AIT NEWS

the Appellate Tribunal was right in holding that the second reassessment proceedings were not validly initiated and thereby quashing the reassessment proceedings-the proceedings initiated by the AO for the second time under Section 147 is barred by limitation-even the proviso to Section 147 does not come into play on the facts of the case-AIT-2010-373-HC Even if the goods belong to same entry, manufacture does take place if new identifiable/marketable goods known in market emerge due to operation conducted-the process of ironing applied to the stiched brassieres prior to their packing was a process incidental to the completion of the brassieres as a manufactured product-process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved-AIT-2010-370-HC Larger Bench of CESTAT rules the Tribunal has ample power to condone the delay in filing the appeal including the one filed under section 35 E (4)-AIT-2010-372-CESTAT Corruption in IRS takes its toll-Deputy Commissioner of Income Tax Dhananjay Kumar arrested by CBI in Mumbai-Joint Commissioner of Customs & Excise Hemant Kothikar also arrested by CBI FM directs expediting of Cadre Restructuring in CBDT & CBEC Tariff Value for import of Brass Scrap is 3924-Customs Non-Tariff Notification No. 78 Chief Justice of Gauhati High Court Justice Ranjan Gogoi to be Chief Justice of Punjab & Haryana High Court Anti-dumping duty on imports of Acrylic Fibre originating in, or exported from Japan and Belarus-Customs Tariff Notification No.85 Prescribing SION for new product “Propylene” under Chemical & Allied Products Group-DGFT PN 7 Inclusion of Finished Leather in the Focus Product Scheme of FTP-DGFT PN 6 Exchange Rate for imported goods is Rs 47.25 per US Dollar and Rs 60.35 per EURO-Exchange Rate for export goods is Rs 46.30 per US Dollar and Rs 58.70 per EURO-Customs Non-Tariff Notification No. 77-Click on Exchange Rate for details Anti Dumping Duty under the Notification No.15/2007 is not applicable to Spandex Yarn (Elastomeric yarn)-Customs Circular No.30 Import of goods under Notification No.13/2010 for Commonwealth Games, 2010-Customs Circular No.31 Larger Bench of CESTAT rules charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars to be included in the assessable value of cars for payment of excise duty-AIT-2010-366-CESTAT merely because there was non accounting of goods, penalty was technical and inference of clandestine removal was not called for-AIT-2010-365-HC ITAT rules provision for doubtful debts and provision for standard debts are to be taken into consideration for computation of book profit u/s. 115JB of the IT Act-AIT-2010-361-ITAT HC rules slitting of aluminum foils into customized width, mounting the same on the printing machine and thereafter printing the necessary text thereon is covered for 80IB benefit as it falls within the ambit of the term “produce”-AIT-2010-363-HC Definitive Anti-dumping duty imposed on imports of Coumarin, originating in, or exported from China-Customs Tariff Notification No. 82 Special Bench of ITAT Ruling-where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract-AIT-2010-355-ITAT-SB

JUDGMENTS

CENTRAL EXCISE

CUSTOMS

exchange rate

SERVICE TAX

INCOME TAX

VAT

FINANCE ACTS

FINANCE BILLS

EOU STPI

SEZ

DGFT

RBI

NTT

RESOURCES

Email | Print

FinMin in Santa Mode: Doles out Rebate when no duty paid: Double Your Money Scam all set to shake North Block

AIT News Network

JAMMU. What may perhaps be another Rs.100 Crore scam going to shock even the mandarins of the Finance Ministry; is grant of Rebate by Maritime Commissioners on goods manufactured in Tax Heaven of Jammu & Kashmir on which no duty is legally paid but the rebate is being illegally claimed on export of these goods.

Though on one hand Hon’ble Finance Minister is leaving no stone unturned for plugging the Revenue leakage, Double Your Money in no time is the new buzzword for manufacturers and exporters.

The modus operandi is simple:

Step 1. Set up a Unit in Jammu & Kashmir and avail the benefit of Central Excise Notification No. 56/2002.

Step2: Pay Rs.10 lakh on goods manufactured and cleared as prescribed under Notification No.56/2002

Step 3: Get Refund of Rs.10 lakh paid as provided under Notification No.56/2002

Step 4: Export the same goods. Get Rebate of another Rs.10 Lakh.

Thus on an investment of Rs.10 Lakh ; the Government is in fact giving a return of Rs.20 Lakh.

According to sources this incentives without legal backing are being given to some of the manufactures allegedly on the basis of unreported clarification given to the field formations by the Central Board of Excise & Customs.

R.S.Sharma, Well Known Indirect Tax Expert told allindiantaxes.com that granting of Rebate of duty under Rule 18 of the Central Excise Rules, 2002 on the goods directly exported from Jammu Units through Merchant Exporters, in addition to the refund granted under the said Notification No.56/2002-CE is illegal as the Notification No. 56/2002-CE is an exemption notification issued under Section 5A of the Central Excise Act, 1944 granting exemption to the goods manufactured in the specified areas of Jammu region. A suitable mechanism has been incorporated in exemption Notification to operationalize the exemption wherein the the manufacturer is first required to pay the excise duty and thereafter, whatever is paid in cash is to be refunded. In terms of Rule 12 of the CENVAT Credit Rules, 2004, there is a special dispensation to the manufacturers to take CENVAT credit of duty paid on the goods bought from the units of Jammu region and used in the manufacture of subsequent final products. However, there is no such special dispensation for admissibility of rebate under Rule 18.

Under Notification No. 56/2002-CE, effectively no duty is being paid on the goods cleared and in addition, they are getting rebate of duty @ rate of 16% of value of goods which is never paid.

It has been reportedly learnt that the alleged clarification given by the Board has given indication that payment of duty under the said Notification is also payment of duty for the purpose of granting rebate under Rule 18. It seems to be incorrect in as much as since Notification No. 56/2002-CE is an exemption Notification under Section 5A i.e. no duty is being paid effectively, grant of rebate under Rule 18 in the absence of special dispensation as in the case of CENVAT Credit Rules, 2004, is a double benefit resulting into revenue loss in crores of rupees, which needs to be addressed immediately.

In view of above Allindiantaxes.com suggests:

FinMin should give equal opportunities( as guaranteed under Constitution of India) to all manufacturers exporters to double their money by claiming first Refund and thereafter Rabate of the same amount by issue of a Circular that the Rebate is also admissible in addition to Refund under the said Notification and Rebate Party is open for all manufacturers exporters as granting of rebate in addition to refund in the above manner has resulted in loss of business opportunity to those manufactures who are not claiming such rebate vis-à-vis manufacturers who have claimed rebates and have offered lower prices of the products to their buyers.

Immediate directions should be issued to stop Rebate Party and to recover the rebate granted erroneously. Possibility of the same fate for North East units or units in Kutch region cannot be ruled out. But whether Intelligence Agencies will be able to trace merchant exporters who have availed the Rebate or not; is a big question as their addresses are neither verified at the time of issue of IEC Code nor at the time of grant of Rebate.