Condition no. (v) of the customs notification no. 96/2009 dated 11.09.2009 says that in respect of imports made after the discharge of export obligation against advance authorisation, if facility of Cenvat under Cenvat Credit Rules, 2004 has been availed, then the importer shall, at the time of clearance of the imported materials, furnish a bond to the Customs, binding himself to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture of dutiable goods and to submit a certificate, from the jurisdictional C. Ex. officer or from a specified CA within six months from the date of clearance of the said materials, that the imported materials have been so used. Can we clear such dutiable goods for exports under bond/UT1 or for deemed exports without duty payment?
Explanation (1) to the said notification says that ‘dutiable goods’ means excisable goods which are not exempt from Central excise duty and which are not chargeable to ‘nil’ rate of Central excise duty. Such goods are allowed to be cleared for export under bond/UT1 under Rule 18 of Central Excise Rules, 2002 (Notification 42/2001-CE(NT) dated 26.06.2001). Such goods are not allowed to be cleared under any exemption notification for deemed exports. If you intend to supply the final products on duty payment against ICB, it is better that you do not use duty-free replenished material for such production itself, because as per Para 8.3 (c) Foreign Trade Policy, you will not be able to claim refund of the terminal excise duty that you pay.
We cleared building materials to a SEZ developer without duty payment as per CBEC Circular no. 29/2006 dated 27.12.2006. Now, the excise audit party is objecting to the same, on the grounds that goods have not been exported but only supplied to a SEZ, within India. What is the correct position?
In my view, the audit party objection is not correct, as the definition of export given in the SEZ Act/Rules must prevail over the definition given in other legislations, but I must point out that in the case of Tiger Steel Engineering India Pvt. Ltd. [2009 (242) ELT 378 (Tri. Mumbai)], has said that the said Board Circular lacks legal sanctity. The Tribunal said so in the context of refund under Rule 5 of the Cenvat Credit Rules, 2004, while hearing a stay application.
Can we take Cenvat Credit of service tax paid on membership fees paid to industry associations?
In the case of Vikram Ispat [2009 (16) STR 195 (Tri. Mumbai)], Credit of service tax paid on such membership fees has been disallowed. This judgment disallows Credit of service tax paid on rent-a-cab services used for commuting between office and factory also. Credit of service tax paid on security services used at railway sidings and mobile phones not shown to have been used in relation to manufacture and clearance of final products has also been disallowed for want of adequate documentation.