We were issued a Show Cause Notice on a matter relating to valuation and the Commissioner has passed an order against us imposing a penalty also. We want to appeal to the Tribunal but we have to pre-deposit the amount. We are short of cash due to the recession but we have a lot of unutilised Cenvat Credit in balance. If we agree to block the amount involved in our RG 23A Part II, can we avoid the cash deposit?
In the case of India Casting Company, the Tribunal had directed the appellant to deposit 25 per cent of the adjusted duty in cash. The appellant petitioned the Allahabad High Court [1998 (104) ELT 17 (All.)]. The High Court held that the petitioner will be entitled to furnish the same from RG 23A Part-II account and the same will be treated as sufficient compliance with the Tribunal’s order and directed that the Tribunal shall hear the appeal on merits.
A similar view has been taken in the case of Birla Yamaha Ltd. [1996 (83) ELT 396 (T)]. This judgment was relied upon in the case of Morarjee Bambana Ltd. [2003 (157) ELT 657 (Tri. Mumbai)] and Manmade Spinners (I) Ltd. [2003 (159) ELT 884 (Tri. Mumbai)] to grant similar relief. Can we utilise service tax Cenvat for rebate under export of goods?
I believe you are a manufacturer who takes Cenvat Credit of service tax on ‘input services’ (as defined in Rule 2 (l) (ii) of Cenvat Credit Rules, 2004). Such credit can be utilised for payment of excise duty on final products (including for exports under rebate claim) under Rule 3 (4) of Cenvat Credit Rules, 2004.
Anti-dumping duty has been imposed on plastic processing or injection moulding machines imported for China ranging from 96 per cent to 223 per cent through customs notification no. 47/2009 dated 12/05/2009. Can we avoid this duty by importing under Export Promotion Capital Goods (EPCG) scheme? We can furnish a bond to customs covering anti-dumping duty and take up more export obligation, as the duty saved will be more.
Neither the said anti-dumping notification nor the Customs notification no. 64/2008 dated 9/5/2008, nor any provisions in Section 9A of the Customs Tariff Act, enable you to avoid payment of the anti-dumping duty under EPCG scheme. The Customs Circular no. 58/2004 dated 21/10/2004 issued by the Central Board of Excise and Customs (CBEC) prescribes bond for the amount of ‘duty leviable but for the exemption’. In other words, whatever is not payable due to exemption notification (64/2008 dated 9/5/2008) is the amount of the bond. The duty saved and export obligation will be worked out accordingly. Anti-dumping duty will have to be paid in cash.
I think you must make representations to the CBEC to amend the notification no. 64/2008 dated 9/5/2008 to allow exemption from anti-dumping duty and safeguard duty under EPCG scheme the way it is allowed under the Customs notification no. 93/2004 dated 10/09/2004 relating to advance authorisation.
