'EOUs can't lease capital goods from suppliers'

We have an export oriented unit (EOU). We want to import some capital goods on lease from the supplier. Is that allowed?

As per Para 6.4 of the Foreign Trade Policy (FTP), you can source capital goods from a domestic / foreign leasing company. In that case you and the domestic / foreign leasing company should jointly file documents to enable import of capital goods without payment of duty. You can also sell capital goods and lease back the same from a non banking financial company (NBFC), subject to certain conditions such as permission from the jurisdictional customs/excise authorities, being a positive NFE (Net Foreign Exchange) unit, actual user condition, joint undertaking with NBFC, etc. In short, the FTP does not envisage lease from supplier.

We have paid service tax on commission remitted to foreign agent. Can we take Cenvat Credit of the same?

Yes. This matter has been clarified through CBEC Circular no. B1/4/2006-TRU dated 19th April 2006. Para 4.2.13 of the Circular says that ‘the treatment of the recipient of service, as the deemed service provider under section 66A is only for the purpose of charging service tax on taxable services received from outside the country. Services provided from outside India and received in India, therefore, are not treated as taxable service provided by the recipient for the purpose of Cenvat Credit Rules, 2004. However, where such service is used as an input for providing any taxable output, the service tax paid on such service can be taken as input credit.’

We import automobile components in returnable steel cases. The steel cases are durable. We declare the value of the cases separately and claim duty drawback when we re-export the same to the supplier. These claims are held up as the cases did not bear any unique number for identification. Is there any way out?

In terms of CBEC Circular no. 69/2002-Cus dated 15th October 2002, you can claim exemption from duty payment for such durable packing material under notification no. 104/94-Cus dated 25.10.2002. Further, the CBEC Circular no. 73/2002-Cus dated 7.11.2002 clarifies that any type of reusable packaging containers such as cases, boxes cartons, trays, etc., made up of metals or plastics, may be cleared duty-free under the said notification read with the Board’s Circular referred to above, subject to fulfillment of conditions stipulated therein.

Particular identification number on each packaging container may also not be insisted upon. However, the importer may be asked to declare other particulars such as dimension, shape, weight, colour of the containers and asked to get the consignment photographed, if required, at the time of examination at his expense and get it attested from the Customs. The consignment may be examined at random for the above and other particulars as per the normal procedure. Identity may be established at the time of export with the help of photographs and parameters like dimension, weight, etc., allowing a variation of ± 10 per cent.