Honeymoon of manufacturers in J & K, Kutch & North-East is Over

Sudha Sharma appointed as Member of CBDT Rupee hits a high of 48.73 against Dollar Excise Officers caught burning official files in midight in Aligarh after Income Tax raids on Ponty Chadha SC cancels 122 licences issued by A Raja during his tenure as Telecom Minister Laxman Das is Officiating Chairman of CBDT Tariff Value for import of gold is 556 & for silver 1067 & for Brass Scrap 4078 & for poppy seeds 2205-Customs Non-Tariff Notification No. 10 Fused Silica is classifiable under Tariff Item 32074000-Customs Circular No.3 Additional Commisssioner of Income Tax HA Siddiqui sentenced to 4 years imprisonment for accepting bribe of Rs 1 Lakh by CBI Court in Delhi Exchange Rate for imported goods is Rs 50.20 Per US Dollar & Rs 66 per EURO-Exchange Rate for export goods is Rs 49.40 per US Dollar & Rs 64.40 per EURO HC upholds levy of service tax on booking of flats-The explanation which was inserted by the Finance Act of 2010 clearly brings within the fold of taxable service a construction service provided by the builder to a buyer where there is an intended sale between the parties whether before, during or after construction Authority for Advance Ruling rules super concentrates shall be classified as products of the chemical industry under heading 3824 90 90 of Customs Tariff Anti dumping duty imposed on import of Morpholine from China European Union & USA Anti dumping duty imposed on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms from Refund of Anti-Dumping Duty (Paid in Excess of Actual Margin of Dumping) Rules, 2012 notified-Customs Non-Tariff Notification No.5 Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Amendment Rules, 2012-Customs Non-Tariff Notification No.6 Safeguard duty at the rate of 10% ad valorem notified on import of Phthalic anhydride, falling under tariff item 2917 35 00-Customs SG Notification No.1 Customs duty on import of Gold, Silver, Cut & Polished Diamonds hiked Customs duty to be charged at the rate of 2 per cent of Tariff Value on gold and 6 per cent of Tariff Value on silver Tariff Value for import of gold & silver notified-Customs Non-Tariff Notification No.3 Anti-dumping duty on imports ofSilk fabrics 20-100 gms per metre, falling under heading 5007 originating in, or exported from, China-CustomsTariff Notification No. 2 Anti-dumping duty imposed on imports of Nylon Filament Yarn, falling under Chapter 54 ,originating in, or exported from, China, Chinese Taipei, Malaysia, Thailand and Korea RP-Customs TariffNotification No.3 Anti-dumping duty imposed on import of Phosphoric Acid of allgrades and all concentrations (excluding Agriculture/Fertilizer Grade) ,falling under tariff item 28092010, originating in, or exported from, Israel and Taiwan-Customs Tariff Notification No.4 Anti-dumping duty on imports of Cellophane Transparent Film , falling under Chapter 39 , originating in, or exported from, China-Customs TariffNotification No.5 Anti-dumping duty onimports of Saccharin, falling under Chapters 29, 30, 33 and 38 ,originating in, or exported from, China-Customs Tariff Notification No.7 Special Bench of ITAT rules the appellant is not entitled to set off carry forward business loss against the long term capital gain arising on sale of land used for the purpose business ITAT rules Long Term and Short Term gains / losses on sale of equity shares under Portfolio Management Scheme is business income and not Capital Gains HC rules the opinion of the AO may have been legally erroneous but this cannot be a ground for initiation of re-assessment proceedings Anti-dumping duty on ‘Caustic Soda’, originating in, or exported from, Saudi Arabia, Iran, Japan, USA & France-Customs Tariff Notification No.1 Cost Accountants can issue Certificates for the purpose of refund of 4% CVD-Customs Circular No.1 Customs duty on import from ASEAN nations lowered- Customs Tariff Notification No.127 deeper tariff cut on import from Malaysia notified- Customs Tariff Notification No.128 deeper tariff cuts on import from Korea notified- Customs Tariff Notification No.123 deeper tariff cuts on import from Srilanka & Pakistan under SAFTA notified- Customs Tariff Notification No.125 Schedule of Rates for Service Tax Refund to Exporters notified in supersession of Notification No.17/2009-Service Tax Notification No. 52 Customs duty on import of several products from specified countries lowered-Customs Tariff Notification No.113 Anti-dumping duty on ‘Sodium Hydrosulphite (SHS)’, falling under headings 2831 and 2832 , originating in, or exported from, China PR- Customs Tariff Notification No.111 CBEC specifies documents required for Registration of ServiceTax Customs duty on import of 532 Products from Singapore lowered-many products exempted from duty-Customs Tariff Notification No. 106 Government allows Rebate of excise duty on export of goods to Nepal under ARE-1 Procedure w.e.f. 1st March 2012-Central Excise Non-Tariff Notification No.24

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Honeymoon of manufacturers in J & K, Kutch & North-East is Over

RS Sharma Advocate

Modification of excise exemption scheme for Jammu & Kashmir, Kutch, North-East & Sikkim is like changing the rules of the game after the game has already started. The Scheme was more lucrative than the scheme of Uttaranchal & Himachal because of the twin benefits. Though Uttaranchal & Himachal Units get outright exemption from excise duty and thus not required to pay any excise; a special mechanism was provided by the Government for J & K, Kutch , North-East & Sikkim. The Notifications for these States exempted that portion of the excise duty, which was paid by the manufacturers in cash. According to the mechanism prescribed in pre-amended Notifications ; the manufacturer was first required to pay the excise duty and thereafter, whatever was paid in cash(other than CENVAT) was refunded. It is also a part of the scheme that the buyer of any input or capital goods on which such exemption is availed ; gets full CENVAT Credit including the portion of duty refunded to the manufacturer. The provisions of section 11B of Central Excise Act do not apply in case of all these Notifications.

The following Central Excise Tariff Notifications have been issued on 27th March 2008 amending the existing scheme in Jammu & Kashmir, Kutch, North-East & Sikkim.

16/2008	Exemption from Excise duty in Kutch Notification No. 39/2001 amended
17/2008	Exemption from Excise duty in North-East Notification No. 32/99 amended
18/2008	Exemption from Excise duty in North-East Notification No. 33/99 amended
19/2008	Exemption from Excise duty in J & K Notification No. 56/2002 amended
20/2008	Exemption from Excise duty in North-East Notification No. 20/2007 amended
21/2008	Exemption from Excise duty in J & K Notification No. 56/2003 amended
22/2008	Exemption from Excise duty in J & K Notification No. 57/2002 amended
23/2008	Exemption from Excise duty in Sikkim Notification 71/2003 amended

As a fallout of the amendment in the abovesaid Notifications , in the preamble, for the words and figures, “to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2002”, the words “to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit” has been substituted with effect from 1st April 2008.

As a result, the refund of only duty paid on value addition will be admissible to a manufacturer in place of unlimited refund of duty paid in cash. As a general norm 36 per cent of duty has been treated as duty for value addition whereas a different percentage of value addition has been notified for Chapters 29, 30, 33. 34, 38, 39, 40, 72, 73 , 74 , 76 & 85.

The only solace is that the manufacturer has the option not to avail the rates specified in the Notifications and apply to the Commissioner of Central Excise for fixation of a special rate representing the actual value addition in respect of any goods manufactured and cleared under these notification, if the manufacturer finds that four-fifths of the ratio of actual value addition in the production or manufacture of the said goods to the value of the said goods, is more than the rate specified in the said Table expressed as a percentage.

Investment of Lakhs of Crores was made by Industrialists in Jammu & Kashmir, Kutch, Sikkim & North-East after working out the incentives and sops. Though the Government was concerned with a drain of revenue in doling out Crores as refund to these Units; the Industrialists are in for a shock and have already approached the Advocates for filing Petition in High Courts for challenging the amendments as the Government seems to have backtracked from its promise and , therefore, it is a case of Promissory Estoppel.

Several Delhi based Industrialists deserted their wives and families and migrated to Jammu & Kashmir for setting up Units. Last night I got a call at 12.30 Hours from the jubiliant wife of such an Industrialist who told me that her husband has decided to wind up his Project in Jammu & Kashmir due to change in Policy and has decided to shift back to Delhi. I asked the rich and lonely lady as to why she was disturbing me at odd hours? The lady told me that she wanted to cross check about the change in policy from a Consultant as she had a big doubt that her husband was making her an April Fool.

(The Writer is an Advocate & Consultant based in Delhi and is advising several MNCs PSUs & Indian Corporates on Indirect Tax Issues. He can be mailed at rssharma@gmail.com)

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