We had imported certain components duty-free and fabricated the capital goods within our export oriented unit (EOU). We had debited only the duty payable on the components. We now want to clear the capital goods in the domestic tariff area (DTA). Can we pay duty on the depreciated value of the components?
As per CBEC Circular no. 22/20098-Cus dated 19.08.2009, capital goods manufactured out of duty-free inputs for use within the EOU are required to be accounted for and bonded as per the usual bonding procedure. While following the into-bond procedure, the value of such capital goods would be assessed by following the computed value method in terms of the Customs Valuation Rules, which would inter alia account for the raw material captively consumed in the manufacture of capital goods. If you had followed the above procedure, then you can pay duty on the depreciated value of the capital goods. Otherwise, you may ask to now follow that procedure and take depreciation.
We are doing job-work for a party who is instructing us to send the goods to their depot after charging duty on raw material value plus job-work charges. Is it correct?
Rule 10A (ii) of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 stipulates that where the excisable goods are produced or manufactured by a job-worker, on behalf of a principal manufacturer, then in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of the job-worker, and where the principal manufacturer and buyer of the goods are not related, and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time.
In this connection, you may refer to CBEC Circular no. 902/22/2009-CX., dated 20-10-2009, which says that a plain reading of the aforesaid provision of law makes it clear that the assessable value for the purpose of charging Central excise duty, in cases where the job-worker transfers the excisable goods to the depot/sales office/distributer and/or any other sales point of the principal manufacturer, shall be the transaction value on which goods are sold by the principal manufacturer from such a place.
Can we ask for authorisation under Export Promotion Capital Goods (EPCG) scheme from our branch office?
Yes, so long as the Registration-Cum-Membership Certificate (RCMC) issued by the Export Promotion Council (EPC) mentions the name and address of the branch office. The Policy Circular no. 17/2009 dated 18.11.2009 issued by Director General of Foreign Trade (DGFT) makes it abundantly clear. It also says that Para 4.2 & 4.3 of Handbook of Procedures, Vol. 1 (HBP) applies mutatis mutandis to the EPCG scheme also.
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