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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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Publish Date: 03 Mar, 2016
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IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY – PROCEDURE SIMPLIFIED WITH A DEMERIT

IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY – PROCEDURE SIMPLIFIED WITH A DEMERIT

An article by:-
CA Pradeep Jain
CA Preeti Parihar
Jitesh Bhandari

 
Preface:-
The Budget, 2016 brought about a series of changes in various sectors of the industry. In this article we will focus on the various changes made through notification No. 32/2016 – Customs (N.T.). This notification has been issued to supersede the existingCustoms (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. The new rules will be known as Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 and are applicable w.e.f. 1.4.2016.
Existing rules – an overview:-
Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 are explained as follows:-
1)      Application:-
These rules are applicable if the following conditions are satisfied:-
·         The importer intends to avail the benefit of exemption notification which is dependent upon the end use condition for the imported goods.
·         The notification specifically prescribes that these rules shall be applicable.
·         These rules will apply even if the final product is not chargeable to excise duty or are wholly exempted.
 
2)      Registration: -
The manufacturer importer has to obtain registration from the Assistant or Deputy Commissioner having jurisdiction over his factory. The registration certificate is to be issued by AC/DC containing the details like Name and address of the manufacturer, description of the final product produced and the nature and description of the goods intended to be imported at concessional rate.
 
3)      Application to be made by the manufacturer: -
After obtaining the registration certificate, at the time of import, the manufacturer has to file an application stating the intent to import the specified goods mentioning the following particulars therein:-
·         Whether the application is in respect of single consignment or whether it is for a specified quantity which may be imported for a particular period (upto one year).
·         The estimated quantity, value of goods to be imported, particulars of the notification applicable and the port of Import are to be specified.
·         Undertaking is to be given that the imported goods shall be used for the intended purpose.
·         The application should have to be countersigned by the Assistant or deputy commissioner of central excise certifying that the bond has been executed in respect of end use of imported goods; and mentioning therein the particulars of such bond.
 
 
4)      Procedure to be followed by Assistant Commissioner of Customs or Deputy Commissioner of Customs: -
The Assistant/Deputy Commissioner of Customs has to accomplish the following tasks:-
·         On the basis of the countersigned application so filed by the importer, the AC/DC of Customs shall allow the benefit of the exemption notification.
·         Where the application is for specified period, the quantity and value of import are to be debited in the total quantity and value mentioned in the application.
·         A copy of the Bill of Entry is to be forwarded to the assistant or deputy commissioner of excise containing the relevant particulars.
 
5)      Procedure to be followed by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise: -
The copy of bill of entry as forwarded by the AC/DC of Customs is to be acknowledged by the AC/DC of Central Excise.
 
6)      Procedure to be followed by Manufacturer after import of goods:-
The manufacturer importer has to follow the following procedure after the goods are imported:-
·         The intimation of the receipt of goods is to be given within 2 days of the receipt to the Superintendent of central excise.
·         Proper records are to be maintained indicating receipt and consumption of imported goods and other particulars.
·         A quarterly return is to be filed in specified format to AC/DC of Central Excise.
 
 
7)      Re-export of unutilised goods: -
The manufacturer may re-export the unutilised or defective imported goods with the permission of the AC/DC of Central Excise within 6 months from the date of import. However, the re-export value should not be less than the value of the goods at the time of import.
 
8)      Recovery of duty in certain case: -
In case the imported goods are not used for the intended purpose then the AC/DC of central excise shall recover the amount equal to the difference between the concessional amount paid and the duty leviable if the notification was not adhered to by the manufacturer importer along with interest at the specified rates.
The above procedure is applicable as on date and it will not be applicable w.e.f. 1.4.2016.
 
New rules w.e.f. 1.4.2016:-
The new rules namely, Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 shall come into force on 1.4.2016. As per new rules, following procedure is to be followed:-
1)      Application: -
These rules are applicable if the following conditions are satisfied:-
·         The importer intends to avail the benefit of exemption notification which is dependent upon the end use condition for the imported goods.
·         The notification specifically prescribes that these rules shall be applicable.
·         These rules will apply even if the final product is not chargeable to excise duty or are wholly exempted.
 
2)      Information about intent to avail benefit of exemption notification:-
The manufacturer who intent to avail the benefit of exemption notification shall provide information to the AC/DC of central excise regarding his name & address, excisable goods produced in his factory, nature and description of goods to be imported. If the manufacturer importer is not registered then he shall obtain registration under Rule 9 of Central excise rules, 2002. The particulars of said registration are also to be submitted.
 
3)      Procedure to be followed at the time of import: -
The manufacturer importer shall follow the following procedure when if he intends to import the goods:-
·         An information in duplicate; about estimated quantity, value, particulars of exemption notification and port of import and an indication to the affect whether it is for a particular consignment or for a period upto one year; is to be filed to AC/DC of Central Excise & one set to the AC/DC of Customs at port of import.
·         A bond or security as deemed appropriate by AC/DC of Central Excise is to be furnished to him undertaking to pay the duty leviable on default alongwith interest.
·         The AC/DC of Central Excise shall forward one copy of information so received to the AC/DC of Customs at the port of import.
·         On receipt of the copy of the information, the AC/DC of customs at the port of importation shall allow the benefit of the exemption notification to the manufacturer. Further the manufacturer while filing bill of entry shall provide the details of his registration number of the factory where the inputs are meant to be used.
 
4)      Procedure to be followed by manufacturer importer after import:-
The manufacturer shall give information about the receipt of goods within 2 days of the receipt to the Superintendent of central excise. He will also maintain accounts as specified and submit a quarterly return in a specified format.
 
5)      Re-export or clearance of unutilised or defective goods: -
The manufacturer may re-export the unutilised or defective imported goods with the permission of the AC/DC of Central Excise within 3 months from the date of import. However, the re-export value should not be less than the value of the goods at the time of import.
The manufacturer may also clear the unutilised or defective imported goods with the permission of the AC/DC of Central Excise within 3 months from the date of import by paying the differential duty alongwith interest.
 
6)      Recovery of duty in certain case: -
In case the imported goods are not used for the intended purpose; AC/DC of central excise shall recover the amount equal to the difference between the concessional amount paid and the duty leviable, by invoking the Bond to initiate the recovery proceedings, along with interest at the specified rates.
 
Comparision of old v/s new rules:-
The basic theme of new rules is the same as applicable now. However, the new rules have incorporated some simplifications and beneficiary provisions. A comparison between the two is given 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. 
 
While Parting:-
The new rules are more or less framed on the same lines as the old rules. Some modifications are there on procedural aspects which are welcome step. The important provision added in the new rules is the clearance of defective or unutilized imported goods domestically on payment of differential duties alongwith interest. This provision has been added for the ease of manufacturers where the re-export is not possible for some reasons. However, one major drawback in the new rules is the reduction of time limit of re-export of the defective or unutilized imported goods from 6 months to 3 months. This reduction in time limit will lower down the popularity of exemption notifications where these rules are applicable, particularly in the industries where the production cycle is longer. Except this, the rules are modified for the sake of betterment and it is reflected by the framing of the new rules.
 

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