Excise

Notification No. 112/2013 containing rates of exchange applicable from November 22, 2013

As per Section 67A of the Finance Act, 1994 read with explanation to Section 14 of the Customs Act, 1962, rate of exchange for calculation of gross value of taxable service tax would be the rate, as determined by CBEC for the conversion of foreign currency into Indian currency or vice versa, applicable on the date on which taxable service has been provided or agreed to be provided. CBEC from time to time issues Notification to notify rate of exchange determined by it.

In this context, please find enclosed herewith the Notification No. 112/2013 dated November 21, 2013 containing the Rates of Exchange applicable from November 22, 2013.

NOTIFICATION NO 112/2013-CUS (N.T), Dated : November 21, 2013

In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.109/2013-CUSTOMS (N.T.), dated the 7 th November, 2013 vide number S.O.3397 (E), dated the 7 th November, 2013, except as respects things done or omitted to be done before such super session, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 22nd November, 2013 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

SCHEDULE-I

S.No.	Foreign Currency	Rate of exchange of one unit of foreign currency equivalent to Indian rupees
(1)	(2)	(3)
		(a)	(b)
		(For Imported Goods)	(For Export Goods)
1.	Australian Dollar	59.20	57.80
2.	Bahrain Dinar	171.40	162.00
3.	Canadian Dollar	60.75	59.35
4.	Danish Kroner	11.50	11.15
5.	EURO	85.30	83.35
6.	Hong Kong Dollar	8.15	8.05
7.	Kuwait Dinar	228.65	215.40
8.	New Zealand Dollar	52.55	51.25
9.	Norwegian Kroner	10.40	10.10
10.	Pound Sterling	102.25	100.00
11.	Singapore Dollar	50.85	49.75
12.	South African Rand	6.40	6.00
13.	Saudi Arabian Riyal	17.25	16.30
14.	Swedish Kroner	9.55	9.30
15.	Swiss Franc	69.40	67.55
16.	UAE Dirham	17.60	16.65
17.	US Dollar	63.30	62.30

SCHEDULE-II

S.No.	Foreign Currency	Rate of exchange of 100 units of foreign currency equivalent to Indian rupees
(1)	(2)	(3)
		(a)	(b)
		(For Imported Goods)	(For Export Goods)
1.	Japanese Yen	63.35	61.80
2.	Kenya Shilling	75.05	70.85

[F.No.468/03/2013-Cus.V]

(M. Satish Kumar Reddy)
Director (ICD)

 

Complex Fertiliser and Fertiliser Mixture- Excisability

Posted In Excise Duty | Articles | No Comments »

R.K Rengaraj

For more than two decades, there was no excise duty for Fertilizers and the exemption continued up to 28.02.2011. Excise Duty was imposed in the 2011-12 Union Budget, effective from 01.03.2011 for Chapter 31 which covers Mineral or Chemical Fertilizers containing Nitrogenous, Phosphatic and Potassic.  Except 3101, all other fertilizers listed under Heading Nos. 3102, 3103, 3104 & 3105 were brought under excise net @1%, with a view to move towards GST.  Three notifications were issued for the applicability of excise duty for fertilizers during the year 2011.

Notification No.1/2011-CE dt 01.03.2011 -1%  ad valorem is levied vide serial No.40 of the notification for Chapter 31 : “All goods, other than those which are clearly not to be used as fertilizers” provided Inputs or tax on input services are not availed.

Notification No. 2.2011-CE dt 01.03.2011- 5% ad valorem is levied vide serial No.21 of the notification for chapter 31:  “All goods, other than those which are clearly not to be used (a) as fertilizers or (b) in the manufacture of other fertilizers, whether directly or through the stage of an intermediate product”. For paying 5% ED, CENVAT benefit is allowed.

There was another notification issued vide notification No. 4/2011-CE dt 01.03.2011 substituting some entries to the effect to exempt certain fertilizers used in the manufacture of other fertilizers.  The entry reads as under:

Sl.No.63 –Chapter 31 : All goods, other than those which are clearly not to be used in the manufacture of other fertilizers, whether directly or through the stage of an intermediate product. –NIL.

From the above notifications the following points can be observed.

• 1% Duty is payable for Fertilizers covered under chapter heading no.3102,3103,3104 & 3105 without CENVAT benefit and 5% Duty (now it is 6%) is payable for fertilizers with CENVAT benefit as per 2011-12 Budget notification.
• No Duty is payable if all goods, which are clearly to be used in the manufacture of other fertilizers whether directly or through the stage of an intermediate product.

In other words, when complex fertilizers are manufactured such as Complex 15:15:15, Complex 17:17:17, the ingredients (inputs) are not attracting Excise Duty 1% or 5%, as the case may be, and only the end product attracts duty.

While it is so, the fertilizer mixture manufacturing industry has not received any clarification/communiqué from the Department of Revenue, Ministry of Finance as to whether similar benefit is passed on to fertilizer mixtures also.  In this case, the NPK mixture manufactures are getting their fertilizers with Duty element and again their end products attract Excise duty.  They are not eligible for CENVAT benefit also (who opts to pay 1% duty). It would result in double taxation.  The process is nothing but activity of mixing various chemical fertilizers which is a manufacturing activity as per Section 2(f) of the Central Excise Act, 1944 and in accordance with the principles laid down by the Hon’ble Supreme Court in the case of UOI Vs DCM 1977 ELT 199 SC.

CONCLUSION:

While greater importance is given to Agro industry by the Central Government, as the Fertilizer mixtures are used by the Farmers, why not a circular can be sent clarifying that either Fertilizer mixtures are to be given duty exemption as the raw materials have already suffered Excise duty or the duty is to be exempted when the fertilizers (inputs) are to be used in the manufacture of fertilizers whether directly or through stage of an intermediate product. It is also emphasized that all other inputs like Naptha, Sulphuric Acid, Ammonia, ammonium Chloride, Manganese Sulphate etc., which go into the production of Fertilizers also given exemption (General Exemption No.50).

And lastly, various State Governments such as Tamilnadu, Kerala, Punjab, Haryana have also given VAT exemption on their part for the sale of fertilizers and its mixtures in order not to increase the selling price of the Fertilizers which are ultimately used by the Farming community.

In the author’s opinion, the Central Government can look into the complexities involved in this cenvat issue and consider issuing a circular for the fertilizer mixing industries.

—————-

Author :-

R.K RENGARAJ M.COM., MBA., LL.B

ADVOCATE AND TAX CONSULTANT

The author can be reached at renga42002@yahoo.co.in Mobile: 09244219688

The Department can’t force assessee to avail a particular exemption Notification when benefit of other exemption Notification is available

Posted In Excise Duty | Articles | 1 Comment »

We are sharing with you an important judgement of the Hon’ble CESTAT, New Delhi in the case of M/s Winsome Yarns Ltd. Versus Commissioner of Central Excise & Service Tax, Chandigarh-II [2013 (7) TMI 372 - CESTAT NEW DELHI] on following issue:

Issue:

Whether the Department can force the assessee to avail the benefit of a particular exemption Notification when benefit of other exemption Notification is available?

Facts & Background:

M/s Winsome Yarns Ltd. (“the Appellant”) is manufactures of Yarn. During the period from September, 2009 to May, 2010, the Appellant were availing the exemption Notification No. 29/2004-CE dated July 9, 2004 (“Notification No. 29”) in respect of the yarn manufactured and cleared for export as well Notification No. 30/2004-CE dated July 9, 2004 (“Notification No. 30”) in respect of clearances intended for domestic consumption.

Notification No. 29 prescribes a concessional rate of duty of 4% for yarn without any condition and the Appellant can avail inputs Cenvat Credit under the said Notification. Notification No. 30 provides for full duty exemption to the items specified thereunder subject to condition that no input Cenvat Credit is availed. However, during the period of dispute the Appellant did not avail any inputs Cenvat credit at all but availed only Cenvat Credit on capital goods.

The Department contended that since the Appellant did not avail any Cenvat Credit on inputs in respect of the goods cleared under Notification No. 29 on payment of 4% duty, the Appellant was not eligible for benefit under Notification No. 29. Further, the authorities were of the view that the Appellant should have cleared the goods under Notification No. 30 on payment of NIL duty. Hence, the amount paid towards duty cannot be treated as duty but only a deposit and the goods have to be treated as exempted goods cleared under Notification No. 30. Accordingly, in terms of Rule 6(4) of Cenvat Credit Rules, 2004, no Cenvat Credit would be admissible in respect of capital goods as they have been used exclusively for manufacture of exempted goods.

The Department issued two show cause notices for recovery of alleged wrongly availed Cenvat Credit on capital goods along with interest and penalty which were upheld by the Deputy Commissioner adjudicating these notices.

The Appellant appealed against the order of the Deputy Commissioner before the Commissioner (Appeals) who rejected the appeal and hence the Appellant appealed before the Hon’ble CESTAT.

Held:

It was held by the Hon’ble CESTAT that when two exemption Notifications are available to an assessee, he can always opt for the Notification which is most beneficial for him and in this regard the Department cannot force the assessee to avail a particular exemption Notification.

The Hon’ble CESTAT held that the condition of non-availment of inputs Cenvat Credit is for NIL duty under Notification No. 30. But this does not mean that an assessee not availing inputs Cenvat Credit cannot avail the exemption under Notification No. 29, as this is an unconditional Notification. When an assessee does not avail of inputs Cenvat credit, he has option to pay 4% duty under Notification No. 29 and also the option to clear his goods at NIL rate of duty under Notification No. 30.

Since during the period of dispute, the Appellant was clearing the goods by availing full duty exemption as well as on payment of duty, the capital goods cannot be treated as having been used exclusively in the manufacture of exempted goods and Cenvat Credit in respect of the same cannot be denied.

Therefore, on the basis of the above judgment, the Hon’ble Delhi Tribunal rejected the contention of the Department and decided the case in favour of the Appellant.

Point to be noted

It is worthwhile to note that the above issue of “availment of the exemption Notification which is more beneficial to the assessee” has been settled in a number of judgments of the Hon’ble Supreme Court, some of which are mentioned below:

• H.C.L. Limited Vs Collector of Customs [2001 (130) ELT 405 (SC)]
• Share Medical Care vs. Union of India [2007 (209) E.L.T. 321 (S.C.)]
• Unichem Laboratories Ltd. Vs. Collector of Central Excise, Bombay [2002 (145) E.L.T. 502 (S.C.)]
• CCEx, Baroda Vs. Indian Petro Chemicals [1997 (92) ELT 13 (SC)]
• CCE Vs. Maruthi Foam (P) Ltd. [1996 (85) ELT 157 (Tri.)] affirmed by the Supreme Court vide 2004 (164) ELT 394 (SC).

——————-
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
Mobile: +91 9810604563
E-mail: bimaljain@hotmail.com