By CA Ankit Gulgulia (Jain) | ankitgulgulia@gmail.com |
CBEC clarified vide Circular
No.1005/12/2015-CX (in pursuance to Notification 34/2015, 35/2015 & 36/2015
CE dated 17th July, 2015) that Domestically manufactured goods continue to be
exempt from excise duty or subject to concessional rate of excise duty as the
case may be as they were prior to 17th July. 2015.
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“7. It may, therefore, be noted that the domestically manufactured goods covered under these notifications / entries continue to he exempt from excise duty or subject to concessional rate of excise duty. as the case may be as they were prior to 17th July. 2015. 5. In this context, opinion of the Ministry of Law 6. In the above context. apprehensions have been |
It is noteworthy that CBEC had issued notifications No. 34/2015, 35/2015 & 36/2015
dated 17th July, 2015 back to back whose
essence was to allow the exemptions on various products and Concessional Rate
of 2% under Notification 1/2011-CE only in cases where such goods manufactured
out of inputs / input services on which appropriate
duty of excise / service tax is leviable / paid and no credit of such
excise duty or additional duty of customs on inputs or service tax on input
services has been taken by the manufacturer of such goods (and not the buyer of
such goods), under the provisions of the CENVAT Credit Rules, 2004.
The term appropriate duty was a cause of disturbance of in the
present notifications as “appropriate
duty of Excise” does not include the goods exempted from duty or chargeable to
“Nil rate of Duty”. (Refer Apex Court decision in the case of CCE Vadodra Vs
Dhiren Chemical Industries) & CBEC Circular No. 667 dated 26.09.2002.
Now
the board has issued this clarification and thereby issued due relief to
Domestic manufacturers that the
appropriate duty or appropriate additional duty or appropriate service tax for the purposes of
the said notifications/entries
includes nil duty or tax or concessional
duty or tax. whether or not read with any relevant exemption notification for
the time being in force.
Full
Text of Judgement of Circular is as under:-
Circular
No.1005/12/2015-CX
F.No.
336/4/2015-TRU
Government
of India
Ministry
of Finance (Department of Revenue)
Tax
Research Unit
**
New Delhi, the 21st
July. 2015
To.
Principal Chief Commissioners / Chief Commissioners of
Central Excise (All)
Principal Chief Commissioners / Chief Commissioners of
Central Excise & Service Tax (All) Principal Chief Commissioners / Chief
Commissioners of Customs (All)
Sir Madam.
Subject Judgment of
the Supreme Court in the case of Mis SRF Ltd. versus Commissioner of Customs.
Chennai – Clarification relating to notifications No.30/2004-Central Excise
dated 09.07.2004. No.1 /2011-Central Excise dated 01.03.2011 and
No.12/2012-Central Excise dated 17.03.2012. as amended Regarding.
It may recalled that the Hon’ble Supreme Court. in the
case of M/s SRF Ltd. versus Commissioner Of Customs. Chennai and M/s ITC Ltd.
v/S Commissioner of Customs (I&G) [2015
(4) TMI 561 – SUPREME COURT]. New Delhi relating to CVD
exemption. has held that the benefit of excise duty exemption [available to
final products manufactured by the domestic manufacturer. subject to the
condition of non-availment of CENVAT credit of duty on inputs or capital goods
used by such manufacturer for manufacture of such final products] will also be
available to the importers of such final products for the purposes of CVD on
the ground that the importer was not availing the credit of duty on inputs or
capital goods.
- The implication of the Hon’ble Supreme Court
judgment was that all such final products when imported by manufacturer
importer would have attracted concessional excise duty as CVD. while the
domestic manufacturer of such final products had to forgo input tax credit to
be eligible for such concessional rate. This would put the domestic
manufacturers at a disadvantage vis-a-vis imports and would adversely impact
the Make in India Policy of the Government.
- The Judgment of the Hon’ble Supreme Court was
examined in CBEC and it was found that there were certain errors apparent on
record/interpretational issues and. with the concurrence of the Ld. Attorney
General. a Review Petition / Revision Application has been filed against the
same.
- However, keeping in view the adverse implications
of the aforesaid judgment on the domestic industry, legal opinion was sought
from the Ministry of Law & Justice as to whether pending the aforesaid
Review Petition / Revision Application, such conditions in the relevant
notifications be suitably amended so as to make the intention abundantly clear
(that these conditions are to be satisfied by the manufacturers of such goods
and not the buyer / importer of such goods).
- In this context, opinion of the Ministry of Law
& Justice was also sought With the concurrence of the Ld. Attorney General
notifications No.34/2015-CE. No.35/2015-CE and No.36/2015-CE all
dated 17.7.2015 were issued amending the conditions in notifications No.30/2004-CE
dated 09.07.2004. No.1/2011-CE dated 01.032011 and No.12/2012-CE dated
17.03.2012, respectively.
- In the above context. apprehensions have been
raised about the use of the phrase of “appropriate duty” In this
regard. Explanations have been inserted in the notifications
No.30/2004-CE dated 09.07.2004. No.1/2011-CE dated 01.032011 and No.12/2012-CE
dated 17.03.2012 so as to clarify that the appropriate duty or appropriate
additional duty or appropriate service tax for the purposes of the said
notifications/entries includes nil duty or tax or concessional duty or tax.
whether or not read with any relevant exemption notification for the time being
in force.
- It may, therefore, be noted that the domestically
manufactured goods covered under these notifications/entries continue to he
exempt from excise duty or subject to concessional rate of excise duty. as the
case may be as they were prior to 17th July. 2015.
- Trade Notice/Public Notice may be issued to the
field formations and taxpayers.
- Difficulties faced. if any. in implementation of
this Circular may be brought to the notice of the Board.
(Alok Shukla)
Joint Secretary (TRU)
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