TMI BlogChanges in Customs and Central Excise law and rates of duty - Budget 2014-15X X X X Extracts X X X X X X X X Extracts X X X X ..... Non-Tariff No.50/2014-Customs (NT) and No.51/2014-Customs (NT) 11th July, 2014 CENTRAL EXCISE Tariff No.8/2014-CE to No.20/2014-CE 11th July, 2014 Non-Tariff No.17/2014-CE (NT) to No.22/2014-CE (NT) 11th July, 2014 Unless otherwise stated, all changes in rates of duty take effect from the midnight of 10th/11th July, 2014. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 86, 87 [(1) and (9)(ii)], 104, 105(1), 107, and 110 of the Finance (No.2) Bill, 2014 so that changes proposed therein also take effect from the midnight of 10th/11th July, 2014. The remaining legislative changes would come into effect only upon the enactment of the Finance (No.2) Bill, 2014. Retrospective amendments in the provisions of law or notification issued under the respective Acts shall have the force of law only upon the enactment of the Finance (No.2) Bill, 2014 but with effect from the date indicated in the relevant cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With warm regards, Yours sincerely, (P. K. Mohanty) Joint Secretary (TRU-I) To, All Chief Commissioners/ Directors General All Commissioners of Customs All Commissioners of Central Excise All Commissioners of Customs and Central Excise All Commissioners of Service Tax Director DPPR/ Logistics/Legal Affairs/ Data Management Annex I CUSTOMS Chapter 1 to 7 : No change Chapter 8 1) Description of the product sun dried dark seedless raisins which attracts concessional Basic Customs Duty of 30% is being changed to dark seedless raisins . S.No.29 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers. Chapter 9 to 14 : No change Chapters 15, 29 and 38 1) Basic Customs Duty on fatty acids, crude palm stearin, RBD and other palm stearin and specified industrial grade crude oils is being reduced from 7.5% to Nil for manufacture of soaps and oelochemicals subject to actual user condition. Basic Customs Duty is also being reduced on crude glycerine from 12.5% to 7.5% in general and from 12.5% to Nil for manufacture of soaps subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VD on Anthracite coal, Coking coal and other Coal is being reduced from 6% to 2%. S.Nos.122, 122A, 123 and 124 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refer. New S.No.124A covers other coal (2701 1990). 2) Basic Customs Duty on metallurgical coke is being increased from Nil to 2.5%. S.No.125 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers. 3) Basic Customs Duty on crude naphthalene is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126A] refers. 4) Basic Customs duty on reformate and other goods under sub-heading 2707 50 00 is being reduced from 10% to 2.5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126B] refers. 5) Basic Customs Duty on coal tar pitch is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption from Basic Customs Duty is being provided on specified raw materials used in the manufacture of solar backsheet and EVA sheet for use in manufacture of solar PV cells or modules. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.211A] refers. 6) Full exemption of customs duty is being provided on security fibre, security threads and M-feature imported by Bank Note Paper Mill India Private Limited (BNPMIPL), Mysore. S.No.233 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers. Full exemption from BCD and CVD is also being provided for raw materials required for manufacture of security threads and security fibre subject to actual user condition. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.233A] refers. 7) S.No.169 of notification No.10/2008-Customs, dated 15th January, 2008 [India-Singapore Comprehensive Economic Co-operation Agreement (CECA)] relating to tariff item 3903 19 90 is being omitted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to pre-forms of precious and semi-precious stones. S.No.312A of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refer. 2) Basic Customs Duty on half-cut or broken diamonds is being increased from NIL to 2.5% and on cut polished diamonds including lab-grown diamonds and colored gemstones from 2% to 2.5%. S.Nos.313, 314 and 315 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers. 3) The variation level and the parameter of measurement in respect of re-import of cut and polished diamonds after certification/grading from a foreign laboratory/agency are being increased as a trade facilitation measure. Henceforth, in the case of re-import of cut and polished diamonds, a variance not exceeding +_ 0.05mm in diameter for round shape diamonds and +_ 0.07mm in length and breadth for diamonds of other shapes shall be allowed. The allowable variance in weight remains unchanged. Notification No.9/2012-Customs, dated 9th March, 2012 as amended by notification No.16/2014-Customs, dated 11th July, 2014 refers. Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y notification No.12/2014-Customs, dated 11th July, 2014 refers. 2) Basic Customs Duty on LCD and LED TV panels of below 19 inches is being reduced from 10% to NIL. S.No.432 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers. 3) Basic Customs Duty on colour picture tubes for manufacture of cathode ray TVs is being reduced from 10% to NIL. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.432A] refers. 4) Basic Customs Duty is being exempted on specified parts of LCD and LED panels for TVs. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.432B] refers. 5) Basic Customs Duty is being reduced from 7.5% to NIL on E-Book readers. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.433A] refers. 6) Basic Customs Duty on battery waste and battery scrap is being reduced from 10% to 5%. Notification No.12/2012-Customs, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent. S.No.354 (condition no.40) of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers. 2) CVD exemption on portable X-ray machine / system is being withdrawn. S.No.20 of notification No.39/96-Customs, dated 23rd July, 1996 as amended by notification No.20/2014-Customs, dated 11th July, 2014 and notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.490A] refer. 3) State Governments concerned are being notified as sponsoring authority for Metro Rail Projects covered under the Project Import Regulations, 1986. Notification No.23/86-Customs, dated 3rd April, 1986 as amended vide notification No.25/2014-Customs, dated 11th July, 2014 refers. Miscellaneous : 1) Full exemption from customs duty is being provided on specified HIV/AIDS drugs and diagnostic kits imported under National AIDS Control Programme (NACP) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM). Notification No.23/2014-Customs, dated the 11th July 2014 refers. 2) Full exemption from Basic Customs Duty is being prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of an entry in the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect. 2) Basic excise duty on cigarettes and other products of tariff heading 2402 is being increased. Clause 105 of the Finance (No.2) Bill, 2014 may be referred to for details. There is no change in NCCD leviable under the Seventh Schedule to the Finance Act, 2001 and Additional Duty (health cess) under the Seventh Schedule to the Finance Act, 2005 . Tariff items related to cigarettes of length exceeding 75 mm but not exceeding 85 mm and cigarettes of length exceeding 85 mm are being merged into a single tariff item i.e. others [2402 20 90]. Accordingly, tariff item 2402 20 60 and the entries relating thereto are being omitted from the Seventh Schedule to the Finance Act, 2001 and from the Seventh Schedule to the Finance Act, 2005 . By virtue of an entry in the Provisional Collection of Taxes Act, 1931, these changes will come into force with immediate effect. The changes in total excise duty rates are summarized below. TARIFF ITEM DESCRIPTION (length in mm) Rs. per 1000 sticks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n environment. Clause 111 of the Finance (No.2) Bill, 2014 refers. The Clean Energy cess is being increased from ₹ 50 per tonne to ₹ 100 per tonne. Notification No.3/2010-CE dated 22.06.2010 which prescribes the effective rate of ₹ 50 per tonne is being rescinded vide notification No.20/2014-Central Excise, dated 11th July, 2014 . Henceforth, the rate of Clean Energy Cess will be the tariff rate i.e. ₹ 100 per tonne. 2) Excise duty on Branded Petrol is being reduced from ₹ 7.50 per litre to ₹ 2.35 per litre. S.No.70 of Notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers. 3) Full exemption from Central Excise duty is being provided to Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to Non-Domestic Exempted Category (NDEC) customers by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited retrospectively w.e.f. 08.02.2013. Clause 103 of the Finance (No.2) Bill, 2014 refers. The exemption shall continue w.e.f. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise, dated 1st March, 2011 as amended vide notification No.9/2014-Customs, dated the 11th July 2014 [new S.No.28A] refers. 2) Optional excise duty of 2% (without CENVAT) / 6% (with CENVAT) on writing and printing paper for printing of educational textbooks is being withdrawn and instead a uniform excise duty of 6% with CENVAT is being levied. S.No.63 is being omitted from notification No.1/2011-Central Excise, dated 1st March, 2011 . Notification No.8/2014-Central Excise, dated the 11th July 2014 refers. 3) Full exemption from excise duty is being provided for security threads and security fibre supplied to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Private Limited (BNPMIPL), Mysore. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.149A] refers. 4) Excise duty on Polyester Staple Fiber (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 08.05.2012) is being exempted retrospectively w.e.f. 29.06.2010 to 07.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided on flat copper wire used in the manufacture of PV ribbons (tinned copper interconnect) for use in the manufacture of solar cells or modules. Notification No.12/2012- Central Excise dated 17th March, 2012 as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.215A] refers. 2) Excise duty on winding wires of copper is being increased from 10% to 12%. S.No.346 of notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers. Chapter 75-76 : No Change Chapter 77-84 : 1) Excise duty on machinery for the preparation of meat, poultry, fruits, nuts or vegetables, and on presses, crushers and similar machinery used in the manufacture of wine, cider, fruit juices or similar beverages and on packaging machinery is being reduced from 10% to 6%. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.241B, 245A and 245B] refers. 2) Full exemption from excise duty is being granted in respect of machinery, equipments, etc. required for initial setting up o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refer. Chapter 86 : No Change Chapter 87 : 1) Excise duty is being exempted on parts of tractors removed from one or more factories of a tractor manufacturer to another factory of the same manufacturer for manufacture of tractors. S.No.340 of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refers. Chapter 88-96 : No Change Miscellaneous : 1) Full exemption from excise duty is being provided to reverse osmosis (RO) membrane element for water filtration or purification equipment (other than household type filter). Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.239A] refers. 2) Excise duty on RO membrane element used in household type filters is being reduced from 12% / 10% to 6%. Notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.241A] refers. 3) Director (Electrical) is being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation and Collection of Duty) Rules, 2008 is being amended with retrospective effect from 13.04.2010 to provide that where a manufacturer manufactures pouches of different RSPs on a single machine in a month, the duty liability for that month would be the duty applicable to the highest of the RSP so manufactured. This will align the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 with the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 with regard to manufacture of pouches of different RSPs on a single machine under the compounded levy scheme. Clause 101 of the Finance (No.2) Bill, 2014 refers. Annex III CLARIFICATIONS CUSTOMS 1) Representations have been received regarding the eligibility of aircraft engines and parts thereof for customs duty exemption under S.No.454 of notification No.12/2012-Customs, dated 17th March, 2012 . It is clarified that aircraft engines and parts thereof are eligible for customs duty exemption when imported for servicing, repair or maintenance of aircrafts used for scheduled operations subject to fulfilment of conditions sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the context of the phrase not mixed with any other ingredient . It is clarified that the exemption is available to heena powder mixed with a liquid, so far that the liquid is a medium to change the form of heena powder into paste but excludes products like heena dye and such other products which are cosmetics. 3) A reference has been received from the Railway Board in the context of S.No.106 of notification No.1/2011-CE dated 1st March, 2011 as to whether manufacturers of goods (including rolling stock) falling under headings 8601 to 8606 are eligible for CENVAT credit. It is clarified that all goods falling under headings 8601 to 8606 (except 8604) attract 2% (without CENVAT credit) under the notification referred to above or 6% (with CENVAT credit) by Tariff. Hence, manufacturers of such goods paying 6% excise duty are eligible for CENVAT credit. Prior to 17.03.2012, the duty was 5% with CENVAT benefit. 4) All goods falling under any Chapter supplied against International Competitive Bidding (ICB) are fully exempt from excise duty [ Sl.No.336 of notification No. 12/2012-CE dated 17.3.2012 ], subject to the condition: If the goods are exempted from the duties of customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r settlement of cases can also be filed in cases where a Bill of Export, Baggage Declaration, Label or Declaration accompanying the goods effected through Post or Courier have been filed. 8) Section 127B is also being amended so as to omit sub-section (2) since the same is redundant. 9) Section 127L is being amended so as to insert an Explanation that the concealment of particulars of duty liability relates to any such concealment made from the officer of customs and not from the Settlement Commission. 10) Section 129A(1) is being amended so as to increase the discretionary powers of the Tribunal to refuse admission of appeal from the existing ₹ 50,000 to ₹ 2 lakh. 11) Section 129A(1B) is being amended to substitute the words by notification in the official gazette with the words by order so as to enable the Board to constitute a Review Committee by way of an order instead of by way of a notification. 12) Section 129B(2A) is being amended to omit the first, second and third proviso in view of substitution of section 129E with a new section. 13) Section 129D is being amended to insert a proviso in sub-section (3) so as to vest the Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quential amendments in the Act. 2) Section 2(b) is being amended so as to provide for inclusion of Principal Chief Commissioner of Central Excise and Principal Commissioner of Central Excise in the definition of the Central Excise Officer. 3) Section 15A is being inserted so as to empower the Central Government to prescribe an authority or agency to whom the information return shall be filed by the specified persons such as Income Tax Authorities, State Electricity Boards, VAT or Sales Tax Authorities, Registrar of Companies. Information can be collected for the purposes of the Act, such as, to identify tax evaders or recover confirmed dues. It is also proposed to insert a new section 15B which provides for imposition of penalty if the information return is not submitted. 4) Section 31(g) and section 32(1) is being amended to change the name of the Customs and Central Excise Settlement Commission‟ to the Customs, Central Excise and Service Tax Settlement Commission‟. 5) Section 32E(1) is being amended to replace the reference to section 11AB with a reference to section 11AA. 6) Section 32E(1) is also being amended to allow filing of applications of sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 49/2008-CE (NT) dated 24.12.2008 which specifies goods liable for assessment based on Retail Sale Price (RSP). This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Amendments in the First Schedule to the Central Excise Tariff Act, 1985 : 1) Excise duty on cigarettes is being increased by 72% for cigarettes of length not exceeding 65 mm and by 11% to 21% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos. 2) Basic excise duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and chewing tobacco. 3) Tariff items related to cigarettes of length exceeding 75 mm but not exceeding 85 mm and cigarettes of length exceeding 85 mm are being merged into a single tariff item i.e. others [2402 20 90]. Accordingly, tariff item 2402 20 60 and the entries relating thereto are being omitted. 4) The entry 2403 19 occurring against the description Other than paper rolled biris, manufactured without the aid of machine is being substituted with 2403 19 21. 5) The u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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