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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 ..... 14-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 clause or Schedule. These dates may be carefully noted. 2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the four Annexes appended to this letter. Annex I contains Chapter wise changes relating to Customs; Annex II contains Chapter wise changes relating to Central Excise. Annex III contains the clarifications being issued on various matters. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct "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 actual user condition. S.Nos.51 and 73 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 and new S.Nos.73A, 187B and 230A of notification No.12/2014-Customs, dated 11th July, 2014 refer. Chapter 16 to 21: No change Chapter 22: 1) Basic Customs Duty on denatured ethyl alcohol is being reduced from 7.5% to 5%. S.No.96 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 notification No.12/2014-Customs, dated the 11th July 2014 [new S.No.126C] refers. 6) Exemption from Basic Customs Duty and CVD is being granted on re-gasified LNG for supply to Pakistan. 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.138C] refers. Condition 8B may be referred for details. 7) Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) imported by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /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. As a result, Basic Customs Duty on Polystyrene (other than moulding powder) is being increased from 1.15% to 7.5%. Notification No.17/2014-Customs, dated the 11th July 2014 refers. Chapter 50: No change Chapter 51 and 52: 1) The list of specified goods required by handicraft exporters is being expanded so as to include wire rolls in the same for the purpose of granting the facility of duty free import. S.No.206 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated the 11th July 2014 refers. 2) Non-fusible embroidery motifs or prints are being included in the list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. Chapter 72 1) Basic Customs Duty on stainless steel flat products (CTH 7219 and 7220) is being increased from 5% to 7.5%. S.No.334 of notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 refers. Chapter 73 1) Basic Customs Duty is being reduced from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. Notification No.12/2012-Customs, dated 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.335A] refers. Chapter 74 1) Full exemption from Basic Customs Duty is being provided on flat copper wire for use in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms, 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 17th March, 2012 as amended by notification No.12/2014-Customs, dated 11th July, 2014 [new S.No.433B] refers. 7) Basic Customs Duty on specified telecommunication products not covered under the ITA (Information Technology Agreement) is being increased from NIL to 10%. Clause 87 of the Finance (No.2) Bill, 2014 refers. Notification No.24/2005-Customs, dated 1st March, 2005 is being amended vide notification No.11/2014-Customs, dated 11th July, 2014 so as to exclude these specified tariff items, which will henceforth attract the tariff rate of basic customs duty of 10%. However, all goods required for the manufacture of the aforesaid telecommunication products would continue to enjoy the exemption from basic customs duty. Notification No.11/2014-Customs, dated 11th July, 2014 may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 provided to goods imported by National Technical Research Organisation (NTRO). Notification No.39/96-Customs, dated 23rd July, 1996 as amended by notification No.20/2014-Customs, dated 11th July, 2014 refers. 3) Plants & Equipment imported prior to 2008 for use in projects financed by the UN or an international organization, which hitherto could not be transferred / sold / re-exported out of the project site, are now being allowed to be transferred / sold / re-exported from the project site subject to the conditions specified therein. Notification No.84/97-Customs, dated the 11th November, 1997 as amended vide notification No.22/2014-Customs, dated the 11th July 2014 refers. 4) The requirement of certification by Ministry of Road Transport (or NHAI) for availing of customs duty exemption on specified goods required for construction of roads is being done away with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anges 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 (Existing Rate) Rs. per 1000 sticks (New Rate) 24022010 Non filter not exceeding 65 669 1150 24022020 Non-filter exceeding 65 but not exceeding 70 2027 2250 24022030 Filter not exceeding 65 669 1150 24022040 Filter exceeding 65 but not exceeding 70 1409 1650 24022050 Filter exceeding 70 but not exceeding 75 2027 2250 24022060 Filter exceeding 75 but not exceeding 85 2725 Tariff item Omitted 24022090 Other 3290 3290 3) 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. Clause 105 of the Finance (No.2) Bill, 2014 and S.No.35 of notification No.12/2012-Central Excise dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014, may be referred to for details. These changes will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Accordingly, the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of solar photovoltaic cells or modules. Notification No.12/2012- Central Excise as amended vide Notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.133A] refers. 2) Semi-mechanized units manufacturing safety matches, which attract concessional excise duty of 6%, are being allowed to carry out the processes of „Pasting of labels‟ and „Packing‟ with the aid of power. S.No.142 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. 3) Full exemption from excise duty is being provided to DDT manufactured by Hindustan Insecticides Limited for supply to the National Vector Borne Diseases Control Programme (NVBDCP) of the Ministry of Health & Family Welfare. Notification 12/2012- Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 [new S.No.144A] refers. 4) Full exemption from excise duty is being provided on plastic materials reprocessed out of the scrap or waste and cleared into the DTA by an EOU. This would bring EOU at par with domestic and SEZ Units. S.No.147 of Notification No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g imposed on Polyester Staple Fiber and Polyester Filament Yarn manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles w.e.f. 11th July, 2014. Notification No.1/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.8/2014-Central Excise, dated the 11th July 2014 [new S.No.70A] and S.No.172A of notification No.12/2012-Central Excise, dated 17th March, 2012 as amended vide notification No.12/2014-Central Excise dated 11th July, 2014 refer. Chapter 56-63: No Change Chapter 64: 1) Excise duty is being reduced from 12% to 6% on footwear of retail price exceeding ₹ 500 per pair but not exceeding ₹ 1,000 per pair. Footwear of retail price upto ₹ 500 per pair will continue to remain exempted. S.No.180 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 65 to 69: No Change Chapter 70: 1) Full exemption from excise duty is being provided on solar tempered glass used in the manufacture of solar photovoltaic cells or modules, solar power generating equipment or systems and flat plate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise duty on hand operated sewing machine (2% without CENVAT / 6% with CENVAT) is being rationalized by levying concessional excise duty on sewing machines other than those operated with electric motors (whether in-built or attachable to the body). S.No.97 of notification No.1/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.8/2014-Customs, dated the 11th July 2014 and S.No.58 of notification No.2/2011- Central Excise, dated 1st March, 2011 as amended vide notification No.9/2014-Customs, dated the 11th July 2014 refer. Chapter 85: 1) Excise duty on Metal Core PCB and LED driver for use in the manufacture of LED lights and fixtures and LED lamps 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.321A] refers. 2) Full exemption from excise duty is being provided to parts consumed within the factory of production for the manufacture of non-conventional energy devices, and when such use in elsewhere than in the factory of production, the exemption is being allowed subject to actual user condition. Notification No.12/2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM). Notification No.13/2014-Central Excise dated 11th July, 2014 refers. 5) Full exemption from Excise Duty is being provided to goods supplied to National Technical Research Organisation (NTRO). Notification No.64/95-Central Excise, dated 16th March, 1995 as amended vide notification No.10/2014-Central Excise dated 11th July, 2014 refers. 6) Plants & Equipment supplied prior to 2008 for use in projects financed by the UN or an international organization, which hitherto could not be transferred / sold out of the project site, are now being allowed to be transferred / sold from the project site subject to the conditions specified therein. Notification No.108/95-Central Excise, dated the 28th August, 1995 as amended vide notification No.11/2014-Central Excise, dated the 11th July 2014 refers. 7) Intermediate goods manufactured and consumed captively for further manufacture of matches is being fully exempted. Notification No. 67/95-CE dated 16th March, 1995 as amended by Notification No.19/2014- Central Excise, dated the 11th July 2014 refers. 8) Education cess and secondary & higher education cess (customs component) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um whose names appear in the contract can import goods under the said notification. 3) Under S.No.7 of notification No. 39/96-Cus dated 23.7.1996, paints, consumables, metallic and non-metallic materials etc. in any form and articles thereof conforming to aeronautical specification accompanied with certificate of conformance / release note / airworthiness certificate for development are exempt from BCD and CVD subject to conditions specified thereon. Representations have been received regarding the scope of the said exemption. It is clarified that the exemption is available to all materials in any form and articles thereof, subject to the overall condition that they conform to aeronautical specification accompanied with certificate of conformance/release note/airworthiness certificate for development. CENTRAL EXCISE 1) In pursuance of discussions in the Tariff Conference of Chief Commissioners of Central Excise held on 16-17 September, 2013 at Pune, a clarification was sought regarding the exemption from education cess and secondary & higher education (SHE) cess on the clean energy cess leviable on coal vide notifications No.28/2010-CE and No.29/2010-CE, both dated 22.06.2010. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CHANGES Amendments in the Customs Act, 1962 1) The Customs Act, 1962 is being amended so as to provide that a reference in that Act to a Chief Commissioner of Customs or a Commissioner of Customs may also include a reference to the Principal Chief Commissioner of Customs or the Principal Commissioner of Customs, as the case may be. It also seeks to provide for consequential amendments in the Act. 2) Section 3 is being amended so as to provide for inclusion of the Principal Chief Commissioner of Customs and Principal Commissioner of Customs in the class of officers of customs. 3) Section 15(1) is being amended to provide for determination of rate of duty and tariff valuation for imports through a vehicle in cases where the Bill of Entry is filed prior to the filing of Import Report (as the Manifest is called in case of imports by land). 4) Section 25 is being amended to provide that the customs duties on mineral oils including petroleum & natural gas extracted or produced in the continental shelf of India or the exclusive economic zone of India shall not be recovered for the period prior to 7th February, 2002. 5) Section 46(3) is being amended to allow the filing of a Bill of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular order being cited as a precedent decision on the issue has not been appealed against for reasons of low amount. Amendments in the Customs Tariff Act, 1975 1) Section 8B of the Customs Tariff Act, 1975 is being amended so as to provide for levy of safeguard duty on inputs/raw materials imported by an EOU and cleared into DTA as such or are used in the manufacture of final products & cleared into DTA. This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Clause 86 of the Finance (No.2) Bill, 2014 refers. Amendment in the First Schedule to the Customs Tariff Act, 1975: 1) Tariff item 2402 20 60 is being omitted as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act, 1985. 2) The tariff rate of basic customs duty on goods falling under tariff items 8517 62 90 and 8517 69 90 is being increased from Nil to 10%. 3) The unit quantity code against certain entries is being changed. The changes at 1) and 2) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. Clause 87 of the Finance (No.2) Bill, 2014 refers. Ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute a Review Committee by way of an order instead of by way of a notification. 11) Section 35C(2A) is being amended to omit the first, second and third proviso in view of substitution of section 35F with a new section. 12) Section 35E is being amended to insert a proviso in sub-section (3) to vest the Board with powers to condone delay for a period upto 30 days for review by the Committee of Chief Commissioners of the orders in original passed by the Commissioner of Central Excise. 13) Section 35F is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at the first stage and another 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of ₹ 10 crore. 14) Section 35L is being amended so as to clarify that determination of disputes relating to taxability or excisability of goods is covered under the term „determination of any question having a relation to rate of duty‟ and hence, appeal against Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th July, 2014 refers. Amendments in the Central Excise Rules, 2002: 1) E-payment is being made mandatory for all assessees subject to certain exceptions. 2) Sub-rule (3A) of rule 8 is being substituted to provide that in case of default in payment of duty, the assessee shall on his own pay a penalty of 1% per month on the amount of duty not paid for each month or part thereof. Notification No.4/2002-Central Excise (NT) dated 1st March, 2002 as amended vide notification No.19/2014-Central Excise dated 11th July, 2014 refers. Amendments in the Central Excise Valuation Rules, 2004: 1) The Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is being amended so as to provide that in cases where excisable goods are sold at a price below the manufacturing cost and profit and there is no additional consideration flowing from the buyer to the assessee directly or from a third person on behalf of the buyer, value for the assessment of duty shall be deemed to be the transaction value. Notification No.45/2000-Central Excise (NT) dated 30th June, 2000 as amended vide notification No.20/2014-Central Excise dated 11th July, 2014 refers. Authority for Advance R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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