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I refer to your reply to the question (in BS dated 1st May 2012) regarding payment of 6 per cent under Rule 6(3)(i) of Cenvat Credit Rules, 2004 (CCR) for clearance of Synthetic yarn (chapter 52 & 55) when the benefit of exemption notification no. 30/2004-CE dated 9.7.2004 is also being availed. Can you please refer to Rule 6(3)(D) of CCR and review the opinion?
As mentioned in that reply, the said notification no. 30/2004-CE clearly says that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs has been taken under the provisions of CCR.
The CBEC Circular no. 845/03/2007-CX dated 1-2-2007 had clarified that non-availment of credit on inputs is a precondition for availing exemption under the said Notification. Thereafter, the Circular no. 858/16/2007-CX, dated 8-11-2007 clarified that in case the credit taken on inputs used in the manufacture of the goods cleared under the said notification has been reversed before utilisation, it would amount to credit not having been taken.
On 1.3.2011, Rule 6(3)(D) found place in CCR. It says that “payment of an amount under sub-rule (3) shall be deemed to be Cenvat credit not taken for the purpose of an exemption notification wherein any exemption is granted on the condition that no Cenvat credit of inputs and input services shall be taken.” Therefore, after 1.3.2011, if Cenvat credit has been taken on common inputs used in the manufacture of dutiable goods as well as goods exempted under notification no. 30/2004, then payment of 6 per cent would ensure that the exemption under that notification need not be denied, despite the condition mentioned in that notification.
On re-export of goods imported on duty payment, can we get any benefits such as FPS?
Para 3.17.2 of the Foreign Trade Policy (FTP) specifically denies the benefits of Chapter 3 schemes to re-export of imported goods. However, you can claim drawback under Section 74 of the Customs Act, 1962.
Would director’s commission and sitting fees be liable for service tax from 1/7/2012?
The services of a director are not covered under the negative list or any exemption notification and so liable to service tax.
Can we use duty credit scrips issued under Chapter 3 of FTP for payment of duty on goods procured from Special Economic Zones and if so, what are the procedures?
You may get the scrip registered at the port of registration, obtain Release Advice (RA) and produce the scrip and RA along with your bill of entry and related documents at the SEZ Customs and claim exemption under the relevant customs notification.
Against export of our goods to wholesaler abroad, who in turn supplies the same to his customers located in other countries, we receive part payment from the wholesaler and balance directly from the customer of wholesaler in other countries. Is it OK?
I see no bar but your bankers may ask for satisfactory explanation for such an arrangement.