Whether safeguard duty imposed under section 8C of Customs Tariff Act 1975, is exempted for import goods from China under Advance Authorisation Scheme.

1  That   investigation under section 8 B of the Customs Tariff Act ,1975 ,is for “ Serious injury “ whereas   for  “market disruption” is under  Section 8 C  of the Customs Tariff Act ,1975.   The test for “ Serious injury “  is very stringent  compare to  “market disruption”. And when   Safeguard  duty  on  import of any  goods from  China  under Section 8 B  is exempted under  Advance Authorisation  but    Safeguard Duty  imposed on import of any  goods from  China   under Section 8 C  of the Customs Tariff Act ,1975, is not exempted  under  Advance Authorisation  Scheme goes against very nature of  Safeguard  Duty  measure and protection.

2.Hence , by denying exemption  benefits of  Safeguard  duty  imposed under  section 8 C of the Tariff Act ,1975, it also amount denying exemption  benefits of  Anti -dumping duty  under  Customs Notification  96/2009.  This is against the very purpose of the Notification benefit issued for import under Advance Authorisation  Scheme.

3. That  if Anti-dumping duty is not taken into accounts  for determining Safeguard duty on  such import then  such Safeguard duty  amount will be  higher than  duty levied by Customs Notification   , 4 / 2012-Customs (SG)  ,dated the 5th October, 2012, against the final findings of DG( SG) and also violation of  rule 12 of the Customs Tariff (Transitional Product Specific Safeguard Duty) Rules, 2002.

4.Further,  that the both the Customs Notification, namely:  No.96/2009- Cus,Dated 11.09.2009  and 

No.93/2004 –Cus, Dated 10.09.2004, are still in force.  Therefore, if the same material is imported  from China under Advance Authorisation Scheme issued under previous FTP ( 2004-2009), then, it is not subjected to any safeguard duty imposed under Section 8 C of  the Customs Customs Tariff Act ,1975. But  , import of such material from China under Advance Authorisation issued under present FTP (2009-2014) are subjected to safeguard duty imposed under Section 8 C of the the Customs Customs Tariff Act ,1975. Thus, this charging of safeguard duty to import input under   section   8 C of the Customs Tariff Act ,1975 is against the provisions and principles of FTP and discriminatory in nature.  

5.The imported carbon black from China is to be incorporated into goods meant for export purpose. Hence, they are not for sale into domestic market and such goods cannot cause any injury to domestic market. Therefore, there is no safeguard duty can be imposed on such goods even under section 8 C of the said tariff Act.

  

4.Further, we submit that the both the Customs Notification, namely:  No.96/2009- Cus,Dated 11.09.2009  and No.93/2004 –Cus, Dated 10.09.2004, are still in force.  Therefore, if the same material is imported  from China under Advance Authorisation Scheme issued under previous FTP ( 2004-2009), then, it is not subjected to any safeguard duty imposed under Section 8 C of  the Customs Customs Tariff Act ,1975. But  , import of such material from China under Advance Authorisation issued under present FTP (2009-2014) are subjected to safeguard duty imposed under Section 8 C of the the Customs Customs Tariff Act ,1975. Thus, this charging of safeguard duty to import input under   section   8 C of the Customs Tariff Act ,1975 is against the provisions and principles of FTP and discriminatory in nature.

5.The imported carbon black from China is to be incorporated into goods meant for export purpose. Hence, they are not for sale into domestic market and such goods cannot cause any injury to domestic market. Therefore, there is no safeguard duty can be imposed on such goods even under section 8 C of the said tariff Act.

 If you require any further clarification on this draft, pl free to contact.

 

Thanks and Regards

Ravindra Kumar
Founder & CEO
Indirect Tax & Supply Chain
Global Tax Guru | Global Supply Chain Guru | Global Cad Guru
************************************************************
Email : ravindra@globaltaxguru.in
Website : globaltaxguru.in | globalsupplychainguru.com | globalcadguru.com
Office : 24,G.F., Scottish Mall, Sohna Road, Gurgaon(HR)
************************************************************
+91-9958257070
+91-124-2219229
+91-141-5138753
************************************************************

TV of any size have been removed from list of duty free baggage allowance

Now , LED TV ,LCD TV, PLASMA TV have been removed from list of items covered under duty free  Baggage allowance. This is effective from 26th August ,2013.  TV will attract duty of 35.7% if imported as bonafide baggage.

CRT  TV are still allowed for duty free allowance under Baggage.

TV imported through AirCargo  and Sea Cargo will attract duty @ 28.852%. The CVD on TV is  12 % , Basic Customs Duty @ 10 % , SAD@ 4% and Cess 2% .But , CVD on TV is based on MRP price in India. The value of  TV to determine  CVD is  calculated  after giving 35% abatement of MRP  price in India.

The recent Customs Notification issued  for removing  TV from Baggage Allowance.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

     

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION

No. 84 /2013-Customs (N.T.)

New Delhi, the 19^th August, 2013

    G.S.R.   (E). - In exercise of the powers conferred by section 79 of the Customs Act, 1962 (52 of 1962), the Central Government hereby makes the following rules to further amend the Baggage Rules, 1998, namely:-

1. (1)    These rules may be called the Baggage (Second Amendment) Rules, 2013.

    (2)    They shall come in to force on the 26^th day of August, 2013.

2.         In the Baggage Rules, 1998, in Annex I, after item 5 relating to Gold or silver, in any form, other than ornaments, the  following item shall be inserted, namely:-

“6.  Flat Panel (LCD/LED/Plasma) Television.”.

 [F.No.354/112/2013-TRU]

[Raj Kumar Digvijay]
Under Secretary to the Government of India

Note. - The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 30/98-Customs (N.T.), dated the 2^nd June, 1998 [GSR 296 (E), dated the 2^ndJune, 1998] and last amended vide notification No.25/2013-Customs (N.T.), dated the 1^st  March, 2013 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 139 (E), dated the 1^st  March, 2013. 

Claiming of wrong exemption notification is not misdeclaration as contemplated by section 111(m) of the Customs Act.

That claiming of wrong exemption notification is not misdeclaration as contemplated by section 111(m) of the Customs Act.

Relying  on  following case laws for above submission.

i)                    The  Honourbale Supreme Court  of India held ,in case of Northern Plastic Ltd Versus  Collector Of Customs & Central Excise, [1998 (101) E.L.T. 549 (S.C.)],

 vide Para 22, that wrong exemption notification are not  misdeclaration as contemplated by Section 111(m) of the Customs Act  :

“……. While dealing with such a claim in respect of payment of customs duty we have already observed that the declaration was in the nature of a claim made on the basis of the belief entertained by the appellant and therefore, cannot be said to be a misdeclaration as contemplated by Section 111(m) of the Customs Act. As the appellant had given full and correct particulars as regards the nature and size of the goods, it is difficult to believe that it had referred to the wrong exemption notification with any dishonest intention of evading proper payment of countervailing duty    “.

ii)                  As claiming  exemption notification cannot be treated  as declaration  for the purpose of  section 111(m).- J.K. Industries   v. Commissioner of Customs-1996(88) E.L.T 41 (Tribunal)

iii)                Claiming of classification and consequential exemption under a heading other than subsequently determined by the department does not amount to mis-declaration or an attempt to evade duty. No mala fides have been proved or established.- Hindustan Lever Ltd. V. Collector -1996(83) E.L.T. 520 (Tribunal); Metro Tyres Ltd. V, Collector -1994(74) E.L.T. 964( Tribunal)

Misclassification of goods and misdeclaration of goods are distinct in nature and scope

It is settled law that misclassification of goods and misdeclaration of goods are distinct in nature and scope. Misdeclaration  of goods   attract penal  provision under section 111(m) of Customs Act ,1962.But misclassification  of goods is a subject of interpretation  and  does not attract penal provision under Section 111(m).

   Relying on following case laws for above submission.

i)                    The Honourbale High Court  of Karnataka held, in case of  COMMISSIONER OF CUSTOMS, BANGALORE Versus  A. MAHESH RAJ - 2006 (195) E.L.T. 261 that In case of misclassification, it may be bona fide case of wrong classification as the importer or the person clearing the goods may not be fully conversant with the Schedule to the Act.

The relevant portion of  Para  20  of above cited  case law has been reproduced below as:

“. The scope of the provisions cannot be unduly enlarged if the intendment of the Legislature to provide for settlement in cases of short levy or non-levy on account of misclassification or misdeclaration also, as there is a vast and considerable distinction between cases of misclassification of goods and misdeclaration of goods. A misclassification of goods will only result in duty liability being at a different rate in terms of entry under which it is classified, whereas misdeclaration can be a situation of suppression, distortion and misrepresentation. In a situation of misclassification, only goods are disclosed or declared but goods are not properly classified for the purposes of determination of rate of duty, whereas in a case of misdeclaration, goods might not have been declared correctly at all, in the sense description is not of the actual goods also quantity may varying and mischief being deliberate and designed to avoid payment of customs duty. In case of misclassification, it may be bona fide case of wrong classification as the importer or the person clearing the goods may not be fully conversant with the Schedule to the Act. In the case where there was no deliberate or  intended desire on the part of the importer to evade or avoid payment of any customs duty, in tact, to provide immunity and protection of such class of people ,Chapter XIVA has been ushered in ……….”.

Ii) Misdeclaration can be of description but not of classification – Bajaj Health & Nutrition  Pvt Ltd V. Commissioner ,2004(166) ELT 189 (Tri)

Iii)    Mens rea not attributable – if importer have claimed wrong classification according to his limited Understanding  of the Customs Law- Jay Kay Exports & Industries V. Commissioner -2004(163) E.L.T. 359 (Tri-Kolkata)

Iv ) Demand on account of wrong classification –confiscation not resortable when description of goods given correctly- Hindustan National Glass &Indus limited V.Commissioner , Calcutta-2002(145) E.L.T.162(Tri-Kol)

v) The Honourable High Court of Bombay  ,in  case of Commissioner Of Central Excise Mumbai-V   Vs Guru Plastics Work, 2010 (261) E.L.T. 60 (Bom.),uphold the view of learned  Tribunal  that in the issue of classification  ,imposition of penalty was not called for.   The Para 2 and 3 of this order is reproduced here:

”2. From the facts and record, we find that the learned Tribunal had recorded the finding that the issue of classification in the case was an issue and in these circumstances, the imposition of penalty was not called for. The matter was thereafter remitted back to the Commissioner to re-determine the valuation as per the formulae in the case of M/s. Ujagar Prints v. Union of India - 1989 (39) E.L.T. 493 (S.C.).

3. It is this order which was the subject matter of the appeal before us. The law insofar as Section 11AC has been settled in the judgment of the Supreme Court in Dharamendra Textiles, 2008 (231) E.L.T. 3 (S.C.) and explained in Rajasthan Spinning & Weaving Mills Ltd., 2009 (238) E.L.T. 3 (S.C.) has laid down that Revenue has to prove the predicates of Section 11AC, one of which is that the non-payment of duty was with an intent to evade payment of duty. In the instant case, there is a clear finding of fact that there was a vexed issue of classification.”

Postal import-No confiscation of goods imported through parcel on account of misdeclaration and undervaluation

In case of postal parcel, declaration on goods is done by  foreign exporter(sender).Therefore, any wrong declaration for value and description of goods on the parcel ,Indian buyer cannot be held responsible. Hence, no fine and penalty on this account.
(This is based on CESTAT Ahmedabad judgement reported in 2013(293)E.L.T.412(Tri.-Ahmd.))

Customs duty on LCD and LED TV Panels of 19" and above

Dear Tanyaji,
                      Baggage  import duty are not covered by above notification. Hence , you have to pay duty  as per Baggage rules after availing duty free allowances ,if any.

Thanks and Regards

Ravindra Kumar
Founder & CEO
Indirect Tax & Supply Chain
Global Tax Guru | Global Supply Chain Guru | Global Cad Guru
************************************************************
Email : ravindra@globaltaxguru.in
Website : globaltaxguru.in | globalsupplychainguru.com | globalcadguru.com
Office : 24,G.F., Scottish Mall, Sohna Road, Gurgaon(HR)
************************************************************
+91-9958257070
+91-124-2219229
+91-141-5138753
************************************************************

--- On Thu, 14/3/13, tanya raheja wrote:

From: tanya raheja
Subject: Your advice & help on customs duty
To: ravindrakumar_iitd@yahoo.co.in
Date: Thursday, 14 March, 2013, 2:49 PM

Dear Ravindra Kumar Ji,


Hope you are doing fine. I had written to you in the past seeking your help on importing a LED TV & your advice helped me a lot.

Recently I came across this link.
http://www.taxmann.com/topstories/222330000000000094/changes-in-customs-laws-by-budget-2013-14.aspx

It says as per a new notification LCD and LED TV Panels of 19" and above are exempt.
It is clarified that LCD and LED TV Panels and LCD and LED TV Modules are one and the same thing for the purpose of exemption under this
notification . Notification No 12/2013-Customs

What does this mean ? As a tourist if I go to Singapore & get a 46 inch LED TV worth Rs 50000 , will it be completely duty free ? Does it mean I
dont have to pay any duty to customs ?

Thanks,
Tanya

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013

CHAPTER VI
SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013
94. This Scheme may be called the Service Tax Voluntary Compliance Encouragement Scheme,
2013.
95. (1) In this Scheme, unless the context otherwise requires,—
(a) “Chapter” means Chapter V of the Finance Act, 1994;
(b) “declarant” means any person who makes a declaration under sub-section (1) of section 97;
(c) “designated authority” means an officer not below the rank of Assistant Commissioner of
Central Excise as notified by the Commissioner of Central Excise for the purposes of this Scheme;
(d) “prescribed” means prescribed by rules made under this Scheme;
(e) “tax dues” means the service tax due or payable under the Chapter or any other amount due
or payable under section 73A thereof, for the period beginning from the 1st day of October, 2007
and ending on the 31st day of December, 2012 including a cess leviable thereon under any other
Act for the time being in force, but not paid as on the 1st day of March, 2013.
(2) Words and expressions used herein and not defined but defined in the Chapter or the rules
made thereunder shall have the meanings respectively assigned to them in the Chapter or the rules
made thereunder.
96. (1) Any person may declare his tax dues in respect of which no notice or an order of determination
under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st
day of March, 2013:
Provided that any person who has furnished return under section 70 of the Chapter and disclosed
his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be
eligible to make declaration for the period covered by the said return:
Provided further that where a notice or an order of determination has been issued to a person in
respect of any period on any issue, no declaration shall be made of his tax dues on the same issue
for any subsequent period.
(2) Where a declaration has been made by a person against whom,—
(a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or
short-paid has been initiated by way of —
(i) search of premises under section 82 of the Chapter; or
(ii) issuance of summons under section 14 of the Central Excise Act, 1944, as made applicable
to the Chapter under section 83 thereof; or
(iii) requiring production of accounts, documents or other evidence under the Chapter or the
rules made thereunder; or
(b) an audit has been initiated,
and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated
authority shall, by an order, and for reasons to be recorded in writing, reject such declaration.
97. (1) Subject to the provisions of this Scheme, a person may make a declaration to the designated
authority on or before the 31st day of December, 2013 in such form and in such manner as may be prescribed.
(2) The designated authority shall acknowledge the declaration in such form and in such manner as
may be prescribed.
(3) The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent. of
the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority.
Special
provision for
taxable
services
provided by
Indian
Railways.
Short title.
Definitions.
 Person who
may make
declaration of
tax dues.
32 of 1994.
Procedure for
making
declaration
and payment
of tax dues.
1 of 1944.
5
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5033
(4) The tax dues or part thereof remaining to be paid after the payment made under sub-section (3)
shall be paid by the declarant on or before the 30th day of June, 2014:
Provided that where the declarant fails to pay said tax dues or part thereof on or before the said
date, he shall pay the same on or before the 31st day of December, 2014 along with interest thereon,
at such rate as is fixed under section 75 or, as the case may be, section 73B of the Chapter for the
period of delay starting from the 1st day of July, 2014.
(5) Notwithstanding anything contained in sub-section (3) and sub-section (4), any service tax which
becomes due or payable by the declarant for the month of January, 2013 and subsequent months
shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for
delay in payment thereof, shall also be payable under the Chapter.
(6) The declarant shall furnish to the designated authority details of payment made from time to
time under this Scheme along with a copy of acknowledgement issued to him under sub-section (2).
(7) On furnishing the details of full payment of declared tax dues and the interest, if any, payable
under the proviso to sub-section (4) the designated authority shall issue an acknowledgement of
discharge of such dues to the declarant in such form and in such manner as may be prescribed.
98. (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon
payment of the tax dues declared by him under sub-section (1) of section 97 and the interest payable
under the proviso to sub-section (4) thereof, shall get immunity from penalty, interest or any other
proceeding under the Chapter.
(2) Subject to the provisions of section 101, a declaration made under sub-section (1) of section 97
shall become conclusive upon issuance of acknowledgement of discharge under sub-section (7) of
section 97 and no matter shall be reopened thereafter in any proceedings under the Chapter before
any authority or court relating to the period covered by such declaration.
99. Any amount paid in pursuance of a declaration made under sub-section (1) of section 97 shall
not be refundable under any circumstances.
100. Where the declarant fails to pay the tax dues, either fully or in part, as declared by him, such
dues alongwith interest thereon shall be recovered under the provisions of section 87 of the Chapter.
101. (1) Where the Commissioner of Central Excise has reasons to believe that the declaration
made by a declarant under this Scheme was substantially false, he may, for reasons to be recorded in
writing, serve notice on the declarant in respect of such declaration requiring him to show cause why
he should not pay the tax dues not paid or short-paid.
(2) No action shall be taken under sub-section (1) after the expiry of one year from the date of
declaration.
(3) The show cause notice issued under sub-section (1) shall be deemed to have been issued
under section 73, or as the case may be, under section 73A of the Chapter and the provisions of the
Chapter shall accordingly apply.
102. For the removal of doubts, it is hereby declared that nothing contained in this Scheme shall be
construed as conferring any benefit, concession or immunity on the declarant other than the benefit,
concession or immunity granted under section 98.
103. (1) If any difficulty arises in giving effect to the provisions of this Scheme, the Central Government
may, by order, not inconsistent with the provisions of this Scheme, remove the difficulty:
 Provided that no such order shall be made after the expiry of a period of two years from the date
on which the provisions of this Scheme come into force.
(2) Every order made under this section shall, as soon as may be after it is made, be laid before
each House of Parliament.
104. (1) The Central Government may, by notification in the Official Gazette, make rules for carrying
out the provisions of this Scheme.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any
of the following matters, namely:—
(a) the form and the manner in which a declaration may be made under sub-section (1) of
section 97;
(b) the form and the manner of acknowledging the declaration under sub-section (2) of section 97;
Immunity
from penalty,
interest and
other
proceeding.
No refund of
amount paid
under the
Scheme.
Tax dues
declared but
not paid.
Failure to
make true
declaration.
Removal of
doubts.
Power to
remove
difficulties.
Power to
make rules.
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54 of 1963.
(c) the form and the manner of issuing the acknowledgement of discharge of tax dues under
sub-section (7) of section 97;
(d) any other matter which is to be, or may be, prescribed, or in respect of which provision is to
be made, by rules.
(3) The Central Government shall cause every rule made under this Scheme to be laid, as soon as
may be after it is made, before each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in the rule or both Houses agree that the rule should not
be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case
may be; so, however, that any such modification or annulment shall be without prejudice to the validity
of anything previously done under that rule.
CHAPTER VII
COMMODITIES TRANSACTION TAX
105. (1) This Chapter extends to the whole of India.
(2) It shall come into force on such date as the Central Government may, by notification in the
Official Gazette, appoint.
(3) It shall apply to taxable commodities transactions entered into on or after the commencement of
this Chapter.
106. In this Chapter, unless the context otherwise requires,—
(1) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 of the Incometax Act, 1961;
(2) “Assessing Officer” means the Income-tax Officer or Assistant Commissioner of Income-tax
or Deputy Commissioner of Income-tax or Joint Commissioner of Income-tax or Additional
Commissioner of Income-tax who is authorised by the Board to exercise or perform all or any of the
powers and functions conferred on, or assigned to, an Assessing Officer under this Chapter;
(3) “Board” means the Central Board of Direct Taxes constituted under the Central Boards of
Revenue Act, 1963;
(4) “commodities transaction tax” means tax leviable on the taxable commodities transactions
under the provisions of this Chapter;
(5) “commodity derivative” means––
(i) a contract for delivery of goods which is not a ready delivery contract; or
(ii) a contract for differences which derives its value from prices or indices of prices––
(A) of such underlying goods; or
(B) of related services and rights, such as warehousing and freight; or
(C) with reference to weather and similar events and activities,
having a bearing on the commodity sector;
(6) “prescribed” means prescribed by rules made under this Chapter;
(7) “taxable commodities transaction” means a transaction of sale of commodity derivatives in
respect of commodities, other than agricultural commodities, traded in recognised associations;
(8) words and expressions used but not defined in this Chapter and defined in the Forward
Contracts (Regulation) Act, 1952, the Income-tax Act, 1961, or the rules made thereunder, shall
have the meanings respectively assigned to them in those Acts.
107. On and from the date of commencement of this Chapter, there shall be charged a commodities
transaction tax in respect of every taxable commodities transaction, being sale of commodity derivative,
at the rate of 0.01 per cent. on the value of such transaction and such tax shall be payable by the
seller.
74 of 1952.
43 of 1961.
Extent,
commencement
and
application.
Definitions.
Charge of
commodities
transaction
tax.
43 of 1961.
5
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35
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Changes in Service Tax

30
CHAPTER V
SERVICE TAX
93. In the Finance Act, 1994,— .
(A) in section 65B,—
(i) in clause (11),—
(a) in sub-clause (i), after the words “National Council for Vocational Training”, the words
“or State Council for Vocational Training” shall be inserted;
(b) in sub-clause (ii), the word “or” occurring at the end shall be omitted;
(c) sub-clause (iii) shall be omitted;
(ii) in clause (40), after the words and figures "the Central Excise Act, 1944”, the words, figures
and brackets “or the Medicinal and Toilet Preparations (Excise Duties) Act,1955” shall be inserted;
(B) in section 66B, the Explanation shall be omitted;
(C) after section 66B, the following section shall be inserted, namely:—
“66BA. (1) For the purpose of levy and collection of service tax, any reference to section 66 in
the Finance Act, 1994 or any other Act for the time being in force, shall be construed as reference
to section 66B thereof.
(2) The provisions of this section shall be deemed to have come into force on the 1st day of
July, 2012.”;
(D) in section 66D, in clause (d), in sub-clause (i), the word “seed” shall be omitted;
(E) in section 73, after sub-section (2), the following sub-section shall be inserted, namely:-
“(2A) Where any appellate authority or tribunal or court concludes that the notice issued under
the proviso to sub-section (1) is not sustainable for the reason that the charge of,—
(a) fraud; or
(b) collusion; or
(c) wilful misstatement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or the rules made thereunder with
intent to evade payment of service tax,
has not been established against the person chargeable with the service tax, to whom the notice was
issued, the Central Excise Officer shall determine the service tax payable by such person for the
period of eighteen months, as if the notice was issued for the offences for which limitation of eighteen
months applies under sub-section (1).”;
(F) in section 77, in sub-section (1), for clause (a), the following clause shall be substituted, namely:—
“(a) who is liable to pay service tax or required to take registration, fails to take registration in
accordance with the provisions of section 69 or rules made under this Chapter shall be liable to
a penalty which may extend to ten thousand rupees;”;
(G) after section 78, the following section shall be inserted, namely:—
“78A. Where a company has committed any of the following contraventions, namely:—
(a) evasion of service tax; or
(b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable
service in violation of the rules made under the provisions of this Chapter; or
(c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service
or excisable goods either fully or partially in violation of the rules made under the provisions of
this Chapter; or
(d) failure to pay any amount collected as service tax to the credit of the Central Government
beyond a period of six months from the date on which such payment becomes due,
Amendment of
Act 32 of
1994.
Reference to
section 66 to
be construed
as reference
to section 66B.
1 of 1944.
16 of 1955.
32 of 1994.
Penalty for
offences by
director, etc.,
of company.
5
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15
20
25
30
35
40
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then any director, manager, secretary or other officer of such company, who at the time of such
contravention was in charge of, and was responsible to, the company for the conduct of business
of such company and was knowingly concerned with such contravention, shall be liable to a
penalty which may extend to one lakh rupees.”;
(H) in section 83, for the figure and letter “9A”, the words, brackets, figures and letter "subsection (2) of section 9A” shall be substituted;
(I) in section 86, in sub-section (5), for the word, brackets and figure “sub-section (3)”, the words,
brackets and figures “sub-section (1) or sub-section (3)” shall be substituted;
(J) in section 89,—
(a) in sub-section (1), for clauses (i) and (ii), the following clauses shall be substituted, namely:—
“(i) in the case of an offence specified in clauses (a), (b) or (c) where the amount exceeds
fifty lakh rupees, with imprisonment for a term which may extend to three years:
 Provided that in the absence of special and adequate reasons to the contrary to be recorded
in the judgment of the court, such imprisonment shall not be for a term of less than six months;
(ii) in the case of the offence specified in clause (d), where the amount exceeds fifty lakh
rupees, with imprisonment for a term which may extend to seven years:
Provided that in the absence of special and adequate reasons to the contrary to be
recorded in the judgment of the court, such imprisonment shall not be for a term of less
than six months;
(iii) in the case of any other offences, with imprisonment for a term, which may extend to one
year.”;
(b) for sub-section (2), the following sub-section shall be substituted, namely:—
“(2) If any person is convicted of an offence punishable under—
(a) clause (i) or clause (iii), then, he shall be punished for the second and for every
subsequent offence with imprisonment for a term which may extend to three years;
(b) clause (ii), then, he shall be punished for the second and for every subsequent offence
with imprisonment for a term which may extend to seven years.”;
(K) after section 89, the following sections shall be inserted, namely:—
“90.(1) An offence under clause (ii) of sub-section (1) of section 89 shall be
cognizable.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences,
except the offences specified in sub-section (1), shall be non-cognizable and bailable.
91. (1) If the Commissioner of Central Excise has reason to believe that any person has
committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89, he may,
by general or special order, authorise any officer of Central Excise, not below the rank of
Superintendent of Central Excise, to arrest such person.
(2) Where a person is arrested for any cognizable offence, every officer authorised to arrest a
person shall, inform such person of the grounds of arrest and produce him before a magistrate
within twenty-four hours.
(3) In the case of a non-cognizable and bailable offence, the Assistant Commissioner, or the
Deputy Commissioner, as the case may be, shall, for the purpose of releasing an arrested person
on bail or otherwise, have the same powers and be subject to the same provisions as an officer
in charge of a police station has, and is subject to, under section 436 of the Code of Criminal
Procedure, 1973.
(4) All arrests under this section shall be carried out in accordance with the provisions of the
Code of Criminal Procedure, 1973 relating to arrests.”;
(L) in section 95, after sub-section (1-I), the following sub-section shall be inserted, namely:—
“(1J) If any difficulty arises in giving effect to section 93 of the Finance Act, 2013, in so far as
it relates to amendments made by the Finance Act, 2013 in Chapter V of the Finance Act, 1994,
the Central Government may, by an order published in the Official Gazette, not inconsistent with
the provisions of this Chapter, remove the difficulty:
32 of 1994.
Cognizance
of offences.
Power to
arrest.
2 of 1974.
2 of 1974.
2 of 1974.
5
10
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35
40
45
5032
 Provided that no such order shall be made after the expiry of a period of one year from the
date on which the Finance Bill, 2013 receives the assent of the President.”;
 (M) after section 98, the following section shall be inserted, namely:—
“99. Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July,
2012, no service tax shall be levied or collected in respect of taxable services provided by the
Indian Railways during the period prior to the 1st day of July, 2012, to the extent notices have
been issued under section 73, up to the 28th day of February, 2013.”.
CHAPTER VI
SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013
94. This Scheme may be called the Service Tax Voluntary Compliance Encouragement Scheme,
2013.
95. (1) In this Scheme, unless the context otherwise requires,—
(a) “Chapter” means Chapter V of the Finance Act, 1994;
(b) “declarant” means any person who makes a declaration under sub-section (1) of section 97;
(c) “designated authority” means an officer not below the rank of Assistant Commissioner of
Central Excise as notified by the Commissioner of Central Excise for the purposes of this Scheme;
(d) “prescribed” means prescribed by rules made under this Scheme;
(e) “tax dues” means the service tax due or payable under the Chapter or any other amount due
or payable under section 73A thereof, for the period beginning from the 1st day of October, 2007
and ending on the 31st day of December, 2012 including a cess leviable thereon under any other
Act for the time being in force, but not paid as on the 1st day of March, 2013.
(2) Words and expressions used herein and not defined but defined in the Chapter or the rules
made thereunder shall have the meanings respectively assigned to them in the Chapter or the rules
made thereunder.
96. (1) Any person may declare his tax dues in respect of which no notice or an order of determination
under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st
day of March, 2013:
Provided that any person who has furnished return under section 70 of the Chapter and disclosed
his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be
eligible to make declaration for the period covered by the said return:
Provided further that where a notice or an order of determination has been issued to a person in
respect of any period on any issue, no declaration shall be made of his tax dues on the same issue
for any subsequent period.
(2) Where a declaration has been made by a person against whom,—
(a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or
short-paid has been initiated by way of —
(i) search of premises under section 82 of the Chapter; or
(ii) issuance of summons under section 14 of the Central Excise Act, 1944, as made applicable
to the Chapter under section 83 thereof; or
(iii) requiring production of accounts, documents or other evidence under the Chapter or the
rules made thereunder; or
(b) an audit has been initiated,
and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated
authority shall, by an order, and for reasons to be recorded in writing, reject such declaration.
97. (1) Subject to the provisions of this Scheme, a persom may make a declaration to the designated
authority on or before the 31st day of December, 2013 in such form and in such manner as may be prescribed.
(2) The designated authority shall acknowledge the declaration in such form and in such manner as
may be prescribed.
(3) The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent. of
the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority.
Special
provision for
taxable
services
provided by
Indian
Railways.
Short title.
Definitions.
 Person who
may make
declaration of
tax dues.
32 of 1994.
Procedure for
making
declaration
and payment
of tax dues.
1 of 1944.
5
10
15
20
25
30
35
40
45
50


32
 Provided that no such order shall be made after the expiry of a period of one year from the
date on which the Finance Bill, 2013 receives the assent of the President.”;
 (M) after section 98, the following section shall be inserted, namely:—
“99. Notwithstanding anything contained in section 66, as it stood prior to 1st day of July,
2012, no service tax shall be levied or collected in respect of taxable services provided by the
Indian Railways during the period prior to the 1st day of July, 2012, to the extent notices have
been issued under section 73, up to the 28th day of February, 2013.”.

Changes in Excise Act

Excise
78. In the Central Excise Act, 1944 (hereinafter referred to as the Central Excise Act), in section 9,
in sub-section (1), in clause (i), for the words "thirty lakh”, the words "fifty lakh” shall be substituted.
79. In section 9A of the Central Excise Act, for sub-section (1), the following sub-sections shall be
substituted, namely:—
“(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, offences under
section 9, except the offences referred to in sub-section (1A), shall be non-cognizable within the
meaning of that Code.
(1A) The offences relating to excisable goods where the duty leviable thereon under this Act
exceeds fifty lakh rupees and punishable under clause (b) or clause (bbbb) of sub-section (1) of
section 9, shall be cognizable and non-bailable.”.
80. Section 11 of the Central Excise Act shall be renumbered as sub-section (1) thereof, and in subsection (1) as so renumbered,—
(a) for the portion beginning with the words "may deduct” and ending with the words “or may
recover the amount”, the following shall be substituted, namely:—
“may deduct or require any other Central Excise Officer or a proper officer referred to in
section 142 of the Customs Act, 1962 to deduct the amount so payable from any money owing to
the person from whom such sums may be recoverable or due which may be in his hands or under
his disposal or control or may be in the hands or under disposal or control of such other officer,
or may recover the amount”;
(b) after sub-section (1) as so renumbered, the following sub-section shall be inserted,
namely:—
“(2)(i) The Central Excise Officer may, by a notice in writing, require any other person from
whom money is due to such person, or may become due to such person, or who holds or may
subsequently hold money for or on account of such person, to pay to the credit of the Central
Government either forthwith upon the money becoming due or being held, or at or within the time
specified in the notice, not being before the money becomes due or is held, so much of the
money as is sufficient to pay the amount due from such person or the whole of the money when
it is equal to or less than that amount;
(ii) every person to whom a notice is issued under this sub-section shall be bound to comply
with such notice, and in particular, where any such notice is issued to a post office, banking
company or an insurer, it shall not be necessary to produce any pass book, deposit receipt,
policy or any other document for the purpose of any entry, endorsement or the like being made
before payment is made, notwithstanding any rule, practice or requirement to the contrary;
(iii) in a case where the person to whom a notice under this sub-section has been issued, fails
to make the payment in pursuance thereof to the Central Government, he shall be deemed to be
a person from whom duty and any other sums of any kind payable to the Central Government
under any of the provisions of this Act or the rules made thereunder have become due, in respect
of the amount specified in the notice and all the consequences under this Act shall follow.”.
81. In section 11A of the Central Excise Act, after sub-section (7), the following sub-section shall be
inserted, namely:—
“(7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4)
43 of 1961.
Amendment
of section 9.
Amendment
of section 11.
Amendment
of section 9A.
2 of 1974.
52 of 1962.
Amendment of
section 11A.
15
20
25
30
35
40
45
10
5029
or sub-section (5), the Central Excise Officer may, serve, subsequent to any notice or notices served
under any of those sub-sections, as the case may be, a statement, containing the details of duty of
central excise not levied or paid or short-levied or short-paid or erroneously refunded for the
subsequent period, on the person chargeable to duty of central excise, then, service of such statement
shall be deemed to be service of notice on such person under the aforesaid sub-section (1) or subsection (3) or sub-section (4) or sub-section (5), subject to the condition that the grounds relied upon
for the subsequent period are the same as are mentioned in the earlier notice or notices.”.
82. In section 11DDA of the Central Excise Act, in sub-section (1), the words, brackets and figure
“sub-section (1) of” shall be omitted.
83. In section 20 of the Central Excise Act, for the words “shall either admit him”, the words "shall,
where the offence is non-cognizable, either admit him” shall be substituted.
84. In section 21 of the Central Excise Act, in sub-section (2), in the proviso,—
(i) in clause (a), for the words “shall either admit him”, the words "shall, where the offence is
non-cognizable, either admit him” shall be substituted;
(ii) in clause (b), after the words “against the accused person”, the words "in respect of offence
which is non-cognizable” shall be inserted.
85. In section 23A of the Central Excise Act, for clause (a), the following clause shall be substituted,
namely:-—
'(a) “activity” means production or manufacture of goods and includes any new business of
production or manufacture proposed to be undertaken by the existing producer or manufacturer, as
the case may be;'.
86. In section 23C of the Central Excise Act, in sub-section (2), in clause (e), for the words “admissibility
of credit of excise duty”, the words “admissibility of credit of service tax paid or deemed to have been
paid on input service or excise duty” shall be substituted.
87. In section 23F of the Central Excise Act, in sub-section (1), for the word, figures and letter
“section 28-I”, the word, figures and letter “section 23D” shall be substituted.
88. In section 35C of the Central Excise Act, in sub-section (2A), after the second proviso, the
following proviso shall be inserted, namely:—
“Provided also that where such appeal is not disposed of within the period specified in the first
proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being
satisfied that the delay in disposing of the appeal is not attributable to such party, extend the period
of stay to such further period, as it thinks fit, not exceeding one hundred and eighty-five days, and in
case the appeal is not so disposed of within the total period of three hundred and sixty-five days
from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said
period, stand vacated.”.
89. In section 35D of the Central Excise Act, in sub-section (3), for the words “ten lakh rupees”, the
words “fifty lakh rupees” shall be substituted.
90. In section 37C of the Central Excise Act,—
 (i) in sub-section (1), in clause (a), after the words “registered post with acknowledgement due”,
the words and figures ‘‘or by speed post with proof of delivery or by courier approved by the Central
Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963” shall be
inserted;
(ii) in sub-section (2), after the words “delivered by post”, the words, brackets and figure “or
courier referred to in sub-section (1)” shall be inserted.
91. The Third Schedule to the Central Excise Act shall be amended in the manner specified in the
Fifth Schedule.
Central Excise Tariff
92. In the Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise Tariff Act), the
First Schedule shall be amended in the manner specified in the Sixth Schedule.
Amendment
of section
11DDA.
Amendment
of section 20.
Amendment of
section 21.
Amendment of
section 23A.
Amendment of
section 35C.
Amendment of
section 35D.
Amendment of
section 23F.
Amendment of
section 23C.
Amendment
of section
37C.
Amendment of
Third
Schedule.
Amendment of
First
Schedule.
54 of 1963.
5 of 1986.
15
20
25
30
35
40
45
5
10

Changes in Customs Act

CHAPTER IV
INDIRECT TAXES
Customs
54. In the Customs Act, 1962 (hereinafter referred to as the Customs Act), in section 11, in subsection (2), in clause (n), for the words “and copyrights”, the words ", copyrights, designs and
geographical indications” shall be substituted.
55. In section 27 of the Customs Act, in sub-section (1), after the second proviso, the following
proviso shall be inserted, namely:—
“Provided also that where the amount of refund claimed is less than rupees one hundred, the
same shall not be refunded.”.
56. In section 28 of the Customs Act, in sub-section (1), the following proviso shall be inserted,
namely:—
“Provided that the proper officer shall not serve such show cause notice, where the amount
involved is less than rupees one hundred.”.
57. In section 28BA of the Customs Act, in sub-section (1), for the words, brackets and figures “subsection (1) of section 28”, the words, brackets and figures "sub-section (1) or sub-section (4) of section
28” shall be substituted.
58. In section 28E of the Customs Act, for clause (a), the following clause shall be substituted,
namely:—
'(a) “activity” means import or export and includes any new business of import or export proposed
to be undertaken by the existing importer or exporter, as the case may be;'.
59. In section 29 of the Customs Act, in sub-section (1), after the words “as the case may be”, the
words “, unless permitted by the Board” shall be inserted.
60. In section 30 of the Customs Act, in sub-section (1),—
(a) for the words “an import manifest prior to the arrival”, the words “an import manifest by presenting
electronically prior to the arrival” shall be substituted;
(b) the following proviso shall be inserted, namely:—
‘‘Provided that the Commissioner of Customs may, in cases where it is not feasible to deliver
import manifest by presenting electronically, allow the same to be delivered in any other manner.”.
61. In section 41 of the Customs Act, in sub-section (1),—
(a) for the words “export manifest”, the words “export manifest by presenting electronically” shall
be substituted;
(b) the following proviso shall be inserted, namely:—
“Provided that the Commissioner of Customs may, in cases where it is not feasible to deliver
the export manifest by presenting electronically, allow the same to be delivered in any other
Amendment
of section 46.
Amendment of
section 30.
Amendment of
section 11.
Amendment of
section 28.
Amendment of
section 28BA.
Amendment of
section 28E.
Amendment of
section 29.
Amendment of
section 41.
Amendment of
section 27.
52 of 1962.
5
10
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20
25
30
35
40
45
5026
manner.”.
62. In section 47 of the Customs Act, in sub-section (2), for the words “five days”, the words “two
days” shall be substituted.
63. In section 49 of the Customs Act,—
(a) for the words “be permitted to be stored in a public warehouse”, the words “be permitted to be
stored for a period not exceeding thirty days in a public warehouse” shall be substituted;
(b) the following proviso shall be inserted, namely:—
“Provided that the Commissioner of Customs may extend the period of storage for a further
period not exceeding thirty days at a time.”.
64. In section 69 of the Customs Act, in sub-section (1), for clause (a), the following clause shall be
substituted, namely:—
“(a) a shipping bill or a bill of export in the prescribed form or a label or declaration accompanying
the goods as referred to in section 82 has been presented in respect of such goods.”.
65. In section 104 of the Customs Act, for sub-section (6), the following sub-sections shall be
substituted, namely:—
“(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an offence
punishable under section 135 relating to—
(a) evasion or attempted evasion of duty exceeding fifty lakh rupees; or
(b) prohibited goods notified under section 11 which are also notified under sub-clause (C) of
clause (i) of sub-section (1) of section 135; or
(c) import or export of any goods which have not been declared in accordance with the
provisions of this Act and the market price of which exceeds one crore rupees; or
(d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided
under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees,
shall be non-bailable.
(7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable.”.
66. In section 129B of the Customs Act, in sub-section (2A), after the second proviso, the following
proviso shall be inserted, namely:—
“Provided also that where such appeal is not disposed of within the period specified in the first
proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being
satisfied that the delay in disposing of the appeal is not attributable to such party, extend the period
of stay to such further period, as it thinks fit, not exceeding one hundred and eighty-five days, and in
case the appeal is not so disposed of within the total period of three hundred and sixty-five days
from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said
period, stand vacated.”.
67. In section 129C of the Customs Act, in sub-section (4), for the words “ten lakh rupees”, the
words “fifty lakh rupees” shall be substituted.
68. In section 135 of the Customs Act, in sub-section (1), in clause (i), in sub-clauses (B) and (D), for
the words “thirty lakh”, the words “fifty lakh” shall respectively be substituted.
69. In section 142 of the Customs Act, in sub-section (1), after the proviso, the following clause shall
be inserted, namely:—
“(d) (i) the proper officer may, by a notice in writing, require any other person from whom money is
due to such person or may become due to such person or who holds or may subsequently hold money
for or on account of such person, to pay to the credit of the Central Government either forthwith upon
the money becoming due or being held, or at or within the time specified in the notice not being before
the money becomes due or is held, so much of the money as is sufficient to pay the amount due from
such person or the whole of the money when it is equal to or less than that amount;
(ii) every person to whom the notice is issued under this section shall be bound to comply with
such notice, and in particular, where any such notice is issued to a post office, banking company or
an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other
document for the purpose of any entry, endorsement or the like being made before the payment is
made, notwithstanding any rule, practice or requirement to the contrary;
Amendment of
section 47.
Amendment of
section 49.
Amendment of
section 69.
Amendment
of section
104.
Amendment
of section
129B.
Amendment
of section
129C.
Amendment
of section
135.
Amendment
of section
142.
2 of 1974.
5
10
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20
25
30
35
40
45
5027
(iii) in case the person to whom a notice under this section has been issued, fails to make the
payment in pursuance thereof to the Central Government, he shall be deemed to be a defaulter in
respect of the amount specified in the notice and all the consequences of this Chapter shall
follow.”.
70. Section 143A of the Customs Act shall be omitted.
71. In section 144 of the Customs Act, in sub-section (3), the words‘‘, if such duty amounts to five
rupees or more” shall be omitted.
72. For section 146 of the Customs Act, the following section shall be substituted, namely:—
“146. (1) No person shall carry on business as a customs broker relating to the entry or departure
of a conveyance or the import or export of goods at any customs station unless such person holds
a licence granted in this behalf in accordance with the regulations.
(2) The Board may make regulations for the purpose of carrying out the provisions of this section
and, in particular, such regulations may provide for—
(a) the authority by which a licence may be granted under this section and the period of validity
of such licence;
(b) the form of the licence and the fees payable therefor;
(c) the qualifications of persons who may apply for a licence and the qualifications of persons
to be employed by a licensee to assist him in his work as a customs broker;
(d) the manner of conducting the examination;
(e) the restrictions and conditions (including the furnishing of security by the licensee) subject
to which a licence may be granted;
(f) the circumstances in which a licence may be suspended or revoked; and
(g) the appeals, if any, against an order of suspension or revocation of a licence, and the
period within which such appeal may be filed.".
73. In section 146A of the Customs Act,-—
(a) in sub-section (2), in clause (b), for the words “customs house agent”, the words “customs
broker” shall be substituted;
(b) in sub-section (4),—
(i) for clause (b), the following clause shall be substituted, namely:—
“(b) who is convicted of an offence connected with any proceeding under this Act, the Central
Excise Act, 1944, the Gold (Control) Act, 1968 or the Finance Act, 1994; or”;
(ii) for the words, figures and brackets “Central Excises and Salt Act, 1944 or the Gold (Control)
Act, 1968”, the words, figures and brackets “Central Excise Act, 1944 or the Gold (Control) Act,
1968 or the Finance Act, 1994” shall be substituted.
74. In section 147 of the Customs Act, in sub-section (3), after the words ‘‘for such purposes”, the
words “including liability therefor under this Act” shall be inserted.
75. (1) The notification of the Government of India in the Ministry of Finance (Department of Revenue)
number G.S.R. 153(E), dated the 1st March, 2011, issued under sub-section (1) of section 25 of the
Customs Act, 1962 shall stand amended and shall be deemed to have been amended retrospectively,
in the manner specified in column (2) of the Second Schedule, on and from the date specified in
column (3) of that Schedule.
(2) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to
have the power to amend the notification referred to in sub-section (1) with retrospective effect as if the
Central Government had the power to amend the said notification under sub-section (1) of section 25
of the Customs Act, 1962 retrospectively, at all material times.
(3) The refund shall be made of all such duty of customs which has been collected but which would
not have been so collected, had the notification referred to in sub-section (1), been in force at all
material times.
(4) Notwithstanding anything contained in the Customs Act, 1962, an application for the claim of
refund of duty of customs shall be made within six months from the date on which the Finance Bill,
2013 receives the assent of the President.
Omission of
section 143A.
Substitution of
new section for
section 146.
Licence for
customs
brokers.
Amendment
of section
146A.
Amendment
of section
147.
Amendment of
notification
issued under
sub-section (1)
of section 25 of
Customs Act
retrospectively.
52 of 1962.
1 of 1944.
45 of 1968.
32 of 1994.
1 of 1944.
45 of 1968.
32 of 1994.
52 of 1962.
52 of 1962.
52 of 1962.
Amendment of
section 144.
5
10
15
20
25
30
35
40
45
5028
Explanation.— For the removal of doubts, it is hereby declared that the provisions of section 27 of
the Customs Act, 1962, shall be applicable in case of refunds under this section.
Customs Tariff
76. In the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act), the First
Schedule shall be amended in the manner specified in the Third Schedule.
77. In the Customs Tariff Act, —
(a) in the Second Schedule, against Sl. No. 43, for the entry in column (2), the entry “7210, 7212”
shall be substituted and shall be deemed to have been substituted with effect from the 1st day of
March, 2011;
(b) the Second Schedule shall be amended in the manner specified in the Fourth Schedule.
Amendment of
First
Schedule.
Amendment of
Second
Schedule.
51 of 1975.
5

change in Excise Duty in Budget ( See at Annexure II)

1
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
*****
P. K. Mohanty
Joint Secretary (TRU-I)
Tel: 23092687
Fax: 23092031
Email: pk.mohanty@nic.in
D.O.F.No.334/ 3/2013-TRU
New Delhi, dated the 28th February, 2013.
Dear Chief Commissioner/ Commissioner,
The Finance Minister has introduced the Finance Bill, 2013 in Lok Sabha today, i.e., 28th February, 2013. Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2013 (clauses 54 to 77 for Customs and clauses 78 to 92 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
CUSTOMS:
Notification Nos.
Date
Tariff
No. 9 /2013-Customs to No.15 /2013-Customs
1st March, 2013
Non-Tariff
No. 25 /2013-Customs(NT)
1st March, 2013
CENTRAL EXCISE
Tariff
No. 5 /2013-CE to No. 12 /2013-CE
1st March, 2013
Non-Tariff
No. 1 /2013-CE (NT) to No. 4 /2013-CE (NT)
1st March, 2013
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 28th February/1st March, 2013. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 76, 77(b), 91 and 92 of the Finance Bill, 2013 so that changes proposed therein also take effect from the midnight of 28th February/1st March, 2013. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2013. Retrospective amendments in the provisions of law or notification issued under the respective Acts shall have the force of law only upon the enactment of the Finance Bill, 2013 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.
2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the three Annexes appended to this letter. Annex I contains Chapter wise changes relating to Customs; Annex II contains Chapter wise changes relating to Central Excise. These
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Annexes also contain a few clarifications. Annex III provides a bird’s eye view of legislative changes proposed in the Finance Bill, 2013.
2.1 The Annexes provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.
3. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill are studied carefully and feedback on issues that may need clarification is provided urgently.
4. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately or to the notice of Shri Amitabh Kumar, Director (TRU) (Tel No.011-23092236; e-mail: amitabh.kumar@nic.in, Sh. G. G. Pai, Director (TRU) (Tel No. 011-23092753; e-mail: giridhar.pai@nic.in or Sh. Prashant Kumar Jha, Budget Officer (TRU) (Tel No. 011-23094819; e-mail: prashantk.jha@nic.in ). We can also be reached at budget-cbec@nic.in.
5. Copies of Finance Bill, 2013, Finance Minister’s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.
6. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.
With warm regards,
Yours sincerely,
(P. K. Mohanty)
To
All Chief Commissioners/ Directors General
All Commissioners of Customs
All Commissioners of Central Excise
All Commissioners of Customs and Central Excise
All Commissioners of Service Tax
Director DPPR/ Logistics/Legal Affairs/ Data Management



Annex II

CENTRAL EXCISE

Chapter 1 to 10: No change
Chapter 11
11.1 Tapioca starch manufactured and consumed captively in the manufacture of tapioca sago (sabudana) is being exempted from excise duty. Notification No.12/2012-CE, dated 17th March, 2012 as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No 8A contains the changes.
Chapter 12-14: No change
Chapter 15
15.1 Sub-heading 1517 90 20 (peanut butter) is being deleted from the First Schedule to the Central Excise Tariff Act, 1985. An amendment has been proposed in the Finance Bill, 2013 (Clause 92 read with the Sixth Schedule) to delete the current sub-heading 1517 90 20 and entries relating thereto from the Tariff. Hereafter, peanut butter will be classified under sub-heading 2008 11 00. At present, sub-heading 1517 90 20 as well as sub-heading 2008 11 00 of the Central Excise Tariff carries a tariff rate of 6%. However, the applied rate is Nil for sub-heading 1517 90 20. The exemption is being continued. In this connection, notification No. 12/2012-CE, as amended by notification No.12/2013-CE, dated 1st March, 2013 refers. S. No 13A contains the changes.
Chapter 16-18: No change
Chapter 19
19.1 Tapioca sago (Sabudana) is being exempted from excise duty. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No 24A contains the changes.
Chapter 20 -23: No change
Chapter 24
24.1 Basic excise duty on cigarettes and other products of tariff heading 2402 is being increased. Clause 92 of the Finance Bill, 2013 read with the Sixth Schedule may be referred to for details. By virtue of the Provisional Collection of Taxes Act, 1931, the levies will come into
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force with immediate effect. There is no change in NCCD and Health Cess rates. The changes in basic excise duty rates are summarized below.
Cigarettes
TARIFF
ITEM
DESCRIPTION
(length in mm)
BED
Rs. per 1000 sticks
(Existing Rate)
BED
Rs. per 1000 sticks
(New Rate)
24022010
Non filter not exceeding 65
509
No change
24022020
Non-filter exceeding 65 but not exceeding 70
1463
1772
24022030
Filter not exceeding 65
509
No change
24022040
Filter exceeding 65 but not exceeding 70
1034
1249
24022050
Filter exceeding 70 but not exceeding 75
1463
1772
24022060
Filter exceeding 75 but not exceeding 85
1974
2390
24022090
Other
2373
2875
Cigar, Cheroots and Cigarillos:
TARIFF ITEM
DESCRIPTION
BED
(Existing Rate)
BED
(New Rate)
2402 10 10
Cigar and cheroots
12% or Rs.1370 whichever is higher
12% or Rs.1781 whichever is higher
2402 10 20
Cigarillos
12% or Rs.1370 whichever is higher
12% or Rs.1781 whichever is higher
2402 90 10
Cigarettes of Tobacco Substitutes
Rs.1258 per thousand
Rs.1511 per thousand
2402 90 20
Cigarillos of Tobacco Substitutes
10% or Rs.1473 whichever is higher
12% or Rs.1738 whichever is higher
2402 90 90
Other
10% or Rs.1473 whichever is higher
12% or Rs.1738 whichever is higher
Chapter 25
25.1. Basic excise duty is being increased on marble slabs and tiles from ` 30 per square meter to ` 60 per square meter. S.No.54 of notification No.12/2012-CE, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers.
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25.2 Under notification No.12/2012-CE (S.No.55), sulphur recovered as by product in refining of crude oil (sub-heading 2503 00 10) used for the manufacture of fertilisers is exempt from excise duty. "Fertilizers" include bentonite sulphur and hence, sulphur under sub-heading 2503 00 10 used for manufacture of bentonite sulphur is exempt from excise duty. An Explanation has been inserted below the entry against S. No.55 to place the matter beyond doubt. Notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details.
Chapter 26-29: No change
Chapter 30
30.1 Branded Ayurvedic medicaments and medicaments of Unani, Siddha, Homeopathy or Bio-chemic system are being brought under MRP based assessment with an abatement of 35% from the MRP. Ayurvedic medicaments as well as medicaments of Unani, Siddha, Homeopathy or Bio-chemic System (generic as well as branded) have been included in the Third Schedule to the Central Excise Tariff Act, 1944. In this connection, clause 91 of the Finance Bill 2013 read with the Fifth Schedule and notification No. 1/2013-C.E. (NT) dated 1st March, 2013 refer. By virtue of the Provisional Collection of Taxes Act, 1931, the changes will come into force with immediate effect.
Chapter 31 and 32: No change
Chapter 33
33.1 Henna powder or paste, not mixed with any other ingredient is being exempted from excise duty. S No 134 of notification No 12/2012-CE, as amended by notification No 12/2013-CE, dated 1st March 2013 refers.
Chapter 34 -38: No change.
Chapter 39
39.1 S. No. 146 and the entries relating thereto are being deleted from notification No. 12/2012-CE, as a general exemption is being issued. Notification No. 7/2013-CE dated 1st March 2013 may be referred to for details.
Chapter 40-56: No change.
Chapter 57
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57.1 All handmade carpets and carpets & other textile floor coverings of coir and jute, whether or not handmade, falling under Chapter 57, are being fully exempted from excise duty. In this connection, notification No. 12/2012-CE as amended by notification No. 12/2013-C.E. dated 1st March, 2013 refers. S. No 173A contains the changes. Consequently, the entries against S. No. 72 of notification No. 1/2011-CE, dated 1st March, 2011 and S. No. 37 of notification No. 2/2011-CE, dated 1st March, 2011 are being omitted. Notification No. 9/2013-CE and 10/2013-CE, both dated 1st March, 2013 may be referred to.
Chapter 58-60: No change.
Chapter 61-63
61.1 Zero excise duty route, as existed prior to Budget 2011-12, is being restored on readymade garments and made ups. The zero excise duty route will now be available in addition to the CENVAT route under which manufacturers can pay excise duty on the final product and avail of credit of duty paid on inputs. S.No.16 of notification No. 30/2004-CE dated the 9th July, 2004 as amended by notification No.11/2013-CE dated the 1st March, 2013 and S. No.7 of notification No. 7/2012-CE dated 17th March,2012, as amended by notification No. 8/2013- CE dated the 1st March, 2013 may be referred to for details.
Chapter 64 to 67: No change
Chapter 68
68.1 Excise duty on marble slabs and tiles is being increased from ` 30 per square meter to ` 60 per square meter. S. No. 54 of the notification No. 12/2012-CE, as amended by notification No.12/2013-CE dated 1st March, 2013 refers.
Chapter 69 to 70: No change
Chapter 71
71.1 Excise duty of 4% is being imposed on silver produced or manufactured during the process of zinc or lead smelting starting from the stage of zinc or lead ore or concentrate. Notification No.12/2012-CE, as amended by notification No.12/2013-CE, dated the 1st March 2013 refers. S. No 191A contains the changes.
Chapter 72
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72.1. The compounded duty rate on stainless steel “patta- patti” is being increased from Rs 30,000 per machine per month to Rs 40,000 per machine per month. Notification No. 17/2007-CE, dated 1st March, 2007 as amended by notification No. 5/2013-CE, dated 1st March 2013 refers.
Chapter 73: No change
Chapter 74
74.1 Under notification 12/2012-CE (S. No. 217), trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils attract excise duty of Rs 3,500 per metric tonne. For the purposes of this entry, by way of an explanation, it is clarified that copper means copper and copper alloys including brass. Notification No. 12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 refers.
Chapter 75: No change.
Chapter 76
76.1. Sub-heading 7615 19 10 (pressure cookers) is being replaced by sub-heading 7615 10 11 in the Third Schedule to the Central Excise Act, 1944. An amendment has been proposed in the Finance Bill, 2013 (Clause 91 read with the Fifth Schedule). This is basically a technical rectification. In this connection, notification No. 12/2012-CE, as amended by notification No.12/2013-CE, dated 1st March, 2013 refers. S. No 212 contains the changes. Relevant changes are also being made in notification No.49/2008(NT) dated 24th December, 2008 as amended by notification No. 1/2013-CE(NT) dated 1st March,2013.
Chapter 77-84: No change.
Chapter 85
85.1 Excise duty on mobile handsets including cellular phones having retail sale price more than Rs. 2000/- is being increased from 1% to 6%. The duty on mobile phones priced up to and inclusive of Rs. 2000 (retail sale price) would remain unchanged. Notification No. 12/2013-CE, dated 1st March, 2013 (S. No. 263A) provides the details. Consequently notification No. 20/2011-CE, dated 24th March, 2011 is being rescinded. Notification No. 6/2013-CE, dated 1st March 2013 refers.
Chapter 86: No change
Chapter 87
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87.1 The validity period of concessional excise duty of 6% granted to specified parts of hybrid and electric vehicles is being extended by two more years up to 31st March, 2015. Proviso to notification No.12/2012-C.E, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers.
87.2 The excise duty on chassis of diesel motor vehicles for the transport of goods (8706 00 42) is being reduced from 14% to 13%. In this connection, notification No.12/2012-C.E, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No.s 292A and 292B contain the changes.
87.3 Excise duty on SUVs (including utility vehicles falling under CTH 8703) and engine capacity >1500 cc is being increased from 27% to 30 %.( Clause 92 of the Finance Bill, 2013 read with the Sixth Schedule). The SUV has been defined in the notification No. 12/2013-CE dated 1st March, 2013. S. No. 284A contains the changes. By virtue of the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect.
87.4 The taxi refund in respect of SUVs is being adjusted with a view to ensuring that the duty increase does not affect SUVs used as taxis. Now, in respect of SUVs the refund of 28% of the excise duty paid at the time of clearance would be applicable. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details. S.No.s 284 and 284A contains the changes.
Chapter 88: No change.
Chapter 89
89.1 Excise duty on ships, tugs and pusher craft, dredgers and other vessels falling under CETH 8901, 8904, 8905, 8906 90 00 is being exempted. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details.
Chapter 90-96: No change.
Miscellaneous:
Goods manufactured and captively consumed within the factory of production in the manufacture of final products in respect of which exemption is claimed under the Area Based Exemption Scheme under notification Nos. 49/2003-CE and 50/2003-CE, both dated 10th June 2003 (available for Uttarakhand and Himachal Pradesh) is being exempted from excise duty. Notification No. 7/2013-CE dated the 1st March 2013 may be referred to for details.
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Annex III
LEGISLATIVE CHANGES
Advance Ruling
Section 28E of the Customs Act, 1962 defines “advance ruling”. “Advance ruling” means “the determination, by the Advance Ruling Authority, of a question of law or fact specified in the application regarding the liability to pay in relation to an activity which is proposed to be undertaken by the applicant”. “Activity” is defined to mean “import or export”. The definition of “activity” is being expanded to include any new business of import or export so as to enable such importer or exporter to seek advance ruling when he starts a new line of business. Similar amendment has been proposed in section 23A of the Central Excise Act, 1944. “Activity” now includes any new business of production or manufacture by the existing producers or manufacturers. This will enable such producers or manufacturers to seek advance ruling when starting a new line of business.
Under 23 (C) (e) of the Central Excise Act, 1944, an advance ruling can be sought, inter- alia, on the issue of admissibility of credit of excise duty paid or deemed to have been paid on the goods used in/ in relation to the manufacturer of excisable goods. This section is being amended so as to extend the advance ruling provisions also to the admissibility of the credit of service tax paid on or deemed to have been paid on input services used in the manufacture of excisable goods.
Under section 28E of the Customs Act, 1962, only a select category of persons are eligible for advance ruling. This includes joint ventures and resident public limited companies. Presently, the latter category is not eligible for advance ruling under the Central Excise law. Notifications are being issued to make “resident public limited companies” eligible for seeking advance ruling on central excise and service tax matters as is available on the Customs side
Arrests and Prosecutions
Section 104 of the Customs Act, 1962 contains provisions relating to arrest. This section is being amended to make certain offences punishable under section 135 as non-bailable. The offences are:
(a) Evasion or attempted evasion of duty exceeding Rs. fifty lakh;
(b) Prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135;
(c) Import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds Rs. one crore;
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(d) Fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds Rs. fifty lakh.
Barring the offences mentioned above, all other offences under the Customs Act are bailable. Similar changes have been proposed in the Central Excise Act, 1944 and Finance Act, 1994 (relating to Service tax).
Stay Order by Appellate Tribunal and Other Matters
Section 35C (2A) of the Central Excise Act, 1944 and the corresponding provisions under section 129B (2A) of the Customs Act, 1962 are being amended to provide for a maximum ceiling of 365 days up to which the Tribunal can grant stay of recoveries. By inserting a proviso in the abovementioned sections, it is being stipulated that after 365 days from the stay order, this stay shall stand vacated even if the disposal of the case is pending for no fault of the assessee. By virtue of stipulation under section 86(7) of the Finance Act, 1994, the provisions of the Central Excise Act would be applicable for dispute in Service Tax matters.
Section 129C is being amended to enhance the monetary limit of the Single Bench of the Tribunal to hear and dispose of appeals from Rs.10 lakh to Rs.50 lakh. Corresponding changes have been made in Section 35D of the Central Excise Act, 1944.
Other Amendments in the Customs Act, 1962
(i) Section 11: “Designs and geographical indications” have been included along with patents, trade mark and copy rights to enable the Central government to prohibit either absolutely or conditionally the import or export of goods to protect these legal rights;
(ii) Section 27: Where the amount of refund claimed is less than Rs 100/-, the same shall not be refunded;
(iii) Section 28: Show Cause Notice shall not be served where the amount involved is less than Rs 100/-;
(iv) Section 28BA: This section is being amended to provide for provisional attachment of property belonging to any person to whom notice under sub-section (4) of section 28 has been served.
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(v) Section 29: This section is being amended to empower Board to allow landing of vessels or aircrafts at any place other than customs ports or customs airports.
(vi) Section 30 and Section 41: These sections are being amended to provide for electronic filing of Import General Manifest/Export General Manifest. It is also being provided that where this is not feasible, the Commissioner may allow the delivery of such manifest in any other manner.
(vii) Section 47: This section is being amended reduce the interest free period for payment of import duty from 5 days to 2 days;
(viii) Section 49: This section deals with storage of imported goods in a warehouse pending clearance. This section is amended to provide a time limit of 30 days for storage of goods in the interest of accountability and early finalization of assessments. The Commissioner may extend the period of storage for a further period not exceeding 30 days at a time.
(ix) Section 69: This section deals with export of warehoused goods. The document listed under the section is Shipping Bill or Bill of Export. This section is being amended to allow export of warehoused goods under postal export document;
(x) Section 135: In sub-clauses (B) and (D) of clause (i) of section 135(1), the threshold limit for punishment in an offence relating to evasion or attempted evasion of duty or fraudulently availing of or attempting to avail of drawback or any exemption from duty in connection with export of goods,has been increased from Rs.30 lakh to Rs.50 lakh.
(xi) Section 142: A new clause (d) is being inserted in section 142 to provide (i) for recovery of money due to the Central Government from any other person other than the defaulter after giving such other person a notice in writing, (ii) that the person to whom such notice has been issued shall be bound to comply, and (iii) that if the person to whom the notice is issued fails to comply, he shall be deemed to be a defaulter in respect of the amount specified in the notice.
(xii) Section 143A is being omitted.
(xiii) Section 144: Sub-section (3) of section 144 is being amended to remove the duty liability on any sample of goods which is consumed or destroyed during the course of testing or examination.
(xiv) Section 146 is being substituted to change the nomenclature of “customs house agents” to “customs brokers” considering the global practice and internationally accepted nomenclature.
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(xv) Section 146A is being amended so as to:- (a) substitute the phrase “customs house agent” with the phrase “customs broker”; (b) include any offence committed under the Finance Act, 1994 as a disqualification for person to act as an authorized representative in customs matters.
(xvi) Section 147: Sub-section (3) of section 147 is being amended to expand the scope of the liability of agents of the owner, importer or exporter of any goods. It now casts equal responsibility on agents for making correct self-assessment.
Other Amendments in the Central Excise Act
(i) Section 9 provides that an offence case involving evasion in which the duty leviable exceeds thirty lakh rupees shall be punishable with a term of imprisonment extending to seven years with fine. This section is being amended so as to substitute the amount of thirty lakh rupees with fifty lakh rupees.
(ii) Section 9A is being amended to make an offence cognizable and non-bailable where the duty liability exceeds Rs.50 lakh and punishable under clause (b) or clause (bbbb) of sub-section (1) of section 9.
(iii) Section 11 is being amended so as to provide for (i) recovery of money due to the Government from any person other than from whom money is due after giving a proper notice, if that other person holds money for or on account of the first person; (ii) the other person to whom
such notice has been issued is bound to comply and (iii) if the other person to whom the notice is served fails to comply, he shall face all the consequences under this Act.
(iv) Section 11A is being amended to insert sub-section (7A) providing that service of a statement containing details of duty not paid, short levied or erroneously refunded shall be deemed to be a service of notice under sub-section (1) or (3) or (4) or (5) of this section.
Reference to sub-section (1) in section 11DDA is being omitted.
(v) Section 20 is being amended so as to make the provisions applicable only to offence which is non-cognizable.
(vi) Section 21 is being amended so as to make the provisions regarding release of arrested person on bail or personal bond applicable only to offence which is non-cognizable.
(vii) Section 37C is being amended to specify additional modes of delivery of specified documents i.e. by speed post with proof of delivery or through courier approved by the Central Board of Excise & Customs.
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These are the broad changes made through the various clauses of the Finance Bill, 2013. The relevant clauses may kindly be perused to find out the precise changes made.
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