Customs duty changes in Indian Budget 2006-2007

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Excise duty changes in Indian Budget 2006-2007

The Finance Minister has introduced the Finance Bill, 2007 in the Lok Sabha on 28th February, 2007. Changes in excise and customs duties have been made through the Finance Bill and through Notification Nos.20/2007-Customs to 34/2007-Customs, 3/2007-CE to 18/2007-CE, and 8 /2007-CE (NT) to 14/2007-CE (NT), all dated 1st March, 2007. Details
of the changes are available in the Explanatory Notes. Salient features of these changes in respect of excise and customs duties are indicated below. For full details, relevant provisions of the Finance Bill and the notifications should be referred to.

I. Secondary and Higher Education Cess [Clauses 126, 128 and 129 of Finance Bill] 2.1 A Secondary and Higher Education Cess at the rate of 1% of the aggregate duties of customs, excise and service tax has been imposed. The proceeds from this cess will be utilized to finance secondary and higher education. This will be in addition to the 2% Education Cess imposed in 2004 budget. While the cess will apply in respect of customs and excise duties with effect from 1.3.2007, in respect of service tax, it will come into effect on enactment of the Finance Bill, 2007.

2.2 In the case of customs duties, the Secondary and Higher Education Cess on imported goods will be 1% of the aggregate duties of customs, (but excluding safeguard duty under section 8B and 8C, countervailing duty under section 9, Anti Dumping Duty under section 9 A of the Customs Tariff Act and the two Education Cesses). Items attracting customs duty at bound rates, for example, under the IT Agreement or the Indo-US/Indo-EU Textile Agreement have been exempted from this cess. Suitable provision has been made in the Finance Bill, 2007 (and by notification to cover the period till the date of enactment of the finance Bill) to provide that for calculating the Education Cess of 2004, inter alia, the Secondary and Higher Education cess will not be taken into account. The method of calculation of the Secondary and Higher Education cess will be the same as in the case of Education Cess introduced in 2004 budget.

2.3 In the case of excise duties, Secondary and Higher Education Cess on excisable goods will be chargeable on the aggregate duties of excise (excluding Education cesses) leviable on such goods. The method of calculation of the Secondary and Higher Education cess will be the same as in the case of Education Cess introduced in 2004 budget. Suitable provision has been made in the Finance Bill, 2007 (and by notification to cover the period till the date of enactment of the Finance Bill) to provide that for calculating the Education Cess of 2004, the Secondary and Higher Education cess will not be taken into account. Necessary amendments have been made in the Cenvat Credit Rules, 2004 to allow credit of this Education Cess paid on inputs and capital goods, which can be utilized for payment of Education cesses only.

III. CENTRAL EXCISE
17. Relief Measures:
17.1 Excise duty has been fully exempted on:

(a) Packed biscuits of per Kg. retail sale price equivalent not exceeding Rs.50;
(b) Food mixes (including instant food mixes);
(c) Specified water purification equipment based on membrane technology;
(d) Household water filters not using electricity and pressurised tap water;
(e) Biodiesels.
17.2 Excise duty has been reduced from 16% to 8% on:
(a) umbrellas;
(b) plywood, veneered panels and similar laminated wood falling under heading 4412;
(c) footwear parts/components falling under heading 6406; and wadding, gauze.

18. Petroleum: Ad valorem component of excise duty on petrol and diesel has been reduced from 8% to 6%.

19. Textiles:

19.1 Excise duty has been reduced from 16% to 12% on caprolactam, nylon chips and benzene for manufacture of caprolactam.
19.2 Optional excise duty at 12% has been prescribed on fishnet grade nylon yarns (yarns of 210 deniers and multiples thereof), nylon fishnet fabrics and fishnets.
19.3 Full exemption from excise duty on specified textile machinery has been withdrawn and an excise duty of 8% has been imposed thereon.

20. Small Scale Industries: Exemption limit under the SSI scheme has been increased from Rs 1 crore to Rs.1.5 crore. This will be effective from 1.4.2007.
21. Research & Development: Exemption from excise duty has been extended to specified items when domestically procured by research institutions (other than hospitals) registered with Department of Scientific & Industrial Research, for the purpose of research, subject to certain conditions
22. Metals: The rate of compounded levy on aluminium circles has been increased from Rs.7500/10000 per machine per month to Rs.12000 per machine per month.
23. Information Technology:
23.1 ‘USB flash memory’ is exempt from excise duty. The exemption has now been extended to ‘flash memory’ in general.
23.2 ‘DVD drive’ is exempt from excise duty. The exemption has now been extended to ‘DVD drive/DVD writer’.

25. Cement: Dual rates of excise duty have been prescribed on cement as under:
25.1 General rate (other than mini cement plants)
25.1.1 Excise duty has been reduced from Rs.400 per metric tonne to Rs.350 per metric tonne for cement of declared retail sale price not exceeding Rs.190 per 50 Kg. bag or per metric tonne retail sale price equivalent not exceeding Rs.3800.
25.1.1 Excise duty has been increased from Rs.400 per metric tonne to Rs.600 per metric tonne for cement of declared retail sale price exceeding Rs.190 per 50 Kg. bag or per metric tonne retail sale price equivalent exceeding Rs.3800.
25.1.3 For cement in respect of which no RSP is required to be declared and thus no RSP is declared, the rates will be Rs 400 per metric tonne.
25.2 Mini cement plants
25.2.1 Excise duty has been reduced from Rs.250 per metric tonne to Rs.220 per metric tonne for cement of declared retail sale price not exceeding Rs.190 per 50 Kg. bag or per metric tonne retail sale price equivalent not exceeding Rs.3800.
25.2.2 Excise duty has been increased from Rs.250 per metric tonne to Rs.370 per metric tonne for cement of declared retail sale price exceeding Rs.190 per 50 Kg. bag or per metric tonne retail sale price equivalent exceeding Rs.3800.
25.3 For cement in respect of which no RSP is required to be declared and thus no RSP is declared, the rate will be Rs 250 per metric tonne.
25.4 It has also been provided that if a bulk package, which does not have RSP, declared on it contains a number of smaller packs with RSP declared on such smaller packs, then assessment will be done on the basis of such declared RSP. It has also been provided that if the bulk package also carries a sale price, per tonne equivalent of which is different from the per tonne equivalent of RSP declared on the smaller packs, then the higher of the two per tonne price equivalents will be relevant for assessment.
25.5 Cement has been included in Third Schedule of the Central Excise Act to provide that in relation to products of sub-heading 252329, packing or repacking in unit container, labelling or relabelling of packages, including the declaration or alteration of RSP on it or adoption of any other treatment to render the product marketable to the consumer, shall
amount to ‘manufacture’. This provision comes into effect immediately.
25.6 There is no change in excise duty on cement clinkers. Excise duty rates of Rs.400 PMT and Rs.250 PMT on cement cleared in bulk from general cements plants and mini cement plants respectively, also remain unchanged.

26. Retail Sale Price (RSP) Based Assessment:
26.1 RSP based assessment will be extended from a date to be notified to:
(a) Personal computers (including lap tops)
(b) Computer printers
(c) Computer monitors
(d) Computer key boards
(e) Scanners
(f) Computer mouse
(g) Ink cartridge with print head assembly
(h) Fax machines
(i) Modems
(j) Set top boxes for gaining access to internet
(k) Set top boxes for television sets
26.2 Third Schedule of the Central Excise Act is being amended so as to include these items.

27. Water Supply Projects:

27.1 The exemption from excise duty at present available for pipes used in taking water from water treatment plant, to the first storage point is being continued. It has also been clarified that the concession will be available for taking water from the clear (treated) water reservoir attached to the water treatment plant to the first storage point.
27.2 In addition, exemption has now been extended to all pipes of outer diameter exceeding 20 centimeter, when such pipes are integral part of the water supply project. The exemption will be available irrespective of whether such pipes are used for taking water from treatment plant to the first storage point or from one storage point to another storage point.

28. Withdrawal of Exemptions:

28.1 Excise duty exemptions/concessions have been withdrawn on following items:
a) Chemical reagents manufactured by Hindustan Antibiotics Ltd. For use in manufacture of kits for testing narcotics drugs and psychotropic substances;
b) Optical glass manufactured by the Central Glass and Ceramic Research Institute, Kolkata for use by any Department of the Central Government;
c) Goods like brooms, hand operated mechanical floor sweepers, mops, feather dusters, prepared knots and tufts of broom or brush; pain pads & rollers, squeezes etc.;
d) Recorded video cassettes intended for television broadcasting, supplied in formats such as U-matic, Betacam or any similar format;
e) Nicotine polacrilex gum;
f) Dust and powder of synthetic stones;
g) Cold-set high speed printing machines;
h) Specified parts of set top boxes.

28.2 Excise duty exemption (vide notification no 8/2004-CE) on pan masala containing tobacco and other tobacco products manufactured in the North East Region has been withdrawn in respect of clearances made on or after 1.3.2007. In respect of clearances prior to 1.3.2007 the exemption availed of would be protected but only if the conditions in the relevant notification are satisfied.

29. Other Amendments in Customs Act and Central Excise Act: [To come into effect on enactment of Finance Bill, unless otherwise specified]

a) As per sub-section (1) of section 14 of the Customs Act, 1962, valuation of goods is based on the concept of ‘deemed value’. Sub-section (1A) of section 14 provides that valuation of imported goods shall be based on the concept of ‘transaction value’. To remove this contradiction, existing section 14 is being substituted by a new section 14. The new section provides that the value of imported goods and export goods shall be the transaction value of such goods, as determined in accordance with the rules made in this behalf. Moreover, transaction value of imported goods shall include any amount that the buyer is liable to pay for costs and services, including commissions and brokerages, assists, engineering, design work, royalties and license fees, costs of transportation to the place of importation, insurance and handling charges.
Further, where there is no sale or the transaction value of the imported goods or export goods is not determinable, the value of such goods shall be determined in accordance with the rules made in this behalf. This change will come into effect
from a date to be notified after enactment of Finance Act, 2007.

b) Section 27 of the Customs Act, 1962 provides that a refund claim shall be made within a period of six-months/one year from the relevant date. This section is being amended by inserting a proviso in sub-section (1) to provide that the relevant date for the purpose of refund of duty in consequence of any judgement, decree, order or direction of appellate authority, Appellate Tribunal or any court shall be the date of such judgement, decree, order or direction.

c) Section 28E I (ii) of the Customs Act, 1962 defines an “applicant” who is entitled to seek Advance Ruling. Under this section ‘applicant’ includes a “joint venture in India”. This section is being amended by inserting an Explanation in clause I so as to clarify that ‘joint venture in India’ means a venture in which at least one of the participants, partners or equity holders is a non-resident having substantial interest in the joint venture and exercising joint control over it.

d)     Section 75A of the Customs Act, 1962 deals with payment of interest on drawback paid to a claimant erroneously. It provides that in addition to payment of said amount of drawback, the claimant shall pay interest at the rate fixed under section 28AA, within a period of two months from the date of demand. Sub-section (2) of Section 75A is being amended to provide that in case of erroneous refund, the interest shall be charged at the rate fixed under section 28AB, from the date of payment of drawback till the date of recovery of such drawback.

e)    Prior to operationalisation of Special Economic Zone (SEZ) Act, 2005, the scheme of SEZs was implemented through Chapter XA of the Customs Act, 1962, and the rules notified under the said Act. In view of the specific legislation covering SEZs, Chapter XA of the Customs Act, 1962 has become redundant. Customs Act, 1962 is accordingly being amended to omit Chapter XA of the said Act.

f)    Section 127A of the Customs Act, 1962 is being amended so as to provide that an applicant can file an application before the Settlement Commission only in respect of cases pending before the adjudicating authority. It further provides that in respect of cases referred back by the Appellate Tribunal, Court or any other authority to the adjudicating authority for freshadjudication, the applicant shall not be entitled to file an application;

g)    Section 127B of the Customs Act, 1962 is being amended so as to provide that an applicant shall be eligible to file an application in respect of cases in which he admits short levy on account of misclassification, under valuation, inapplicability of exemption notification but not in respect of the goods not included in the Bill of entry or Shipping Bill, as the case may be. It further provides that while filing any application, he shall deposit the additional amount of customs duty accepted by him along with stipulated interest due thereon. It also proposes to enhance the minimum settlement amount from Rs.2 lakh to Rs.3 lakh. It also provides that in respect of an application filed before 1.06.2007, but pending issuance of an order by the Commission, the applicant shall pay the accepted duty by 30.06.2007, failing which the application shall be rejected;

h)    Section 127C of the Customs Act, 1962 is being amended so as to specify time limit at every stage for disposal of the application filed before the Settlement Commission. It, inter alia, provides that in respect of an application filed on or before 31st May, 2007, the order shall be passed by 29th February, 2008, and in respect of application made on or after 1st June, 2006, the order should be passed within 9 months of the application. It also provides that amount of settlement ordered by the Commission shall in no case be less than duty liability admitted by the applicant. It further provides that the settlement amount shall be paid within 30 days of the receipt of the order and no extension for payment of this amount shall be granted by the Commission;

i)    Section 127E of the Customs Act, 1962 is being amended with a view to debar the Settlement Commission from re-opening the completed proceedings in respect of applications received on or after 1.6.2007;

j)    Section 127F of the Customs Act, 1962 is being amended so as to make consequential changes in view of the amendments made in section 127C;

k)    Section 127H of the Customs Act, 1962 is being amended so as to debar the Settlement Commission from granting immunity from prosecution for any offence under Indian Penal Code or any Central Act for the time being in force other than Customs Act. It also provides that the Settlement Commission shall not have power to grant immunity from payment of interest as provided under this Act. It further provides that applications pending before the Settlement Commission on 31.05.2007 shall be decided in accordance with the existing provisions;

l)    Section 127J and 127K of the Customs Act, 1962 are being amended so as to make consequential changes in view of the amendments made in section 127C;

m)    Section 127L of the Customs Act, 1962 is being amended so as to provide that an applicant can apply for settlement only once during his lifetime so that the scheme of settlement is not treated as a permanent amnesty scheme by the tax evaders. It also provides that in respect of cases involving identical recurring issue, the applicant can file application for settlement provided that his earlier application is pending before the Settlement Commission;

n)    Section 127MA of the Customs Act, 1962 is being omitted as it has outlived its utility;

o)    Section 129 of the Customs Act, 1962 is being amended by inserting a new subsection (6) therein with a view to debar the President, Vice-President or other Member of the Customs, Excise and Service Tax Appellate Tribunal from appearing, acting or pleading before the said Tribunal on ceasing to hold office.

p)    Section 129D of the Customs Act, 1962 is being amended so as to provide that the Committee of Chief Commissioners or the Commissioners shall review the orders of the Commissioner or adjudicating authorities below the rank of Commissioner within a period of three months as against the present period of one year from the date of communication of the decision or order of the Adjudicating Authority. It is also proposed to reduce the time available under sub-section (4) for authorized officer to file appeal before the Appellate Tribunal or the Commissioner (Appeals), as the case may be, from three months at present to one month.

q)    In view of the specific legislation covering Special Economic Zones, sub-section (1) of Section 3 of the Central Excise Act, 1944 is being amended to omit the provisions relating to ‘free trade zone’ and substitute the meaning of ‘special economic zone’ so as to harmonize the said provisions with the Special Economic Zone Act, 2005.

r)    Section 11B of the Central Excise Act, 1944 provides that an application for refund of duty should be made before the expiry of one year from the relevant date. This section is being amended by inserting a new sub-clause (ec) in clause (B) of Explanation to provide that the relevant date for the purpose of refund of duty in consequence of judgement, decree, order or direction of appellate authority, Appellate Tribunal or any court, shall be the date of such judgement, decree, order or direction.

s)    Section 23A I of the Central Excise Act, 1944 act defines an “applicant” who is entitled to seek Advance Ruling. Under section 32AI (ii), applicant includes a joint venture in India. This section is being amended by inserting an Explanation in clause I so as to clarify that ‘joint venture in India’ means a venture in which at least one of the participants, partners or equity holders shall be a non-resident having substantial interest in the joint venture and exercising joint control over it.

t)    Section 31 of the Central Excise Act, 1944 is being amended so as to provide that an applicant can file an application before the Settlement Commission only in respect of cases pending before the adjudicating authority. It further provides that in respect of cases referred back by the Appellate Tribunal, Court or any other authority to the adjudicating authority for fresh adjudication, the applicant shall not be entitled to file an application;

u)    Section 32A of the Central Excise Act, 1944 is being amended so as to empower the Chairman, Settlement Commission to constitute a Bench consisting of three Members and the senior among the Members shall act as the presiding officer of the Bench, if the Vice-Chairman is not one of the Members;

v)    Section 32E of the Central Excise Act, 1944 is being amended so as provide that the applicant shall be eligible to file an application in respect of the case in which he admits short levy on account of misclassification, under valuation, inapplicability of exemption notification or CENVAT credit but not in respect of the goods for which he had not filed a return. It further provides that while filing any application, he shall deposit the additional amount of excise duty accepted by him along with stipulated interest due thereon. It also proposes to enhance the minimum settlement amount from Rs.2 lakh to Rs.3 lakh. It also
provides that in respect of an application filed before 1st June, 2007, but pending ssuance of an order by the Commission, the applicant shall pay the accepted duty by 30th June, 2007, failing which the application shall be rejected;

w)    Section 32F of the Central Excise Act, 1944 is being amended so as specify time limit at every stage for the disposal of the application filed before the Settlement Commission. It, inter alia, provides that in respect of an application filed on or before 31st May, 2007, the order shall be passed by 29th February, 2008, and in respect of application made on or after 1st June, 2006, the order should be passed within 9 months of the application. It also provides that amount of settlement ordered by the Commission shall in no case be less than duty liability admitted by the applicant. It further provides that the settlement amount shall be paid within 30 days of the receipt of the order and no extension for payment of this amount shall be granted by the Commission;

x)    Section 32H of the Central Excise Act, 1944 is being amended with a view to debar the Settlement Commission from re-opening the completed proceedings in respect of applications received on or after 1.6.2007;

y)    Section 32 I of the Central Excise Act, 1944 is being amended so as to make consequential changes in view of the amendments made in section 32F;

z) Section 32K of the Central Excise Act, 1944 is being amended so as to debar the Settlement Commission from granting immunity from prosecution for any offence under Indian Penal Code or any Central Act for the time being in force other than Central Excise Act. It also provides that the Settlement Commission shall not have the power to grant immunity from payment of interest as provided under this Act. It further provides that the applications pending before the Settlement Commission on 31st May, 2007 shall be decided in accordance with the existing provisions;

aa)    Section 32M and Section 32N of the Central Excise Act, 1944 are being amended so as to make consequential changes in view of the amendments made in section 32F;

bb)    Section 32 O of the Central Excise Act, 1944 is being amended so as to provide that an applicant can apply for settlement only once during his lifetime so that the scheme of settlement is not treated as a permanent amnesty scheme by the
tax evaders. It also provides that in respect of cases involving identical recurring issue, the applicant can file application for settlement provided that his earlier application is pending before the Settlement Commission;

cc)    Section 32PA of the Central Excise Act, 1944 is being omitted as it has outlived its utility;

dd)    Section 35E of the Central Excise Act, 1944 is being amended so as to provide that the Committee of Chief Commissioners or the Commissioners shall review the orders of the Commissioner or adjudicating authorities below the rank of Commissioner within a period of three months as against the present period of one year from the date of communication of the decision or order of the Adjudicating Authority. It is also proposed to reduce the time available for authorized officer to file appeal before the Appellate Tribunal or the Commissioner (Appeals), as the case may be, from three months at present to
one month.

ee)    Section 35F of the Central Excise Act, 1944, inter alia, provides that where in any appeal, the decision or order appealed against relates to any duty demanded, the person appealing against such decision or order shall deposit first the duty demanded. This section is being amended so as to insert an Explanation therein with a view to widen the scope of expression ‘duty demanded’. The proposed amendment provides for inclusion of amount determined under section 11D; amount of erroneous CENVAT credit taken; amount payable under rule 57CC of Central Excise Rules, 1944; amount payable under rule 6 of Cenvat Credit Rules, 2001 or Cenvat Credit Rules, 2002 or Cenvat Credit Rules, 2004; interest payable under the provisions of this Act or the rules made thereunder; within the ambit of expression ‘duty demanded’ in addition to the duty specified under section 3 of the said Act for the purpose of predeposit, pending appeal, under section 35F of the Act.

ff)    Section 37 (4) of the Central Excise Act, 1944 provides that if any manufacturer, producer or licensee of a warehouse contravenes any of the provisions stipulated therein, then such person, inter alia, will be liable to a penalty not exceeding duty leviable on such goods or ten thousand rupees, whichever is higher. This section is being amended so as to reduce the penalty from Rs.10000 to Rs.2000 for possessing, transporting, removing, depositing, keeping, concealing, selling or purchasing any excisable goods which are liable to confiscation. Similarly, section 37 (5) is also being amended to reduce the penalty from Rs.10000 to Rs.2000

30. The Central Excise Rules, 2002 have been amended as under (with immediate effect):

a) An explanation has been inserted in rule 8 to provide that for the purposes of this rule, the expressions ‘duty’ or ‘duty of excise’ shall also include the ‘amount’ payable in terms of the CENVAT Credit Rules, 2004. Therefore, all amount payable like payment under rule 6 (3) of the CENVAT Credit Rules, 2004 etc., can be paid along with duty payable by 5th or 15th of the next month;

b) Rule 8 has been further amended to make e-payment mandatory for payment of duty by all assessees who have paid excise duty of rupees 50 lakh or more in cash during the preceding financial year. This provision would come into effect from 01.04.2007;

c) Sub-rule (2) of rule 11 has been amended to provide that the invoice shall also contain address of the jurisdictional Central Excise Division. This change will come into force from 01.04.2007;

d) Rule 21 has been amended to increase the power of remission given to various officers of central excise.

e) Rules 25 & 26 are being amended to reduce the minimum penalty from the present level of rupees ten thousand to rupees two thousand. This change will be effective on enactment of Finance Act, 2007.

f) A new sub-rule (2) has been inserted in rule 26 to provide for penal action against the person who issues CENVAT invoices without delivery of goods mentioned therein and also against the person who is involved in fabricating Central Excise documents or any other document like shipping bill, bill of lading, etc., based on which the user of said document is likely to take or has taken any ineligible benefits like CENVAT credit, refund, etc.;

31) The CENVAT Credit Rules, 2004 have been amended as under (with immediate effect):

a) Necessary amendments have been made in the Cenvat Credit Rules, 2004 to allow credit of Secondary and Higher Education Cess paid on inputs and capital goods, which can be utilized for payment of Education cesses only.

b) Sub-rule (2) of rule 9 has been amended to provide that the CENVAT credit can be taken if all the particulars as prescribed under the rules are available on the invoice or other duty-paying document. Further, in case any of the required
particulars (other than specified particulars) are not available on the document, the Assistant/Deputy Commissioner may allow the credit subject to his satisfaction that (i) goods/services covered by said document has been received by the asseessee, and (ii) the receipt of said goods/services has been accounted for in the books of accounts of the receiver. Consequential amendments have also been made in rule 15(1) and 15(3), which provides for penal action. Sub-rule (3) of rule 9 has been deleted;

c) Sub-rule (11) has been inserted in rule 9 so as to allow an assessee to rectify mistakes and file revised return within 60 days from the date of filing of original return, subject to specified conditions;

d) New sub-rules (3) & (4) have been inserted in rule 11 to provide that when a person opts for exemption from whole of duty (in case of conditional notification) or where a product becomes exempted absolutely, in such cases, the CENVAT credit taken on inputs lying in stock, or in process or contained in the final product lying in stock should be reversed. Similar provision has been made in respect of cases wherein taxable service becomes exempted. However, no reversal of credit of input services is required to be made in such cases.

32. Job work valuation:

32.1 A new rule 10A has been inserted in the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 to provide that where goods are manufactured by a job-worker on behalf of a person (commonly known as principal manufacturer), the value for payment of excise duty would be based on the sale value at which the principal manufacturer
sells the goods, as against the present provision where the value is taken as cost of raw material plus the job charges.
32.2 The liability to pay duty will rest with the job-worker as per the present practice. The value in such cases shall be:
(a) the ‘transaction value of the goods at which they are sold’ by the principal manufacturer for delivery at the time of removal of goods from the factory of job-worker, provided that the principal manufacturer and the buyer of the goods are not related and that the price is the sole consideration for the sale.(b) the ‘normal transaction value of goods sold at or about the same time’, when sold by the principal manufacturer from a place other than the factory of job-worker, provided that the principal manufacturer and the buyer of the goods are not related and that the price is the sole consideration for the sale. This methodology is similar to valuation in case of sale through depot. (c) Determined in accordance with the principles enunciated in the Valuation Rules, for cases not covered under (a) and (b) above, on a case-to-case basis. For example, if the excisable goods manufactured on job-work are sold by the principal manufacturer where the price is not the sole consideration for sale,
the value of such goods shall be determined in terms of principles laid down in rule 6.

32.3 It has also been provided in the rule that the cost of transportation from the premises, wherefrom the goods are sold, to the place of delivery shall not be included in the value of excisable goods.

32.4 This amendment will come into effect from 1.4.2007. The new rule may be brought to the notice of trade and be studied carefully. If any modification or clarification is needed, the same may be brought to the notice of Member (Central Excise) through a d.o. letter latest by 15.3.2007.

33. Miscellaneous:

33.1 Explanation to Notification No. 21/2004-CE (NT) dated 06.09.2004 specifies the duties which can be given as rebate This explanation has been amended by inserting a new clause so as to provide that the additional duty leviable under section 3 of the Custom Tariff Act, equivalent to the duty of excise specified in the said clause, can also be given as rebate under this notification.

33.2 Condition no.3 (i) of Notification No.5/2006-CE (NT) dated 14.03.2006 provides that in order to claim refund of accumulated CENVAT credit, the exporter should submit shipping bill or bill of export duly certified by the officer of Customs as a proof of export. This condition has been amended to further provide that photocopy of such documents attested by the same officer of Customs would also be acceptable.

33.3 Chief Commissioners have been empowered to allocate the adjudication cases among the Commissioners or Commissioners (Adjudication) within their jurisdiction. Thus, there would be no need to refer the cases to the Board for transferring adjudication cases from one Commissioner to the other.

34. Revenue foregone statements:
34.1 Last budget, for the first time, a chapter was introduced in ‘Receipt Budget’, which is part of the Budget documents. This chapter contained a statement on revenue foregone. This year also, similar statements have been prepared as part of budget documents giving revenue foregone figures for 2005-06 and 2006-07 (estimates). These have been prepared with the help of data made available by Directorate of Systems. But the quality of data for excise duties is still not comprehensive.