Ownership rests with the seller till the goods are loaded at the port

Ownership rests with the seller till the goods are loaded at the port

CHATROOM/ TNC Rajagopalan

We have taken Cenvat credit of service tax we paid to the Customs House Agent for export of our goods. The local Central Excise authorities are objecting to the same. Are they correct?

According to CBEC Circular no. 91/8/2007-S.T. dated August 23, 2007, where the sale of goods takes place at the destination point and the ownership of the goods remains with the seller till the delivery of goods, the place of removal would get extended to the destination point and credit of service tax paid on transportation up to the point of sale would be admissible.

Based on this Circular, the Tribunal has held in the case of Rolex Rings Pvt. Ltd,[2008 (230) ELT 569 (Tr.-Ahmd.)] that Credit of service tax on services rendered by Customs house Agents and Surveyors at the port would be admissible, as the ownership in case of exports rests with the seller till the goods are loaded at the port and the place of removal is the port area.

We are an export oriented unit (EoU). We want to remove samples for display and return. Can we do it without duty payment?

Para 6.29.2 of Handbook of Procedures, Vol. 1 (HB-1), EoU may remove samples without payment of duty, on furnishing suitable undertaking to the Customs authorities for bringing back the samples within a stipulated period. As per Para 6.29.4 of HB-1, EoU may, on the basis of records maintained, and on prior intimation to the Customs authorities send samples to other EoU for display on returnable basis within a period of 30 days.

We want to club an expired advance authorisation with a valid advance authorisation, where imports have been effected in full. Our Regional Authorities are objecting to it. Can you suggest a way out?

According to Para 4.20.3 of HB-1, clubbing facility is available only for Advance Authorisation(s) where there is shortfall in fulfillment of export obligation and which is sought to be clubbed with an Advance Authorisation which is valid for imports. Apparently, your authorities are of the view that the Authorisation is not valid for imports as it has been fully utilised.

As the Authorisation in question has not expired, what you can do is seek enhancement in the quantity and value. Once you get the enhancement, the objection of the authorities will cease to have any merit.

But, please note that for expired Authorisation(s) with shortfall in export obligation and which is sought to be clubbed with an Advance Authorisation which is valid for imports, you have to pay composition fee for extension in the export obligation period as per Para 4.22 of HB-1. Also, wherever exports are made beyond the export obligation period (allowed as per Para 4.22 of HB-1) of earlier Authorisation, no clubbing shall be allowed.

We are an EoU. The Excise department is charging Merchant Overtime (MOT) for supervision even during working hours, as per CBEC Circular no.31/2003-Cus. dated April 7, 2003. Can we object to that?

MOT is not payable in such cases and CBEC Circular is illegal as held in the cases of Sandur Laminates [2005 (190) ELT 109 (Tri.Bang.)], Rajasthan Textile Mills [2007 (216) ELT 380 (Tr.-Del.), Flair Filtration [2007 (209) ELT 475 (Tr.-Del.)] andTransworld Garnet India [2008 (229) ELT 77 (Tri.Chennai).