TIOL-DDT 2880
01 07 2016
Friday

A delegation of the office bearers of Delhi Exporters Association (All India Body of Exporters) met Chairman (CBEC) on 22.6.2016 and requested that there be no letup in the timely disposal of AIR Drawback claims. Certain instances of field formations asking for "no overdue payments" certificates from banks w.r.t. realization of export proceeds or raising of generalized queries or queries for producing documents that prima facie do not have specificity to the claims were brought to notice of Chairman. Drawback hold up on account of EGM mismatch was highlighted. The field formations insisting on timely "supplementary" claims from exporters when the drawback Cells had, themselves, in the past, made drawback "zero-zero" without following normal procedure or principles of natural justice was also raised and the Association pointed out that "zero-zero" drawback was an administrative action so such insistence by field formations was not appropriate.

Board desires that:

1. the Zones continue to ensure there is no hold up of drawback and that processable cases are disbursed timely.

2. resolving EGM mis match by Airlines should be made a continuous process via regular Trade Facilitation Committee meetings.

3. Insofar as a seeking realization certificate from Banks is concerned, the Zones are aware that the new electronic RBI-BRC Module is effective for exports with LEO dates from 1.4.2014 onwards. This obviates need to routinely seek documents from the large majority of compliant exporters.

4. Even for earlier shipping bills, the Commissioners should be instructed to personally ensure that outstanding issues are resolved in a trade friendly manner.

The Board has also decided that Commissioners shall launch a concerted drive from 1.7.2016 to 30.9.2016 to -

(a) weed out generalized queries or irrelevant requests for information in queried cases by undertaking a review of the database of queries and resolve such queried cases;

(b) redress the above cited type of zero-zero drawback cases where exporters have produced the documents/replied to queries.

CBEC Letter in F.No.609/14/2014-DBK., Dated June 30 2016

Balance of Education Cesses in PLA - whether lapses or is refundable?

WE received this mail -

I find that DDT has championed the cause of we assessees in the matter of utilization of accumulated credit of Education Cess(es).

Nonetheless, we were disheartened to note the contents of the Para B-21 of CBEC Instruction in F.No.96/85/2015-CX.I., Dated: December 07, 2015

Reported in DDT 2741 wherein you have encapsulated the Board's decision thus -

1. It was Government's conscious policy decision to withdraw the Education Cess and Secondary & Higher Education Cess.

2. It is a policy decision to not allow utilization of accumulated credit of education cess and secondary and higher education cess after these Cesses have been phased out.

3. As these Cesses have been phased out and no new liability to pay such Cess arises, no vested right can be said to exist in relation to the accumulated credit of the past.

4. The rule and notifications as they exist need to be followed and do not need any amendment.

In a manner of sorts, we have resigned ourselves to our fate in the matter.

However, a few of our brethren had a balance of such Education cesses in their account current (PLA) and which on the fateful day of the Government exempting the Cesses remained unutilized and continue to remain so. A couple of them, after getting to know the Board decision (cited above) waited for the Union Budget but finding nothing therein filed refund claims u/s 11B of CEA, 1944, recently.

Not to mention that the departmental authorities have issued SCNs alleging time bar, we feel that the ground is inapplicable if we delve into the past Board instructions (almost three decades old, which advises a mere transfer of credit) and also a few decisions of the Tribunal.

+ Board Circular No. 7/93-CX.6 Dated 23-4-1993

Subject: Central Excise - Transfer of Credit Balance lying in Personal Ledger Account under one minor head to another minor head - Regarding.

The Board has examined the question of utilisation of credit balance of Special Excise Duty (SED) lying unutilised in the PLA consequent to the abolition of SED vide Notification No. 5/93-C.E., dated 28-2-1993. The issue had earlier been examined by the Board the context of abolition of SED vide Notification No. 178/86-C.E., dated 1-3-86 and instructions were issued, in consultation with Chief Controller of Accounts, vide Circular No. 23/86-CX.6, dated 27-6- 1986. Board desires that the procedure prescribed therein may be followed, mutatis - mutandis, in case of unutilised credit balance of SED lying in PLA of assessees in your jurisdiction.

+ The Circular 23/86-CX.6 mentions -

3. The assessee desiring to transfer the unutilised credit balance of SED to the head of account of BED in his PLA may make an application in quintuplicate indicating, inter-alia, (i) name and address of the assessee, PLA No. sub-major and minor head of account name of the commodity and tariff item balance of SED and (ii) sub major and minor head of BED account, name of the commodity and tariff item to which the amount is to be transferred. On receipt of the said application, the Range Superintendent after making necessary effect checks and verifications will permit the transfer of the credit balance under SED to the BED after indicating the proper head of account and make endorsement to this effect on all copies of the application. One copy of the application bearing the Range Officer's endorsement permitting the transfer shall be forwarded to the C.A.O. so has to enable him to carry out necessary reconciliation/adjustment in his accounts. Other copies will be handed over to the assessee, who would attach the same to the RT-12 pertaining to the month in which the transfer is effected.

Coupled with the above, the following decisions as reported by TIOL should assist the assessee in getting the due refund -

++ Jay Shree Tea & Industries Ltd. 2005-TIOL-1626-CESTAT-KOL

Refund - Withdrawal of sum deposited in PLA following removal of duty on packaged tea - Neither unjust enrichment nor limitation to apply such deposits as the money belongs to the assessee.

++ Bijalimoni Tea Estate 2007-TIOL-2332-CESTAT-KOL

Un-utilised amount in PLA is refundable to the appellants

++ Welspun India Ltd - 2009-TIOL-1313-CESTAT-AHM

Refund of Unutilized amount in PLA - the money is that of the assessee and can be claimed by him without attracting the provisions of refund claim:

It is also pertinent to note that section 11B(2), first proviso clearly excludes the following from the bar of unjust enrichment -

(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise;

DDT may like to make a mention of the above in its daily issue for the benefit and guidance of all concerned. Hopefully, the Board also shows some indulgence.

Writ Jurisdiction of the Supreme Court - Only When Fundamental rights are violated

IN a case pertaining to NDPS, there was a writ petition in the Supreme Court asking for a direction to allow remission of sentence. The issue here is whether a writ of mandamus can be issued to authorities to grant remission to the petitioners. The Supreme Court held that Article 32, as has been interpreted and stated by the Constitution Bench and well settled in law, can be only invoked when there is violation of any fundamental right or where the Court takes up certain grievance which falls in the realm of public interest litigation.

For more details, please see Breaking News

Rates of Interest - What is meaning of 'except as respects things done or omitted to be done before such supersession'?

IN a recent meeting of the Regional Advisory Committee of the Cochin Central Excise Zone, a query was raised:

Notification 13/2016 dated 1.03.2016 supersedes Notification 12/2014 which prescribed different rates of interest from 18% - 30 % from 1.10.2014. The Notification prescribes two different rates of 24% and 15% as the case may be. But the supersession is subject to the condition "except as respects things done or omitted to be done before such supersession".

Please clarify whether the above expression would cover:

1. Show Cause Notice issued but not adjudicated.

2. Show Cause adjudicated but pending filing of appeal

3. Investigation started/Audit completed but no show cause issued.

In case no Departmental Investigation /Enquiry/Audit initiated whether the assessee can adopt 15% interest for the past period also.

On this query, the Commissioner Trivandrum explained to the members that the phrase "Except as respects things done or omitted to be done before such supersession" suggests that there is an existing order and this order is superseded or replaced by new order to such an extent that where the replacing or new order is silent, the prevalent rules and process are to be followed.

It was clarified that in all the situation/cases mentioned in the query, the interest rate applicable would be the rates notified as per the Notifications which were in force during the respective periods. The new Interest rate as specified in NotfnNo.13/2016 takes effect only with effect from the date the Finance Bill, 2016 receives the assent of the President of India and the changes has only prospective effect.

A Member requested the chair to clarify as to why such an expression is given in the Notification, for which, the Chief Commissioner explained that it is a legal requirement for the transition and has only the meaning as explained by the Commissioner. The Commissioner, Trivandrum added that same wording can be seen in the earlier Notifications also.

QED!

Increase in Tariff Values of Gold and Silver

GOVERNMENT has increased the tariff values of gold and silver. The Tariff values of other items are also changed.

Notification No. 92/2016-CUSTOMS (N.T.)., Dated: June 30, 2016

Until Monday with more DDT

Have a nice Weekend.

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