TIOL-DDT 2519
16 01 2015
Friday

THE avoidable delays on account of non-uniform Customs procedures adopted at some ports/Customs stations not only increase transaction cost and time of clearance but also prove to be major constraints in making Indian ports international transshipment hubs. Therefore, a Committee was set up by Ministry of Shipping for simplification of shipping related Customs procedures. The Committee has made, certain recommendations for implementation by Customs:

CBEC has examined the recommendations and Board has taken some decisions:

1. Henceforth the number of hard copies of IGM required to be submitted by shipping lines/steamer agents at a Customs House shall be restricted to 2 (two) only.

2. At present, the port clearance is given on the strength of a bond and a guarantee which are given each time a vessel enters. As a measure of simplification, Board has decided to give an option to the steamer agent to (a) give a continuity bond and (b) merge the guarantee with the continuity bond. This would reduce the number required documents from 2 (two) to1 (one)and periodicity (of submission) would also get reduced drastically.

3. Recognizing the need for reducing number of copies of SMTP, Board has decided that only 1 (one) copy of SMTP would be sufficient and Customs at ICD should not insist on more number of hard copies of SMTP (Sub Manifest Transhipment Permit).

4. With a view to boost inter-modal transportation of transshipped cargo and simply [perhaps what the Board meant is 'simplify'] procedure, Board has decided that henceforth no separate permission is required from jurisdictional Customs in case of change of mode of transshipment under the Goods Imported (Conditions of Transhipment) Regulations, 1995. However, the carrier is required to intimate the change to the jurisdictional Commissioner of Customs who will ensure the bond covers both modes of transport.

Board wants the Chief Commissioners to ensure that the decisions are complied with strictly by field formations.

CBEC Circular No. 02/2015-Cus., Dated: January 15, 2015

Customs - valuation of export goods when declared FOB is more than 150% of value declared in ARE-1

MUMBAI Customs Commissioner yesterday issued some very important instructions to his staff.

FOB more than 150% of value : If the FOB value declared in the shipping bill is found to be more than 150% of the value declared in ARE-1, the matter should be brought to the notice of Dy. / Asstt. Commissioner of Customs in charge of CFS from where the goods are being exported for further verification in this regard. Moreover in case of project exports wherever the FOB value is found to be more than 150% of ARE-1 value, value declared in the ARE-1 must be mentioned in the inspection/examination reports /comments in shipping bills.

ARE-1 not mentioned in Shipping Bill : Wherever ARE-1/ARE-2 is not declared in the shipping bill the officers shall not make any endorsement of shipment on such ARE1/ARE-2 produced subsequently, unless due procedure for amendment of such shipping bill has been followed.

Verification of availment of CENVAT credit : where ARE-1/ARE-2 is mentioned in the shipping bills, the dock officers should ensure that in inspection/examination reports /comments in shipping bills, it has to be compulsorily mentioned as to whether the following are availed:

1. CENVAT Credit;or

2. Notification 21/2004 - Central Excise (N.T) dated 06.09.2004 (Claim for rebate of duty paid on materials used in the manufacture or processing of finished export goods);or

3. Notification 43/2001 - Central Excise (N.T) dated 26.06.2001 (Removal of input material without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, for use in the manufacture or processing of finished export goods)

These measures are to facilitate the trade.

JN Custom House (NS IV) Standing Order No. 02/2015., Dated: January 15, 2015

SSI Notification and 3/2014-CE - a disconnect

IN a mail, we were informed of the following by a registered SSI unit.

1. They are engaged in the manufacture of Rail Joints for the Indian Railways.

2. Rails are supplied free of cost by Railways and without the cover of any duty paying documents.

3. The Notification in question is No. 3/2014-C.E., dated 3-2-2014 and it provides the following rate of duty -

Condition 49:

4. The assessee satisfies the condition mentioned against the said entry and, therefore, stake their claim for the same.

5. As mentioned, since they are a SSI unit and do not avail any CENVAT credit on inputs, they are not required to pay any CE duty for an aggregate clearance value of Rs.1.5 crores in terms of notification 8/2003-CE.

6. For computing this value of Rs.1.5 crores, the SSI unit takes into account the value as arrived in terms of the Explanation to the notification.

7. The department has objected to the same and resultantly the assessee has been asked to pay excise duty. It is the department's view that the "Explanation" would be applicable for computing the value only when the assessee 'pays' the duty of 12% Basic in terms of the amending notification 3/2014-CE and not otherwise.

8. Applying the provisions of section 4 of the CEA, 1944 read with rule 6 of the Valuation Rules, 2000, they are including the value of the rail in the value of the rail joints manufactured and cleared by the assessee. This has led to astronomical CE duty demand on the small-time assessee. Shutting down of business is the only option left.

9. In this Make in India era, there are hundreds of such small time rail joint manufacturers who would be saddled with crores of demands.

10. Unless the CBEC listens to their plea and carries out the necessary amendment in the SSI notification,doomsday is near.

There is also another issue with this. Sl No 30 of Notification No 5/2006 CE dated 01.03.2006 provided exemption from the value of Rails. This Notification was in force up to 16.3.2012.With effect from 17.03.2012, concessional rates of duty vide Notification Nos 3/2005-CE dated 24.2.2005, 3 to 6/2006-CE, all dated 1st March, 2006, 10/2006-CE dated 1.3.2006;2/2008-CE dated 1.3.2008;and 59/2008-CE dated 7.12.2008 - merged into a Single Notification No 12/2012 dated 17.03.2012. This new consolidated Notification has 344 entries and in the process of consolidation, some of the earlier entries were lost sight of. One such entry is Sl No 30 of Notification No 5/2006 CE. This has been rectified vide amending Notification No 3/2014 CE dated 03.02.2014 and the exclusion of value of rails has been restored for the above goods.

But, for the period from 17.03.2012 to 02.02.2014, there was no exemption because of a mistake by a babu and the department is demanding differential duty on value of rails during this period. Again astronomical sums from Small Scale Industries!

Perhaps, a section 11C notification would be in order.

Tariff Value of Gold, Silver and oils increased

THE Government has increased the Tariff value of Gold from 392 USD to 401 USD per 10 gms. The tariff value of Silver is also increased from 519 USD to 543 USD per kilogram.

Apart from the above, Tariff values of all oils have been hiked.

The Tariff values as on 31.12.2014 and with effect from 15.01.2015 are as under:

Notification No. 10/2015-Cus.(N.T.), Dated: January 15 2015

Customs - New Exchange Rates from Today

CBEC has notified new exchange rates for Imported Goods and for Export Goods with effect from 16 January 2015. The US Dollar is 62.30 rupees for imports and 61.30 rupees for exports.

The Exchange rates were last notified on 1st January 2015.

Notification No.09/2015 - Cus.,(N.T.), Dated: January 15, 2015

Jurisprudentiol-Monday's cases

Income Tax

Income tax - Whether benefit of deduction u/s 32AB can be extended to term loans taken against trucks and tankers - YES: HC   

THE issue before the bench is - Whether the benefit of the deduction u/s 32AB cannot be extended to term loans taken against trucks and tankers. And the verdict goes against the Revenue.

Customs

Cus - Export of non-basmati rice- Redemption fine imposable in lieu of confiscation is limited by the ceiling of market price of the confiscated goods - Tribunal could not have reduced the value declared and legalized a patent illegality - Appeal dismissed: High Court

THE appellant filed a shipping bill for the export of a consignment of 125.00 MT of "Indian Pusa 1121 Parboiled Rice", which was valued at Rs.67.82 lacs (FOB). When the customs department carried out an inspection and examination it was revealed that the goods were non-basmati rice and were not of the description contained in the shipping bill.

Central Excise

CENVAT - Although Steatite Ceramics, CTH 6804, are capital goods and appellants are entitled to take only 50% credit in first year, they have taken full credit - since they are entitled to balance credit in subsequent year, at the most, interest for intervening period is payable: CESTAT

THE appellant is a manufacturer of enamel, paints, thinner and varnish. They procured Steatite Ceramics, used in the manufacture of paints, and took CENVAT Credit of duty paid on these goods.

Until Monday with more DDT

Have a nice weekend.

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