TIOL-DDT 2181
03.09.2013
Tuesday

IN a recent RAC meeting of Hyderabad Central Excise Zone, a Member asked the following question:

We are manufacturers of Injection Moulded Plastic Articles; we are loading the customers' moulds on our injection moulding machine to test the functioning of new moulds & its products for 8-12 hrs and we charge to the customers for the machine hours used for that purpose.

In this connection the following queries are raised:

i. For this mould trials on our machine, is service tax attracted?

ii. If so,under which service it can be classified?

iii. If we are liable to pay service tax, whether we can avail SSI exemption?

iv. Prior to mould trials, whether we/our customers have to file any intimation/declaration to Central Excise department regarding mould trials?

The Department replied:

Till 30.06.2012, there were more than 115 service categories which were liable to service tax. Any taxpayer to know whether his services were taxable had to refer to the definition of various services and decide whether tax is payable or not. However, w.e.f. 1st July 2012 the same has been done away with, as there are no specific taxable services there is a negative list of services on which no tax is applicable. Also there is a mega notification which provides a list of services which are specifically exempted from tax. In the present case, the services rendered are taxable. (before or after 1.7.2012 or both?)

Taxable service of aggregate value not exceeding ten lakh rupees in any financial year is exempt from the whole of the service tax liable thereon under section 66B of the said Financial Act as per Notification No.33/2012-Service Tax dated 20.06.2012.

If the customer is a manufacturer of moulds and sending the moulds without payment of duty for testing purpose, he has to intimate the jurisdictional Central Excise Officer under Rule 16C of Central Excise Rules, 2002. If the customer has purchased moulds from open market he need not file any intimation to the Central Excise Department.

Customs - Baggage Declaration Form Notified

THE CBEC has notified the Customs Baggage Declaration Regulations, 2013 to be effective from 01.01.2014.

All passengers who come to India are required to declare their accompanied baggage in Form I appended to the regulation.

The Form at the very top states 'Please see important information given below before filling this Form' but there is no information important or otherwise.

These regulations were made in exercise of the powers conferred by clause (a) of section 81 of the Customs Act, 1962, which states, "The Board may make regulations, - (a) providing for the manner of declaring the contents of any baggage;"

The present Customs Act came into existence in 1962 and we managed for the last 50 years without the regulation and a baggage declaration form - Or Did we? There is already a baggage declaration doing the rounds in the airports - is it illegal?

And should passengers bring these declaration forms with them or will the Customs provide the form?

The Form I is as given below:

Form I

INDIAN CUSTOMS DECLARATION FORM

(Please see important information given below before filling this Form)

1. Name of the Passenger…………….……………………………………………………………………………………………………………………

2. Passport Number ……………………………………………   3. Nationality ………………..………..

4. Date of Arrival ………………… (DD/MM/YYYY)      5. Flight No. ………………..………..

6. Number of Baggage …………………………………… 7. Country from where coming..………..

8. Countries visited in last six days ……………………………………………………………

9. Total value of dutiable goods being imported (Rs.) ……………………………………………..

10.; Are you bringing the following items into India? (please tick Yes or No)

Please report to Customs Officer at the Red Channel counter in case answer to any of the above question (not questions) is ‘Yes'.

Signature of Passenger ………………

Notification No. 90/2013-Cus (NT), Dated: August 29, 2013

Anti-Dumping Duty on DVD-R and DVD-RW - Resurrection Again

GOVERNMENT had imposed anti dumping duty on imports of Digital Versatile Discs-Recordable (DVD-R and DVD-RW) originating in or exported from China PR, Hong Kong and Chinese Taipei by Notification No. 8/2009-Customs, dated the 22nd January, 2009 with effect from 23.07.2008 and this notification expired with effect from 23.07.2013.

Now, the Government has again done the resurrection trick. It has extended the life of the notification till 22.07.2014 - more than a month after its official death.

Why can't they keep track of their sunset notifications? Resurrecting dead notifications has become an incorrigible habit with the Board in spite of the Board's own instructions that such resurrection is not valid! Is the Board God?

Notification No. 19/ 2013-Cus.,(ADD), Dated: August 29, 2013

Safeguard Duty on Hot Rolled Flat Products of Stainless Steel

GOVERNMENT has imposed final safeguard duty at the rate of twenty per cent ad valorem on all imports of Hot Rolled Flat Products of Stainless Steel - 304 grade (upto a maximum width of 1605 mm), from the People's Republic of China, for the period of 200 days starting from the 4th January 2013 to 22nd July 2013 (both days inclusive).

The Provisional safeguard duty was imposed by Notification No. 1/2013-Cus., (SG), dated 04.01.2013.

Notification No. 02 / 2013-Customs (SG), Dated: August 29, 2013

Tariff Values of all items except areca nuts changed - Slight Reduction for Gold and Silver

THE Tariff values as on 29.08.2013 and with effect from 30.08.2013 are as under:

Table 1

Table 2

Table 3

The Tariff Values were changedon 29.8.2013 and the next day - on 30.8.2013, they have again changed them. The latest notification is dated 30.8.2013, but was made available only on 2.9.2013. What will be the fate of imports during the previous three days?

Notification No. 93/2013-Cus (NT), Dated: August 30, 2013

Remission claim rejected on ground that ‘assessee had not taken proper care for fire accident' and consequently demand confirmed - Matter remanded

THE remission application filed by the assessee under Rule 21 of the CER, 2002 was rejected by the CCE, Thane-I. Consequently, duty demand on the goods lost in fire was confirmed and the lower appellate authority too upheld the demand.

The appellant is before the CESTAT against both the orders.

It is submitted that the rejection of remission application was without affording the appellant an opportunity of being heard and hence it is in gross violation of the principles of natural justice.

The Bench observed -

"5. The impugned order is only an intimation to the appellant on behalf of the Commissioner that their claim of remission of duty has been rejected that you have not taken proper care for fire accident but no opportunity of hearing was given to the appellant. Therefore, I hold that the impugned order is in gross violation of principles of natural justice. Same is set aside and matter is remanded to the ld. Commissioner for fresh consideration of the issue with a direction to decide the issue afresh after giving a reasonable opportunity to the appellant to present their case. Appeal is disposed of in the above terms.

6. Appeal no. E/1951/12 is arising consequent to the order passed in Appeal E/1390/11 therefore it is held that the impugned order is pre-mature. Accordingly, impugned order is set aside and the matter is remanded back to the Adjudicating authority to decide the issue after decision in the Remission application filed by the appellant. Stay application as well as Appeal are disposed of in the above terms."

Now, the remission application would hang fire.

See 2013-TIOL-1305-CESTAT-MUM

344 Group A Posts Vacant in CBEC

344 Group A posts in the main stream are lying vacant in the CBEC. This is out of a sanctioned strength of 1293 as on 1.7.2013. In July, CBEC had promoted 44 officers and that still leaves a solid vacancy position of 300.

They are talking of cadre review under which a few thousands of posts are to be filled up. When they can't fill 300 vacancies, will they be able to fill up 3000 posts?

[Vacancy position as given in CBEC's DGHRD report on vacancy position as on 1.7.2013]

Jurisprudentiol - Wednesday's cases

Central Excise

CENVAT -A buyer can take steps which are in their control and he cannot be expected to verify records of the supplier's broker to check whether in fact supplier has paid duty on goods supplied by him or not - as long as bona fide nature of consignee transaction is not doubted, credit should not be denied - Revenue appeals rejected: CESTAT

IT is not only possible but impractical also for an assessee to further check the records maintained by the first stage dealer and to verify correctness of the same. It is sufficient if the assessee buys the goods from first stage dealer whose status he has checked and verified. There is no dispute in the present case that M/s. M K Steels was registered as a dealer with the Revenue and the invoices issued by him reflected his registration number.

Income Tax

Whether depreciation is allowable even if machinery is not put to use due to paucity of raw materials - YES: HC

THE issues before the Bench are - Whether depreciation can be claimed when business is a going concern and the machinery could not be put to use due to raw material paucity and Whether the word "used" in Section 32 should be understood in a wider sense so as to embrace passive as well as active use. And the verdict goes against the Revenue.

Service Tax

GTA Service - CENVAT Credit can be used to pay Service Tax by recipient of service: HC

THE assessee is engaged in manufacture of yarn of different kinds. The assessee holds Service Tax Registration for the Service Goods Transport Agency ("GTA"). During the period between 1.1.2005 and 30.9.2005, the assessee had paid the service tax due on the GTA service by utilizing the CENVAT Credit availed on inputs and capital goods. The adjudicating authority viewed that such adjustment of the CENVAT Credit towards the liability on Service tax was contrary to the Rule. It was held that the CENVAT Credit could be utilised only in respect of "input service" as per definition of 2(l) of CENVAT Credit Rules, 2004. Thus, utilisation of CENVAT Credit for payment of service tax due was improper and consequently show cause notice was issued, proposing to demand service tax on GTA under Section 73 of Chapter V of Finance Act, 1994 along with interest under Section 75 of the Finance Act, apart from proposing levy of penalty under Section 76 of the Act.

See our Columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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