Export Duty on Steel Products – applicable for clearances to SEZ – Confusion continues
THE left hand not knowing what the right hand is doing is a hallmark of babudom .On 10.5.2008, the Government introduced export duty on several steel products. Immediately a doubt was raised whether the export duty is payable for clearances to SEZ. DDT asked a Chief Commissioner whether the issue was discussed in the conference of Chief Commissioners. The Chief Commissioner said, “what is there to discuss ?, we are clear that export duty is payable!”
A Commissioner issued a clarification that no such duty is payable. The CBEC and the Revenue Departments are SILENT.
In the meantime, the Commerce Ministry issued a Circular stating that, “While this Ministry has taken up this matter with DOR & Ministry of Law, you are requested to allow supply of steel products to SEZs on submission of a Bond and a Bank Guarantee in case the duty will be finally payable/chargeable.”
So, now the Commerce Ministry has introduced a bond and bank guarantee. Tax has to be collected by AUTHORITY OF LAW and not by bonds and bank Guarantees.
Based on the Commerce Ministry's Circular, the SEZ , Vizag has issued a Circular stipulating that:-
1. The SEZ Developers and Units are advised to submit an undertaking on Rs.100 /- Non-judicial Stamp Paper to the Specified Officer/Authorized Officer for clearance of the Steel procured by them for undertaking the authorised operations.
2. The Specified Officers and Authorized Officers of the SEZs are advised to obtain an Undertaking on Rs.100 /- Non-judicial Stamp Paper from the SEZ Developers and Units in respect of the export duty payment alongwith the interest if any leviable at a later stage and clear the steel procured by the SEZs Developers and Units for undertaking the authorized operations.
Now, the Customs officers posted in Vizag SEZ are in a dilemma. Should they follow the directions of the Development Commissioner and the Commerce Ministry's Circular and ask for a bond or follow the Revenue opinion that duty has to be collected or follow the benign Commissioner of Central Excise who has held that no duty is payable?
It's not even Catch 22; is there a Catch 33?
Why can't the CBEC issue an urgent clarification and put an end to the controversy? Should Government always look like an adversary?
Commerce Ministry's F. No. Dated 23rd May, 2008 and Vizag SEZ No.9 / SEZ /Misc/2008- Dated 02.06.2008