Judicial wisdom
TIOL-DDT 151
06 07 2005
Wednesday
Mr. Moheb Ali, the Honble Member, Technical, CESTAT, Mumbai recently passed a devastating (for the party) order against Sterlite, the Optical Fibre giant. The long and exhaustive order was full of wit and wisdom. We bring you a sample.
M/s. SOTL's intentions to export optical fibres received a setback in September 2001, according to them. With monotonous regularity some miscreants crashed passenger planes into high rise buildings of New York on September 11, 2001. This type of activity created a slump in the export market for optical fibres, according to the appellants.
There are schemes carefully crafted by the Commerce Ministry to promote exports. Statistically speaking, they do.
All this could result in endless litigation. But, from time immemorial fiscal laws are meant to be complicated so that they provide employment to those who sit in judgment over their interpretation and deliver learned judgments.
An assessee can only make an application for grant of a concession. He cannot be made to suffer simply because the Babus in the government take their sweet time to decide.
The syllogism is somewhat like this -
Goods produced in an EOU are exempt from duty, except those which are allowed to be sold.
So goods sold without being allowed to be sold are exempt from duty!!
If there is any case which deserves a penalty under Section 11AC it is the appellants'. They made every attempt to qualify themselves for such visitation.
The appellants are a large industrial house. The captains as someone would call them. If the captains and the marshals were to engage themselves in such fraudulent activities the corporals and soldiers would not be far behind.
A benefit of doubt could be given to him with an observation that recipients of benefit of doubt need not be exactly proud of such awards. Some blame for all that happened could be fastened on to him;
The Commissioner seemed to be imposing penalties on the employees stating that they were aware of the fact that they were knowingly concerned with the goods liable to confiscation. Going by his logic every employee/worker can be accused of such knowledge, a greaser, a forklift truck operator etc.
Click here for full text of the order
Why exemption from excise duty for EOUs?
In the Sterlite case mentioned above, benefit of Notification No. 125/84 was denied to the appellant. This notification exempted goods produced in an EOU from excise duty. The notification in another avatar, is still valid.
Notification No. 24/2003-C.E., dated 31-3-2003
exempts all excisable goods produced or manufactured in an export oriented undertaking from whole of duty of excise leviable thereon
Provided that the exemption contained in this notification in respect of duty of excise leviable under section 3 of said Central Excise Act shall not apply to such goods if brought to any other place in India;
What is the purpose of this notification? If goods are exported from EOU, which they are expected to do in the first place, there is no duty. If they are cleared in the DTA, they are required to pay duty. Then, why this exemption? Is it for captive consumption? What are the situations under which this exemption can be availed? Is there a single unit which has availed this exemption? Or is it standing in monumental isolation without serving any purpose?
Anti Dumping Notification amended
With reference to the Anti dumping duty on acrylonitrile butadiene rubber (NBR) imposed vide Notification No. 111/2002- Customs dated the 10th October, 2002, the CESTAT had ordered that the entry relating to M/s Korea Kumho Petrochemical Co. Ltd shall remain deleted and all imports of acrylonitrile butadiene rubber into India from Korea RP and exported by M/s Korea Kumho Petrochemicals Co. Ltd shall be subjected to anti-dumping duty at the rate of US $ 106.16 per metric tonne. In obedience of this Tribunal order, the Government has now amended the notification.
NOTIFICATION .No. 61/ 2005-Customs dated 5th July 2005
Parts of IC engines used by Railways exempted
The Government has exempted Parts of internal combustion engines falling under any Chapter if manufactured by a factory belonging to the Indian Railways, and used for reconditioning internal combustion engines of railway locomotives by the Indian Railways including its undertakings.
Notification. No.30/2005-Central Excise dated 5th July 2005
Conversion of loan of precious metals taken from the nominated agencies into outright purchase
As per para 6.2(f) of Foreign Trade Policy the Gem & Jewellery Units in EOU/SEZ may source gold/silver/platinum from the nominated agencies on loan basis and units obtaining such precious metals from the nominated agencies are required to make export of gold/silver/platinum jewellery within 90 days from the date of release. This does not apply in case of outright purchase of precious metals from the nominated agencies.
A doubt has arisen whether the precious metals received on loan can be converted into outright purchase.
DGFT clarifies that such conversion is permissible within the original stipulated 90 days.
CIRCULAR NO. 14(RE-2005)/2004-2009, Dated: July 4, 2005
Reimbursement of education cess - terminal excise duty -deemed exports
DGFT clarifies that refund of excise duty for deemed exports will include education cess paid on the excise duty.
CIRCULAR NO. 15 (RE-2005)/2004-2009, Dated: July 4, 2005
Free import of air guns for shooters
The DGFT has amended the ITC(HS) classification to allow free import of 0.177 bore air guns and air pistols for shooters registered with Rifle Clubs or District/State/ National Rifles Association.
DGFT NOTIFICATION NO. 12 (RE-2005)/2004-09, Dated: July 4, 2005
Until Tomorrow with more DDT
Have a nice day.
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