TIOL-DDT 2534
09 02 2015 
Monday

THE Commissioner of Customs (Export), 100% EOU, Air Cargo Complex, Mumbai in a Public Notice, notes,

"The facility of duty exemption is available to the EOU/STPS/EHTP as per the Letter of Permission (LOP) issued by the Development Commissioner. However, quantity and goods of such class and description eligible for duty exemption are to be restricted as per the particulars mentioned in each Procurement Certificate (PC) issued by the Central Excise authorities. Hence, it becomes necessary to verify the genuineness of the PCs received from the concerned authorities, as these amounts to special authorizations based on which the duty exemption is allowed.

Instances have come to the notice that procurement certificate have been issued even for those items which were not mentioned in the LOP. Further, many times import details do not correspond with the goods particulars mentioned in the PCs in terms of description and quantity.

It appears that there is a common perception that there is no revenue implication in respect of the clearance made under EOU scheme which had led to laxity in terms of the procedures to be followed and cautions to be exercised.

Therefore, it is decided that a random check of PCs will be conducted as to verify their genuineness from the concerned issuing authorities. In case of first time importers under EOU scheme, the verification of PC will be compulsory. However, to facilitate the smooth clearance of the imports under the EOU scheme, the Procurement Certificate issued from jurisdiction Central Excise/Customs authorities, recommending for duty free import to the EOUs, will be accepted by hand only if they are brought in sealed cover. Fax copy of the P.C. will also be entertained under special circumstances. The same will also be cross verified with the copy received by registered post."

The Commissioner continues,

Though the import of goods are allowed without payment of duty on the basis of the particulars in the Procurement Certificate, the fulfillment of the conditions of duty exemption under EOU will become complete only when Re-warehousing Certificates (RWCs) are received from the concerned jurisdictional Central Excise Authorities. The Board vide Circular No. 14/98 dated 10.03.1998 had prescribed maximum period of 90 days from the date of issuance of Procurement Certificate (PC) for the submission of the RWC. Also, the Board vide Circular No. 07/06 - Cus dated 13.01.2006 and Circular No. 19/2007-Cus dated 03.05.2007 has prescribed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units.

In spite of the time limit of 90 days prescribed by the Boards Circular No. 14/98-Cus dated 10.03.1998, RWCs are not submitted by the Exporters operating under the EOU scheme. In the absence of RWCs, the jurisdictional Central Excise Authorities on being advised by the Customs are under obligation to issue Demand Notices to the concerned EOUs to safeguard the interest of revenue. This office from time to time has been reminding the concerned Central Excise/Customs Authorities to issue and forward the RWCs if goods were already warehoused properly, or to issue Demand Notice to the concerned EOU.

However, it seems that the desired response is not forthcoming. It also appears that the EOUs have also become oblivious to the fact that it is their responsibility to produce the RWC from the concerned authorities regarding the duty free imported goods, failing which they will be liable for payment of Customs duties but for the exemption contained in the EOU Notification issued by the Board. Time limit of submission of RWCs from the jurisdictional authorities is 90 days from the day of P.C. issued as per the Boards Circular No. 14/98-Cus dated 10.03.1998 failing which SCNs will be issued against them for recovery of government revenue. No unit having a pendency of more than 10 RWC of more than 6 months age will be allowed duty free clearance expect with the approval of ADC/ JC for one time clearance beyond which they will be required to execute a full B.G. covering the duty of the goods intended to be imported. No duty exemption will be allowed until the authenticity of the warehousing of the goods is proved by the concerned EOUs by way of submitting the required RWCs .

It is not all enforcement - the Commissioner has offered some facility too:

To facilitate the importers operating under EOU to close their RWCs pendencies, it has also been decided to accept now onwards, by hand, the RWCs submitted by the EOUs/their authorized CHAs only in cases where the same are brought in sealed cover from Jurisdictional Central Excise/Customs authorities and entries in the Transit Allow Register (TAR) /Procurement certificate register (PCR) may be closed accordingly. The signature on the PC & RWC shall be verified with the specimen signature. In case of specimen signature is not available due to transfer of officer, the officer on duty may accept the same after confirming from the jurisdictional Central Excise authority. In case of unusual deviation, PC/RWC may be verified prior to any further action. Further, it is also decided that the entries in TA Register, for previous pendencies will be closed upon receipt of the copies of pending RWCs duly certified by jurisdictional Central Excise/Customs Authority in Sealed Cover or a Certified Copy of the pending RWC authenticated by the Authorized Signatory of the unit submitted along with original copy of the RWC, forwarded to the unit from Central Excise/Customs .

The Commissioner has also detailed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units.

Commissioner of Customs (Export), Air Cargo Complex Public Notice No.02/2015-16, Dated: January 21 2015

Employees suffering with disability - No Need to Quit

MANY Government servants seek voluntary retirement on medical grounds. Sec 47 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PWD Act) lays down that no establishment shall dispense with the services of an employee who acquires a disability during the course of service.

The issue had come up in Bhagwan Dass & Anr Vs Punjab State Electricity Board, decided by the Supreme Court where the employee who had during his service suffered from blindness had applied for voluntary retirement. The Supreme Court had observed that he was not aware of any protection that the law afforded him and apparently believed that the blindness would cause to lose his job, the source of livelihood of his family. In those circumstances it was the duty of superior officers to explain to him the correct legal position and to tell him about his legal rights.

It is proposed that any Government servant seeking voluntary retirement on medical grounds may be apprised of the above provisions of PWD ACT, in order that he can take a considered decision.

Government plans to issue an OM in this regard.

DoPT Office Memorandum in F. No. 25012/01/2015-Estt (A.IV), Dated: February 06 2015

FTP - Reduction in Minimum Export Price (MEP) on export of edible oils

MINIMUM Export Price (MEP) on export of edible oils in branded consumer packs of up to 5 Kgs has been reduced to USD 900 per MT. Earlier it was USD 1100 per MT.

DGFT Notification No. 108 (RE - 2013)/2009-2014, Dated: February 6, 2015

FTP - Minimum Import Price (MIP) of Cardamom

THE minimum import price (MIP) of Cardamom with HS code 0908 31 of Chapter 09 of ITC (HS), 2012 - Schedule - 1 (Import Policy) is fixed at Rs.500/- per Kg.,

DGFT Notification No. 109 (RE - 2013)/2009-2014, Dated: February 6, 2015

FTP - Prohibition on export of Shark fins of all species of Shark

EXPORT of Shark fins of all species of Shark has been prohibited.

DGFT Notification No. 110 (RE - 2013)/2009-2014, Dated: February 6, 2015

FTP - Import of 'Shark fins'- prohibited

IMPORT policy of the item 'Shark fins' covered under EXIM Code 0305 71 00 is changed from ‘free' to 'prohibited'.

DGFT Notification No. 111 (RE - 2013)/2009-2014, Dated: February 6, 2015

Govt grants petticoats to female canteen employees

THERE is an elaborate procedure in providing uniforms to employees working in the canteens of the Government Departments.

As per a 2002 Office Memorandum, female canteen employees are entitled to 2 sets of Sarees (Mem Sahib Light Blue Terene Cotton), Blouse and Fall for Sarees OR Salwar Kameez (Light Blue Terene Cotton), per year.

Now this does not include petticoats. Totally against the principles of equality - other Government lady employees like Peons, Sweepers, Staff Car Drivers, Despatch Riders etc. are entitled to petticoats. And please note that ‘fall' is provided for the sari, but no provision for the petticoat under. How unjust!

The massive Government machinery has moved and this lapse is rectified. Now, female canteen employees of the Government are assured of a respectable inner wear.

An Office Memorandum issued recently states:

"The matter regarding issue of uniforms to entitled female canteen employees has been reviewed and it has been decided to authorise issue of petticoat to entitled female canteen employees who wear saree and Dupatta to those who wear Salwar Kameez in addition to already authorized articles of uniform."

The uniforms are to be got stitched by the Canteen Managing Committees directly. Unstitched cloth or cash will not be given to the employees under any circumstances. The charge allowed for stitching a petticoat is Rs.30/- and for a blouse it is Rs. 45/-.In this age of ready-mades, should stitching be made mandatory?

This has not come that easily; both the Home Ministry and the Finance Ministry have agreed to this petticoat project. Just imagine the number of papers, files, note sheets and the large army of officers who must have worked on this project. And still there is ambiguity - they have not specified the colour of the petticoat and whether the petticoats will be supplied now for the saris already supplied or will the petticoats be supplied only along with the next batch of saris. Maybe other undergarments will also follow.

A petticoat costs about Rs. 120/- and this female employee of the canteen gets a salary of about Rs. 20,000/-; she can certainly afford to buy a petticoat for her sari instead of the whole Government machinery moving in to buy cloth and getting a petticoat stitched for her. This is how Government is busy. Just imagine the cost of sending this circular to all the Central Government offices in India - with half the cost, perhaps you can gift her a silk sari - with a satin petticoat!

And you thought only tax notifications are complicated!

Dept. of Revenue O.M in F. No.O-21030/4/2015-Coord, Dated: January 23, 2015

Info on Black Money - Door for Dialogue with Switzerland open

SWITZERLAND'S Federal Department of Finance last week published the Report on international financial and tax matters 2015. An extract from the report:

India's finance minister, Arun Jaitley, took up office on 26 May 2014. He has joined the government at a time when India is stepping upits fight against tax evasion and fraud, with the creation of a Special Investigation Team (SIT) entrusted with shedding light on the assets held abroad by Indian residents.

Relations with Switzerland remain tense due to the refusal to exchange information when a request is based on data obtained illegally. Despite the difficult environment, the door for dialogue nevertheless remains open. A meeting was thus held in Bern on 15 October 2014 on Switzerland's initiative. The meeting took place in a positive atmosphere and ended with a joint statement identifying the basis for solutions concerning the bilateral issues under discussion.

Live issues in Litigation

WE bring you some live issues which are at various stages of litigation. Perhaps the CBEC can try to bring some clarity on these issues and avoid wasteful litigation. Budget may be a good time for this.

1. Requirement of reversing Cenvat Credit availed on the inputs while allowing the remission of Central Excise Duty on the damaged goods.

2. Simultaneous availment of SSI exemption and credit on inputs used in manufacture of branded goods.

3. The issue involved is regarding interest on suo-moto credit taken by the party of excess duty paid by them. The correct option according to the Department was for them was to apply for refund of duty.

4. Whether the Commission paid to the Commission Agent by an EOU is includable in the assessable value of DTA sale by the EOU for the purpose of levy of duty on such supplies.

5. Availing Cenvat Credit on zerox copies of bill of entry and invoices.

6. Whether the credit of Service Tax taken at the time of purchase of inputs is required to be reversed with the amount of Excise duty at the time of clearance of inputs as such without being used in the manufacture of final product?

7. Admissibility of Cenvat Credit of additional customs duty discharged through DEPB credit.

8. The department enforced Bank Guarantee of the party for the recovery of duty liability; however the departmental order was struck down in CESTAT. The amount was refunded to the party. The issue pertains to the admissibility of claim of the party for interest on the amount so refunded by the department.

9. The Tribunal offered the assessee an option to deposit the amount of interest and penalty within 30 days of its order to avail the benefit of reduced penalty of 25%, even while the quantum of penalty was not redetermined by the tribunal.

10. Should the department bear the expenses of the accused to attend prosecution case?

11. Whether Service Tax on the overseas commission on account of service rendered by the foreign based commission agent is not leviable on the recipient of service w.e.f.1.1.05 in the light of Rule 2(1)(d)(iv) of the Service Tax Rules, 1944 which were framed by the Central Govt. in exercise of the power conferred u/s 94 (1)&(2) of the Finance Act,1994

12. Whether Cenvat credit is admissible on molasses contained in rectified spirit which is an exempted product.

13. Admissibility of Cenvat Credit on steel and cement used in the construction of storage tank in the factory premises. Department's contention was that storage tank wasn't movable and thus not excisable. Therefore, cement and steel used for civil construction of tank was not admissible.

14. Whether Education Cesses levied and collected under Section 91 of Finance Act, 2004 can be considered as a duty of excise for the purpose of grant of refund in cash or by way of self credit under Notification No. 56/2002-CE dated 14.11.2002 (as amended) as the said notification grants exemption only to the specified goods from (a) Basic Excise Duty, (b) Additional duties of Excise leviable under Sub-Section (3) of Section 3 of the Additional Duty of Excise (Goods of Special Importance) Act, 1957 (58) of 1957) and (c) The Additional Duties of Excise (Textile and Textile Articles) Act, 1978 leviable under Sub-Section (3) of Section 3 of the said Act, mentioned in the said notification.

15.

a. Whether the confessional statement recorded by the Authority of Directors, authorized signatory, admitting the guilt of clandestine removable of goods can be held not to be the basis for deciding aspect of clandestine removal of goods by the assessee.

b. Whether tribunal erred in not appreciating the aspect that statement recorded under Section 14 of the Central Excise Act, 1944 are admissible and binding to party.

These are some of the issues on which there are orders favourable to the assesses, but which the CBEC would like to take to the Supreme Court, but could not because of monetary limitation. We will bring you some more such issues soon.

Until Tomorrow with more DDT

Have a nice day.

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