JANUARY 29, 2015

By H S Prasad

1) RETURN of goods of goods under Rule 16 of CER, 2002 - CCR, 2004: The Board vide Circular No. 990/14/2014-CX-8 dated 19.11.14 has clarified that in the case of re-credit, the time limit of 6 months is not applicable. But the Board has ignored the difficulties faced on the returned materials for availing of credit. When the goods are returned from the field for any of the reason to the factory for re-making / manufacturing, the credit under Rule 16 is availed on the strength of the original invoice when it was cleared from the factory. Normally such returns will be of more than 6 months old from the date of clearance from the factory. Now after introduction of 6 months time limit to avail the credit, we are facing difficulty in availing the credit on the returned materials which are of more than 6 months. The CCR, 2004 may accordingly be amended giving an exception to such cases from the embargo laid down.

2) Spent Sulphuric Acid for use in the manufacture of fertiliser: Sulphuric Acid used in the manufacture of fertiliser is exempt from payment of excise duty vide S.No. 86 to the Central Excise Notification No. 12/2012 dated 17.03.2012. The exemption is available subject to the condition that the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 is followed. Normally,Sulphuric Acid will have concentration of 98%. For use in the manufacture of fertilizers, Sulphuric Acid concentration upto 75% is sufficient. Even if the manufacturer of fertiliser buys Sulphuric Acid of 98%, again it has to be diluted to make it suitable for use in the manufacture of fertiliser. Hence the Sulphuric Acid generated as waste in the detergent industry wherein the concentration vary from 75% to 85%, is widely used in the manufacture of fertiliser across India. We face difficulty in getting a CT 2 certificate for claiming exemption under the captioned notification. Since the detergent industry clears the waste Sulphuric Acid as ‘Spent Sulphuric Acid' department is denying the exemption although the goods fall under the same SH2807 00 10. Necessary amendments be made in the notification so as not to deny the exemption.

3) Correction in fertilizer grade in customs notification: A concessional basic custom duty is available on import of Water Soluble Fertiliser vide S.No. 202 (I)of Customs Notification 12/2012 dated 17.03.2012. In this S.No.for different types of fertilizers as mentioned in (a) to (m) concessional rate of Basic Custom duty has been fixed. For 202 (I) (g) 13:25:26 fertilizers, the Basic Custom Duty is fixed at 2.5%. There is no such grade of Water Soluble Fertilizers. This should be corrected to 13:05:26 fertilizers.

4) Availing of simultaneous benefit of exemption notifications: Fertiliser imported for use in the manufacture of other fertilizers is exempt from payment of CVD vide S.No. 127 of Notification No. 12/2012-CE dated 17.03.12 along with concessional rate of basic custom duty in terms of S.No. 197 to 205 of Customs Notification 12/2012 dated 17.03.2012. However the ICEGATE System does not accept the simultaneous availment of two exemption notifications. The Board has clarified to the Chief Commissioner of Customs, Visakhapatnam vide letter dated 11.12.2013 in F.No. 336/9/2013-TRU that the importer can simultaneously avail the benefit of Sl.No 198 or 203 of notification of 12/2012-Customs for concessional rate of BCD and S.No.127 of notification 12/2012-Central excise for exemption of CVD. The Board clarification is limited to Urea and Muriate of Potash i.e. S.No. 198 and 203 since it was specific to the representation. In the absence of the same we have forced to pay 1% CVD. It should be made applicable to all fertilizers from S.No. 197 to 205.

(The author is Sr.GM, Indirect Taxation, Coromandel International Limited, Hyderabad)