No time limit is stipulated for filing bill of entry

CHATROOM

We had, by mistake, debited the Cenvat account twice while making monthly payment of excise duty. We had written a letter to the excise authority about the mistake and taken credit of the excess duty debited. We relied on the Tribunal judgment in the case of Sanghi Polyesters [2004 (169) ELT 128 (Tri.Bang.), which allowed suo-moto credit of excess duty paid through personal ledger account (PLA). However, our excise authorities are objecting to the same. Kindly advise correct position.

The Division Bench of the Tribunal in the case of Tide Water Oil Company vs CCE, Chennai as reported 2002 (52) RLT 463 had come to the conclusion that the assessee having debited the excess amount of Cenvat Account is eligible to avail the Cenvat amount on their own. On the other hand the Tribunal in the case of CCE, Belgaum vs Comfit Sanitary Napkin (I) Pvt Ltd as reported in 2004 (174) E.L.T. 220 (Tri. - Bang.) had come to the conclusion that the assessee can not avail suo motu credit without applying for refund when excess duty is paid.

Since both these decisions reflected contrasting views for availment of suo motu credit, the matter had to be settled by a full Bench of Tribunal. The larger bench, in the case of BDH Industries Ltd [2008 (229) ELT 364 (Tri.-LB)] held that there is no provision in the Central Excise Act, 1944 and Rules allowing suo moto taking of credit or refund without sanction by the proper officer. The Tribunal did not accept the contention that only an accounting is being corrected. ,you have no option but to reverse the credit you have taken and claim refund of the duty debited twice.

We had imported certain earth moving equipments in March 2008 and leased them out. From May 16, 2008, the renting out movable property became a taxable service. We had taken credit of the additional duties of customs paid on the capital goods. Recently, the excise authorities have asked us to reverse the credit. Are we required to do that?

Till May 15, 2008, ‘supply of tangible goods, without transferring right of possession and effective control’ was outside the scope of the Section 66 of the Finance Act, 1994 and thus was covered under the definition of the term “exempted services” under the Cenvat Credit Rules, 2004. According to Rule 6(4), no Cenvat Credit can be taken on capital goods, which are used in providing only exempted services.

Therefore, ab initio, you were not eligible to take credit of the additional duties. It doesnot become eligible, after service tax is imposed on the service at a later date. In this connection, you may refer to Madurai Central Excise Commissionerate Trade Notice 15/2008-ST dated September 11, 2008.

We could not file bill of entry within 30 days of arrival of cargo as the sellers did not dispatch the documents immediately. The Customs have now cleared the goods but levied a penalty, under Section 117 of the Customs Act, 1962, alleging violation of Section 48 provisions. Can we challenge that?

Yes, as no time limit is stipulated for filing bill of entry. Section 48 only gives right to the custodian to sell the goods, if they are not cleared within 30 days.