TaxTMI 
TaxTMI 
Changes in or clarifications about the scope of the tax proposals changes introduced through the Central Excise & Customs Notifications issued on 24-3-2011
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.... and Notification Nos. 31 and 32/2011-Customs, all dated 24th March, 2011 have been issued to give effect to these announcements. Notification Nos. 8 to 12/2011-Central Excise (NT), dated 24th March, 2011 have also been issued in this regard. 3. The changes introduced through these notifications are discussed in the following paragraphs. In addition, clarifications on some of the salient issues have also been provided. I. CENTRAL EXCISE 3. Branded Ready Made Garments and Made-up Articles of Textiles: 3.1 The following changes have been made with regard to this levy : (i) The tariff value notified under section 3 of the Central Excise Act for these items i.e., goods falling under Chapters 61, 62 and 63 (heading Nos. 63.01 to 63.08) has been reduced from 60% to 45% of the Retail Sale Price. Notification No. 12/2011-CE (NT), dated 24th March, 2011 refers, (ii) It has been pointed out by industry associations that persons owning a brand often get goods bearing their brand from other manufacturers (normally small units) without providing the raw materials or inputs. Such manufacturers do not answer the description of "job-workers" and are necessarily required to regist....
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....ollowing procedure for this purpose : a. To submit an intimation within 48 hours of the receipt of the returned goods about the value of returned goods received in his factory/registered premises; b. To maintain proper accounts/record of the receipt, finishing operations, and dispatch of returned stock indicating the monthly and cumulative value of the returned stock received during the financial year and to produce the same as and when required; Notification No.31/2011-CE, dated 24th March, 2011 has been issued in this behalf. The benefit of this exemption is available only if the manufacturer does not take Cenvat credit of the duty paid on the garments/ made-ups at the time they were initially cleared from the factory. The procedure prescribed for this purpose does not envisage the physical verification of returned stock by Central Excise officers on receipt of the intimation. It may be ensured that visits by the staff are not made to the factory/ registered premises for such verification. Normal checks could be conducted, if required, at the time of audit of the unit on the basis of records/accounts maintained for the purpose. Owing to the fact that most of the units ma....
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.... falling under Chapters 61, 62 or 63 (heading 63.01 to 63.08) manufactured on his own account on job work shall pay the duty leviable on such goods as if the goods were manufactured by him. It is evident, therefore, that the brand name owner (and not the job-worker) is required to register and comply with all the provisions of Central Excise law. It is relevant that the brand name owner has been given the option to authorise his job-worker to pay the duty leviable on the goods. If such an authorisation is given, it is the job-worker who would have to obtain registration. 2. If a unit manufactures goods bearing the brand name of another person out of inputs or raw materials which have been purchased independently and not supplied by the brand owner, will the unit be eligible for treatment as a "job-worker"? If not, would it be required to register? Such a unit does not satisfy the definition of "job-worker" contained in the Explanation to Rule 4(1A). It is not enough for a job-worker to manufacture goods or to undertake a process on behalf of and under instructions of the brand owner. The inputs or goods should also have been supplied by the brand owner or by....
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....tion? Would it be the Retail Sale Price, wholesale price or the tariff value? Value for computing the eligibility as well as the exemption limit for purposes of SSI exemption is defined in Explanation (C) to Notification No.8/2003-CE, dated 1st March, 2003. Accordingly, it would be the tariff value of the goods. 8. Would SSI exemption be available to a manufacturer/ unit for goods falling under Chapters 61, 62 or 63 for the full exemption limit of Rs. 1.5 crore for the month of March, 2011? Or, would this limit be applied on a prorata basis for one month i.e., Rs. 12.50 lakh? In the absence of a provision in the SSI notification to curtail the exemption to Rs. 12.5 lakh for March, 2011 benefit up to the full exemption threshold of Rs. 1.50 crore would be available for clearances for home consumption made in March, 2011. Of course, the conditions of the notification would have to be fulfilled. 9. How would the eligibility for SSI exemption be computed for the financial year 2011-12? As stated above, the eligibility for availing of the SSI exemption in 2011-12 is that the value of clearances for home consumption from one or more manufacturer from one or more unit....
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....burden on them. The salient features of this are as under : a. Waste, scrap and parings arising in the course of manufacture of items subject to the 1% levy have been fully exempted. The benefit of this exemption is available only to units that exclusively manufacture these items. Notification No. 27/2011-CE, dated 24th March, 2011 refers. The benefit of this exemption is also available to units exclusively manufacturing mobile handsets including cellular phones. b. Post- registration verification of the factory premises shall not be required for such units. c. Visits to such units should not be required in the normal course. If at all the need arises, the officer visiting them should do so only with the prior authorization of the Assistant Commissioner or the Deputy Commissioner Central Excise of the jurisdictional division. The authorisation should be shown to the assessee and his signatures obtained on it at the time of the visit. These instructions may be disseminated to the field formations for strict compliance. d. Facility of quarterly returns is being prescribed for these units. Notification No. 8/2011-CE (NT), dated 24th March, 2011 refers. e. A simple forma....
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....ded garments, in case of goods falling under Chapter heading 7113 and 7114 also, where a brand owner gets jewellery or articles other than jewellery made from any other person, and supplies the raw materials such as gold/ silver/ gemstones etc. (of Chapter 71) to the job-worker for such manufacture, the duty liability would be on such person who gets jewellery or articles made from the job worker, unless the job worker opts to discharge the duty liability. However, a person manufacturing jewellery of heading 7113 or articles of heading 7114 bearing a brand name or sold under a brand name on his own account will be liable to pay excise duty unless he claims benefit of the SSI exemption. B. What constitutes a Brand name for the purposes of this exemption 5.2.1 It has been prescribed in respect of jewellery and other articles, "brand name" means a brand name or trade name, whether registered or not, that is to say, a name or a mark, such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating, or so to indicate, a connection in the course of trade between the product and some person using such....
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....STOMS : 6. Full exemption from levy of Special Additional Duty of Customs has been provided to Ships; Aircrafts imported by non-scheduled operators and specified parts of personal computers viz., Microprocessor for computer, other than motherboards, Floppy disc drive, Hard disc drive, CD-ROM drive, DVD Drive/DVD Writers, Flash memory and Combo drive. The exemption on parts of personal computers is subject to actual user condition. 7. It may be recalled that excise duty of 1% was imposed on ships and other goods falling under heading 89.01 on the condition that no Cenvat credit is taken. Doubts have been raised about the applicability this levy as CVD to foreign-going vessels. It is clarified that the levy would not apply to such imports which are temporary in nature. 8. In the Budget 2011-12, concessional rate of 5% excise duty/CVD and NIL SAD had been provided for parts of inkjet printers and laser jet printers. The concessional rate is being extended to parts of all printers capable of being attached with computers, subject to actual user condition. 9. As you are aware, a definition of Completely Knocked down Unit had been prescribed in the Budget. However, considerin....