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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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Publish Date: 02 Jul, 2016
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IMPORT AT CONCESSIONAL RATE OF DUTY – AIM OF AMENDMENT NOT ACHIEVED

­­IMPORT AT CONCESSIONAL RATE OF DUTY – AIM OF AMENDMENT NOT ACHIEVED

 

An article by:-
CA. Pradeep Jain
CA. Preeti Parihar
CA. Vaibhav Bothra

 
Introduction 
New Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 have come into force w.e.f. 1.4.2016. The old rules were superseded with these rules with an aim to simplify the procedural formalities. As of now, three months have passed since the implementation of new rules, but the target of “procedural simplification” has not been achieved. This article is an insight about the aims of new rules and current status of the said aims.
 
Comparision of new and old rules
A comparision of the changes made by new rules and their rationale is discussed as follows:-
1.     In the old rules, there was requirement of taking the new registration from AC/DC of Central Excise if the benefit of these rules is to be availed. However, the new rules omit the requirement of separate registration if the manufacturer is already registered with AC/DC of Central Excise which is a big relaxation given to the importer manufacturers.
2.     In the old rules the intimation of import was countersigned by the AC/DC of Central Excise which was to be submitted to the AC/DC of Customs. However, in the new rules, the import intimation is to be filed to AC/DC of Central excise in duplicate who will forward one copy to the AC/DC of customs at the port of importation.
3.     The new rules reduces the time limit for re-export of the unutilised or defective imported goods from 6 months to 3 months
4.     The new rules specify that the defective or unutilized imported goods may be cleared on payment of differential import duty along with interest at specified rates.
5.     The new rules provide that the AC/DC of Central Excise may require the importer to furnish security also which was not provided in the old rules.
Out of the above stated amendments, the second one, i.e. the condition pertaining to import intimation is the crucial one and amendment done in its procedure does not give relaxation to the importers.
 
Intimation of import – procedural simplification
Every time the import is done under the provisions of these rules, an intimation of import is to be filed to AC/DC of Central Excise. This intimation is countersigned by him and this countersigned copy is to be forwarded by the importer to AC/DC of Customs at the time of import. It is on the basis of this countersigned copy that the benefit of these rules read with respective exemption notification is allowed. As per the new rules, the importer is not required to forward the countersigned copy to customs department. The importer’s work ends with submitting the intimation of import in duplicate to the Excise Department. It is the Excise department which is supposed to send the copy signed by its AC/DC to the AC/DC of customs department. In other words, the movement of intimation has been made inter-departmental transfer by virtue of newly substituted rules.
 
Aim of amendment fails here
Government has brought the new rules to simplify the procedure of filing the import intimation. However, the practical situation is still the same. The importers are still forced to take away the countersigned copy of intimation and file the same to custom department. The excise department is not showing any interest in sending the intimation to customs department. Initially when the new rules were implemented, the importers were relaxed that they need not bother about the countersigned copy of import intimation. However, at the time of import, they were harassed on knowing that the procedure laid down under new rules is not being followed. Ultimately, the importers themselves had to arrange for the countersigned copy of the import intimation from the excise department and it was then submitted to the customs department. Thus, due to non-co-operation of both the departments, the importers are forced to follow the old practice and procedure laid down in the old rules despite fact that the new rules does not speak about the same. Due to this, it seems that the substitution of old rules with new ones has become a futile exercise due to non co-operation of relevant departmental officers.
 
While parting
It is quite clear that the intention of the government has been to ease the procedure and paper work to be followed by the importer. Although the new rules have come in force but in practical life, it seems that ease of doing business is still a long fetched dream. This is clearly visible by the existing situation in the governmental departments. The government spends a large amount on research and makes suitable amendments in order to simplify the procedures. However, the entire exercise of government and expectations of trade are bounced back due to negligence and non-co operation of field formations. So far as the new rules in issue are concerned, the government should come up with guidelines or clarification strictly directing the relevant officers of excise and customs department to follow the provisions and procedure laid down by the new rules.
 

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