, which creates duplication of work, causing delay in countersigning annexure (iii) by AC/DC and subsequently incurring demurrage on import consignment. Therefore, it is suggested that the certificate should be for annual consumption and the entire process should get completed at the range level. The verification of consumption of imported inputs, quantity reconciliation etc. should be done by the audit team which visits all units annually.
(iii) The manufacturer has to give information of the receipt of the imported goods in his factory, within two days of such receipt to the superintendent of central excise having jurisdiction over his factory. Assessee has to intimate receipt of all imports within 24 hrs to the excise authorities which is often impractical, maintain account indicating the quantity and value of goods imported, the quantity of imported goods consumed for the intended purpose, and the quantity remaining in stock, bill of entry wise and shall produce the said account as and when required by AC/DC. Traceability of input, bill of entry wise within the factory is tedious and impractical. Cost of compliance is very high as it increases the paper work and avoidable interaction with excise officials. Therefore, it is suggested that the intimation should be given to the excise office at the end of each month/quarter as shipments are arriving everyday and requires sending documents on a daily basis. Maintaining separate accounts is difficult, time consuming and adds to the costs. A simple declaration of end use should suffice.
The Board wants the field officers to examine the suggestions and give the views, stating whether such relaxation in the procedure may lead to any loss of revenue. A list of cases booked regarding the misuse of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules. 1996 should also be provided.
Board wants the field reports by 31.3.2008.
CBEC F.No.267/03/2008-CX-8 dated the 6th February 2008
North-East exemption – Exemption cannot be denied for depositing duty amounts in interest bearing accounts - Senior officials of the department are expected to interpret exemption notifications intended to further the developmental interest of a region in a more pragmatic and liberal way - CESTAT
As per Notification No.8/04-CE dated 21.01.04, excisable goods manufactured in North-Eastern states are exempted in a complicated procedure. The exempted duty has to be deposited in an escrow account and used for investment in the NE States.
A learned Central Excise Commissioner found fault with an assessee for depositing this amount in an interest bearing account and denied the entire exemption benefit to an assessee, demanding a duty of Rs. 50 Crores and imposing a penalty of Rs. 50 Crores.
The Kolkata bench of the CESTAT yesterday set aside this order of the Commissioner observing,
Senior officials of the department are expected to interpret exemption notifications intended to further the developmental interest of a region in a more pragmatic and liberal way.
Apparently, this Commissioner was against all proclaimed policies of the Government – He ensured that the exemption granted for developing industrialisation of the North Eastern States was frustrated; he ensured that funds for investment in these states were locked up in litigation; he ensured that the assessee is made to run from pillar to post to escape from his 100 Crore demand. Who are these revenue officers serving? Unfortunately many of the Revenue officers in the country are on a full time job of killing the industries which lay the golden eggs for them. The FM can try with a gamble. He can close down the department for one year – give the taxmen a one year paid holiday (pay them 10% more for not coming to office) – he will find that the Revenue has gone up by at least 40%.
Coming back to the case, the Tribunal observed that the Adjudicating Commissioner has taken a very mechanical view of the matter. This order was delivered by the Kolkata bench of the CESTAT yesterday and to create a record of sorts, we wanted to carry the order today. But though we have the text of the order with us, we are waiting for a certified copy and will bring you the full order in a couple of days.