Circular No. 23 /2012-Customs dated 30.8.2012
Applicable rate of CVD on imported Fertilizers-regarding.
Representations have been received from trade as well as
the field formations regarding the applicable rate of additional duty of customs
(CVD) on Fertilizers when imported into India. Doubts have arisen in view of the
fact that in Notification No. 12/2012-Customs, dated 17-03-2012, except for
Serial Number 200(ii) [where the CVD rate of 1% is mentioned in column (5)] the
entry in this column for all other Serial Nos. is “-“(dash). In terms of the
Explanation II (b) of the said Notification, “–” appearing in column (5) means
additional duty equal to duty of excise leviable on the goods as per the First
Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) read with any other
notifications issued under sub-section (1) of section 5A of the Central Excise
Act, 1944 (1 of 1944), for the time being in force. Since, the effective rate of
CVD has been prescribed in the case of fertilizers, through a notification
issued under section 25 of the Customs Act, 1962, some field formations have
sought to apply the effective rate of excise duty of 6% ( with cenvat credit)
for the purpose of charging CVD on this item.
2. The matter has been examined. Even though it is true
that for many S. Nos. of notification no. 12/2012-Customs pertaining to goods
falling under Chapter 31(S. Nos 196 to 199 and 201 to 205) the entry indicated
in column (5) is ‘-‘, S. No. 200(ii) covering “All goods, other than those which
are clearly not to be used as fertilizers” prescribes a CVD rate of 1% in column
(5). It is relevant that the entry pertaining to basic customs duty indicated in
column (4) against this S. No. is ‘-‘ implying thereby that the otherwise
applicable rate of basic customs duty is to be charged. From a combined reading
of other S. Nos. covering goods of chapter 31 and S. No. 200 (ii), it is evident
that the benefit of concessional CVD of 1% is available to “All goods, other
than those which are clearly not to be used as fertilizers” even if the benefit
of concessional basic customs duty under any other S. No of the same
notification is claimed. For instance, an importer claiming the benefit of
concessional basic customs duty of 5% under S. No. 204 covering “Potassium
sulphate containing not more than 52% by weight of potassium oxide”, would be
eligible for the benefit of concessional CVD of 1% under S. No. 200 (ii) if the
goods are to be used as fertilizers. However, to avoid disputes & place the
matter beyond doubt, notification no. 46/2012-Customs dated 17th August, 2012
has been issued to expressly prescribe the effective rate of CVD against the
relevant serial nos.
3. The above position may be brought to the notice of
formations under your charge, for strict compliance, especially in respect of
assessments for the period prior to 17th August, 2012.
Yours faithfully,
(Vivek Johri)
Joint Secretary (TRU)
F.No.354/35/2011-TRU
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