CBEC has notified exchange rates for imports and exports, to be effective from May 1, 2011.

Notification No. 32/2011 - Cus., (NT), Dated: April 27, 2011

Establishing identity of CWG 2010 related imported goods for re-export - Board's Instructions

NOTIFICATION No.13/2010-Customs dated 19.02.2010 as amended by Notification No.9/2011-Customs dated 14.02.2011 stipulates that the goods imported for Common Wealth Games (CWG)-2010 should be exported within six months from the conclusion of the Games and identification of the goods at the time of export is a necessary condition in the said notification.

Board has taken note of the difficulties faced by the field formations in establishing identity of the goods imported for CWG-2010 Games since many of the imported items are reportedly generic in nature and do not bear any marks and numbers. Board examined the issue and clarifies that normally a certificate from the Joint Director General (Coordination) or Director (Coordination) or Chief Executive Officer of the Organizing Committee (CWG)-2010, duly supported by a reconciliation statement corroborating the goods with the import documents as well as the shipping Bill under which the goods are exported may be accepted as the proof of identity, if otherwise found in order. However, in cases where imported goods under the said notification have undergone a change in form while being used for the intended purpose and where the condition regarding proof of identity is not satisfied, the benefit of the exemption will not be available.

A similar dispensation as stipulated above may be accorded for goods imported under the exemption notification but on which the importer have chosen to pay duty on the goods either at the time of import or subsequently and have put in a claim for drawback under section 74 of Customs Act, 1962 at the time of re-export of the goods.

These instructions are issued only with respect to imports of CWG-2010 goods under the above mentioned notifications. Board desires that field formations have to be issued suitable instructions accordingly.

CBEC F. No. 528/16/2008-CUS (TU)., Dated: April 27, 2011

Power to issue Show Cause Notices in Customs - Board's Instructions

IN terms of the Hon'ble Supreme Court order in Civil Appeals Nos. 4294-4295 of 2002 along with C.A. Nos. 4603-4604 of 2005 = 2011-TIOL-20-SC-CUS, only such Customs officer who has been assigned the specific functions of assessment and re-assessment of duty in the jurisdictional area where the import concerned has been effected, by either the Board or the Commissioner of Customs, in terms of Section 2 (34) of the Act is competent to issue notice under section 28 of the Act.

The Supreme Court in its judgement has also observed that these judgements shall not preclude the revenue from initiating any proceedings against the importers for recovery of duty and other charges payable in respect of subject goods, if permissible under the Act.

In view of the Supreme Court order, while other alternative measures are being considered to address the matter, it has been decided by the Board that henceforth all Show Cause Notices under Section 28 of the Customs Act, 1962 in respect of cases investigated DRI/Customs Preventive formations are required to be issued by jurisdictional Commissioners from where imports have taken place.

Board also desires the field formations to examine the pending show cause notices and wherever the cases are not hit by limitation, show cause notices may be got issued afresh by jurisdictional Commissionerates in supersession of the earlier show cause notices and in the light of the Hon'ble Supreme Court judgement in the matter.

As for the cases which would be hit by limitation if notices are issued afresh now, necessary legal options are being explored.

It is really unfortunate that after years of running this administration, the Department is not sure as to who should issue Show Cause Notices. CBEC in Circular No. 23/2009–Customs dated 01.09.2009, had clarified that, “In so far as the issuance of Show Cause Notice for demand of duty under Section 28 is concerned, the same can be issued by the respective adjudicating officers depending upon the powers of adjudication ”.

But somehow the DRI/DGCEI has no faith in the Show Cause Notice making power of the Commissioners. So they invariably issue the notices and ask jurisdictional Commissioners to adjudicate those cases with the arrogant belief that no Commissioner will ever have the guts to drop a case booked by DRI. Quite often the Board itself assigns the show cause notices issued by DRI/DGCEI to different adjudicating authorities across the country.

Now several cases may simply go out of the window, just because the Show Cause Notice was issued by an Authority not competent to issue the notice.

CBEC Instruction Dated: April 15, 2011

Board issues Corrigendum to Service Tax Notification

IN TIOL-DDT 1595 we said,

“Unfortunately, the Government has not realized that after enactment of Finance Bill 2011 into Finance Act, 2011 on April 8, 2011, there is a renumbering of the sections. In the process, section 71 of Finance Bill 2011 was renumbered as section 74 and this Notification should have been issued invoking clauses (A) and (B) of section 74 of the Finance Act, 2011 and not section 71 as mentioned therein. Section 71 of the Finance Act deals with amendment of Rule 3 of the CENVAT Credit Rules!

Now Government has to come out with an amendment or a corrigendum to set right this numbering fiasco that crept into this life giving Notification for new services and other amending provisions of Finance Act, 1994. Otherwise, the new services cannot really come into force on May, 1, 2011.”

Board has issued a corrigendum to Notification No. 29/2011-ST dated April 25, 2011 to replace ‘section 71' with ‘section 74'.

Corrigendum to Notification No. 29/201-ST., Dated: April 26, 2011

Board issues another Corrigendum

IN Notification No. 35/2011-ST, dated April 25, 2011, which amended Service Tax Rules, 1994, in the Note thereto, it was stated that the Principal Notification No. 2/94-ST dated June 28, 1994 which notified the said Rules was last amended by Notification No. 25/2011-ST dated March 31, 2011 whereas it was actually last amended by Notification No. 26/2011-ST dated March 31, 2011.

Now a corrigendum is issued to Notification No. 35/2011-ST to set this right. It may be noted that Notification No. 25/2011-ST dated March 31, 2011 was issued to amend ‘Point of Taxation Rules, 2011'.

Corrigendum to Notification No. 35/2011-ST., Dated: April 26, 2011

Imports of goods under Chapter 84 of ITC (HS) – DGFT Clarification

THE Customs at JNPT have sought a clarification on the requirement of complying with the conditions of Import Licensing Note No. 1 and 2 of Chapter 87 of ITC (HS) Classification (Vehicles other than Railway or Tramway Rolling – Stock and parts and accessories thereof) even if the goods fall under Chapter 84 of ITC(HS) (Machinery and mechanical appliances; parts thereof)

The Notes read as:

++ This Chapter does not cover railway or tramway rolling-stock designed solely for running on rails.

++ For the purpose of this Chapter "tractors" means vehicles constructed essentially for hauling or pushing another vehicle, appliance or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilizers or other goods.

DGFT has examined the issue and observes that the goods in question like Reach Stackers / Fork Lifts have been specifically covered at 8 digit level (Code : 8427 20 00) under Chapter 84 of ITC(HS), as mentioned by Customs. This is also clear from a plain reading of Chapter 84 of ITC(HS).

And clarifies that, “Such goods, that are in the nature of machine and equipments and are covered under Chapter 84 of ITC(HS), cannot be classified under Chapter 87 of ITC(HS). Therefore, Import Licensing Note No. 1 and 2 of Chapter 87 of ITC(HS) are not applicable to goods covered under Chapter 84 of ITC(HS)”.

DGFT Circular No. 30 (RE-2010)/2009-14., Dated: April 27, 2011

Jt. Secretary Level Officers required for Post of Minister (Customs) in Permanent Mission of India in Geneva

BOARD has called for names and bio-data of officers of IRS (C & CE) belonging to 1981, 1982 and 1983 batches, who are empanelled to hold Joint Secretary/equivalent posts under the Central Staffing Scheme and having experience in WTO issues pertaining to customs tariffs and other related matters, for consideration for the post of Minister (Customs) in Permanent Mission of India in Geneva. The names of willing officers have to be furnished to the Board latest by 06.05.2011.

F.No. A-35017/32/2011-Ad. II., Dated: April 26, 2011 and No.10/13/2011-EO(SM-I), Dated: April 20, 2011

WCO Photo Competition 2011

WORLD Customs Organization is running the third edition of WCO Photo Competition 2011 in which a WCO Member Customs administration will win an award for an exceptional photograph. This year the WCO will reward a Customs administration which is able to capture the theme “Customs in the 21st Century” through a photograph. The 20 best photos received will be printed, framed and put on display at WCO Headquarters at the Organization's 117th/118th Council Sessions in June 2011. During the exhibition, Heads of delegation will vote for the best photograph. The photo which receives the most votes will be the winner.

Board has requested field officers to forward photographs in digital format only (JPEG, GIF or TIFF files) with minimum resolution 300 DPI and dimension 20 X 30 cm. a caption has to be provided with the photo. The entries have to be sent to the JS (Customs) so as to reach early, and not later than 5th May, 2011. The entries (Entry form plus photo) have to be submitted by the Board to WCO before 11th May 2011 (However, WCO's communiqué mentions midnight of May 20, 2011 as the deadline for submission to the WCO ).

F.No.21000/19/2010- IC (ICD) WCO Cell, Dated: March 22, 2011

Jurisprudentiol – Friday's cases

Central Excise

Central Excise - Commissioner chooses to ignore directions of Tribunal in de novo proceedings - Tribunal totally unhappy - matter remanded again - CESTAT

BY an order dated 22.1.1998, the Commissioner confirmed a duty of Rs. 1,00,97,626/- along with a penalty of Rs. 50 Lakhs. By an order dated 15.7.98, the Tribunal set aside the order and remanded the matter to the Commissioner for fresh decision. The Commissioner by his order dated 26.3.1999 again confirmed the same demand and penalty. By order dated 12.2.2002, the Tribunal again set aside the order and remanded the matter. The Commissioner is equally consistent and simply confirmed the earlier order.

Income Tax

Income tax - Whether depreciation can be claimed on amount of Customs duty paid on imported equipments although Customs duty is shown as advance payment in books and also as contingent liability - YES: ITAT

Central Excise

Central Excise - Duty not liable to be paid on agarbathi perfumery compounds where Revenue has not produced any evidence of such products being bought and sold, in terms of Board Circular No. 495 dated 22.11.1999 - Duty demand confirmed only to extent of ‘venkateswara brand' where evidence was adduced for sale of such product from appellant's sister unit – CESTAT

THE assessee, Karnataka Soaps and Detergents Ltd, is engaged in manufacture of various excisable goods like soaps, detergents and agarbathi perfumes of various brands. These odoriferous compounds falling under Chapter 3302.90 which are liquid form are packed in drums/cans and stock transferred to their unit in Mysore where they are used in manufacture of agarbathis. The assessee paid duty till April 2000 on such stock transfers and thereafter stopped payment of duty in lieu of Board's Circular No. 495 dated 22.11.1999.

See our columns tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day.

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