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Thread: Circulars - Circular No.- 935/25/2010 - Central Excise

  1. #1
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    Thumbs up Circulars - Circular No.- 935/25/2010 - Central Excise

    Circular No. 935/25/2010-CX

    F. No. 390/Misc./100/2009-JC

    Government of India

    Ministry of Finance
    Department of Revenue
    (Central Board of Excise & Customs)

    .....
    New Delhi, dated the 21st September 2010
    To,




    1. All Chief Commissioners and Director Generals under the Central Board of Excise and Customs.
    2. CDR, Customs, Excise & Service Tax Appellate Tribunal.


    3. All Commissioners of Customs / Central Excise/ Service Tax / All Joint Chief Departmental Representatives / Commissioner, Directorate of Legal Affairs
    4.



    Sub:- Measures to streamline the processing of departmental litigation before the Courts and Tribunal - reg.



    Sir / Madam,

    It has been the constant endeavor of the Board to streamline the procedures relating to processing of departmental litigation before the Supreme Court, High Courts and CESTAT. Several circulars/ instructions have been issued by the Board, in the past, in this regard prescribing the procedure to be followed and precautions to be taken by the field formations. However, it has been observed that more than 50% of the proposals received by the Board suffer from infirmities including delays beyond limitation period. It has to be appreciated that the Courts take serious note of such procedural infirmities and considerable effort, resource and time go into rectifying them. Further, Courts do not condone delays unless there is adequate justification for the same. The Board has taken a serious note of the matter and it has been decided to fasten accountability wherever SLP/Civil Appeal Proposal is received by the Board without observance of due procedure or with infirmities or later than the prescribed time frame. The field formations are therefore directed to scrupulously follow the instructions contained in this circular. Needless to say that any deviation, without plausible explanation, would be viewed seriously.

    2. Delay in receipt of proposals in the Board’s office:

    2.1 One major cause of concern is delay in receipt of proposals in the Board’s office. The reason often cited in most of such cases is either non-receipt or delay in receipt of the CESTAT and High Court orders by the Commissionerates. Such delays are avoidable if proper initiatives are taken at local level. Accordingly, the Board desires that following steps be taken on priority,-

    (i) Zonal Chief Commissioners to issue necessary instruction and to ensure that an institutional mechanism is put in place for receipt of copy of order and other communications from the CDR or Jt. CDR, in respect of CESTAT cases.

    (ii) Zonal Chief Commissioner having nodal Commissionerate, assigned coordination work relating to High Court, will ensure putting in place a proper institutional mechanism for timely dissemination of certified copy of High Court’s order to respective Commissionerates. The Legal Cell in the Commissionerates will also develop a system for timely receipt of High Court’s orders.

    (iii) As certified copy of order is essential for filing Special Leave Petition under Article 136 of the Constitution, the Departmental Counsel may be advised to invariably file an application for obtaining a certified copy on the date of pronouncement of the High Court order or on the following day to avoid delay on this count. Where Government Counsel does not apply for certified copy in the prescribed time-period, his or her fees are required to be subjected to deduction. Repeated instances by a particular counsel may be taken note of while assessing the performance of the counsel in the periodical review exercise.

    2.2 It has also been observed that some of the Commissionerates are getting draft SLP prepared at their end and sending the same to the Board along with their proposal. While such effort indicates sincerity for defending cases, it has to be realized that drafting such SLP/CA not only contributes to unnecessary delay but is also a futile exercise as the Central Agency Section of the Ministry of Law does not accept such drafted SLPs / CAs. Central Agency invariably gets the SLP drafted from Drafting Counsels. Therefore this practice of sending draft SLP/CA should be strictly discontinued with henceforth.

    2.3. Similarly, the Commissionerates need not take the legal opinion from the Standing Counsels in respect of the High Court’s orders for forwarding proposal to file appeal as the SLPs against the High Court’s orders are filed by the Board only after obtaining the legal opinion from the Ministry of Law & Justice and Ld. Law officers of the Government of India.

    2.4. The CA proposals should be sent so as to be received in the Boards office within fifteen days from the receipt of the Order of the Tribunal and SLP proposal are received within twenty days from the date of the order of the High Court. The proposal against the High court’s order shall be initiated on the strength of the copy of the order circulated by the Court on its own motion or copy downloaded from the website of the Court i.e www.indiancourts.nic.in or www.courtnic.nic.in without waiting for the certified copy of the order. The certified copy of the order may be sent separately thereafter. It may be noted that in case of CA the period of limitation of 60 days begins from the date of receipt of order. However in case of SLP period of limitation of 90 days begins from the date of order of the High Court.

    2.5. All proposals must be sent by the field formations within the prescribed time limits. In case of delay, detailed justification should be furnished and corrective action should be initiated immediately, so that such delays do not occur in future. Delays on flimsy grounds would be viewed seriously.

    3. Quality of proposals:

    3.1 Quality of proposals sent by Commissionerates is extremely important for preparation of Civil Appeal/SLP. However, it has been observed that proposal lack quality in so far as content is concerned. Therefore, in order to improve the quality of proposals it has been decided to take the following measures,-

    (i) All CA and SLP proposals would henceforth be approved by the Jurisdictional Chief Commissioner. While forwarding the proposal a mention must be made in the covering letter to this effect.

    (ii) All such orders which are against revenue but found acceptable by the Commissioner will be put up to the jurisdictional Chief Commissioner for his concurrence.

    (iii) The office of the Chief / Joint Chief Departmental Representative will also examine carefully every judgment which is against revenue and forward their opinion to the concerned Commissionerate if it is felt that an appeal is merited in the matter. The Commissioners, however, need not wait for such comments and the same can be sent even after sending the proposal to the Board, in continuation of the earlier letter forwarding the proposal. The Board, vide its letter F. No. 390/Misc/411/07- JC dated 6th February 2008 had laid down the elaborate mechanism for examination of orders in the CDR/Jt CDR office.

    (iv) To ensure in-depth analysis and for preparation of comprehensive proposals the Commissioner shall ensure that legal journals such as ELT, RLT etc and software or online services such as Jurix, Manupatra, SCC Online, EXCUS, Lawcrux, Taxindiaonline etc. and reference books, law lexicons are available to the sections/officers dealing with SLP/CA. The Chief Commissioners should ensure availability of such books and online journals in the Commissionerates.


    4. Documentation required with proposals:

    4.1 Another significant aspect that has been found lacking in the proposals is documentation. Often complete sets of documents are either not enclosed or not found legible. The List of documents that are required to be enclosed in SLP/CA proposals is enumerated in Annexure-I. The following measures shall be taken in this context,-
    (i) With every proposal a certificate signed by Commissioner would be enclosed certifying that all relevant documents have been enclosed and that all documents are legible. In case any document is not furnished in the original proposal, the reason thereof would be furnished and such documents shall be furnished as soon as possible.
    (ii) The technical literature, court orders, judgments, copies of written submissions as well as material including technical literature which had been furnished to the Tribunal by the assessee at the time of oral submissions may be required for preparation of appeal proposal by the Department. The Joint Chief Departmental Representatives shall ensure that the documents stated above are preserved and sent to the Commissioner concerned immediately after the pronouncement of the order so that the said documents can be made a part of the Paper Book in case it is decided to agitate the matter before the Supreme Court. In case the documents have not been received by the Commissioner at the time of sending the CA proposal to the Board, the same should be procured by the Commissioners from DR’s office and send to the Board as soon as possible.

    5. Other measures to improve the processing of litigations:

    5.1 Grading of cases pending before the Courts is very important for effective monitoring by supervisory officers and, therefore, the Chief Commissioners are advised to devise an appropriate mechanism to prioritize important cases and classify them in various categories such as cases involving challenge of constitutional validity of provisions of Act / Rules / Notifications/ Circulars as Grade – I cases involving revenue of more than 1 crore as Grade – II cases and so on.

    5.2 The Directorate of Legal Affairs has been providing assistance and liaising between the field officers and the Central Agency Section of the Law Ministry including the Law Officers and Counsels. It has been felt that field formations are not fully aware of functioning of the Directorate of Legal Affairs, even though it is discharging important functions. Therefore, details of its functioning and its role in dissemination of information, revenue’s response in parties’ appeals and curing of defects of Revenue appeals is placed (Annexure VI).

    5.3 Directorate of Legal Affairs has taken several initiatives to make the details of ongoing cases in various courts available on the Internet. Considerable progress has been made towards the dissemination of information about various lists on the Court’s as well as CBEC websites. A brief on the measures adopted for facilitating monitoring of the cases is enclosed as Annexure VII. Most of the information related to listing of cases is available on the CBEC web site as well as on www.courtnic.nic.in . Officers in the field are expected to monitor cases pertaining to their Commissionerates with the help of the information available on these sites. The field officers can now find online the stage of the case, come forward to assist in proper representation of the case and provide timely response in the event of queries made.

    5.4 The Directorate of Legal Affairs will also compile and circulate a list of cases where appeals/ review petitions are not pursued in Supreme Court where amounts are very low or where appeals are dismissed only on grounds of delay or amount being small. Similar database may be maintained at Commissionerate level in respect of orders of High Court / CESTAT /Commissioner (Appeals) accepted on account of limitation or low amount.

    6. Dissemination of information regarding cases which are in favour of revenue: In the event it is observed that pro-revenue decisions have not been published / uploaded in the publications or web-sites like ELT/ STR / RLT / www.taxindiaonline.com , copies may be sent for publication in these journals/ website.

    7. Committee on Disputes (COD) matters

    7.1 In matters of COD, the instructions issued by the Cabinet Secretariat have been circulated by the Board from time to time. However, it is seen that delayed proposals, incomplete or illegible documents and pages not having been numbered, are being received and commented upon by the Committee on Disputes. The enclosures should be legible and all the documents should be page numbered for ease of reference. Also, all the relevant orders should be enclosed. Further, it is once again reiterated that proposals having revenue implication of 5 lakhs and below need not be sent for approval by the High Powered Committee.

    8. The above instructions in brief enumerate the steps/measures being taken or to be taken to improve the mechanism of litigation. The comprehensive instructions in details are contained in Annexures as per details mentioned in para 9 below. Further these instructions cast certain responsibilities on Chief Commissioners, Commissioners and CDR office. Therefore, to ensure compliance of these instructions, a one time report on the points mentioned in Annexure VIII will be furnished by all Zonal Chief Commissioners and CDR by 31st December 2010.

    9. In order to reduce departmental litigation, Board has decided to fix monetary limits below which appeals shall not be filed before the Tribunal and Courts. Separate instruction in this regard is being issued.

    10. The details of Annexures:

    Annexure-I
    Instruction as regards litigation before the Supreme Court

    Annexure- II
    Instruction as regards litigation before the High Court

    Annexure III
    Instructions for improving the quality of Departmental Representation before CESTAT

    Annexure-IV
    Instruction as regards action for disseminationof judgments in revenue’s favour

    Annexure-V
    Instructions as regards disputes between Government Department and Central PSUs / other Government Departments

    Annexure-VI

    The functioning of the Directorate of Legal Affairs

    Annexure-VII
    The mechanism of listing of appeals / SLPs as followed by Supreme Court Registry, alertness expected from Commissioners and marking of cases to the Counsels

    Annexure -VIII
    Points on which Zonal Chief Commissioner and CDR will furnish a one time compliance report

    11. The following circulars/instruction on becoming redundant upon issuance of these instructions stand superseded:

    (i)
    Circular No. 313/29/97-CX., dated 6th May1997
    (ii)
    Circular No 33/97- Cus dated 4th Sep1997
    (iii)
    Circular No 332/48/97 –CX dt 9th Sep 1997
    (iv)
    Circular No 349/65/97 –CX dt 31st Oct 1997
    (v)
    Circular No. 402/35/98-CX., dated 9th June1998
    (vi)
    Circular No 488/54/99 JC dt 12th Oct 1999
    (vii)
    Circular No 517/13/2000 CX dt 2nd March 2000
    (viii)
    Circular No 519/15/2000 CX dt 3nd March 2000
    (ix)
    Circular No 544/40/2000 CX dt 6th Sep.2000 ,
    (x)
    Circular No 550/46/2000 CX dt 18th Sep 2000
    (xi)
    Circular no. 891/16/2005 CX dated 13th October 2005.
    (xii)
    Circular No 835/12/2006 CX dt 6th Oct 2006
    (xiii)
    Circular No 863/1/2008 CX dt 2nd Jan 2008



    12. The following Circulars / letters issued by the Board that find mention in this Circular and its annexures are not being withdrawn.
    (i) Letter F. No. 390/Misc/411/07- JC dated 6th February 2008
    (ii) D.O.F. No.390/Misc/411/07-JC dated 7th January 2008
    (iii) Letter F No 390/R/135/2008-JC dated.9.5.08.
    (iv) Circular No 27/27/94-CX dated 2.3.94 as modified from time to time.
    (v) Circular No 156/67/95-CX dated 17.11.95,
    (vi) Circular No.515/11/2000-CX dated 18.2.2000
    (vii) Circular No. 578/15/2001-CX dated 20-06-2000
    (viii) Letter F No 390/R/187/2009-JC dated 10.8.2009.


    13. Receipt of this Circular may please be acknowledged.


    14. Hindi version will follow.
    (Sunil K Sinha)
    Director (JC)



  2. #2
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    Thumbs up Circulars - Circular No.- 936/26/2010 – Central Excise

    Circular No. 936/26/2010 –CX


    F.No. 6/4/2009-DS (CX.1 & 4)/Pt.

    Government of India
    Ministry of Finance

    Department of Revenue
    Central Board of Excise and Custom


    New Delhi, the 27th October, 2010


    To,

    Directors General (All)
    Chief Commissioners of Central Excise including LTU (All)
    Commissioners of Central Excise (All)

    Sir/Madam

    Subject: Inclusion of After Sale Service and Pre-delivery Inspection Charges in the assessable value.
    Attention is invited to point No. 7 of Board’s circular No. 643/34/2002-CX dated 1-7-2002 and to circular No. 909/29/09-CX dated 11.12.2009 on the above subject.

    2. Board vide its earlier circular No. 643/34/2002-CX dated 1-7-2002 had clarified that After-sale Service and Pre-delivery Inspection chargeswere liable to be included in the assessable value under Section 4 of the Central Excise Act 1944. Further vide circular No. 909/29/09-CX dated 11.12.2009, it was directed to transfer all the show cause notices issued on the above subject to call book pending the decision of the larger bench of CESTAT in the case of Maruti Udyog Ltd.

    3. The larger bench of CESTAT vide its order dated 13.8.2010 in appeal No. 1958 of 2008 in the aforesaid case, has now held that Pre-delivery Inspection charges and After-sale Service charges collected by the dealers are to be included in the assessable value under Section 4 of the Central Excise Act, 1944.

    4. In view of the aforesaid decision of the larger bench, the cases pending in the call book may be decided keeping in view the law laid down by the larger bench of CESTAT.

    5. Receipt of this circular may be acknowledged

    6. Hindi version would follow.






    Yours faithfully



    Madan Mohan
    Under Secretary (CX.1)


  3. #3
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    Thumbs up Circulars - Circular No.- 937/27/2010 - Central Excise

    Circular No. 937/27/2010 - CX

    F.No.52/1/2009- CX.1 Pt

    Ministry of Finance

    Department of Revenue
    Central Board of Excise of Revenue & Customs
    North Block, New Delhi

    ****
    Dated the 26th November, 2010
    To

    Director Generals (All)
    Chief Commissioners of Central Excise including LTU (All)
    Commissioners of Central Excise including LTU (All)

    Sir,

    Sub: Application of provisions of section 5A (1A) of the Central Excise Act


    References had been received from the field formations as well as trade to clarify the ambiguity arising out of simultaneous prevalence of two exemption notifications namely 29/2004-CE dated 9.7.2004 as amended by notification No. 58/2008-CE dated 7.12.2008 and another notification 59/2008-CE dated 7.12.2008. The period of dispute is from 7.12.2008 to 6.7.2009. During this period while one notification No. 29/2004-CE as amended granted full exemption to certain items of Textile Sector without any condition, the second notification 59/2008-CE prescribed a concessional rate of duty of 4% on these items, with the benefit of Cenvat Credit.

    2. The dispute was with regard to whether an assessee can avail the benefit of either of the above said two notifications whichever is beneficial to him or he is bound to avail the unconditional exemption under notification No. 20/2004 - CE, as amended, during the period under dispute in terms of the provisions of section 5A(1A) of the Central Excise Act, 1944.

    3. The matter was examined in the Board. As a substantial question of law was involved, the matter was referred to the Law Ministry for its opinion. The Ministry of Law has opined that the language used in said section 5A(1A) is unambiguous and principles of harmonious construction cannot be applied in the instant case in view of specific provision under sub-section (1A) of section 5A of the Central Excise Act. The Law Ministry has accordingly concluded that in view of the specific bar provided under sub-section (1A) of section 5A of the Central Excise Act, the manufacturer cannot opt to pay the duty under notification 59/2008-CE dated 7.12.2008 and he can not avail the Cenvat Credit of the duty paid on inputs.

    4. The aforesaid opinion of Law Ministry has been accepted by the Board. Pending issues, if any, may be decided accordingly.

    5. Trade may be informed suitably.
    6. The receipt of this circular may be acknowledged.
    7. Hindi version would follow in due course.

    Yours faithfully,

    (Madan Mohan)
    Under Secretary (CX1)



  4. #4
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    Thumbs up Circulars - Circular No. 938/28/09 - Central Excise

    Circular No. 938/28/09-CX



    F.No. 6/5/2009-DS (CX.1 & 4)

    Government of India
    Ministry of Finance

    Department of Revenue
    Central Board of Excise and Custom



    New Delhi, the 29th November, 2010
    To,

    Director General (All)
    Chief Commissioners of Central Excise including LTU (All)
    Commissioners of Central Excise (All)

    Sir/Madam

    Subject: Clarification regarding Quantity discounts, bonus quantities, etc. cleared without payment of duty under MRP based assessment - reg.
    A larger bench of CESTAT in the case of Indica Laboratories Vs CCE, Ahmedabad 2007(213) ELT 20(T-LB), has held that quantity discount, bonuses etc. are applicable for the valuation of goods under section 4 of the Central Excise Act, 1944 and not in case of goods valued under Section 4A.
    2. The party has appealed against the said order before High Court of Gujrat. However, no stay has been granted by the High Court against the said order of the larger bench of tribunal. You may accordingly take necessary action as per the order of the larger bench of tribunal to protect the revenue interests.
    3. Trade & Industry may be informed.
    4. Receipt of this circular may be acknowledged
    5. Hindi version would follow.


    Yours faithfully

    Madan Mohan
    Under Secretary (CX.1)


  5. #5
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    Thumbs up Circulars - Circular No.- 939/29/ 2010 - Central Excise

    Circular No. 939 /29 / 2010-CX

    F.No.102/2/2010-CX-3

    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise and Customs

    New Delhi, dated the 22nd December, 2010


    To

    All Directors General
    All Chief Commissioners of Central Excise
    All Chief Commissioners of Central Excise and Customs

    Sir/Madam,

    Subject: Scope of Notification Nos.49/2003-CE and 50/2003-CE both dated 10.06.2003


    Kind attention is invited to Notification Nos. 49/2003-CE and 50/2003-CE both dated 10.06.2003 which provide full exemption from excise duties to goods cleared from industrial units in the states of Uttarakhand and Himachal Pradesh for a period of ten years from the date of commencement of commercial production. The exemption is available to new units set up or existing units which have undergone substantial expansion in terms of the said notifications and commence commercial production before the cut-off date, that is, on or before 31.3.2010

    2. Representations have been received from Trade and Industry Associations seeking clarification on the availability of the exemption benefit under these notifications in the following situations:

    (i)Where a unit starts producing some new products after the cut-off date using plant and machinery installed up the said cut-off date and without any further addition to the plant and machinery.
    (ii)Where the installed capacity in a particular unit is upgraded after the cut-off date, so as to increase the efficiency of the machinery by installing ancillary machines or replacement of some parts etc but in such a way that it does not lead to increase in capacity of production.
    (i)Where new dosage forms are manufactured after the cut-off date on the same line of production with the same machinery.
    (ii)Where a unit manufacturers a new product by installing fresh plant, machinery or capital goods after the cut-off date.

    3. Board has examined the matter. Under the said notifications, any new unit set up or an existing unit which has undergone substantial expansion that commences commercial production before the cut-off date is entitled to excise duty exemption in respect of excisable goods (other than those appearing in the negative list) manufactured and cleared for a period of ten yeas from the date of commencement of commercial production. The provisions of these notifications do not place a bar or restriction on any addition/modification in the plant or machinery or on the production of new products by an eligible unit after the cut-off date and during the exemption period of ten years as per the notification. Therefore, it is clarified that in all the above situations, the benefit of the excise duty exemption under the notifications would continue to be available to eligible industrial units. However the period of exemption would remain ten years and would not get extended on account of such modifications or additions under any circumstances.

    4. Trade and industry and field formations may be suitable informed.

    5. Receipt of the Circular may be acknowledged.

    6. Hindi version will follow.


    Yours faithfully


    (Dr. Ravindra J Dange)

    Under Secretary (CX-3)



  6. #6
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    Thumbs up Circulars - Circular No. 940/01/2011- Application of provisions of Section 5A(1A) of the Central Excise Act, 1944-reg.

    Circular No. 940/01/2011-CX


    F.No.262/117/2010-CX8
    Government of India
    Ministry of Finance
    Department of Revenue
    (Central Board of Excise & Customs)


    New Delhi, dated the 14th January, 2011
    To,
    All Director Generals,
    All Chief Commissioners of Central Excise (including LTU),
    All Commissioners of Central Excise (including LTU).

    Sir/ Madam,


    Subject: Application of provisions of Section 5A(1A) of the Central Excise Act, 1944-reg.


    Attention is invited to Board’s circular No. 937/27/2010-CX dated 26.11.10 issued from F.No.52/1/2009-CX1 (Pt.), wherein based on the opinion of the Law Ministry, it was clarified that in view of the specific bar provided under sub-section (1A) of Section 5A of the Central Excise Act, 1944, the manufacturer cannot opt to pay the duty in respect of unconditionally fully exempted goods and he cannot avail the CENVAT credit of the duty paid on inputs.


    2. It is further clarified that in case the assessee pays any amount as Excise duty on such exempted goods, the same cannot be allowed as “CENVAT Credit” to the downstream units, as the amount paid by the assessee cannot be termed as “duty of excise” under Rule 3 of the CENVAT Credit Rules, 2004.



    3. The amount so paid by the assessee on exempted goods and collected from the buyers by representing it as “duty of excise” will have to be deposited with the Central Government in terms of Section 11D of the Central Excise Act, 1944 . Moreover, the CENVAT Credit of such amount utilized by downstream units also needs to be recovered in terms of the Rule 14 of the CENVAT Credit Rules, 2004.



    4. Trade & Industry as well as field formations may be suitably informed.



    5. Receipt of this circular may kindly be acknowledged.

    6. Hindi version will follow.
    Yours faithfully,
    (Amish Kumar Gupta)
    OSD (CX-8)

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