FEBRUARY 21, 2015

By Rishabh Kumar Sawansukha

EACH issue has been discussed in 5 parts

1. Issue

2. Industry Sector involved

3. Tax Involved

4. Genesis of the issue

5. Suggestions

SERIAL NO. 1

1. Issue

Integration and Rationalisation of CENVAT Credit scheme

2. Industry/sector involved

Manufacturing/ Services

3. Tax involved

Central Excise & Service Tax- Cenvat

4. Genesis of the issue

Negative Service tax regime was introduced since July 2012 by bringing all services under service tax regime except negative and exempted one. However restrictions, exceptions and limitations on availability of input tax credit still continues. This creates an inequitable situation whereby the taxation of services is universal while the credit for the tax paid on input services used in business by Manufacturer & Service Tax provider continues to be restricted. The following instances exemplify the iniquitous approach being adopted by the Government:-

(a) Restrictions on availment of cenvat credit on services related to civil construction or services which are mandatory for business.

The definition of 'input service' places restrictions on availment of cenvat credit on certain services which inter-alia include services related to civil construction, services related to motor vehicles i.e. cab services, services which are used for consumption of any employee. Further, with effect from 1 April, 2011, the definition specifically omitted input services used in 'activities relating to business'. This seemingly seeks to restrict the ambit of Cenvat credit and also leads to ambiguities in interpretation of law.

(b) Cascading of Service Tax for Brand Owners when Manufacture is by Job-Workers.

CENVAT credit pertaining to inputs and capital goods is available to the assessee irrespective of whether manufacture is in-house or at job worker premises whereas the benefit of service tax credit is available only if the manufacture is at the assessee's own unit. This inequity dilutes the cost competitiveness of assessees who own brands and use job-workers exclusively for manufacture of goods - more so since, the scope of the service tax has been expanded following the introduction of 'negative list' based approach to Service Tax.

5. Suggestions

In order to ensure that the CENVAT Credit scheme meets its objectives it is important that unnecessary qualifications/categorizations like 'input', 'input service' and 'capital goods' be done away with and all input side tax costs in relation to business activity should be allowed as credit.

Specifically, amendment should be made in the definition of "input service" to allow credit when the immovable property is used for manufacture of excisable goods or for provision of taxable services. The credit should be denied only in cases where the immovable property is used for sale or for non-taxable purposes.

It is further suggested that the CENVAT Credit Rules be amended to provide a mechanism that enables availment and distribution of credit of service tax by brand owners to job-workers. This will motivate manufacturing sector who relies upon job-work to obtain the economies of scale and competitiveness.

It may also be mentioned that following his announcement in his budget speech, the Finance Minister had last year set up a Study Team to examine the possibility of a common tax code for service tax and central excise. The Study Team under Mr M K Gupta had interacted with the trade and industry and cenvat credit scheme was one of the items on which FICCI had given certain suggestions for its rationalization. It is requested that the Report of the Study Team should be placed in public domain and its recommendations considered for implementation.

SERIAL NO. 2

1. Issue

Strict timelines to be adhered for finalization of audit and adjudication

2. Industry/sector involved

All sectors

3. Tax involved

Customs, Central Excise, Service Tax

4. Genesis of the issue

At present, no time limit is prescribed under the law for adjudication of the show cause notices issued by the department. As a result, there are certain cases, where the show cause notices are not adjudicated by the authorities for a number of years. This practice is more common where the show cause notices are issued pursuant to audit objection raised by CERA. These show-cause notices are transferred to call books and not adjudicated for a long period of time.

Similarly, the refund proceedings are often delayed for an indefinite period of time, sometimes by requiring vast amounts of information / documentation from the taxpayer. While the CBEC has sought to address this squarely, there are many instances where implementation of these guidelines at the ground level, has been lacking.

As a result, taxpayers are put to undue hardship due to continued delay in adjudication proceedings. Therefore, at the adjudication stage itself, matters take 1 to 2 years to get finalized.In fact, refund cases at times take a longer period of 2 to 4 years to attain finality at adjudication level.

This creates an uncertainty for the assessee as a number of business decisions are kept on hold due to lack of clarity on the issues for which the dispute is raised by the department vide issuance of show cause notice.

5. Suggestions

++ Statutory timelines should be introduced for finalization of a matter and failure to adhere to these timelines should attract adverse consequences for the Department.

++ The current provisions of not more than 3 adjournments to be sought for by the taxpayer at the initial adjudication level (post which the matter could be decided "ex-parte") could be continued to ensure that there is no protraction of the adjudication by the taxpayer.

++ It should further be ensured that SCNs questioning eligibility for refunds are issued within a period of three months from the date of submission of a complete refund application so as to ensure timely disbursement of refund amounts. Further to the same if SCN is not issued within three months of filing the claim, 50 percent of the refund amount should be sanctioned. Further, if SCN is not issued within six months of filing the claim, the entire 100 percent of the refund amount ought to be sanctioned with applicable interest.

++ It is absolutely necessary that all the processes involved in adjudication are captured online and are accessible to the public at large. The data capture should start from the stage of issue of show-cause notice, the date on which a reply has been furnished by the assessee, the date of personal hearing, the date of issuing the adjudication order, the stages in the first appeal, second appeal etc. An important field of data capture should be the name of the officer designated to adjudicate that show-cause notice. In case the officer gets transferred, the system should capture the name of the new officer to whom the case has been assigned along with the date of such assignment. SMS functionality to be provided for the litigants to keep a track of all hearings. Apart from enabling monitoring the progress of adjudication, such a system should also enable evaluation of the quality of orders passed by each officer since the system would record the outcome of appeal if any filed against the said order. Such a system would enable the department to assess the judiciousness of each adjudicating officer at any point of time in his career. In the long run it is expected that such an exercise would help improve the quality of decision making by the officers.

SERIAL NO. 3

1. Issue

Valuation Rules for clearance of goods for captive consumption by Job-worker to Principal Manufacturer

2. Industry/sector involved

Manufacturing

3. Tax involved

Central Excise

4. Genesis of the issue

(a) Presently there is no specific valuation rule for clearance of goods manufactured by a job worker which are used by the principal manufacturer for captive consumption. Normally such goods manufactured by job worker for captive consumption of the manufacturer are cleared based on cost of raw material + packing material+ other inputs supplied by the principal + the conversion charges paid by the manufacturer to job worker. The conversion charges included in the cost also includes the profit margin of the job worker. The basis of computation of assessable value on cost of material + conversion charges is based on the Supreme Court's decision in the case of Ujjagar Prints. Recently certain Commissionerates have objected to this basis of clearance and raised show cause notices stating that Rule 8 should be applied even in such kind of situations and accordingly, the Job-Worker should pay the excise duty on the assessable value arrived on the basis of cost of raw material + packing material+ other inputs supplied by the principal + the conversion charges paid by the manufacturer to job worker + 10% margin.

The basis of calculation of value proposed by the excise officials results in unwarranted addition of 10% towards profit margin as the profit margin of the said job worker who is manufacturer of these goods already stands included in the conversion charges.

(b)As per Rule 8 of the Cenvat Excise Rules, the goods for captive consumption are to be cleared on cost of production + 10% profit margin. The computation of cost of production is based on the actual cost sheet which is prepared at the year end and accordingly the clearances have to be made on provisional basis on estimated cost of production during the year. The cost normally varies from month to month in view of changes in raw material / packing material cost, cost of various consumables like diesel, electricity, etc. This variation in cost could be upward or downward depending on the marketing conditions of the various inputs.

It may be appreciated that in case the estimated cost of production in any month increases, the assessee has to pay differential duty for the previous period with interest and start paying duty on revised estimated cost of production in future. If at a later date due to reduction of cost of raw/packing materials, the cost of production goes down, there is no provision for adjustment of excise duty paid in the past especially where the goods manufactured for captive consumption are sent to excise exempted areas like Himachal, Northeast etc. In such cases the excess excise duty paid in the past becomes an additional cost as no credit for the same is available at the other site of the manufacturer.

5. Suggestions

(a) It is suggested that in order to avoid litigation either a clarification may be issued for valuation of goods cleared by job worker for captive consumption clarifying that the value should be cost of goods + conversion charges which includes profit margin of the job worker or a specific Rule may be inserted in the valuation Rules for such cases.

(b) In order to simplify the process the assessee may be permitted to clear the goods for captive consumption on provisional basis based on the actual cost sheet of the last year and any adjustment for difference in actual cost of production at the yearend vis a vis the rates at which the goods were cleared during the year should be allowed to be adjusted within 3 months of the close of the year. In case the actual cost is more than the cost at which the goods are cleared provisionally during the year the assessee may be permitted to pay the differential duty within 3 months at the close of the year without any interest and if the duty is not paid within 3 months, the assessee should be asked to pay interest from the due date of payment of excise duty of each month.

In cases where actual cost at year end is less than the rate at which the duty was paid during the year, and the assessee has not claimed the credit of such duty as the consignee was in excise exempt area, the assessee may be permitted to claim refund based on the certificate obtained from the consignee that no credit for the duty was availed by them. This certificate may also be required to be authenticated by the excise authorities of the consignee. This process will reduce the complexity of change of cost of production on monthly basis and will also ensure that the proper duty is paid to the department and hence will not lead to any loss of revenue to the department. We may add that this process suggested by the industry is somewhat similar to the present process of cenvat credit rules 6(3A).

SERIAL NO. 4

1. Issue

Interpretation of the term 'Food Stuff' used in Notification No. 25/2012-ST dated 20.6.2012 in connection with Goods Transport Agency Services

2. Industry/sector involved

Manufacturing -Food stuff

3. Tax involved

Service Tax

4. Genesis of the issue

Vide Union budget 2012, an amendment was made in the Notification No. 25/2012-ST dated 20.6.2012 to provide the exemption from service tax on GTA service used for transportation of food stuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages.

However, the expression 'food stuff' has not been defined in the Notification. A number of question have arisen in the mind of the tax payers as to whether the goods manufactured or traded by them such as Noodles, Biscuits, Health Drink Powders, Ready to cook food preparations etc would come within the scope of the expression 'food stuff' to be covered by the exemption.

Though the above amendment has been made for the larger interest of the society to reduce the service tax burden on transportation of certain commodities, in the absence of any definition of the expression 'foodstuff', the same is going to lead ongoing litigation with the departmental officers due to different possible interpretations and contrary judgments on the same under different tax laws.At several places, the audit objections have already been raised by the department due to difference in the view taken by the assessee and the service tax authorities.

5. Suggestions

An appropriate amendment be made in the notification no. 25/2012 - ST defining the expression 'food stuff' in an exhaustive manner or align the same with the HSN codes or issue some clarification defining the scope of the above expression.

SERIAL NO. 5

1. Issue

Denial of Cenvat credit of Sugar Cess paid on Sugar purchased by Industrial Consumers

2. Industry/sector involved

Manufacturing - Food and beverages

3. Tax involved

Central Excise - CENVAT

4. Genesis of the issue

Food Industry uses Sugar as a principal raw material and the denial of credit affects the entire industrial consumption of approximately 27% of total sugar consumption.

Sugar is presently subject matter of multiple tax levies i.e. enhanced basic excise duty (including additional duty of excise imposed in the past), Sugar Cess and VAT. Sugar Cess is being levied at Rs. 24 per quintal.

Sugar Cess is not creditable to manufacturers of food articles and beverages and therefore, levy of Sugar Cess leads to cascading effect of taxes and higher input costs. (Industries in areas such as Biscuits, Cakes, Chocolates,Sugar Boiled Confectionary Juice based Drinks and Carbonated Beverages, Malted Milk Foods)Any non-creditable taxes are against the stated present and proposed indirect tax policy besides causing a cascading effect on tax costs and distorting the economic environment.

Given that sugar represents significant manufacturing cost for food and beverage industry, higher sugar cost has a significant impact on prices of these commodities, thereby fuelling inflation.

It has been recommended in the report of Thirteenth Finance Commission that share of special purpose cesses (such as Sugar Cess) in the gross tax revenues of the Central Government should be reduced since the proceeds of such cesses is not available for sharing with the States.

5. Different views observed in application of law/regulation etc., if any

It is pertinent to understand that Education Cess (Central Levy) levied on Sugar is Cenvatable and also the State VAT levied by States like AP, Bihar, Orissa and Karnataka (1/8/2013) is also Vatable. Hence it's a paradox if Sugar Cess alone is not Cenvatable for industrial purposes.

6. Suggestions

Allow CENVAT Credit of Sugar Cess against output excise duty levied under Central Excise Act, 1944 by way of an amendment to Cenvat Credit Rules

Or

Exempt Sugar Cess when sold to industrial consumers by issuing an exemption notification to this effect

SERIAL NO. 6

1. Issue

Levy of service tax on facilities provided by employer to employees during the course of employment

2. Industry/sector involved

Manufacturing and other sectors

3. Tax involved

Service Tax

4. Genesis of the issue

In the year 2012, at the time of introduction of negative list regime under the Finance Act, 1994, the services provided by an employee to the employer during the course of employment were specifically excluded from the definition of the service under Section 65 B (44) of the Finance Act, 1994. However, no similar exclusion was made for service provided by employer to an employee.

During the course of employment, a number of facilities are provided by an employer to the employee. The employer might be having a canteen in his factory / office premises for which a fixed amount may be recovered from the employees. Many employers also charge their employees towards providing transportation facility from their home to work place. Like the above, there may be many other amounts collected by the employers from their employees for various facilities such as telephone etc.

Going by the strict definition of the term 'service', any amount recovered by the employer from the employee for the above said facilities would attract service tax in the hands of the employer.

All these facilities provided by the employers to the employees during the course of employment are nothing but the perquisites which are the part of the salary. There is no activity carried out by the employer for the employee with an intention to receive any consideration. Further, there is no intention between the parties to provide/ receive any service. Moreover, the appropriate service tax is charged by the service provider providing all these facilities for which a reimbursement is claimed by the employer from the employees.

Therefore, logically there should not be any service tax liability on such amounts recovered by the employer from the employees. However, in the absence of any specific exclusion, the same are liable to tax in the hands of employer.

This is posing lot of administration & compliance issue for the entire industry. Raising the service tax invoices, maintaining records for all such petty amounts recovered/ deducted from the employee's salary is really a big hassle.

5. Different views observed in application of law/regulation etc., if any

The Draft circular dated 27.7.2012 issued by the Board provides that the activities carried out by the employers for the employees, for a consideration, fall within the definition of "service" and are liable to be taxed unless specified in the Negative List or otherwise exempted.

6. Suggestions

Suitable amendment be made in the definition of 'service' under Section 65 B(44) of the Finance Act, 1994 to exclude the services provided by the employer to the employee.

Alternatively, a simple procedure may be prescribed for collection & payment of service tax on such amounts recovered by the employer from the employees.

SERIAL NO. 7

1. Issue

Introduction of limitation period of 6 Months from the date of Invoice to avail Cenvat Credit on inputs and input services in the Union Budget 2014 vide Notification No. 21/2014-CE(N.T.) dated 11.07.2014. This limitation need to be removed allowing Industry to claim genuine CENVAT credit any time.

2. Industry/sector involved

Manufacturing/Services

3. Tax involved

Excise Duty and Service Tax

4. Genesis of the issue

Cenvat Credit Rules, 2004 as introduced vide Notification No. 23/2004-C.E dated 10.09.2004 did not provide for any period of limitation (time limit) for the purpose of availment of Cenvat Credit on inputs and input services. Hence, in the absence of any embargo on time period for availment of Cenvat Credit, manufacturers and service providers were under liberty to avail the Cenvat Credit anytime post receipt of goods in the factory premises and consumption of input services, as per their convenience. In other words, availment of Cenvat Credit could be deferred for any period of time without any restriction.

The above legal position resulted in litigation between the manufactures/service providers and Department. Divergent views were taken by the Appellate forums on the above issue. Even in the absence of any embargo in the Rules for availment of Cenvat Credit, the Appellate Tribunals started taking a consistent view that although the rules do not lay down any time limit, it is settled position that reasonable time limit has to be read into law. Recently, the Mumbai Bench of the Hon'ble CESTAT in case of Shayona Pulp Conversion Mills Private Limited vs Commissioner of Central Excise Aurangabad [Appeal no E / 44 / 2009 CESTAT Mumbai] reported in TS-241-TRIBUNAL-2014-EXC reiterated the aforesaid legal position and held that normal period of one year would be applicable to avail Cenvat Credit, as in case of duty demand and refund claims.

Thus, the aforesaid decision took away the unfettered discretion available to the manufacturers and service providers under Rules with regards to the time limit within which Cenvat Credit could be availed.

Subsequent to the aforesaid decision of the CESTAT, the Government of India vide Notification No. 21/2014-CE(N.T.) dated 11.07.2014 has amended the provisions of Rule 4 of the Cenvat Credit Rules to provide for explicit time limitation of 6 months for availment of Cenvat Credit. However, while providing for such time limit, the Government has reduced the period of 1 year considered by the CESTAT as 'reasonable' to 6 months.

Logically,the Government ought to have at least provided for a reasonable period of one year, at par with the time period provided for the issuance of show cause cum demand notices and filing of refund claims.

The aforesaid short period of limitation of 6 month swill pose lot of administration & compliance issues for the entire industry and ultimately, result in denial of huge credits to the manufacturers/service providers, thereby enlarging the cascading effect of taxes, which is completely contrary to the object of the Cenvat Credit scheme.

5. Suggestions

Suitable amendment ought to be made in the aforesaid Notification to substitute the period of limitation of 'six months' with 'one year', in order to avoid unwarranted denial of Cenvat Credit of duly paid excise duty and service tax to the Industry, which would ultimately result in enlarging the cascading effect of taxes, which is against the object of the Cenvat Credit Scheme.

SERIAL NO. 8

1. Issue

Mandatory pre-deposit in cash for admission of appeal in Central Excise / Customs & Service tax need to have an option to submit Bank Guarantee (BG)

2. Industry/sector involved

All

3. Tax involved

Central Excise, Service Tax, Customs

4. Genesis of the issue

All appeals will now have a proof of payment submitted for payment of pre-deposit @ 7.5% or 10% as the case may be and this pre-deposit will carry a mandatory interest @6% payable by government. Considering the increased litigation it is in the interest of both Government and Assessee to have an option of making this pre-deposit in the form of non-revocable Bank Guarantee. This way assesse will save cash and government will save on interest and banking sector will get benefited from BG business. However if assesse loses the case finally, he will be asked to pay interest on the total demand, otherwise in case pre-deposit has been opted by him, interest will apply only on differential demand after appropriating pre-deposit.

5. Suggestion

Provision of paying mandatory pre-deposit through BG should be an option to be provided under the new Section 35-F of Central excise act, 1944 and pari materia sections under Customs and Service tax should also be provided.

SERIAL NO. 9

1. Issue

Levy of Additional Duty of Excise @ 5% on Aerated Waters having added Sugar, Sweetener or Flavor under Sevanth Schedule of Finance Act 2005 (amended by clause 110 of Finance Act 2014 read with Ninth Schedule). Considering them hazardous goods like Tobacco and Pan Masala without any basis is detrimental to whole Industry.

2. Industry/sector involved

Non-Alcoholic Beverage Industry

3. Tax involved

Central Excise

4. Genesis of the issue

An Additional Duty of Excise @5% on Aerated Waters with added Sugar or any other sweetening flavor effective from 11 July 2014 .This Additional Duty of Excise has been levied via a separate enactment which was initially introduced in Section 85 of Finance Act, 2005 for Pan Masala and certain notified tobacco products.

It is pertinent to adduce that the amendment has been made with a larger focus than a mere rate change as the industry viewed it initially .The Basic Excise Duty rates could have been amended to 16% or 17% but the classification change adopted for Additional excise Duty levy only for aerated beverage Industry appears to be an isolated approach. Classifying aerated beverages with added Sugar in category of proclaimed hazardous products like Tobacco and Pan masala is a great injustice and insensitive approach to the fact that non-alcoholic beverage do not cause any externalities.

Indian Council of Medical research has observed that per capital consumption of sweetened beverage in India is too low and insignificant to warrant any health concern. Report issued by Oxford Economics, International Tax & Investment Centre in February 2013 has said that Non Alcoholic Beverage neither cause any externalities nor a luxury goods.

Drinks classified under central excise tariff 2202 10 also includes "Lemonades" and which provide instant source of energy and hydration needs of masses with a hygienic and affordable drink. Targeting this segment for wrong reasons will not only create adversaries for Industry but also allow un-organized and spurious drink manufacturer to fill the vacuum . It is important to note that adverse impact on human health may be caused by substandard and poor quality products flooded in market.

This additional duty tent amount to 42% increase in the current duty structure and not integrated with the other duties. This industry being price sensitive and demand is elastic, it will restrict the choice of quality products for the consumer and at the same time will not gain extra revenue for government if overall volume drop because of sub-standard products being encouraged to take advantage of price elasticity.

5. Suggestion

Remove Non Alcoholic Aerated Beverages from the 7th Schedule of Finance Act 2005 and any change in the duty rate should be brought by amending Central Excise Tariff.

SERIAL NO. 10

1. Issue

Notification to bring few excisable goods of Tariff Heading 2202 of Central Excise Tariff Act under Section 4A of the Central Excise Act, already covered by the provisions of the Legal Metrology Act, 2009.

2. Industry/sector involved

Non-Alcoholic Beverage Industry

3. Tax involved

Central Excise

4. Genesis of the issue

Central Excise Tariff Sub Heading 2202 02 interalia covers various products viz. Waters, Mineral Waters, Aerated Waters and other non-alcoholic beverages containing added sugar or other sweetening matter or not, flavoured or not.

It is matter of common knowledge that all these beverages are sold in the market to the ultimate consumers on the basis of Retail Sale Price (RSP) declared on the label of these products since it is mandatory under the provisions of the provisions of the Legal Metrology Act, 2009 to declare RSP on the packages of all these products. However, it has been observed that Central Government has not yet notified some of these products under the provisions of Section 4A of the Central Excise Act to make these products liable to Central Excise Duty on the basis of RSP declared on such products and hence, as a result, these unnotified products are still subject to Central Excise Duty on the basis of transaction value under Section 4 of the Central Excise Act. For ease of reference, tariff and description such unnotified products are given as under:

Reasons for the representation by Industry are as under:

Section 4 Valuation is prone to litigation - It is also matter of common knowledge that valuation of excisable goods liable to Central Excise Duty under Section 4 on the basis of 'transaction value' is always prone to litigation hovering around inclusion/exclusion of certain items while arriving at the assessable value.

Hardship for Industry to pay duty when a particular product is manufactured at one factory only and the same is being distributed/sold in the rest of the Country through its depots and factories - It is pertinent to highlight that in case where a manufacturer is having multiple locations presence across PAN India and a particular product is manufactured at only one of its factories and distributed for selling for rest of the country, it becomes very daunting and cumbersome task for the Industry to calculate 'transaction value' of these products to pay duty under Section 4 when such goods are not sold at the factory gate, but are first cleared to depots and other factories of manufacturer and subsequent sold by the recipient depot/factory locations in their respective market territories. Hence, in such business model, it is not possible for the Industry to discharge Central Excise Duty on the basis of transaction value, since final sale price(transaction value) of goods cleared from factory would be known only once these goods are actually sold to the customers by the respective depot/factory locations, which at times may involve a time lag of 1-4 months whereas Central Excise Duty is required to be discharged on monthly basis. Hence, the Industry has to take recourse to provisional assessment of goods to enable it to discharge duty on monthly basis on provisional prices. The final assessment of duty entails production of bulky documentary evidences to the Department for scrutiny, which is in itself very burdensome task for both Revenue and Assessee, when goods are initially cleared from factory provisionally on account of non-availability of actual transaction value of goods and are finally sold from various depot/factory locations.

The aforesaid unwarranted litigation and data collating exercise could be easily avoided if all the products covered by Tariff Heading 2202 are notified by the Central Government under the provisions of the Section 4A of the Central Excise Act. MRP/RSP based assessment under Section 4A of the Act leads to ease of assessment of duty without any scope for litigation on account of valuation of goods since it enables Government to collect Central Excise Duty on the basis of maximum price declared on the product after allowing prescribed abatement on account of taxes, trade margins of distributors/retailers, etc.

Identical representation in past made by Industry - Further, it is also important to point out that beverages classifiable under Tariff Heading 2202 9020 were exempted from levy of Central Excise Duty by virtue of Central Excise Exemption Notification No. 3/2006, which was withdrawn in Union Budget 2011 vide Central Excise Notification No. 01/2011 dated 01.03.2011 and 02/2011 dated 01.03.2011. While withdrawing the exemption, the Government had omitted to notify these beverages under Section 4A of the Central Excise Act and as a result, Industry was required to discharge Central Excise Duty on the basis of transaction value under Section 4 inspite of the fact that these products are sold in the market to the ultimate consumers at MRP declared on these products and also duly covered by the provisions of the Legal Metrology Act, 2009.

Based on representations from industry/trade associations and Chambers of Commerce, the Government took due cognizance of the above anomaly and vide Central Excise Notification No. 11/2011-C.E.(N.T.) dated 24.03.2011, beverages classifiable under Tariff Heading 2202 9020 were notified under Section 4A of the Central Excise Act, with prescribed abatement of 35 %. The Government also issued clarification on the aforesaid change subsequent to the Budget vide Instruction D.O. F.No. B-1/3/2011-TRU, dated 25-3-2011.

5. Suggestion

Hence, in light of the above representations, it is humbly prayed that aforesaid anomaly in the valuation of products classificable under Tariff Heading 2202 be corrected at the earliest by notifying said products under the provisions of Section 4A of the Central Excise Act, by issuance of appropriate Notification to provide respite to the Industry grappling with unwarranted litigation on account of valuation of goods under Section 4.

(The author is National Head, Taxation, HCCB)