Central Excise Exemption Notification no. 42 / 2015 which exempts the Excise Duty on Methanol -

[george thomas]

Dear Sir,

We wish to bring your kind notice that with reference to the Central Excise Exemption Notification no. 42 / 2015 which exempts the Excise Duty on Methanol -

We could not get any indigenous manufactures of the Methanol who can charge the Central Excise duty. To the best of our knowledge we could find the suppliers who import the methanol and Invoice us as first / second stage dealer by passing-on the actual import duties paid by them at the time of original Import i.e., the applicable Customs duties like BCD 7.5%,CVD - 12.5% and SAD - 4% paid at the time of Import.

​I approached our Central Excise Department to issue exemption permission for the portion of CVD to be charged in the Dealer Invoice. However, they are mentioning that the Nt. 42 is a CE Notification and not applicable to any taxes charged ​and collected under the Customs Act and hence we can not avail any benefit for CVD on account of CE Notification No. 42 / 2015.

In addition to the above the suppliers are mentioning that they have to charge and collect the CVD from us (irrespective of the exemption permission if any) because it is collected on account of Actual Reimbursement of Taxes already paid by them to the Customs and if it is not charged and collected from us it will an additional burden to them.

 

In this scenario we seek your kind advise to proceed further.

[KASTURI SETHI]

Sh.George Thomas,

CVD is applicable in this scenario. No exemption from CVD in such situation.

[Rajagopalan Ranganathan]

Sir,

No CVD is payable if the like goods manufactured in India is unconditionally exempted. However the exemption can be claimed only by the importer and not by the purchaser. If the exemption is conditional and the conditions for exemption cannot be fulfilled in respect of the imported goods than CVD is payable at tariff rate. Lots case laws are available in this regard.

[KASTURI SETHI]

Sh.Rajagopalan Ranganathan,

Yes Sir. I agree with you. You have explained in a much better way.

[Rajendra Kruthiventi]

Do we need to furnish any bank guarantee/Bond to avail the exemption benefit under Notification 42/2015 of CE? And any idea why it is limited to period till 31-03-2016?

AI Summary

Countervailing duty applicability when domestic excise exemption exists: importer, not purchaser, must claim exemption; conditions govern liability. CVD may remain payable on imports unless the Central Excise exemption for like domestic goods is unconditionally available to and claimed by the importer; purchasers cannot claim the exemption in place of the importer. Conditional exemptions that cannot be fulfilled for imported consignments attract CVD at the tariff rate. Suppliers invoicing reimbursement of customs duties will collect such sums unless the importer secures the exemption, and procedural requirements such as bonds and the notification's time limit bear on entitlement.