We are in Himachal and are free from Excise duty but when we go for Export from Himachal, Excise Department ask for MoT charges to be paid for the sealing of cartons and for signing the ARE1 documentations.
As we are in excise free zone, we do not have any Excise Registration Number,
In such situation, How can we pay the MoT charges and what will be the charge for MoT charges. As per Excise, after lunch we have to pay for the Full Block for 8 hrs.
Kindly help and provide the statutory procedures for the same.
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Please refer para 7 of the Circular No. 952/13/2011-CX dated 08-09-2011 in this regard and MOT charges can be paid through GAR-7 Challan by depositing the MOT in the Bank.
A detailed article on the MOT controversy written by CA Pradeep Jain for your kind information to understand this matter lucidly:-
Merchant overtime fee (MOT charges) are the charges which are required to be paid by the exporter/ assessee who is availing the services of Central Excise Officers, in accordance with any prescribed procedure, beyond office hours or on Sunday, Saturdays or public holidays i.e. is after the official hours. The rates for the same are prescribed under the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998.The table for the same is as under:-
|Fee per hour or
part thereof on
|Fee per hour or
||6 AM – 8 PM
|8 PM – 6 AM
|6 AM – 8 PM
|8 PM- 6 AM
|1. Appraisers Superintendent
Customs Preventive and
Superintendent Central Excise
|2. Air Customs Officers, Examiners
Preventive Officers and Inspectors
of Central Excise
|3. Class IV Staff
Thus, it prescribes the rates for normal working hours as well as beyond working hours as well as on holiday. As such the department says that the charges to be paid for normal working hours also.
But the provisions for the same have been prescribed in the CBEC’s Supplementary Instructions in Chapter 18, Part-II. The said provisions are reproduced hereunder for ready reference:-
Over time Fee
1.1 Wherever an assessee or exporter is requires the services of Central Excise Officers for supervision in accordance with of any procedure specified in this regard by rules or instructions beyond office hours or on Sundays, Saturdays or public holidays and where there is no specific posting of Officers in shifts by any Office order, he shall be required to pay Merchant Overtime at the rates specified under the Customs Act, 1961 under Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998.
1.2 If a manufacturer or exporter requisitions the services of Central Excise Officers for supervision and examination of export cargo and stuffing in containers at his premises, such Officers also discharges functions of a “Customs Officers”.
Thus, it is clear that an exporter is required to pay Merchant Overtime only if supervision by the Excise Officers is done:-
- beyond office hours, or
- on Sundays, Saturdays or public holidays, or
- where there is no specific posting of Officers in shifts by any Office order.
There are many cases in which it has been held that the MOT fee cannot be charged for services of Central Excise Officers availed during the official hours.
The Board’s directive contained in Circular not enforceable in law as it is ultra vires Regulation (3) of Customs (Fees for Rendering Services by Customs Officers) Regulations. Such charges are not leviable under the Regulations for supervision by officers of department during their normal office working hours. Appellants entitled to refund of MOT charges paid for supervision of their stuffing work for normal office working hours of the supervising officers of department. Impugned order set aside. Appeal of the assessee allowed. (Para.3)
If the services of stuffing of goods in the container was rendered by the officers within his Range only i.e. within his normal place of work, no MOT charges is payable for stuffing of goods carried out during the working days only. The refund allowed in respect of such charges. Appeal of the assessee is allowed. (Para.4)
As the Supervising Officer has worked at his Normal place of work and not beyond the customs Area, during Normal working days, during working hours within their Range, no MOT is payable. There is nothing on record to prove that the services were provided beyond the normal working hours. In absence of which demand of MOT charges is not sustainable in terms of Para 3 of the Chapter 13 of the Customs Manual of Supplementary instructions. The Appellants has deposited the MOT charges in respect of services provided beyond Normal Working Hours. The appeal filed by the Revenue is dismissed. (Paras.6, 7)
Stuffing of goods had taken place in the appellants’ factory coming within the jurisdiction of the Central Excise Range. The work of stuffing was admittedly a Customs work which, being a part of loading of the goods. The Central Excise Superintendent attending to the Customs work acted as a Customs officer. The service of supervision of stuffing of goods in container was rendered by the officer within his Range only, i.e., within his normal place of work. As regards the time of work, it appears, the work was carried out on working days during working hours only. The pleading has not been rebutted by the lower appellate authority. Hence it has to be held that the stuffing work was carried out during the working hours on working days only. None of the conditions for levy of MOT charges was satisfied in this case. Hence, the demand is set aside and this appeal is allowed. (Para 3).
But the Department is charging MOT fee from the assessees even when the central excise officers are being asked to work within the official hours.
Representations have also been made to the Department to consider the matter at hand and clarify the situation regarding the charging of MOT fees from assessees for work done by the excise officers within official hours. But the department does not hear the same. The Board should consider the representation and help the exporters in such an era of global recession.
Thanks Mr. Pradeep,
But can this challan GAR-7 can be depostied into Bank without having any Excise Registration Number, please specify.
Though it is mandatory to mention the ECC number on the GAR-7 Challan But you may specify PAN number on the Challan stating that you are not registered with Central Excise Department. Also provide the intimation to the concerned authorities in this regard.
Dear Sharma Ji
I do not understand why you want to pay MOT charges. MOT charges are paid for sealing/stuffing of container at factory by the central excise officers after certain office hours. Here I want to add one more thing that You can not ask the central excise officer as right to make sealing/stuffing at factory. The department has allowed the manufacturer exporter to clear the goods from factory on the basis of his own seal and no official seal by central excise officers is required at all.
Yes, agreed with 'Neeraj Sir' that there is a option available to exporter to export the goods without sealing under the supervision of Central Excise Officers in the case of Free Shipping Bill. But what if the Shipping Bill is prepared under the export promotion scheme.
And moot question is how to MOT charges to the revenue department, if the exporter is not registered with Central Excise Department. Though, I had suggested solution that on the basis of PAN it may be deposited, but it seems that this option is not workable as concerns raised by Mr. Pawan Sharma.
I think that this query needs some more brainstroming from ourside. So, I am gearing up myself with one more sleepless night.
Neeraj Sir, I would also need your expertise opinion and kind co-operation to solve this query. Hoping for the same.
We can go back to issue id no 3175, where similar issue was replied.
In my view all export even export under scheme can be cleared with self sealing except in case of export to Nepal and Bhutan, Now after 01.03.2012 Nepal has been deleted from the list so it is only Bhutan. As far as payment of MOT by a non assessee is concerned, It appears it is not possibble except by taking a temporary registration , where a temporary PAN based no. is generated.
If some other view is there I would also be curious to know and it is always welcome.
The Board Circular viz., 952/13/2011-CX., Dated: September 8, 2011 at para 7 ibid inter alia mentions ‘any other premises other than the jurisdiction of the Central Excise officer’ could according to me will possibly cover the query under reference. Therefore, MOT charges will be squarely applicable and such premises of the manufacturer could be treated in the same manner as ‘Merchant Exporter’. Further, in my opinion, Letter of Undertaking (LUT) may be executed by the manufacturer ( as a Merchant Exporter) before the jurisdictional Divisional officer who authorizes/deputes the Central Excise officer for supervision of export cargo in the premises of the manufacturer. Later, the said manufacturer will be squarely responsible for getting proof of exports etc.,. Further, reliance is also placed by me on the decision in the case of M/s New Vinod Silk Mills Pvt. Ltd. vs. CCEx, Mumbai-I, Order no. A/199/C-IV/SMB/WZB/MUM/2007 dated 15.01.2007 wherein the Bench had held that in case of merchant exporter executing the bond/undertaking to export the goods, the duty liability is to be recovered from the merchant exporter, who has furnished the bond. manufacturer. The MOT charges as certified by the jurisdictional Central Excise Officer may be paid by the said manufacturer by quoting the LUT no. in the GAR challan endorsed by the Central Officer may be directly paid to the bank under Misc. code ( 038---)