We refer to CBEC circular no. 10/2012-Cus dated 29.03.2012, which says to get refund of 4 per cent additional duty of customs (SAD), the same should have been paid in cash, and that in case of SAD paid through DEPB, all credit and utilisation must be completed by 30.06.2012. Just prior to this Circular, we had imported under DEPB and we could not resell the goods, obtain re-credit and utilise the same before 30.6.2012. Do we have any recourse?
The notification no. 102/2007-Cus dated 14.09.2007 grants refund of SAD upon resale of the goods, subject to certain conditions. It does not prescribe re-credit of DEPB. On that ground, you may seek refund of SAD in cash. The notification mandates filing the refund claim within one year of SAD payment. That time limit cannot be curtailed through CBEC Circulars. CBEC Circular no. 26/2007-Cus dated 20.07.2007 clearly says that the goods cleared by debits through DEPBs are not to be treated as exempted but as duty paid.
Therefore, you may file your claim for refund in cash and agitate your case on the grounds that SAD debited to DEPB is to be treated as duty paid, that the notification provides for refund in cash and not by way of re-credit, and that the time limit for filing refund claims given in the notification cannot be curtailed by the CBEC. If the Customs reject your refund claim, you may approach the next higher legal forum for necessary relief.
We are in the manufacturing industry below the excisable limit. But in the next year, we may reach the excisable limit of top line Rs 1.5 crore. Can we register a second firm as trading, and do the billing under the current firm as labour charges/contract manufacturing, paying the applicable service tax if any, and avoid being covered under excise?
You cannot escape the provisions of central excise law if the activity you carry out amounts to manufacture as defined in Section 2(f) of the Central Excise Act, 1944. Service tax laws come in to play when the activity you carry out does not amount to manufacture. Under notification no. 8/2003-C.E. dated 1.3.2003, you need not pay central excise duty till your home clearances reach Rs 1.5 crore, provided the aggregate value of your clearances in the previous year do not exceed Rs 4 crore, subject to specified conditions.
As a SEZ unit, do we need to go through Special Valuation Branch (SVB) procedures for imports from our parent company and, if so, why and what are the instructions?
As a SEZ unit, you need not pay duty on the goods you import, but the value has to be determined, because in case you do not utilise the goods in accordance with the provisions of the SEZ Act, 2005 or SEZ Rules, 2006, duty becomes payable based on the value of goods at the time of imports. For instructions regarding references to SVB and related procedures, you may refer to the CBEC Circular no. 11/2001-Cus dated 23.02.2001.
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