Exporters breathe easy as CBEC eases shipping bill norms

The Central Board of Excise and Customs (CBEC) has made life easier for exporters by relaxing the norms for conversion of shipping bills from free to export promotion scheme and from one export promotion scheme to another. The latest CBEC Circular (no.36/2010-Cus dated 23/09/2010) permits the Commissioners of Customs to allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, from Advance Authorisation/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example, from Drawback scheme to DEPB scheme or vice versa).

In January 2004, CBEC instructed that conversion of free shipping bills into Advance Licence/DEPB/DFRC shipping bills should not be allowed and that conversion of shipping bills from one export promotion scheme to another should only be allowed where the benefit of any export promotion scheme claimed by the exporter has been denied by DGFT/MOC or customs due to any dispute. The courts, however, ruled that this Circular could not override Section 149 of the Customs Act of 1962 which permits amendments to the shipping bill on the basis of documents that existed at the time the goods were exported.

CBEC, however, says that conversion of free shipping bills into export promotion scheme shipping bills (advance authorization, DFIA, DEPB, reward schemes etc.) should not be allowed on the grounds that goods under free shipping bills are not examined. CBEC could have been graceful by following the rationale behind its own circular number 25/2005-Cus dated June 6, 2005 for accepting in-house test results of manufacturer exporters having the ISO 9000 series certification for the purpose of conversion of free shipping bills into export promotion scheme shipping bills.
Source: http://bit.ly/c7egyh

Supreme Court: Secondary Packing is not Part of Excise

In a breather to the assessees, the Supreme Court has ruled that the cost of secondary packing for the purpose of convenience of customers and transportation of goods cannot be included in the value of the goods for assessment of excise duty.
The court partly allowed the appeal of the assessee , National Leather Cloth Manufacturing. It was engaged in the manufacture of coated fabrics. The price of goods declared by the assessee in the price list, as required under Rule 173C of the Central Excise Rules, 1944 was approved by the Revenue from time to time.
However, in the two revised price lists, of November 12, 1980, the assessee indicated that prices declared by it contained certain post manufacturing expenses, which had to be excluded while computing the value of the fabric for the purpose of assessment to excise duty.
The claim was rejected by the Adjudicating Authority on January 7, 1981. Thereafter, the assessee, made a claim of consolidated refund , amounting to 40,18,805.60 for the period from November 13, 1977 to November 12, 1980, representing differential excess duty paid by it on various elements of post manufacturing expenses.
One of the deductions so claimed was on account of cost of material used for packing the final product. The Central Excise department did not responded to such claim. Then, the assessee, moved the Bombay High Court seeking direction for refund along with interest. The adjudicating authority on April 12, 1984, rejected the claim for excluding the cost of polythene bags, printed as well as plain, and hessian cloth used for packing the fabrics.
According to department, packing of coated fabrics in polythene bags for delivery to the customers located in Bombay as also packing of such rolls in hessian cloth and stitching them into one bundle for dispatch to up-country customers was in the normal course of trade and, therefore, there was nothing special about such packing so as to exclude its cost from the value of the fabric.
Then assessee amended the petition to challenge the rejection order of the authority. The high court, however, dismissed the petition and affirmed the order of the department. The high court in its order had said, the denial of deduction on account of secondary packaging from the assessable value as post manufacturing expenses was justified. It is not the case of the assessee that the secondary packing was of a durable nature and returned by the buyer to the assessee.
Source: http://bit.ly/chxblS