(AMENDMENTS FOR NOV 2010 / MAY 2011 STUDENTS)

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 UPDATIONS IN EXCISE
AMENDMENTS IN ACT
Sec 9-A: Offence to Be Non-Congizable (Imp)
(1) Offences under Sec 9 shall be non-cognizable. [i.e., Arrest Warrant is mandatory for arrest]
(2) Compounding of offences (immunity From Prosecution)
Any offence under this Chapter may.
either before or after the institution of prosecution proceedings.
be compounded  by the chief CCE
 on payment of prescribed compounding amount.

Provided that [inserted by FA, 2009]

Nothing containing in this section shall apply to (i.e., Compounding shall not be allowed in following
cases):
(a) A person who has been allowed to compound once in respect of offences mentioned in point (I) to
(6) in Sec 9.
(b) A person who has been allowed to compound once in respect of any offences for goods of Value
exceeding Rs 1 crore,
th
(c) A person who has been convicted by the Court under this Act on or after 30 Dec. 2005.
(d) A person who has been accused of committing an offence this under this Act which is also an
offence under Narcotics Drugs and Psychotropic Substances (NDPS) Act, 1985;
Comment: Compounding of offence refers to immunity from prosecution (imprisonment) by payment of
monetary sum in lieu thereof. Compounding is permissible only if it is specifically allowed / permitted by
the Statute. Central Excise law specifically provides that excise offences can be compounded. Newly
inserted proviso seeks to put restriction on compounding of offences. It provides for exclusion of certain
types of offences and circumstances from the purview of the comounding provisions. It provides that
Compounding shall not be allowed in following cases:
(1) If it is has already been availed once- i.r.o. offences mentioned in point (1) to (6);
(2) If it has been availed once - i.r.o. goods of Value > 1 Crore- i.r.o. offences mentioned in point (7);
If the person has been convicted (imprisoned) by Court (on/after 30th Dec. 2005)
If the offence is also an offence under NDPS Act, 1985

[It shall be noted that corresponding amendment has also been made to sec 137of the Customs Act which
also deals with Compounding of offences]
Sec 137 of the Customs Act, 1962 has been amended to prohibit compounding in the following cases:
a) If it has already been availed once – i.r.o. offences mentioned in Sec 135 and 135-A;
b) If it has been availed once – i.r.o. goods of value > 1 crore – i.r.o. offences (other than those
mentioned in Sec 135 and 135 – A)
c) If the person has been convicted (imprisoned) by Court (on/after 30th Dec. 2005)
d) If the offence is also an offence under any of following:
i) NDPS Act, 1985
ii) Chemicals Weapon Convention Act, 2000;
iii) Arms Act, 1959;
iv) Wild Life Protection Act, 1972;
J) Person is involved in SMUGGLING of any of following goods;
i) Goods Specified in Schedule 2 of ITC Classification of foreign Trade Policy:
ii) Goods of which import/export is prohibited under foreign Trade Policy;
iii) Any other goods or documents, which
-- are likely to affect friendly relations with a foreign State or
-- are derogatory to national honour;
[There is no concept of “Criminal Proceedings’ under ST and thus, no corresponding
amendment in ST]

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 Sec 14 & 14 – AA: Special Audits under Excise
Comment: Sec 14-A (Direction for Special Audit as to AV of Finished Product) and Sec 14-AA (Direction for
Special Audit as to availment of Cenvat Credit) have been amended to provide that chief commissioner may
also nominate Chartered Accountants (CA) for conducting special audits under these provisions. Earlier,
only Cost Account could be nominated to conduct these special audits.

 Sec 23 – A: definitions (Authority for Advance Ruling)(Imp)

 “Authority” means the Authority for Advance Ruling (Central Excise, Customs & Service tax)
[Sec 23-A (e)]  constituted under Customs Act, 1962
 Authorized by CG under Customs Act, 1962 [inserted by FA, 2009]
Comment: CG has authorized Authority for Advance Ruling Authority under Income Tax under Customs Act,
Thus. Authority of Advance Ruling under Income Tax Act will be authority for purpose of Central
Excise and customs also.

 Sec 23 – A: Definitions (Applicant) (Imp)

 “Applicant” means (i)
[Sec 23-A (c)] (a) A non-Resident setting up a joint venture in India in collaboration with
a non-resident or resident; or
(b) A Resident setting up a joint venture in India in collaboration with a
non-resident ; or
(c) A Wholly Owned Subsidiary Indian Company, of which the holding
company is a foreign company.
(ii) A joint Venture in India; or
(iii) A Resident falling within any such class or category of persons, as the
CG may, by Notification in Official Gazattee, specify in this behalf.
And,
 Which or who, as the case may be, makes application for advance
ruling.
Comment : Only a person covered by definition of “Applicant” can obtain advance ruling. Initially,
this facility was intended to help non-resident assesses. Subsequently, its scope was enhanced and it was
provided that even notified residents can opt for advance ruling Now, in year 2009 CG has notified
PUBLIC SECTOR COMPANY as eligible person for obtaining advance ruling [N/N 20/ 2009 – dated
205h Aug. 2009]
Advance ruling facility is available in Customs and in Service Tax also. The notified resident in those
cases are:
Under Customs :- Notified Resident are
i) Public Sector Company
ii) Importer transporting goods under ‘Project Import Scheme”
Under Service tax:- Notified resident are
i) Public Sector Company

 Sec 35 G: Appeal to HC (Imp)

Sec 35 G: Appeal To Higher Court
Appeal able orders:
An appeal shall lie to the High Court against any order passed by CESTAT
if it satisfies 2 conditions
1) Such order does not involve any issue relating to rate of duty or valuation of goods: and
2) HC is satisfied that the case involves a substantial question of law.
Requirement of a valid appeal:
Appeal to HC shall be ---
(a) In the form of a memorandum of appeal precisely stating the substantial question of law involved.
(b) filed within 180 days from the date on which the order appealed against is received;
(c) accompanied by a fee of 200/- (when appeal is filed by assessee):

[Inserted by FA, 2009]

The High Court may admit an appeal after the expiry of 180 days, if it is satisfied that there was
sufficient cause for not filing the same within that period

Comment: Earlier, larger Bench of SC in case of PUNJAB FIBERS LTD-2008 held that “in the case of an
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appeal to the High Court under Section 356, the Parliament has provided only 189 days and no futher
period for filing an appeal is mentioned in the Act. CEA inself provides for condonation of delay in filing
appeal/application wherever it intends. In case of Appeal to HC, there exists no provision for condonation of
delay by HC. Thus, legislature does not intend to empower HC to condone the delay. That being so, General
provisions of Limitation Act cannot be of any help to the appeallant. CEA, being specific provision, shall
only govern matters relating to HC”. Also of HONGO INDIA (P) LTD – 2009 – SC and KANDHARI
RADIO – 2009 – SC. Hon’ble SC reiterated that “time limit prescribed u/s 35-G of CEA, 1944 is absolute
and not extendable by High Court”
Now, all these decisions stands overruled by FA, 2009. Sec 35-G has been amended to specifically
provide that HC can condone the delay in filing the appeal.

[It shall be noted that similar amendment has been made to Sec 130-A of the customs Act which also
deals with appeals to HC in customs cases]

Tutorial Note:
1. This amendment has been basically made to benefit the Department – as generally Department failed
to appeal within 189 days due to lengthy bureaucratic procedure (need of internal approvals for filing
appeal).
2. It has been clarified that the amendment is of procedural nature hence it shall apply to all the appeals
pending before High Court.

AMENDMENTS IN RULES
 AMENDMENTS IN CENTRAL EXCISE RULES, 2002
 (imp)
 Rule 24 – A of CER, 2002 (Definition in INPUTS)
Rule 24-A of Central Excise Rules. 2002 has been inserted –

Rule 24-A RETURN OF RECORDS

The books of accounts or other documents
 Seized by the CEO or
 Produced by an assessee or any other person,
which HAVE NOT BEEN RELIED ON for the issue of notice under the Act or the rules made
thereunder.
Shall be returned
 within 30 days of the issue of said notice or
 within 30 days from the date of expiry of the period for issue of said notice:

Provided that
 the CCE may order for the retention of such books of accounts or documents, for reasons to be
recorded in writing and
 the CEO shall intimate to the assessee or such person about such retention.

Comment: Rule 24-A has been inserted to provide that records seized by the Department during an
investigation but not relied upon in the SCN should be returned to the party within 30 days of issue of SCN
or completion of the period for the issue of SCN. The provision has been made to ensure that CEO doesn’t
harass the assessee by retention of records for prolonged period

 AMENDMENT IN CENVAT CREDIT RULES, 2004

 (Imp)
 Rule 2(k) of CCR, 2004 (Definition of INPUTS)
Explanation 2 to Rule 2 (i) of CCR, 2004 has been amended –
Rule 2(k): INPUTS
Means All goods, except -- Light Diesel Oil (LOD)

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 -- High Speed Diesel Oil (HSD) and
-- Motor Spirit, commonly known as Petrol.
Used in or in relation to the manufacture of final products.
 whether directly or indirectly and
 whether contained in the final product or not.
Includes  Lubricating oils, Greases, Cutting oils, Coolants.
 Accessories of the final products cleared along with the final product.
 Goods used
 as paint, or
 as packing material, or
 for generation of electricity or steam used in or in relation to
manufacture of final products or for any other purpose.
WITHIN THE FACTORY of production.
Expl 1 The LOD, HSD or motor spirit, commonly known as petrol, shall not be treated as input for any
purpose whatsoever.
Expl 2 Input
Includes - - goods used in the manufacture of capital goods which are further used in the factory
of the manufacturer.
But shall not include -- cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo
Mechanically Treated bar (TMT) and other items
Used For
 CONSTRUCTION of factory shed, building or
 LAYING OF FOUNDATION or MAKING OF STRUCTURES for support of capital
goods;
[Amended in Year 2009]
Comment : Explanation 2 to Rule 2 (k) [which contains definition of “input”] has been amended to exclude
certain articles from list of “eligible input”. It seeks to exclude following 2 from coverage of ‘eligible input’:
1) Good used for CONSTRUCTION of factory shed ofr building: Earlier, in case of HINDUSTAN
ZINC-2008 an issue arose before the Hon’ble SC as to admissibility of cenvat credit on duty-paid
cement used for construction of factory premises (i.e.. building material). Therein, hon’ble SC has
held that “Cement cannot be considered as integrally connected material or product with the
process of manufacturing of final product especially when the same is used only a building material
for maintaining or repairing the premises. In our view, cement cannot be said to be used in relation
to manufacturing of final product as same was not used co-extensively with the process of
manufacture of final product and hence, it is not co-extensively connected with manufacture of final
product”. Explanation 2 has been amended to incorporate this decision making these goods ineligible
for cenvat credit.
2) Good used for LAYING DOWN FOUNDATION OR MAKING OF STRUCTURES for
support of Capital Goods: Explanation 2 used to provide for that goods used for manufacture of
capital goods which are used in factory shall be eligible for credit. Dispute arose whether in case
where assessee purchased capital goods from the factory and then used same material for laying
down foundation or giving of structural support to such capital goods shall also be treated as “goods
used for MANUFACTURE of capital goods” and thus eligible for cenvat credit. Now, explanation 2
has been amended to provided that such goods shall not be treated as ‘input’ and thus, no credit
adminissible theorn.
[The amendment is equally applicable to service provider too.]
 (Imp)
 Rule 3(7) (a) of CCR, 2004 (Credit of inputs/capital goods purchased from EoU)
A new proviso has been inseted to Rule 3(7) (a) of CCR, 2004 - -
Rule 3(7)(a): Credit of inputs/capital goods purchased from 100% EoU
Notwithstanding anything contained in sub-rule (I).
Cenvat credit i.r.o. of inputs or capital goods
 Produced/manufactured, by a 100% EOU (including EHTP/STP) and
 used in manufacture of the final products, in any other place in India.
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 In case the EOU pays excise duty u/s 3 of the CEA read with N/N 23/2003-CX.
Shall be admissible equivalent to the amount calculated in the following manner:-
“X”*[(1+BCD/200)*(CVD/100)]
Where
 BCD and CVD denote ad valorem rates (tariff rates), in per cent, of basic customs duty and
additional duty of customs and
 X denotes the assessable value in terms of sec 14(1) of Customs Act.
[inserted by N/N22/2009-dated 7th Sep. 2009]
Provided further that
 the CENVAT credit in respect of INPUTS AND CAPITAL GOODS cleared on or after the 7th
Sep, 2009 from an EoU (including EHTP/STP).
on which such undertaking or unit has paid –
A. Excise duty leviable under Section 3 of the CEA, 1944 read with E/N23/2003;
AND
B. Education Cess (on Excisable goods) leviable under Finance Act, 2004 and
SHEC (on Excisable goods) leviable under Finance Act. 2007.
on the excise duty referred to in (A).
shall be the AGGREGATE OF –
I. The portion of excise duty referred to in (A), as is equivalent to –
(i) CVD leviable under sec 3 (1) of Customs Tariff Act:
(ii) Spl CVD leviable under sec 3 (5) of Customs tariff Act: and
II. Education Cess and SHEC referred to in (B).

 Rule 6(3) of CCR, 2004 (Manufacture of dutiable as well as exempted goods)

Rule 6(3) of CCR, 2004 has been amended –
Rule 6(3) : Manufacture of dutiable as well as exempted goods without maintaining separate
accounts as to usage of common inputs/ inputs services.
Notwithstanding anything contained in sub-rules (1) and (2),
the manufacturer of goods,
 opting not to maintain separate accounts.
 shall follow either of the following options, as applicable to him, namely:-
_________________________________________________________________________________
(i) The manufacturer of goods shall PAY
 AN AMOUNT equal to 5% [Amended in 2009] of value of
the EXEMPTED GOODS:
_________________________________________________________________________________
Or
_________________________________________________________________________________
(ii) The manufacturer of goods shall PAY
 AN AMOUNT equal to the Cenvat credit attributable to inputs and input services
used in, or in relation to, the manufacture of
EXEMPTED GOODS
Subject to the conditions and procedure specified in sub-rule (3A)

AMENDMENT IN EXEMPTION
E/N8/2003 Computation of limit of 150 lakhs / 400 lakhs
For the purposes of determining 150 lakhs. the following clearances shall not be taken
into account, namely:-
b) Clearances bearing the brand name or trade name of another person,
EXCEPT in the following cases :-
(i) Where the specified goods, being in the nature of components or parts of any
machinery or equipment or appliances.
 are cleared for use as ORIGINAL EQUIPMENT in the manufacture of the said

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 machinery or equipment or appliances
by following the procedure laid down in the Central Excise (Removal of Goods at
Concessional Rate of Duty for Manufacture of excisable Goods) Rules. 2001

Provided that manufacturer, whose aggregate value of clearances of the specified

goods for use as original equipment does not exceed 100 lakhs in the immediately
preceding FY.

 may submit a declaration regarding such use instead of following the aforesaid
procedure ..
(ii) Where the specified goods bear a brand name or TRADE NAME OF –
1) Khadi and Village Industries Commission (KVIC):
2) State Khadi and Village Industry Board (SKVIB):
3) National Small Industries Corporation (NTSIC):
4) State small industries development corporation (SSIDC)::
5) State Small Industries Corporation [SSIC]::
(iii) Where the specified goods are manufactured in a factory located in a RURAL
AREA.
(iv) Where the specified goods are Account books, Registers, Writing pads and File
Folders
(v) Where the specified goods are in nature of PACKING MATERIALS NAMELY,
Printed cartons of Paper/Paper Board, Metal Containers, HOPE Waven sacks,
Adhesive Tapes, Stickers, PP caps crown corks, Matal labels, plastic caps, PRINTED
LAMINATED ROLLS [INSERTED NI Year 2009 (dated 7th July 2009)]

Comment: Under N/N8/2003, specified items that are in the nature of packaging material are excluded
from the purview of the brand name restriction (i.e. SSI exemption is available on specified packing material
even if other’s brand name is used on packing materials by the manufacturer).. One more item viz, ‘printed
laminated rolls’ has been added to this list with immediate effect. As a consequence, manufctujerrs of
printed laminated rolls bearing the brand name of another person and fulfilling the conditions of the
notification would be entitled to full exemption from excise duty for their first clearances of this item
(for home consumption) not exceeding Rs. 150 lakh during the remaining part of this financial year
i.e. 2009-10.

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 UPDATIONS IN CUSTOMS

AMENDMENTS IN CUSTOMS ACT, 1962

 Sec 26-A: Refund of Import Duty in certain cases (Imp)
Sec 26-A Refund of Import Duty in certain cases.
(1) Goods imported and cleared paying ID – subsequently re-exported
Where on the importation of any goods capable of being easily identified, any duty has been
paid on clearance of such goods for home consumption.
SUCH DUTY SHALL BE REFUNDED to the person by whom or on whose behalf it was
paid IF –
(a) The GOODS ARE FOUND TO BE DEFECTIVE or OTHERWISE NOT IN
CONFORMITY with the specification agreed upon between the importer and the
supplier of goods:
Provided that the goods have not been worked. Repaired or used after importation
except where such use was indispensable to discover the defects or non-conformity with
the specifications.
(b) the goods are identified to the satisfaction of the AC/DC the goods which were
imparted:
(c) THE IMPORTER DOES NOT CLAIM DRAWBACK under any other provision of
this Act: AND
(d) (i) the GOODS ARE EXPORTED : or
(ii) the importer RELINQUISHES HIS TITLE to the goods and abandons them to
customs; or
(iii) such GOODS ARE DISTROYED or rendered commercially valueless.
in such manner as may be prescribed and
WITHIN 30 DAYS from the date on which the proper officer makes an order for the
clearance of imported goods for home consumption under section 47:
Provided that the period of 30 days may, on sufficient cause being shown, be extended
by the Commissioner of Customs for a period of 3 months:
Provided further that nothing contained in this section shall apply to the good
regarding which an offence appears to have been committed under this Act
or any other law for the time being in force.

(2) Refund only on application

An application for refund of duty shall be made before the expiry of 6 months from the
relevant date in such form and in such manner as may be prescribed.
Explanation. – for the purposes of this sub-section, “relevant date” means.

i) Where the good, are exported out of - the date on which of PO makes an order
India permitting clearance and loading of goods
for exportation u/s 51
ii) Where the title to the goods is - the date of such relinquishment;
relinquished
iii) Where the goods are destroyed or - the date of such destruction or rendering
rendered commercially valueless of goods commercially valueless

(3) No Refund in Certain cases

No refund shall be allowed in respect of
 PERISHABLE GOODS and
 GOODS WHICH HAVE EXCEEDED THEIR SHELF LIFE or their recommended
storage-before-use period.
(4) CBEF empowered to impose additional conditions
CBEC may, by notification in the Official Gazette, specify any other condition subject to
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 which the refund under sub-section (I) may be allowed.

Comment: Sec 26-A has been newly inserted to provide for grant of refund in certain situations paid at
the time of clearance for home consumption on imported goods capable of being easily identified if, the
goods have been found to be defedctive or otherwise not in conformity with the specifications agreed upon
between the importer and the supplier of goods, the goods are identified to the satisfaction of the officer of
customs, the goods have been exported or the importer has relinquished his title to the goods, etc. so as to
eomply with the standards under the INTERNATIONAL CONVENTION ON THE
SIMPLIFICATION AND HARMONISATION OF CUSTOMS PROCEDURE (Revised Kyoto
Convention).

AMENDMENTS IN CUSTOMS TARIFF ACT, 1975

Sec 3: Counter – veiling Duty (CVD) (imp)

Sec3 LEVY OF CVD
(2) for the purpose of calculating CVD leviable under sub-sections (I)
 the VALUE OF THE IMPORTED ARTICLE shall, notwithstanding anything contained in
section 14 of the Customs Act, 1962 be the AGGREGATE of –
(i) the VALUE of the imported article determined u/s 14(1) of the CA 1962 or the TARIFF VALUE
of such article fixed u/s 14(2), as the case may be, and
(ii) – Any DUTY OF CUSTOMS chargeable on that article u/s 12 of the CA 1962 [i.e., BCD] and
- ANY SUM CHARGEABLE on that article under any law for the time being in force
[*Whether Customs Tariff act, 1975 or Finance Act 2004 & 2007]
as an addition to, and in the same manner as, a
DUTY OF CUSTOMS, but does not include –
(a) the duty as referred to in sub-section (1) (3) & (5)
(b) the Safeguard Duty referred to in section 88 and 8C;
(c) the countervailing Duty referred to in section 9;
(d) the Anti-Dumping Duty referred to in section 9A; and
(e) the EC on imported goods as referred to in FA, 2004;
(f) the SHEC on imported goods as referred to the FA, 2007;
Provided that
→ in case of an article imported into India –
(a) in relation to which it is required, under the provision of the SWMA[Standards of Weights and Measures Act]
or the rules made thereunder, to declare MRP on the package; and
(b) where the like article produced or manufactured in India, is the goods specified by Notification in
the OZ u/s 4A (1) of CEA, 1962
→ the value of the shall be → MRP declared on the imported article
Imported article deemed to be less such amount of abatement, as notified
by CG in respect of such like article u/s
4A(2) of CEA, 1944
Explanation: Where on any imported article more than one retail sale price is declared the maximum of
such retail sale price shall be considered.
Provided further that [inserted by FA, 2009]
where the CG has fixed a tariff value for the like → the VALUE OF THE IMPORTED ARTICLE
article produced or manufactured in India under ARTICLE shall be (=) deemed to be SUCH
3(2) of the Central Excise Act, 1944. TARIFF VALUE

Comment: Sec 3(2) which deals with the value of imported goods for the purposes of levy of CVD (the
duty which counter balances the excise duty liability on imported article), has been recently amended to
ensure that in cases where tariff value has been fixed for levy of ED and domestic manufactures paying ED
on that value, the imported article shall also be charged to CVD computed on that value only.
Now, the AV for levy of CVD on imported article shall be as stated below:
AV for levy of ED on Domestic Article AV for levy of CVD on the imported Article
 Where Domestic Industry is paying ED on → Such Tariff Value
TARIFF VALUE fixed by CG u/s 3(2)
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  Where Domestic Industry is paying ED based → MRP of the imported Article
on MRP (as reduced by notified % of abatement
 In any other case (i.e. where Domestic Industry → [Sec 14(1)/(2) Value + BCD]
is paying ED on TV u/s r

 Sec 9 –A ANTI-DUMPING DUTY (ADD) (Imp)

Sec9-A has been amended to clarify that Anti-Dumping Duty is ‘exporter-specific’:

Sec9-A ANTI – DUMPING DUTY

(I) Where any article is exported by an EXPORTER or PRODUCER [Added by FA, 2009] from any
country to India at less than its NORMAL VALUE,
then, upon the importation of such article into India, the CG may, by notification in the OZ,
impose
→ an ANTI-DUMPING DUTY
→ not exceeding the MARGIN OF DUMPING in relation to such article.
Comment: Earlier, there arose a dispute as to whether Anti-Dumping duty is “Country-specific” or
“Exporter-Specific”? In case of RELIANCE INDUSTRIES LTD – 2006 – SC, it was held that ‘both
normal value and NIP (Non-Injurious Price i.e., Fair Selling Price) are not EXPORTER or
DOMESTIC MANUFACTURER SPECIFIC respectevly but EXPORTING COUNTRY SPECIFIC
AND IMPORTING COUNTRY SPECIFIC (India). Once dumping of specific goods from a country is
established, dumping duty can be imposed on ALL EXPORTS OF THOSE GOODS FROM THAT
COUNTRY TO INDIA under Section 9A, irrespective of the exporter. The rate of duty may vary
from exporter to exporter depending upon the export price.”
But in case of INDIAN METALS & FERRO ALLOYS LTD. – 2009 – SC, the identical issue
came up again, Now SC differed from the view taken in Reliance Industries case. Differing from that view,
it referred the case to the Larger Bench of SC.
FA, 2009 has amended Sec 9-A of CTA, 1975 to the effect of clarifying that Anti-Dumping duty is
Exporter-Specific.
Now sub-section (6) has been inserted in Sec 9-A to provide Authority to determine Normal value on basis
of facts available before it when exporter fails to furnish the requisite information:

Sec 9-A ANTI-DUMPING DUTY

sub-section (6-A) [inserted by FA, 2009]
The MARGIN OF DUMPING in relation to an article, exported by an exporter or producer, SHALL be
determined on the basis of
records concerning Normal Value and Export Price maintained, and
information provided
by such exporter or producer.
Provided that
Where an exporter or producer fails to provide such records or information, the MARGIN OF
DUMPING for such exporter or producer shall be determined on the basis of facts available.
Comment: The dispute as to anti-dumping duty being “exporter-specific” or “country-specific” has been
finally been put to rest by FA. 2009. Another related dispute was whether anti-dumping duty being exporter-
specific shall be determined only by referring to the materials to be produced by the exporter, i.e. whether
the scope of investigation by the Authority Director General (Anti-Dumping) shall be restricted only to the
materials produced by the party against whom the investigation is being conducted.
Just to elaborate. Sec 9-A provides that normal value shall be comparable price of like goods in the
exporting country or territory. But where no acceptable material is available in regard to the acceptable
comparable price in the ordinary course of trade in exporting country, then Authority has been given a
choice to determine normal value with reference to (a) price at which same goods have been exported to an
appropriate third country or (b) cost of production of such goods alongwith some reasonable additions. The
disputed issue was whether en investigating authority has any discretion to reject the material
produced by one of the party to the proceedings in regard to the alternatives methods for determining

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the normal value and prefer any other material to establish the normal value.
Just to state an example, suppose Anti-dumping proceedings are being conducted against Mr A
(USA) on a complaint filed by domestic industry. The related article "x" is not having any domestic market.
i.e. it is not sold in USA, Now, DG(Anti-Dumping) is left with 2 alternatives for determination of normal
value to fix charge of anti-dumping. The authority is having choice to consider any of the two methods -- (1)
Determining normal value based on price at which same goods have been exported to an appropriate third
country or (2) Determining normal value based on cost of production of such goods alongwith some
reasonable additions. Now, Authority decides to opt for method (I). i.e. determining normal value based on
price at which same goods are sold to an appropriate third country. It asked Mr A (USA) to furnish
information as to the price at which it has sold same goods to an appropriate third country. Mr A (the
foreign exporter) withholds information as to export price to third country but it submits information as to its
cost of production. Let’s suppose, at the same time. Authority is having reliable information as to price at
which such goods have been exported to an appropriate third country. Now, the issue is whether Authority
will now be bound to determine normal value on basis of such cost information or whether it can determine
normal value based to the data/facts available with it. Mr A(USA) will argue that Authority shall determine
normal value only on the basis of information provided by it to the Authority. If his argument is accepted
then it would give rise to a situation where Mr A (foreign seller) will be able to compel the authority to fix
normal value on cost of production basis (thereby eliminating Authority discretion). On identical facts. in
case of HALDOR TOPSOE A/S-2000-SC Hon’ble SC held that “where the foreign seller withholds
necessary information or does not cooperate with the investigation, then investigating authority has
discretion to rely on material as available before it and is not bound to look into material which is
produced by the foreign seller”.
Now, the spirit of this decision has been given statutory recognition by inserting sub-section (6) in Sec 9-A.

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 UPDATIONS IN SERVICE TAX
AMENDMENTS IN ACT
 AMENDMENT RELATED TO SEC 64 OF FA, 1994
 Sec 64 of FA, 1994 (Applicability of ST provision extended to Installations, Structures and Vessels
in EEZ)
A new notification has been issued extending applicability of Service tax provisions:
Sec 64: Extent, Commencement and Application
This Chapter extends to the whole of India
Except the State of Jammu and Kashmir
Comment : Applicability of ST Provisions to “INDIA” → LAND MASS OR SEA WATER
The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones
Act, 1976
Sec 3: Sovereignty over and limits of TERRITORIAL WATERS …………………….
(1) The sovereignty of India extends and has always extended to the Territorial Waters of India (TWI =
Territorial Waters) and to the seabed and subsoil underlying, and the airspace over, such waters.
(2) The limit of the territorial waters is 12 Nautical Miles from the baseline.

Sec 7: Exclusive Economic Zone (EEZ) ……………………………….

(1) The Exclusive Economic Zone of India (EEZ) is an area beyond and adjacent to the territorial wters,
and the limit of such zone is 200 nautical miles from the baseline.
(2) CG may, by notification in the official Gazette.-
(a) Extend, with such restrictions and modifications as it thinks fit, ANY ENACTMENT FOR THE
TIME BEING IN FORCE IN India or any part thereof to the EEZ or ANY PART THEREOF;
and
(b) Make such provisions as it may consider necessary for facilitating the enforcement of such
enactment.
AND
Any enactment so extended shall have effect as if the EEZ or the part thereof to which it has been
extended is a part of the territory of India.
N/N1/2002: In exercise of the powers conferred by Sec 7(7) of the Territorial Waters, Continental Shelf,
Exclusive Economic Zone and Other Maritime Zones Act, 1976, the CG hereby extends the
provisions Chapter V of the FA, 1994 to the DESIGNATED AREAS IN EXCLUSIVE
ECONIMIC ZONE OF INDIA as declared by the Notification of the Government of India.
 (Latest Notification)
N/N/2009: In exercise of the powers conferred by Sec 7(7) of the Territorial Waters, Continental Shelf,
Exclusive Economic Zone and Other Maritime Zones Act, 1976, the CG hereby extends the
provisions Chapter V of the FA, 1994 to the INSTALLATIONS, STRUCTURES AND
VESSELS in the EXCLUSIVE ECONOMIC ZONE OF INDIA .

The impact of this new notification is as stated below:

 Service provided in “Installations, Structures and vessels” in the EEZ from outside India shall be treated
as “Service provided from outside India and Received in India” and thus, this will be a case of
“IMPORT OF SERVICE” attracting ST liability in terms of Sec 66-A of FA, 1994 (and thus, ST will be
payable by the SERVICE RECEIVER under the reverse charge method).
Service provided in “Installations, Structures and vessels” in the EEZ from India shall be treated as
“Service provided in India” and thus, this will not be a case of ‘EXPORT OF SERVICE”. Thus, this
service will attract ST liability. [Consequent Amendment has also been made in definition of India as
given in EXPORT OF SERVICE RULES, 2005].

 Sec 84 of FA, 1994

Sec 84 of FA, 1994 has been substituted for –
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Sec 84: Extent. Commencement and Application
(1) The CCE
→ may, of his own motion, call for and examine the record of any proceedings in which an
Adjudicating Authority Subordinate To Him has passed any decision or order under this
Chapter for the purpose of satisfying himself as to the legality or propriety of any such
decision or order and
→ may, by order, direct SUCH AUTHORITY or any Central Excise Officer subordinate to him
to apply to the CCE (Appeals) for the determination of such points arising out of the decision
or order as may be specified by the CCE in his order.
(2) Every order under sub-section (1) shall be made within 3 months from the date of communication of
the decision or order of the adjudicating authority.
(3) Where in pursuance of an order under sub-section (1) THE ADJUDICATING AUTHORITY or any
other officer authorised in this behalf makes an application to the CCE (Appeals) within 1 month
from the date of communication of the order under sub-section (1) to the adjudicating authority.

Such application shall be heard by the CCE (Appeals), as if such application were an appeal made
against the decision or order of the adjudicating authority and the provision of this Chapter
regarding appeals shall apply to such application.

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 EXCISE NOTIFICATION BASED
AMENDMENTS UPTO JUNE 2010
CENVAT CREDIT
CENVAT Return (Integrated With Return Under Central Excise Rules 2002)
(Sub Rule 7-10)
For Frequency Due Date Form
Manufacturer Monthly By 10th of next month ER-1
SSI Quarterly By 20th of month after Qtr. ER-3
ISD* / FSD / SSD Quarterly By 15th of month after Qtr. -
Provider Half-Yearly By end of month after half yr ST-3
ISD Half-Yearly By end of month after half yr ST-3
*FA 2008 amendment

Rule 9(8) Proviso – Notification No. 21 / 2010 (18-5-2010)

First stage dealer or second stage dealer, as the case may be, shall submit the said return electronically

RULE 9A: INFORMATION RELATING TO PRINCIPAL INPUTS

“Principal Inputs”, means any input which is used in the manufacture of final products where the cost of such input
constitutes not less than 10% of the total cost of raw-materials for the manufacture of unit quantity of a given final
products.”

(1) A manufacturer of final products shall furnish to the Superintendent of Central Excise, annually by 30th
April of each Financial Year, a declaration in the Form specified (ER-5), by a notification, by the Board, in
respect of each of the excisable goods manufactured or to be manufactured by him,
1. the principal inputs; and
2. the quantity of such principal inputs;
required for use in the manufacture of unit quantity of such final products:

Rule 9A: Proviso:- Notification 21/2010 (18-5-2010)

Where a manufacturer of final products has paid total duty of rupees ten lakh or more including the
amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file such
declaration electronically.

(2) If a manufacturer intends to make any alteration in the information so furnished, he shall furnish
information to the Superintendent together with the reasons for such alteration before the proposed change
or within 15 days of such change in the Form specified by the Board under sub-rule (1).

(3) A manufacturer of final products shall submit, within ten days from the close of each month, to the
Superintendent of Central Excise, a monthly return in the Form specified (ER-6), by a notification, by the
Board, in respect of information regarding the receipt and consumption of each principal inputs with
reference to the quantity of final products manufactured by him.

Rule 9A: Proviso:- Notification 21/2010 (18-5-2010)

Where a manufacturer of final products has paid total duty of rupees ten lakh or more including the
amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall file such
said monthly return electronically.

CENTRAL EXCISE PROCEDURES

1. AMENDMENT – NOTIFICATION 22/2010 DATED 18 MAY 2010
In exercise of the powers conferred by rule 18 of the Central Excise Rules, 2002 read with rule 14

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of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity
Determination and Collection of Duty) Rules, 2010, the Central Government hereby grants
rebate of duty paid on the excisable goods, on their exportation out of India on or after the 8th
March, 2010, to any country except Nepal and Bhutan, subject to the following conditions or
limitations and fulfillment of the following procedures:-
(i) the duty has been paid on the said excisable goods under section 3A of the Central
Excise Act, 1944 (1 of 1944);
(ii) no rebate of duty paid on the materials used in such excisable goods shall be claimed;
(iii) the excisable goods shall be exported directly from a factory or a warehouse;
(iv) the excisable goods shall be exported within six months from the date on which they
were cleared for export from the factory of manufacture or warehouse or within such extended
period as the Commissioner of Central Excise may allow;
(v) the claim or the supplementary claim for rebate of duty, as the case may be, shall be
lodged with the Assistant Commissioner or Deputy Commissioner of Central Excise having
jurisdiction over the factory of manufacture or warehouse, together with the proof of due
exportation, within the time limit specified in section 11B of the Central Excise Act, 1944;
(vi) the market price of the excisable goods at the time of exportation is, in the opinion of the
Assistant Commissioner or Deputy Commissioner of Central Excise, not less than the amount of
rebate of duty claimed;
(vii) the amount of rebate of duty admissible is not less than five hundred rupees;
(viii) if the excisable goods are not exported or the proof of export thereof is not furnished to
the satisfaction of the Assistant Commissioner or Deputy Commissioner of Central Excise in the
manner and within the prescribed time-limit, the said officer on an application being made by
the exporter or otherwise, shall cancel the export documents;
(ix) the procedure as laid down vide notification No. 19/2004-C.E(NT) dated 6th September,
2004 shall be followed, mutatis mutandis (Regarding export under Rule18);
(x) the exporter shall also indicate the number of pouches of excisable goods exported in the
invoice, ARE 1 and any other document used for export.

2. RULE 19 NOT AVAILABLE FOR EXEMPT GOODS EXPORTEDOUT OF INDIA (Notification

24/2010, 26-5-2010)

3. RULE 12 of Central Excise Rules 2002 – FILING OF RETURN

ANNUAL FINANCIAL INFORMATION STATEMENT
 Introduced in 2005
 As per prescribed format – ER 4
 To be submitted to Superintendent by 30 November of forthcoming year
 CG may grant exemption to assessee or class of assessee
 Notified that Units with ED less than 100 lacs are not required to submit this statement
 Where an assessee has paid >= 10 lakh including the amount of duty paid by utilization of
CENVAT credit in the preceding financial year, he shall file the said Annual Financial
Information Statement electronically- Notification No. 20 / 2010 (18-5-2010)

4. RULE 17 of Central Excise Rules 2002 – FILING OF MONTHLY RETURN by EOU

 Provided that where an assessee has paid total duty of rupees ten lakh or more including the
amount of duty paid by utilization of CENVAT credit in the preceding financial year, he shall
submit the said monthly return electronically. Notification No. 20 / 2010 (18-5-2010)

5. SSI TO PAY DUTY BY 5/6th of next month following the quarter – Notification 5/2010 dated 27-2-
2010
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 Provided further that where an assessee is availing of the exemption under a notification based on the
value of clearances in a financial year, the duty on goods cleared during a calendar month shall be paid
by the 6th day of the following month, if the duty is paid electronically through internet banking and
by the 5th day of the following month, in any other case, except in case of goods removed during the
month of March for which the duty shall be paid by the 31st day of March.

6. SSI TO FILE RETURN BY 10th of next month following the quarter – Notification 5/2010 dated
27-2-2010

7. ELECTRONIC PAYMENT OF DUTY & ELECTRONIC FILING OF RETURN WHEN DUTY

LIABILITY >=10 LAKHS – Not 4/2010, 27-2-2010
Provided also that an assessee, who has paid total duty of rupees ten lakh or more including the
amount of duty paid by utilization of CENVAT credit in the preceding financial year duty of fifty
lakhs rupees or more, other than the amount of duty paid by utilization of CENVAT credit, in the
preceding financial year, shall thereafter, deposit the duty electronically through internet banking.
Further, the monthly or quarterly returns shall also be filed electronically

SUMMARY OF AMENDMENTS RELATING TO E-FILING OF RETURNS have been made in the

Central Excise Rules, 2002 and CENVAT Credit Rules, 2004:
i. Manufacturers who have paid Central Excise duty of Rs. 10 Lakh or more (including payment by
utilisation of Cenvat credit) in the previous financial year shall file their Annual Financial Information
Statement (ER4) as prescribed under the proviso to clause (a) of sub rule (2) of Rule 12 of the Central
Excise Rules, 2002,electronically.

ii. EOU manufacturers who have paid Central Excise duty of Rs. 10 Lakh or more (including
payment by utilisation of Cenvat credit) in the previous financial year shall file ER 2 returns as
prescribed under the proviso to sub-rule (3) Rule 17 of the Central Excise Rules 2002, electronically.

iii. All registered dealers would now be required to file quarterly returns as prescribed under the
proviso to sub-rule (8) of rule 9 of the CENVAT Credit Rules 2004, electronically irrespective of the
amount of CENVAT credit taken by them or passed on by them in a year.

iv. Manufacturers who have paid Central Excise duty of Rs. 10 Lakh or more (including payment
by utilisation of Cenvat credit) in the previous financial year shall file the Annual Declaration relating
to principal inputs (ER5) under the second proviso to sub rule (1) of Rule 9A of the CENVAT Credit
Rules, 2004; and

v. Manufacturers who have paid Central Excise duty of Rs. 10 Lakh or more (including payment by
utilisation of Cenvat credit) in the previous financial year shall file the Monthly Return of information
relating to principal inputs (ER6) under proviso to sub-rule (3) of rule 9A, electronically.

8. RULE 11(5) – OMITTED - Notification 5/2010 dated 27-2-2010

Now manufacturer shall not be required to pre-authenticate each foil of the invoice book

9. RULE 5: GOODS SOLD AT A PLACE OTHER THAN PLACE OF REMOVAL

Board Circular dated 19 May 2010 it is clarified that cost of return fare of vehicles is not required to
be added for determining value whether mentioned in the invoice or not, referring to decision of
Madras High Court in case of DCW Ltd and Tribunal decision in case of Haldia Petrochemicals. Earlier
the same was deductible only when the same was mentioned in the invoice

10. ADJUDICATION POWERS OF SUPRINTENDENT

Regarding the power of adjudication of cases given to Superintendents, the following aspects are
clarified:
 They would be eligible to decide cases involving duty and/or CENVAT credit upto Rs. 1 Lakh in
individual SCNs.

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 They would not be eligible to decide cases which involve excisability of a product, classification,
eligibility of exemption, valuation and cases involving suppression of facts, fraud etc.
 They would be eligible to decide cases involving wrong availment of CENVAT credit upto a monetary
limit of upto Rs. 1 Lakh.
 They would be eligible to decide Show Cause Notice proposing only imposition of penalty under Rule
26 and 27 of the Central Excise Rules, 2002 or Rule 15 and 15A of the CENVAT Credit Rules, 2004
 AC / DC shall now have powers upto Rs. 5 Lakh (except the cases where Superintendents are
empowered to adjudicate).
 Joint & Additional Commissioner shall have power to adjudicate cases involving duty of 5 to 50 Lakhs.

11. LTU – TO PAY DUTY ELECTRONICALLY ONLY –

Duty to be paid electronically (Now compulsory under Excise and Service Tax both. However, in
case of difficulties in e-payment, a large taxpayer is permitted to pay the duty through banks (except
in such cases where e-payment is mandatory) in the jurisdiction of the LTU Commissionerate only -
Circular No.878/16 /2008)

12. ITEMS USED IN CERAMIC TILES INDUSTRY - WHETHER CAPITAL GOODS OR INPUT
Circular No. 920/10/2010-CX dated 1.4.2010

QUERY –
Whether items, namely, alumina balls/ ceramic pebbles which are grinding media used in ball mills in
the Ceramic Tile Industry should be treated as capital goods or input under the provisions of
CENVAT Credit Rules.
On the other items too, namely, bolting cloth/ screens/ silicon cylinders which carry designs and
which are fitted on the machines used for printing of design over the surface of the tiles, doubts have
arisen as to whether these should be considered as capital goods or inputs.

CIRCULAR VERDICT –
It has been reported that alumina balls/ ceramic pebbles are essential to run the ball mill in the
ceramic tile factory and the ball mill cannot function without the grinding media. Therefore, alumina
balls/ ceramic pebbles which are grinding media should be considered as component/ part of the
machines to be classified as capital goods for cenvat credit purposes.
Similarly, bolting cloth/ screens/silicon cylinders which carry designs and which are fitted on the
machines used for printing of designs are also essential for operating of the machines. Therefore, these
items would also be considered as capital goods for the purpose of CENVAT Credit Rules, being
part/ component of the machines.

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