National Institute of Business Management

Chennai - 020

EMBA/ MBA

Elective: International Trade Management (Part - 2)

Attend any 4 questions. Each question carries 25 marks

(Each answer should be of minimum 2 pages / of 300 words)

1. Explain the functions of Central Board of Excise and Customs.

2. Explain the refund of duty / recovery of duty short levied.

3. What is an anti dumping duty? Explain.

4. What procedures are to be followed by a manufacturer to obtain

excisable goods without payment of duty?Explain.

5. Explain “Duty Paid Goods Returned to Factory”.

6. Explain the powers of the various cadres of officers on search, seizure,

arrest and adjudication

25 x 4=100 marks
1. Explain the functions of Central Board of Excise and Customs.
Answer:

(i) PARTICULARS OF ORGANISATION, FUNCTIONS AND DUTIES: 

The Central Board of Excise & Customs (CBEC) is the apex body for customs
matters. Central Board of Excise and Customs (CBEC) is a part of the Department of
Revenue under the Ministry of Finance, Government of India.  CBEC deals with the task of
formulation of policy concerning levy and collection of customs duties, prevention of
smuggling and evasion of duties and all administrative matters relating to customs
formations.

The Board discharges the various tasks assigned to it, with the help of its field
organizations namely the Customs, Customs (preventive) and Central Excise zones,
Commissionerate of Customs, Customs (preventive), Central Revenues Control Laboratory
and Directorates. It also ensures that taxes on foreign and inland travel are administered as
per law and the collection agencies deposit the taxes collected to the public exchequer
promptly.  

Zones of Customs, Central Excise and Customs (Preventive)

  There are 23 zones of Central Excise & Customs, 11 zones of Customs &
Customs (Preventive) spread across the country. These zones are headed by the Chief
Commissioners.  

Commissionerates of Customs and Customs (Preventive)

  There are 93 Central Excise & Customs Commissionerates spread across the
country. These Commissionerates perform executive functions entrusted by the Board,
predominantly concerning central excise duty. Some of these Commissionerates also deal
with customs and anti-smuggling work in their respective jurisdictions.  
 There are 35 Commissionerates exclusively of Customs and Customs (preventive)
spread all over the country. These Commissionerates have been assigned following functions

(a)     Implementation of the provisions of the Customs Act, 1962 and the allied acts, which
includes levy and collection of customs duties and enforcement functions in their earmarked
jurisdiction.

(b)    Surveillance of coastal and land borders to prevent smuggling activities. Marine and
telecommunications wings and available with the Board to assist these Commissionerates in
their anti-smuggling work and surveillance of sensitive coastline. 

Appellate Machinery 

There are 67 Commissioners of Central Excise and Customs (Appeals). The

appellate machinery, comprising the Commissioners (Appeals), deals with appeals filed
against the orders passed by the officers lower in rank than Commissioner of Customs &
Central Excise under the Customs Act, 1962, Central Excise Act, 1944 and Service Tax laws.

 Commissioner (Adjudication) 

Four posts of Commissioner (Adjudication) – one each at Mumbai, Chennai,

Delhi and Bangalore – have come into being in the reorganized set-up to decide the cases
which have all-India ramifications and high revenue stakes. These Commissioners attend to
Central Excise as well as Customs cases. 

The Board vide notification no. 14/2002-Cus(NT) dated 07.03.2002 as amended

from time to time have appointed the officers mentioned in  column (2) of the Table below to
be the Chief Commissioners of Customs, for the areas falling within the jurisdiction of the
Commissioner of Customs, or as the case may be, the Commissioner of Central Excise
mentioned in the corresponding entry in column (3) of the said Table.
 2. Explain the refund of duty / recovery of duty short levied.
Answer:

11A. RECOVERY OF DUTIES NOT LEVIED OR NOT PAID OR SHORT-LEVIED OR

SHORT-PAID OR ERRONEOUSLY REFUNDED.

(1) When any duty of excise has not been levied or paid or has been short-levied or
short-paid or erroneously refunded, a Central Excise Officer may, within six months from the
relevant date, serve notice on the person chargeable with the duty which has not been levied or
paid or which has been short-levied or short-paid or to whom the refund has erroneously been
made, requiring him to show cause why he should not pay the amount specified in the notice :

Provided that where any duty of excise has not been levied or paid or has been short-
levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-
statement or suppression of facts, or contravention of any of the provisions of this Act or of the
rules made thereunder with intent to evade payment of duty, by such person or his agent, the
provisions of this sub-section shall have effect

Explanation: Where the service of the notice is stayed by an order of a court, the period of such
stay shall be excluded in computing the aforesaid period of six months or five years, as the case
may be.

(2) The [54 Central Excise Officer 54] shall, after considering the representation, if any,
made by the person on whom notice is served under sub-section (1), determine the
amount of duty of excise due from such person (not being in excess of the amount
specified in the notice) and thereupon such person shall pay the amount so determined.

(3) For the purposes of this section, -

(i) "refund" includes rebate of duty of excise on excisable goods exported out of
India or on excisable materials used in the manufacture of goods which are
exported out of India;
 (ii) "relevant date" means, -

[ 55 (a) in the case of excisable goods on which duty of excise has not been levied or paid or has
been short-levied or short-paid –

(A) where under the rules made under this Act a periodical return, showing particulars of the
duty paid on the excisable goods removed during the period to which the said return relates, is to
be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the
date on which such return is so filed;

(B) where no periodical return as aforesaid is filed, the last date on which such return is to be
filed under the said rules;

(C) in any other case, the date on which the duty is to be paid under this Act or the rules made
thereunder; 55]

(b) in a case where duty of excise is provisionally assessed under this Act or the rules made
thereunder, the date of adjustment of duty after the final assessment thereof;

(c) in the case of excisable goods on which duty of excise has been erroneously refunded, the
date of such refund.

Levy of, and exemption from, Customs duties

Dutiable goods. – (1) Except as otherwise provided in this Act, or any other
law for the time being in force, duties of customs shall be levied at such rates
as may be specified under the Customs Tariff Act, 1975 (51 of 1975)], or any
other law for the time being in force, on goods imported into, or exported
from, India. 
(2)  The provisions of sub-section (1) shall apply in respect of all goods
belonging to Government as they apply in respect of goods not belonging to
Government. 
Duty on pilfered goods. 
If any imported goods are pilfered after the unloading thereof and before the
proper officer has made an order for clearance for home consumption or
deposit in a warehouse, the importer shall not be liable to pay the
duty leviable on such goods except where such goods are restored to the
importer after pilferage. 
Valuation of goods. —
For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other
law for the time being in force, the value of the imported goods and export
goods shall be the transaction value of such goods, that is to say, the price
actually paid or payable for the goods when sold for export to India for
delivery at the time and place of importation, or as the case may be, for export
from India for delivery at the time and place of exportation, where the buyer
and seller of the goods are not related and price is the sole consideration for
the sale subject to such other conditions as may be specified in the rules made
in this behalf :
        
  Provided that such transaction value in the case of imported goods
shall include, in addition to the price as aforesaid, any amount paid or payable
for costs and services, including commissions and brokerage, engineering,
design work, royalties and licence fees, costs of transportation to the place of
importation, insurance, loading, unloading and handling charges to the extent
and in the manner specified in the rules made in this behalf: 
        
  Provided further that the rules made in this behalf may provide for - 

(i) the circumstances in which the buyer and the seller shall be deemed to
be related;

(ii) the manner of determination of value in respect of goods when there is

no sale, or the buyer and the seller are related, or price is not the sole
consideration for the sale or in any other case;
 (iii) the manner of acceptance or rejection of value declared by the
importer or exporter, as the case may be, where the proper officer has
reason to doubt the truth or accuracy of such value, and determination
of value for the purposes of this section:

 
Provided also that such price shall be calculated with reference to the
rate of exchange as in force on the date on which a bill of entry is presented
under section 46, or a shipping bill of export, as the case may be, is presented
under section 50.
 
(2)  Notwithstanding anything contained in sub-section (1), if the Board is
satisfied that it is necessary or expedient so to do, it may, by notification in
the Official Gazette, fix tariff values for any class of imported goods or
export goods, having regard to the trend of value of such or like goods, and
where any such tariff values are fixed, the duty shall be chargeable with
reference to such tariff value.   
 Explanation. — For the purposes of this section —
 
(a) “rate of exchange” means the rate of exchange —
 (i) determined by the Board, or 
(ii) ascertained in such manner as the Board may direct, for the
conversion of Indian currency into foreign currency or foreign
currency into Indian currency;
 
(b) “foreign currency” and ‘‘Indian currency” have the meanings respectively
assigned to them in clause (m) and clause (q) of section 2 of the Foreign
Exchange Management Act, 1999 (42 of 1999).
 
 
Date for determination of rate of duty and tariff valuation of imported
goods. – (1)    The rate of duty and tariff valuation, if any, applicable to any
imported goods, shall be the rate and valuation in force, -

(a) in the case of goods entered for home consumption under section 46, on the date
on which a bill of entry in respect of such goods is presented under that section;

(b) in the case of goods cleared from a warehouse under section 68, on the date on
which a bill of entry for home consumption in respect of such goods is presented
under that section;

(c) in the case of any other goods, on the date of payment of duty:

 
Provided that if a bill of entry has been presented before the date of
entry inwards of the vessel or the arrival of the aircraft by which the goods
are imported, the bill of entry shall be deemed to have been presented on the
date of such entry inwards or the arrival, as the case may be.
 
(2)   The provisions of this section shall not apply to baggage and goods
imported by post.

(a) in the case of goods entered for export under section 50, on the date on which the
proper officer makes an order permitting clearance and loading of the goods for
exportation under section 51;

(b) in the case of any other goods, on the date of payment of duty.

Date for determination of rate of duty and tariff valuation of export

goods. – (1) The rate of duty and tariff valuation, if any, applicable to any
export goods, shall be the rate and valuation in force, - 
(2) The provisions of this section shall not apply to baggage and goods
exported by post.
Assessment of duty. – (1) An importer entering any imported goods under
section 46, or an exporter entering any export goods under section 50, shall,
save as otherwise provided in section 85, self-assess the duty, if any, leviable
on such goods.
 
(2) The proper officer may verify the self-assessment of such goods and for this
purpose, examine or test any imported goods or export goods or such part
thereof as may be necessary.
 

(3) For verification of self-assessment under sub-section (2), the proper

officer may require the importer, exporter or any other person to produce
any contract, broker’s note, insurance policy, catalogue or other document,
whereby the duty leviable on the imported goods or export goods, as the case
may be, can be ascertained, and to furnish any information required for such
ascertainment which is in his power to produce or furnish, and thereupon, the
importer, exporter or such other person shall produce such document or
furnish such information.

 (4) Where it is found on verification, examination or testing of the goods or

otherwise that the self- assessment is not done correctly, the proper officer
may, without prejudice to any other action which may be taken under this
Act, re-assess the duty leviable on such goods.
 
(5) Where any re-assessment done under sub-section (4) is contrary to the
self-assessment 25 done by the importer or exporter regarding valuation of
goods, classification, exemption or concessions of duty availed consequent to
any notification issued therefore under this Act and in cases other than those
where the importer or exporter, as the case may be, confirms his acceptance
of the said re- assessment in writing, the proper officer shall pass a speaking
order on the re-assessment, within fifteen days from the date of re-assessment
of the bill of entry or the shipping bill, as the case may be.
 
(6) Where re-assessment has not been done or a speaking order has not been
passed on re- assessment, the proper officer may audit the assessment of
duty of the imported goods or export goods at his office or at the premises
of the importer or exporter, as may be expedient, in such manner as may be
prescribed.

Explanation.— For the removal of doubts, it is hereby declared that in cases

where an importer has entered any imported goods under section 46 or an
exporter has entered any export goods under section 50 before the date on
which the Finance Bill, 2011 receives the assent of the President, such
imported goods or export goods shall continue to be governed by the
provisions of section 17 as it stood immediately before the date on which
such assent is received.”.

Provisional assessment of duty- (1) Notwithstanding anything contained in

this Act but without prejudice to the provisions of section 46 -
(a)  where the importer or exporter is unable to make self-assessment under
sub-section (1) of section 17 and makes a request in writing to the proper
officer for assessment; or
 
(b) where the proper officer deems it necessary to subject any imported
goods or export goods to any chemical or other test; or 
(c) where the importer or exporter has produced all the necessary documents
and furnished full information, but the proper officer deems it necessary to
make further enquiry; or
 
(d) where necessary documents have not been produced or information
has not been furnished and the proper officer deems it necessary to make
further enquiry, 
the proper officer may direct that the duty leviable on such goods be assessed
provisionally if the importer or the exporter, as the case may be, furnishes
such security as the proper officer deems fit for the payment of the
deficiency, if any, between the duty as may be finally assessed and the duty
provisionally assessed”;

(2)   When the duty leviable on such goods is assessed finally or reassessed

by the proper officer in accordance with the provisions of this Act, then -

(a) in the case of goods cleared for home consumption or exportation, the
amount paid shall be adjusted against the duty finally assessed and if the
amount so paid falls short of, or is in excess of the duty finally assessed,
the importer or the exporter of the goods shall pay the deficiency or be
entitled to a refund, as the case may be;

(b) in the case of warehoused goods, the proper officer may, where the
duty finally assessed or re-assessed, as the case may be, is in excess of the
duty provisionally assessed, require the importer to execute a bond,
binding himself in a sum equal to twice the amount of the excess duty.

(3)   The importer or exporter shall be liable to pay interest, on any amount

payable to the Central Government, consequent to the final assessment order
or re-assessment order under sub-section (2), at the rate fixed by the Central
Government under section 28AB from the first day of the month in which the
duty is provisionally assessed till the date of payment thereof.
 
(4)   Subject the sub-section (5), if any refundable amount referred to in
clause (a) of sub-section (2) is not refunded under that sub-section within
three months from the date of assessment of duty finally or re-assessment of
duty, as the case may be, there shall be paid an interest on such un-refunded
amount at such rate fixed by the Central Government under section 27A till
the date of refund of such amount.  
(5)   The amount of duty refundable under sub-section (2) and the interest
under sub-section (4), if any, shall, instead of being credited to the Fund, be
paid to the importer or the exporter, as the case may be, if such amount is
relatable to
 
 (a) the duty and interest, if any, paid on such duty paid by the importer, or
the exporter, as the case may be, if he had not passed on the incidence
of such duty and interest, if any, paid on such duty to any other
person;

(b) the duty and interest, if any, paid on such duty on imports made by an
individual for his personal use;

(c) the duty and interest, if any, paid on such duty borne by the buyer, if
he had not passed on the incidence of such duty and interest, if any,
paid on such duty to any other person;

(d) the export duty as specified in section 26;

(e) drawback of duty payable under sections 74 and 75.

Determination of duty where goods consist of articles liable to different

rates of duty. – Except as otherwise provided in any law for the time being in
force, where goods consist of a set of articles, duty shall be calculated
as follows:

(a) articles liable to duty with reference to quantity shall be chargeable to

that duty;

(b) articles liable to duty with reference to value shall, if they are liable to
duty at the same rate, be chargeable to duty at that rate, and if they are
liable to duty at different rates, be chargeable to duty at the highest of
such rates;

(c) articles not liable to duty shall be chargeable to duty at the rate at
which articles liable to duty with reference to value are liable under
clause (b):

           Provided that -

(a) accessories of, and spare parts or maintenance and repairing

implements for, any article which satisfy the conditions specified in
 the rules made in this behalf shall be chargeable at the same rate of
duty as that article;

(b) if the importer produces evidence to the satisfaction of the proper

officer or the evidence is available regarding the value of any of the
articles liable to different rates of duty, such article shall be
chargeable to duty separately at the rate applicable to it.

 
Re-importation of goods - If goods are imported into India after exportation
therefrom, such goods shall be liable to duty and be subject to all the
conditions and restrictions, if any, to which goods of the like kind and value
are liable or subject, on the importation thereof.

Goods derelict, wreck, etc. - All goods, derelict, jetsam, flotsam and wreck
brought or coming into India, shall be dealt with as if they were imported into
India, unless it be shown to the satisfaction of the proper officer that they are
entitled to be admitted duty-free under this Act.

Abatement of duty on damaged or deteriorated goods. – (1)   Where it is

shown to the satisfaction of the Assistant Commissioner of Customs or
Deputy Commissioner of Customs -

(a) that any imported goods had been damaged or had deteriorated at any
time before or during the unloading of the goods in India; or

(b) that any imported goods, other than warehoused goods, had been
damaged at any time after the unloading thereof in India but before
their examination under section 17, on account of any accident not
due to any wilful act, negligence or default of the importer, his
employee or agent; or

(c) that any warehoused goods had been damaged at any time before
clearance for home consumption on account of any accident not due
to any wilful act, negligence or default of the owner, his employee or
 agent, such goods shall be chargeable to duty in accordance with the
provisions of sub-section (2).

(2)   The duty to be charged on the goods referred to in sub-section (1) shall

bear the same proportion to the duty chargeable on the goods before the
damage or deterioration which the value of the damaged or deteriorated goods
bears to the value of the goods before the damage or deterioration.

(3)   For the purposes of this section, the value of damaged or deteriorated

goods may be ascertained by either of the following methods at the option of
the owner:

(a) the value of such goods may be ascertained by the proper officer, or

(b) such goods may be sold by the proper officer by public auction or by

tender, or with the consent of the owner in any other manner, and the
gross sale proceeds shall be deemed to be the value of such goods.

 
Remission of duty on lost, destroyed or abandoned goods. – (1) Without
prejudice to the provisions of section 13, where it is shown to the satisfaction
of the Assistant Commissioner of Customs or Deputy Commissioner of
Customs that any imported goods have been lost (otherwise than as a result of
pilferage) or destroyed, at any time before clearance for home consumption,
the Assistant Commissioner of Customs or Deputy Commissioner of Customs
shall remit the duty on such goods.

(2)    The owner of any imported goods may, at any time before an order for
clearance of goods for home consumption under section 47 or an order for
permitting the deposit of goods in a warehouse under section 60 has been
made, relinquish his title to the goods and thereupon he shall not be liable to
pay the duty thereon.
        
 Provided that the owner of any such imported goods shall not be
allowed to relinquish his title to such goods regarding which an offence
appears to have been committed under this Act or any other law for the time
being in force.
 
Power to make rules for denaturing or mutilation of goods. – The Central
Government may make rules for permitting at the request of the owner the
denaturing or mutilation of imported goods which are ordinarily used for
more than one purpose so as to render them unfit for one or more of such
purposes; and where any goods are so denatured or mutilated they shall be
chargeable to duty at such rate as would be applicable if the goods had been
imported in the denatured or mutilated form.
 
Power to grant exemption from duty. – (1) If the Central Government is
satisfied that it is necessary in the public interest so to do, it may, by
notification in the Official Gazette, exempt generally either absolutely or
subject to such conditions (to be fulfilled before or after clearance) as may be
specified in the notification goods of any specified description from the whole
or any part of duty of customs  leviable thereon.
 
(2)   If the Central Government is satisfied that it is necessary in the public
interest so to do, it may, by special order in each case, exempt from the
payment of duty, under circumstances of an exceptional nature to be stated in
such order, any goods on which duty is leviable.
 
(2A)  The Central Government may, if it considers it necessary or expedient
so to do for the purpose of clarifying the scope or applicability of any
notification issued under sub-section (1) or order issued under sub-section (2),
insert an explanation in such notification or order, as the case may be, by
notification in the Official Gazette, at any time within one year of issue of the
notification under sub-section (1) or order under sub-section (2), and every
such explanation shall have effect as if it had always been the part of the first
such notification or order, as the case may be.
 
(3) An exemption under sub-section (1) or sub-section (2) in respect of any
goods from any part of the duty of customs leviable thereon (the duty of
customs leviable thereon being hereinafter referred to as the statutory duty)
may be granted by providing for the levy of a duty on such goods at a rate
expressed in a form or method different from the form or method in which the
statutory duty is leviable and any exemption granted in relation to any goods
in the manner provided in this sub-section shall have effect subject to the
condition that the duty of customs chargeable on such goods shall in no case
exceed the statutory duty.
     
 Explanation. - “Form or method”, in relation to a rate of duty of
customs, means the basis, namely, valuation, weight, number, length, area,
volume or other measure with reference to which the duty is leviable.
 
(4)   Every notification issued under sub-section (1) or sub-section (2A) shall

(a) unless otherwise provided, come into force on the date of its issue by
the Central Government for publication in the Official Gazette;

(b) also, be published and offered for sale on the date of its issue by the
Directorate of Publicity and Public Relations of the Board, New
Delhi.

 
(5)   Notwithstanding anything contained in sub-section (4), where a
notification comes into force on a date later than the date of its issue, the same
shall be published and offered for sale by the said Directorate of Publicity and
Public Relations on a date on or before the date on which the said notification
comes into force.
 
(6)   Notwithstanding anything contained in this Act, no duty shall be
collected if the amount of duty leviable is equal to, or less than, one hundred
rupees.
 
SECTION 26.  Refund of export duty in certain cases. – Where on the
exportation of any goods any duty has been paid, such duty shall be refunded
to the person by whom or on whose behalf it was paid, if -

(a) the goods are returned to such person otherwise than by way of re-
sale;

(b) the goods are re-imported within one year from the date of
exportation; and

(c)  an application for refund of such duty is made before the expiry of
six months from the date on which the proper officer makes an order
for the clearance of the goods.

SECTION 26A.  Refund of import duty in certain cases- (1) Where on the

importation of any goods capable of being easily identified as such imported
goods, any duty has been paid on clearance of such goods for home
consumption, such duty shall be refunded to the person by whom or on whose
behalf it was paid, if—
 

(a) the goods are found to be defective or otherwise not in conformity

with the specifications agreed upon between the importer and the
supplier of goods:

  Provided that the goods have not been worked, repaired or used after
importation except where such use was indispensable to discover the
defects or non-conformity with the specifications;

(b) the goods are identified to the satisfaction of the Assistant

Commissioner of Customs or Deputy Commissioner of Customs as
the goods which were imported;
 (c) the importer does not claim drawback under any other provisions of
this Act; and

(d) (i) the goods are exported; or

  (ii) the importer relinquishes his title to the goods and abandons
them to customs; or

  (iii) such goods are destroyed or rendered commercially valueless in

the presence of the proper officer, in such manner as may be
prescribed and within a period not exceeding thirty days from the date
on which the proper officer makes an order for the clearance of
imported goods for home consumption under section 47:

            Provided that the period of thirty days may, on sufficient cause being

shown, be extended by the Commissioner of Customs for a period not
exceeding three months:
            
Provided further that nothing contained in this section shall apply to
the goods regarding which an offence appears to have been committed under
this Act or any other law for the time being in force.
(2) An application for refund of duty shall be made before the expiry of six
months from the relevant date in such form and in such manner as may be
prescribed. 
Explanation - For the purposes of this sub-section, “relevant date” means - 

a)   in cases where the goods are exported out of India, the date on which
the proper officer makes an order permitting clearance and loading of
goods for exportation under section 51;

b)  in cases where the title to the goods is relinquished, the date of such
relinquishment;

c)  in cases where the goods are destroyed or rendered commercially

valueless, the date of such destruction or rendering of goods
commercially valueless. 
(3) No refund under sub-section (1) shall be allowed in respect of perishable
goods and goods which have exceeded their shelf life or their recommended
storage-before-use period.
(4) The Board may, by notification in the Official Gazette, specify any other
condition subject to which the refund under sub-section (1) may be allowed. 
SECTION 27.  Claim for refund of duty. – (1) Any person claiming refund
of any duty or interest -
(a) paid by him; or
(b) borne by him,
 
may make an application in such form and manner as may be prescribed for
such refund to the Assistant Commissioner of Customs or Deputy
Commissioner of Customs, before the expiry of one year, from the date of
payment of such duty or interest:
 
Provided that where an application for refund has been made
before the date on which the Finance Bill, 2011 receives the assent of the
President, such application shall be deemed to have been made under sub-
section (1), as it stood before the date on which the Finance Bill, 2011
receives the assent of the President and the same shall be dealt with in
accordance with the provisions of sub-section (2): 
Provided further that the limitation of one year shall not apply where
any duty or interest has been paid under protest.
 
Explanation - For the purposes of this sub-section, “the date of payment of
duty or interest'' in relation to a person, other than the importer, shall be
construed as “the date of purchase of goods” by such person. 
(1A) The application under sub-section (1) shall be accompanied by such
documentary or other evidence (including the documents referred to in section
28C) as the applicant may furnish to establish that the amount of duty or
interest, in relation to which such refund is claimed was collected from, or
paid by, him and the incidence of such duty or interest, has not been passed
on by him to any other person.
 
(1B) Save as otherwise provided in this section, the period of limitation of
one year shall be computed in the following manner, namely:  
(a) in the case of goods which are exempt from payment of duty by a
special order issued under sub-section (2) of section 25, the limitation of
one year shall be computed from the date of issue of such order; 
(b) where the duty becomes refundable as a consequence of any
judgment, decree, order or direction of the appellate authority, Appellate
Tribunal or any court, the limitation of one year shall be computed from
the date of such judgment, decree, order or direction; 
(c) where any duty is paid provisionally under section 18, the limitation
of one year shall be computed from the date of adjustment of duty after
the final assessment thereof.'. or in case of re-assessment, from the date of
such re-assessment.
 
(2)   If, on receipt of any such application, the Assistant Commissioner of
Customs or Deputy Commissioner of Customs is satisfied that the whole or
any part of the duty and interest, if any, paid on such duty paid by the
applicant is refundable, he may make an order accordingly and the amount so
determined shall be credited to the Fund:
      
  Provided that the amount of duty and interest, if any, paid on such
duty as determined by the Assistant Commissioner of Customs or Deputy
Commissioner of Customs under the foregoing provisions of this sub-section
shall, instead of being credited to the Fund, be paid to the applicant, if such
amount is relatable to –
 

(a) the duty and interest, if any, paid on such duty paid by the importer, or
the exporter, as the case may be if he had not passed on the incidence
 of such duty and interest, if any, paid on such duty to any other
person;

(b) the duty and interest, if any, paid on such duty on imports made by an
individual for his personal use;

(c) the duty and interest, if any, paid on such duty borne by the buyer, if
he had not passed on the incidence of such duty and interest, if any,
paid on such duty to any other person;

(d) the export duty as specified in section 26;

(e) drawback of duty payable under sections 74 and 75;

(f) the duty and interest, if any, paid on such duty borne by any other
such class of applicants as the Central Government may, by
notification in the Official Gazette, specify:

      
Provided further that no notification under clause (f) of the first
proviso shall be issued unless in the opinion of the Central Government the
incidence of duty and interest, if any, paid on such duty has not been passed
on by the persons concerned to any other person.
 
(3)  Notwithstanding anything to the contrary contained in any judgment,
decree, order or direction of the Appellate Tribunal , National Tax Tribunal or
any Court or in any other provision of this Act or the regulations
made thereunder or any other law for the time being in force, no refund shall
be made except as provided in sub-section (2).
 
(4)   Every notification under clause (f) of the first proviso to sub-section (2)
shall be laid before each House of Parliament, if it is sitting, as soon as may
be after the issue of the notification, and, if it is not sitting, within seven days
of its re-assembly, and the Central Government shall seek the approval of
Parliament to the notification by a resolution moved within a period of fifteen
days beginning with the day on which the notification is so laid before the
House of the People and if Parliament makes any modification in the
notification or directs that the notification should cease to have effect, the
notification shall thereafter have effect only in such modified form or be of no
effect, as the case may be, but without prejudice to the validity of anything
previously done thereunder.
 
(5)  For the removal of doubts, it is hereby declared that any notification
issued under clause (f) of the first proviso to sub-section (2), including any
such notification approved or modified under sub-section (4), may be
rescinded by the Central Government at any time by notification in the
Official Gazette.
 3. What is an anti dumping duty? Explain.
Answer:

Understanding Antidumping & Countervailing Duty Investigations

Under the Tariff Act of 1930, U.S. industries may petition the government for relief from
imports that are sold in the United States at less than fair value ("dumped") or which benefit from
subsidies provided through foreign government programs.

Under the law, the U.S. Department of Commerce determines whether the dumping or
subsidizing exists and, if so, the margin of dumping or amount of the subsidy; the USITC
determines whether there is material injury or threat of material injury to the domestic industry
by reason of the dumped or subsidized imports. For industries not yet established, the USITC
may also be asked to determine whether the establishment of an industry is being materially
retarded by reason of the dumped or subsidized imports.

Antidumping and countervailing duty investigations are conducted under title VII of
the law. The USITC conducts the injury investigations in preliminary and final phases.

Preliminary Phase Antidumping Investigations (Imports Sold at Less Than Fair Value)
and Preliminary Phase Countervailing Duty Investigations (Subsidized Imports)

When: After the simultaneous filing of a petition with the USITC and the U.S. Department of
Commerce, the USITC conducts a preliminary phase injury investigation.

Duration:

The preliminary phase of the investigation usually must be completed within 45 days of
the receipt of the petition. If Commerce has extended its deadline for initiating the investigation,
the USITC must make its preliminary injury determination within 25 days after Commerce
informs the USITC of the initiation of the investigation.
Finding:

The USITC determines, on the basis of the best information available to it at the time of
the determination, (1) whether there is a "reasonable indication" that an industry is materially
injured or is threatened with material injury, or (2) whether the establishment of an industry is
materially retarded, by reason of imports under investigation by the Department of Commerce
that are allegedly sold at less than fair value in the United States or subsidized.

If the USITC determination is affirmative, Commerce continues its investigation. If the

USITC determination is negative, the investigation is terminated. However, if the USITC, in
making a preliminary or final determination, finds that imports from a country are negligible,
then the investigation regarding those imports must be terminated. Imports from a country under
investigation are deemed negligible if they amount to less than 3 percent of the volume of all
such merchandise imported into the United States in the most recent 12-month period preceding
the filing of the petition for which data are available.

There are exceptions to this rule. One exception is that when imports from more than one
country are subject to investigation as a result of petitions filed on the same day, imports from
one or more of those countries under investigation will not be deemed negligible if the sum of
imports from countries subject to investigation whose imports are less than 3 percent on an
individual basis collectively amounts to more than 7 percent of the volume of all such
merchandise imported into the United States.

Further, if there is a potential that imports will imminently exceed the 3 percent or 7
percent thresholds, such imports will not be deemed negligible for purposes of the USITC's
threat determination. There are also other exceptions to the negligibility rule.

Final Phase Antidumping Investigations (Imports Sold at Less Than Fair Value) and Final
Phase Countervailing Duty Investigations (Subsidized Imports)

When: After a preliminary affirmative determination by the Secretary of Commerce (or

after a final affirmative determination if the preliminary determination was negative) that
imported products are being, or are likely to be, sold at less than fair value or are subsidized, the
USITC conducts the final phase of the injury investigation.

Duration:

The USITC final phase injury investigation usually must be completed within 120 days
after an affirmative preliminary determination by the Secretary of Commerce or within 45 days
after an affirmative final determination by the Secretary of Commerce, whichever is later.
However, in cases in which the Commerce preliminary determination is negative but the
Commerce final determination is affirmative, then the USITC final injury determination must be
made within 75 days.

Finding:

The USITC determines (1) whether an industry in the United States is materially injured
or threatened with material injury, or (2) whether the establishment of an industry in the United
States is materially retarded, by reason of imports that the Department of Commerce has
determined to be sold in the United States at less than fair value or subsidized.

If the USITC determination is affirmative, the Secretary of Commerce issues an

antidumping order (in a dumping investigation) or a countervailing duty order (in a subsidy
investigation), which is enforced by the U.S. Customs Service. If the USITC determination is
negative, no antidumping duty or countervailing duty orders will be issued. If the USITC makes
a finding of negligibility, the investigation regarding those imports will be terminated.

In the case of a countervailing duty order with respect to which an affirmative

determination of material injury by the Commission was not required at the time the order was
issued, interested parties may request that the Commission initiate an investigation to determine
whether an industry in the United States is likely to be materially injured by reason of imports of
the subject merchandise if the order is revoked. Such requests must be filed with the Commission
within six months of the date on which the country from which the subject merchandise
originates becomes a signatory to the Agreement on Subsidies and Countervailing Measures.
Sunset provision

The Uruguay Round Agreements Act, approved in late 1994, amended the antidumping and
countervailing duty laws in several respects. The most significant change affecting the
Commission's workload is the new provision requiring the Commission to conduct a review no
later than five years after an antidumping or countervailing duty order is issued to determine
whether revoking the order would likely lead to continuation or recurrence of dumping or
subsidies and material injury

Anti-dumping

A company is dumping if it is exporting a product to the EU at prices lower than the normal
value of the product (the domestic prices of the product or the cost of production) on its own
domestic market.

Anti-dumping in a nutshell

 The European Commission is responsible for investigating allegations of dumping by

exporting producers in non-EU countries.
 It usually opens an investigation after receiving a complaint from the Community
producers of the product concerned, but it can also do so on its own initiative.

EU anti-dumping policy

The EU investigates anti-dumping claims. Specifically, the investigation must show that:

1. there is dumping by the exporting producers in the country/countries concerned

2. material injury has been suffered by the Community industry concerned
3. there is a causal link between the dumping and injury found
4. the imposition of measures is not against the Community interest.

For more information on conditions for imposing an anti-dumping measure, see

Conditions if the investigation finds that the conditions have been met, then anti-dumping
measures can be imposed on imports of the product concerned. These measures usually take the
form of an ad valorem duty but could also be specific duties or price undertakings. The duties are
paid by the importer in the EU and collected by the national customs authorities of the EU
countries concerned.

Exporting producers may offer "undertakings" – agreeing to sell at a minimum price, for
example. If their offer is accepted, anti-dumping duties will not be collected on imports. The
Commission is not obliged to accept an offer of an undertaking.

A duty may be imposed to remove the effects of dumping on imports of a particular product. An
assessment is also made of the level of duty needed to remove the injurious effects of dumping.
Measures will be imposed at the level of dumping or injury whichever is the lower.

Measures are generally imposed for 5 years and may be subject to review if, for example:

 the circumstances of the exporters have changed

 importers request a full or partial refund of duties paid
 new exporting producers requests an accelerated review.

Measures will lapse after 5 years unless an expiry review is initiated.

The Commission monitors measures to ensure they are effective and respected by exporters and
importers.

The way forward on anti-dumping

An anti-dumping investigation can be initiated in response to a complaint lodged by European

manufacturers affected by dumped imports or at the request of an EU country.

Community producers who are considering lodging an anti-dumping complaint, should

 5. Explain “Duty Paid Goods Returned to Factory”.
Answer:

As per Rule 16 of the Central Excise Rules, when duty paid goods are returned to the
factory, the manufacturer is entitled to take Cenvat credit of the duty paid as if such goods are
inputs under the Cenvat Credit Rules. Now what is the document under which these goods are to
be returned and credit to be taken? This interesting question reached the Chennai Bench of the
Tribunal recently.

The goods were returned by the buyer under the cover of a letter and the assessee took
credit on the basis of the triplicate copy of the invoice already available with him. The
department took strong objection on the ground that the triplicate copy originally retained with
the manufacturer is not a valid document for taking credit as this invoice does not show the
manufacturer as the consignee. Production of a valid document is a mandatory requirement for
taking credit.

The Tribunal observed that the intricate requirements under the erstwhile Central
Excise Rules are absent in the simplified Cenvat Credit Rules. It further observed that any of the
regular copies of a manufacturer’s invoice is a document for Cenvat Credit. Therefore, the
triplicate copy available with the manufacturer is an appropriate document and could be used for
availing of Cenvat Credit. Though this is not a final decision but a stay order, the Tribunal
appears to be convinced that any copy of the invoice is a perfectly good document for taking
credit.

But the larger question still remains

The Cenvat credit rules do not prescribe that credit should be taken only on the
duplicate copy of the invoice. So there can be no dispute as to which copy should be used for
taking credit. But when it comes to Rule 16, the situation is slightly different. The goods returned
can be the original goods manufactured in the same factory or they could also be goods
manufactured by others. There is no requirement under Rule 16 that only the goods
manufactured by that factory should be brought back. That is goods manufactured by A
originally cleared to B can be brought to C and C is eligible to take credit under Rule 16. Now
what is the document that B can give to C? A’s invoice? But that will not show C as a consignee.

There no time limit before which duty paid goods can be brought to a factory. So
technically goods cleared in 1986 can also be brought back and credit taken. But, on what
document is the question. If the person who is sending back the duty paid goods is a
manufacturer availing credit, there should be no problem as he can send these goods on his
invoice which should be a good document for taking credit by the original manufacturer. But if
this person is not a manufacturer, the problem comes. Why not return the original or duplicate
copy of the invoice, you may ask. Easier said than done!

Take the case of a transformer manufacturer, who sells and cleared 100 transformers
in an invoice to a state Electricity Board. Now this Electricity Board installs these transformers
in 100 different locations. Power doesn’t flow through Central Excise Rules and some of these
transformers are damaged. Now the Electricity Board sends 20 of these transformers to five
manufacturers including the original manufacturer. Now how will these five manufacturers
repairing the transformers take credit? Even if the original duplicate copy of the invoice is
available, it can be sent to only one manufacturer.

The department will invariably deny credit to four manufacturers and probably to the
original manufacturer also. Under the old Rule 173H there was a provision for the Assistant
Commissioner to allow bringing in of these duties paid goods without original duty paying
documents. Simplification has seen many procedural requirements guillotined. The Rules have
gone from the statutes but not the minds of the officers. Rule 16(3) provides for the
Commissioner to issue instructions in case of any difficulty in following the procedure. In the
guise of removing difficulties many Commissioners had actually prescribed difficulties.

The fact remains that it is not possible to have a proper duty paying document showing
the manufacturer as consignee in case of duty paid goods brought to the factory under Rule 16.
Further the rule does not mention anything about duty paying documents; it only says that credit
can be taken as if such goods are received as inputs and it nowhere mentions that the procedure
under the Cenvat Credit Rules has to be followed for taking credit. The requirement of following
the procedure is only in respect of utilization of the credit, not for taking that credit. This must
have been a consciously framed rule as it is not practically feasible to always produce a duty
paying document in case of returned goods

CBDT notifies Banking Cash Transaction Tax Rules, 2005

CBDT has notified the Banking Cash Transaction Tax Rules which come into force from
today. Every scheduled bank has to pay the amount of such tax to the credit of the Central
Government by remitting it into any branch of the RBI or of the SBI or of any authorised bank
accompanied by a banking cash transaction tax challan. Every branch of a scheduled bank shall
keep and maintain in Form No. 1 the particulars of taxable banking transactions entered into in
that branch. Further, every branch of a scheduled bank which is maintaining its daily account on
a computer media, is required to keep and maintain the particulars as referred to in sub-rule (1),
on a computer media.

Every scheduled bank is required to furnish a statement of taxable banking transactions

in respect of which it is required to collect tax during a month, in Form No 2 to the income tax
authority specified in this behalf by the Board on or before the expiry of the month immediately
following the said month on a computer media, in accordance with the following,-

(a) the computer media conforms to the following specifications:-

i) CD ROM of 650 MB capacity or higher capacity; or
ii) 4mm 2GB/ 4GB (90M/ 120M) DAT Cartridge; or
iii) Digital Video Disc;

(b) if the data relating to the schedules is copied using data compression or backup software
utility, the corresponding software utility or procedure for its decompression or restoration shall
also be furnished;

(c) the statement shall be accompanied by a certificate regarding clean and virus free data.
Return of taxable banking cash transactions is also required to be furnished on or before the 31st
July immediately following that financial year under sub-section (1) of section 98 of the Act in
Form No 3 and be verified in the manner indicated therein.

The return is required to be signed and verified in the case of a scheduled bank, being a
company, by the managing director or a director thereof; and in the case of a scheduled bank, not
being a company, by the principal officer thereof.

Foreign Trade Policy amended – Easing of documentation requirements is back

Pending the finalization of Single Common Document (SCD) for international trade, the
Government Departments dealing with exports and imports will honour the
permission/license/certificate issued by the other Government departments based on the
verification of the export documents Like shipping bill, bank realization certificate, Packing list,
bill of lading etc .and will not insist upon fresh submission of these documents.

Also Para 4.1.4 has been amended to the effect that the exclusion of exemption from
payment of anti-dumping and safeguard duties has been made for deemed exports under para 8.2
(i) and (j) against the earlier exclusion for supplies under 8(h) and (j)
from the jurisdictional Central Excise authority confirming installation of Capital goods at the
factory/premises of the licence holder or his supporting manufacturer(s) vendor(s) within six
months from the date of completion of imports.

However, licence holders who are not registered with Central Excise Authorities and service
providers can give a certificate either from the jurisdictional excise authority or an independent
Chartered Engineer confirming installation of movable and immovable capital goods at the
premises of the licence holder/supporting manufacturer.”

Prior to this amendment, the licence holders who are not registered with the Central Excise
Authorities did not have the option of certification by the Chartered Engineer and they were
required to get a Certificate only from the Central Excise Authorities.

Procedure regarding valuation of goods assessable ad valorem -

1. Every assessee who produces, manufactures or warehouses goods which are chargeable
with duty at a rate dependent on the value of the goods and removes or clears such goods
as provided in rules 9, 49, 144, 152 and 157, shall declare the value under section 4 of the
Act of such goods in the documents such as sales invoice, invoice-cum-challan or like
documents used by him for sale or removal of goods

Provided that —

1. such documents shall indicate separately the value of goods under section 4 of the
Act and the duty paid as provided under section 12A of the Act;
2. that such documents also contain a declaration of the price;
3. that such documents also indicate, wherever applicable, individually the central
excise duty, other taxes, all discounts and other consideration if any, for the
difference between the price and the value of the goods under section 4 of the
Act;
4. that such documents also indicate the date and time of removal of the goods:

Provided further that where an assessee —

5.  sells goods to or through related persons as defined in section 4 of the Act; or

6. uses such goods for manufacture or production of other goods in his factory; or
7. removes such goods for free distribution; or
8. removes such goods in any other manner which does not involve sale; or
9.  removes goods of the same kind and quality from his factories located in the
jurisdiction of different Commissioners of Central Excise or Assistant
Commissioners of Central Excise or Deputy Commissioner of Central Excise
he shall file, with the proper officer a declaration, in such form and in such
manner and at such interval as the Central Board of Excise and Customs or
Commissioner of Central Excise may require, declaring the value of the goods
under section 4 of the Act, the duty and other elements constituting the price of
such goods along with such other particulars as the Central Board of Excise and
Customs or the Commissioner of Central Excise may specify.
2. The assessee shall certify in each such document that the amount indicated in such
document represents the price actually charged by him and that there is no additional
consideration flowing directly or indirectly from such sales over and above what has been
declared.

(2A) Every assessee who produces, manufactures or warehouses goods notified under
Section 4A of the Act shall file with the proper officer a declaration in such form and in
such manner and at such interval as the Central Board of Excise and Customs may
specify, declaring the retail sale price of such goods, amount of abatement, if any on such
sale price and such other particulars as may be specified by the said Board.
3. The proper officer, duly empowered by the Central Government under section 14 of the
Act, may, where he considers it necessary during the course of any enquiry in connection
with the declaration made in the documents referred to in sub-rule (1) or sub-rule (2A) by
an assessee —
1. require any person to produce or deliver any document or thing relevant to the
enquiry; and
2. examine any person acquainted with the facts and circumstances of the particulars
declared in such documents or other records, in the manner provided in section 14
of the Act.

(3A) The assessee shall declare to the proper officer his marketing pattern, discount
structure and such other particulars in such form and in such manner and at such intervals
as the Central Board of Excise and Customs or Commissioner of Central Excise may
require.

4. The proper officer may after such further enquiry as he may consider, reassess following
the provisions of section 11A of the Act and the assessee shall pay the deficiency, if any.

173E. Determination of normal production -

1. Any officer duly empowered by the Commissioner in this behalf may fix the quantum
and period of time when the production in the assessee's factory was considered normal
 by such officer having regard to the installed capacity of the factory, raw material
utilisation, labour employed, power consumed and such other relevant factors as he may
deem appropriate. The normal quantum of production during a given time so determined
by such officer shall form the norm.
2. The assessee shall, if so required by the said officer, be called upon to explain any
shortfall in production during any time, as compared to the norm. If the shortfall is not
accounted for to the satisfaction of the said officer, he may assess the duty due thereon to
the best of his judgment, after giving the assessee a reasonable opportunity of being
heard.
3. The officer empowered as aforesaid may revise the norm as determined by him at any
time, if after such further inquiry as he may consider necessary, he has reason to believe
that any factor affecting the production of factory, has undergone a material change:
Provided that the norm as determined by the officer empowered as aforesaid shall not be
revised to the disadvantage of the assessee unless such assessee has been given a
reasonable opportunity of being heard.