Can we send duty-free goods imported under advance authorisation to a job-worker?
As per Para 4.1.5 of the Foreign Trade Policy (FTP), ‘advance authorisation and/or material imported there under will be subject to Actual User Condition’. As per Para 9.5 of the FTP, ‘“Actual User (Industrial)” means a person who utilises imported goods for manufacturing in his own industrial unit, or manufacturing for his own use in another unit, including a jobbing unit.’ Therefore, you can send the duty free goods imported under advance authorisation to a job-worker.
Some of our Domestic Tariff Area (DTA) suppliers to our Special Economic Zone (SEZ) unit pay excise duty and ask us to claim a rebate. Is this possible?
As per Rule 30(5) of the SEZ Rules, 2006, “where a Bill of Export has been filed under a claim of drawback or Duty Entitlement Pass Book, the Unit or Developer shall claim the same from the Specified Officer and jurisdictional Development Commissioner respectively and in case the Unit or Developer does not intend to claim entitlement of drawback or Duty Entitlement Passbook Scheme, a disclaimer to this effect shall be given to the Domestic Tariff Area Supplier for claiming such benefits.” This provision does not cover claim of excise rebate by the recipient, i.e., the SEZ unit. Therefore, the excise rebate can be claimed by the manufacturer or merchant supplying the goods to the SEZ unit, in accordance with the notification no. 19/2004-CE(NT) dated September 6, 2004.
I refer to your Q&A, wherein you have mentioned that Section 61 of the Customs Act, 1962 will apply only to imported goods warehoused under the provisions of Section 60 of the said Act and not to locally procured goods. But our Central Excise authorities are of the opinion that extension is required for indigenous goods against CT3, as they are to be treated in the same way as imported goods. If it be so, under which provisions is this extension of warehousing period required? If no extension is required, can you give any case law/any other provision in support of the same?
There is no mention about indigenous goods in the warehousing provisions in the Customs law. I find no case law on that point. Whenever the department has a different view and the law is silent, only the courts can resolve the issue. The department loses most cases at the Tribunal stage. So, its views need not necessarily be correct.
Is a service provider required to pay service tax on expenses incurred while giving consultancy service, even when these are reimbursed by the service receiver?
As per Rule 5(2) of Serve Tax (Determination of Value) Rules, 2006, subject to the provisions of sub-rule (1), the expenditure or costs incurred by the service provider as a pure agent of the recipient of service shall be excluded from the value of the taxable service, if specified conditions are satisfied. You may refer to those conditions and examine whether your reimbursed expenses fall within the exclusion.
