We had cleared goods to Special Economic Zone (SEZ) from our factory under ARE-1 without duty payment, but we could not get a re-warehousing certificate within the 45-day time limit. Although we have received and submitted the customs endorsed bill of export copy and ARE-1 copy late, the Central Excise authorities have alleged violation of time limit stipulated in Rule 30 (4) of the SEZ Rules, 2006 and demanded duty and threatened to levy penalty under Rule 25 of Central Excise Rules, 2002. Is there any provision to condone delay in such cases?
Rule 30(4) of SEZ Rules, 2006 says that “a copy of the ARE-1 and/or copy of Bill of Export, as the case may be, with an endorsement by the authorised officer that goods have been admitted in full into the Special Economic Zone, shall be forwarded to the Central Excise Officer having jurisdiction over the Domestic Tariff Area supplier within forty-five days, failing which the Central Excise Officer shall raise demand of duty against the Domestic Tariff Area supplier”. There is no provision in the SEZ Rules to extend the time limit or condone the delay. However, in similar situations, the duty demand was dropped and order levying penalty was set aside in the case of Kirloskar Brothers Ltd. [2010 (261) ELT 788 (Commr. Appeals)].
Can you give the specific reference to the legal provision under which duty drawback is denied on exports to Nepal? I do not find any restrictions under Section 74 or Section 75 of the Customs Act, 1962.
Notification no. 208-Cus dated 1.10.1977, issued under Section 76(2) of the Customs Act, 1962 denies drawback on exports to Nepal. However, this notification is not applicable in certain circumstances, such as payment received in freely convertible currency under letters of credit, supplies to multilaterally funded projects or supply of capital goods against global tenders, etc.
A Ltd. company is paying commission to another Ltd. company for the corporate guarantee provided by them. Is such commission paid under the category of 'banking or other financial services' liable to service tax?
The relevant extract from Section 65(12) (a) (ix) of Finance Act, 1994 defines “banking and other financial services” as services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern, namely — ‘other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults; operation of bank accounts’.
The use of the word ‘namely’ makes it clear that only the services mentioned therein are covered. Since the words ‘providing bank guarantee’ find mention in the definition of ‘banking and other financial services’, the service of providing ‘corporate guarantee’ by ‘other body corporate’ or ‘commercial concerns’ is not liable to service tax.
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