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Finance Bill 2013 – 14 (Indirect Tax) “Amendments in Central Excise and Customs” © VAISH ASSOCIATES.

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Presentation on theme: "Finance Bill 2013 – 14 (Indirect Tax) “Amendments in Central Excise and Customs” © VAISH ASSOCIATES."— Presentation transcript:

1 Finance Bill 2013 – 14 (Indirect Tax) “Amendments in Central Excise and Customs” © VAISH ASSOCIATES

2 EFFECTIVE DATE OF CHANGES ParticularsDate from when effective Changes in Customs TariffMarch 1, 2013 Changes in Excise TariffMarch 1, 2013 Legislative Changes in CustomsDate of enactment of the Finance Bill, 2013 Legislative Changes in ExciseDate of enactment of the Finance Bill, 2013

3 CHANGES IN CUSTOMS TARIFF Effective from 1 st March, 2013  Basic rate of customs duty remains 10%  Sector specific changes: o Agriculture/agro processing/plantation sector o Automobiles o Metals and Precious Metals o Capital Goods/Infrastructure o Aircrafts and Ships o Environment Protection o Textiles o Electronics/Hardware

4 CHANGES IN EXCISE TARIFF Effective from 1 st March, 2013  Rate of excise duty remains at 12%  Sector specific changes: o Agriculture/agro processing/plantation sector o Automobiles o Metals o Aircrafts and Ships o Textiles o Health o Electronics/Hardware o Cigarettes

5 LEGISLATIVE CHANGES IN CUSTOMS ANOTHER GROUND FOR PROHIBITION OF IMPORT OR EXPORT Earlier Government had power to prohibit import or export inter –alia to protect patents, trademarks and copyrights. Now amendment has been proposed also to include protection of “designs and geographical indications” as a ground to prohibit import or export.  Section 11 (2)

6 LEGISLATIVE CHANGES IN CUSTOMS Amended to provide that if the amount of refund claimed is less than rupees hundred, the same shall not be refunded CLAIM FOR REFUND OF DUTY UPTO Rs. 100  Section 27 – Claim for Refund of Duty RECOVERY OF DUTY UPTO Rs. 100  Section 28 – Recovery of Duties Amended to provide that show cause notice will not be served where the amount demanded is less than Rs.100.

7 LEGISLATIVE CHANGES IN CUSTOMS SCOPE OF ADVANCE RULING EXPANDED  Section 28 E– Definition of activity Definition of activity’ has been expanded to enable an existing importer or exporter to seek Advance Ruling when a new business of import or export is proposed to be undertaken by the applicant. PROVISIONAL ATTACHMENTPROVISIONAL ATTACHMENT  Section 28BA – Provisional Attachment to protect revenue in certain cases There was no specific provision in relation to notices served under Section 28(4) on the grounds of collusion or wilful mis-statement or suppression of facts, which has been added now.

8 LEGISLATIVE CHANGES IN CUSTOMS ARRIVAL OF VESSELS/AIRCRAFTS  Section 29 – Arrival of vessels/aircrafts in India The Central Board of Excise and Customs has now been empowered to permit landing of vessels or aircrafts at ports other than customs ports or customs airport. INTEREST FREE PERIOD REDUCED Interest free period has been reduced for payment of import duty from 5 days to 2 days from the return of the Bill of entry for the payment of duty.  Section 47 (2)–

9 LEGISLATIVE CHANGES IN CUSTOMS TIME LIMIT FOR STORAGE OF GOODS IN THE WAREHOUSE Time limit of 30 days has been proposed to be provided for storage of imported goods in warehouse pending clearance in the interest of accountability and early finalization of assessments. The Commissioner may extend the period of storage for a further period not exceeding 30 days at a time.  Section 49  Section 104 (6) – Following offences proposed to be made cognizable & non-bailable (a)Offence relating to evasion or attempted evasion of duty (of more than Rs. 50 lakhs), COGNIZABLE AND NON-BAILABLE OFFENCES

10 LEGISLATIVE CHANGES IN CUSTOMS (b) Offence of import of prohibited goods (the market value of which exceeds Rs. 1 crore), (c)Offence of fraudulently availing or fraudulent attempt to avail any drawback which exceeds Rs. 50 lakhs, Om Prakash vs. Union of India [2011 (272) E.L.T. 321 (S.C.)] COGNIZABLE AND NON-BAILABLE OFFENCES

11 LEGISLATIVE CHANGES IN CUSTOMS VACATION OF STAY IN APPEAL BEFORE CESTAT  Section 129B-Orders of Appellate Tribunal In case there is a delay in disposing of the appeal not attributable to the appellant, the CESTAT may extend the period of stay by a period not exceeding 185 days. If the appeal is not disposed of within a total period of 365 days from the date of order, the stay order shall stand vacated. Commissioner of Customs and Central Excise, Ahemdabad v. Kumar Cotton Mills Pvt. Ltd (180) E.L.T. 434 (SC)

12 LEGISLATIVE CHANGES IN CUSTOMS The monetary limit of Single Bench of the Tribunal to hear and dispose of appeals is enhanced from 10,00,000/- to 50,00,000 /-. MONETARY LIMIT OF SINGLE BENCH ENHANCED Evasion of duty or fraudulently availing drawback in connection with export of goods would be an offence punishable with an imprisonment for maximum of seven years with fine if the duty involved is exceeding Rs. 50,00,000/-. (from Rs. 30,00,000/-). EVASION OF DUTY  Section 135  Section 129C [Similar amendment in Central Excise by amending Section 35D]

13 LEGISLATIVE CHANGES IN CUSTOMS A new clause (d) is being inserted in Section 142 to provide (i)For recovery of money due to the Central Government from any other related third person other than the defaulter after giving such other person a notice in writing, (ii)That the person to whom such notice is bound to comply, and (iii)That if the person to whom the notice is issued fails to comply, he shall be deemed to be a defaulter in respect of the amount specified in the notice. RECOVERY OF AMOUNT DUE UNDER THE CUSTOMS ACT FROM A THIRD PARTYRECOVERY OF AMOUNT DUE UNDER THE CUSTOMS ACT FROM A THIRD PARTY Recovery of sum due to the government  Anita Grover Decision in WP (C) No. 5894/2012 dated  Section 142

14 LEGISLATIVE CHANGES IN CUSTOMS NO CUSTOMS DUTY ON GOODS CONSUMED AS SAMPLES DURING EXAMINATION OR TESTING Earlier the provision said no duty on goods consumed as samples during testing or examination, if such duty amounts to five rupees or more. Now, phrase “if such duty amounts to five rupees or more”removed. CUSTOMS AGENTS TO BE RENAMED AS CUSTOMS BROKERS Customs Brokers’ to substitute Customs Agents’ considering the global practice and internationally accepted nomenclature.  Section 144  Section 146

15 LEGISLATIVE CHANGES IN CUSTOMS A person committing an offence under the Finance Act, 1994 will be disqualified to act as an authorized representative in any customs matter. AUTHORIZED REPRESENTATIVE  Section 146A AMENDMENT TO BAGGAGE RULES Duty free allowance of jewellery for an Indian passenger who has been residing abroad for over one year or a person who is transferring his residence to India is as follows:  Rule 6 of Baggage Rules, 1998

16 LEGISLATIVE CHANGES IN EXCISE Duty free allowance of import of items like chocolates, cheese, cosmetics and other petty gift items by crew members of a vessel/ aircraft for their personal/family use has been increased from Rs. 600/- to Rs. 1,500/-. CategoryPast (INR)Current (INR) Female20,0001,00,000 Male10,00050,000

17 LEGISLATIVE CHANGES IN EXCISE STRINGENT IMPRISONMENT PROVISIONS  Section 9– Offences and penalties COGNIZABLE AND NON-BAILABLE OFFENCES  Section 9A (1A) inserted Imprisonment extending upto 7 years for specific offences involving duty evasion exceeding 30 lakh has been substituted with 50 lakhs. Offences with respect to evasion in payment of duty/ contravention of any provisions in relation to utilization of Cenvat credit wherein the duty amount exceeds 50 lakh, is made cognizable and non-bailable.

18 LEGISLATIVE CHANGES IN EXCISE RECOVERY OF DUES  Section 11 expanded (a)Recovery of money due to the government from any person other than from whom money is due after giving a proper notice, if that other person holds money on account for or on account of the first person; (b)The person to whom such notice has been issued is bound to comply and (c)If the other person to whom the notice is serviced feels to comply, he will face all the consequences under the Central Excise Act.

19 LEGISLATIVE CHANGES IN EXCISE STATEMENT IN LIEU OF NOTICE  Section 11A (7A) inserted A statement can be issued in lieu of notice, by the central excise officer containing the details of duty of central excise not levied/paid or short-levied/short-paid or erroneously refunded for the subsequent periods, provided the ground relied upon for the subsequent period are the same as mentioned in earlier notice(s).

20 LEGISLATIVE CHANGES IN EXCISE PROVISIONAL ATTACHMENT OF PROPERTY WIDENED Amended to include the attachment of property of any person on whom notice has been issued under Section 11A of the Central Excise Act. The earlier section 11DDA was restricted to persons on whom notice had been served under Section 11A(1) only.  Section 11DDA

21 LEGISLATIVE CHANGES IN EXCISE NON-COGNIZABLE OFFENCES  Section 20 and section 21  Officer-in-charge of a police station is empowered to admit bail to any person forwarded to him by the Central Excise officer, applicable only to an offence which is non cognizable.  Release of arrested persons on bail or personal bond is made applicable only to an offence which is non-cognizable.

22 LEGISLATIVE CHANGES IN EXCISE SCOPE OF ADVANCE RULING EXPANDED  Section 23A (a), Section 23 C (e) and section 28E (a)Definition of ‘Activity’ has been amended to include any new business of production or manufacture proposed to be undertaken by the existing producer or manufacturer.Definition of ‘Activity’ has been amended to include any new business of production or manufacture proposed to be undertaken by the existing producer or manufacturer. (b)Amendment has been incorporated providing that advance ruling can be sought on admissibility of service tax paid or deemed to have been paid on input services.Amendment has been incorporated providing that advance ruling can be sought on admissibility of service tax paid or deemed to have been paid on input services. (c)Resident Public Companies have been notified as persons eligible for advance ruling.Resident Public Companies have been notified as persons eligible for advance ruling

23 LEGISLATIVE CHANGES IN EXCISE MAXIMUM TENURE OF STAY ORDERS BY TRIBUNAL  Section 35C (2A)- Orders of Appellate Tribunal (a)In cases where stay is granted by the Tribunal, but, the related appeal is not disposed off within a period of 180 days from the date of grant of the stay, then, based on an application made by a party, the Tribunal can extend the stay for a further period of 185 days. (b)extension will be granted by the Tribunal only in cases where the Tribunal is satisfied that the delay in disposing off the appeal is not attributable to the applicant party. (c)the stay will stand vacated if the appeal is not disposed of within the total period of 365 days from the date of grant of the stay. Commissioner of Customs and Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd. [2005 (180) E.L.T. 434 (S.C.)].

24 LEGISLATIVE CHANGES IN EXCISE MAXIMUM TENURE OF STAY ORDERS BY TRIBUNAL  Section 35C (2A)- Orders of Appellate Tribunal (a)In cases where stay is granted by the Tribunal, but, the related appeal is not disposed off within a period of 180 days from the date of grant of the stay, then, based on an application made by a party, the Tribunal can extend the stay for a further period of 185 days. (b)extension will be granted by the Tribunal only in cases where the Tribunal is satisfied that the delay in disposing off the appeal is not attributable to the applicant party. (c)the stay will stand vacated if the appeal is not disposed of within the total period of 365 days from the date of grant of the stay.  Commissioner of Customs and Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd. [2005 (180) E.L.T. 434 (S.C.)]. Commissioner of Customs and Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd

25 LEGISLATIVE CHANGES IN EXCISE AMENDMENT IN CENTRAL EXCISE RULES  Rule 7(5)- Provisional Assessment (a)Interest on refunds consequent to orders for final assessment have been harmonized with Section 11BB of the Central Excise Act. (a)interest in such cases would be now available only for periods exceeding three months from the date of receipt of application till the date of refund of duty

26 LEGISLATIVE CHANGES IN EXCISE CENVAT CREDIT RULES  Rule 3(5B)- Cenvat credit (a)The amount payable under sub-rules (5), (5A), and (5B) of Rule 3 of the Cenvat Credit Rules, 2004 [viz. on removal of inputs/capital goods as such/ after use/partial or full write off] if unpaid shall be recoverable in the manner as provided under Rule 14 of the Cenvat Credit Rules. (b)This explanation will overturn certain decisions which have held that Rule 14 cannot be invoked in respect of default under Rule 3(5), Rule 3(5A) and Rule 3(5B) [ LG Electronics Pvt. Ltd. vs. Commissioner of Central Excise, Pune-III, 2010 (255) E.L.T. 135 (Tri. - Mumbai); Alpump Pvt. Ltd. vs. Commissioner of Central Excise, Chennai, 2010 (253) E.L.T. 133 (Tri. - Chennai)].

27 Thank You © VAISH ASSOCIATES


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