DGFT- Procedure for export of certified organic products
Public Notice No. 73 (RE-2013)/2009-2014
Dated the 18 November, 2014
Sub: Procedure for export of certified organic products.
In exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14, as amended from time to time, Director General of Foreign Trade hereby lays down the following procedure for export of certified organic products, in supersession of earlier Public Notice No. 72 (RE-2003)/2002-2007 dated 21.07.2004:
(i) A product will be allowed to be exported as "Organic Product" only when accompanied by a Transaction Certificate issued by a Certification Body accredited by National Accreditation Body (NAB) for Organic Products under the National Programme for Organic Production of the Department of Commerce.
(ii) "Organic Products" for export will be so certified only if Produced, Processed and Packed as per the standards laid down in the document "National Programme for Organic Production (NPOP)", available on the website of APEDA http://www.apeda.gov.in/apedawebsite/organic/Organic_Products.htm, as amended from time to time.
- Effect of this Public Notice:
Procedure for export of Certified Organic Products has been notified. This supersedes the earlier Public Notice dated 21.07.2004.
(Pravir Kumar)
Director General of Foreign Trade
E-mail: dgft@nic.in
(Issued from F.No. 01/91/180/190/AM 15/Export Cell)
ERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS CIRCULAR NO 990/14/2014-CX-8, Dated: November 19, 2014 To, Principal Chief Commissioners/Chief Commissioners of Central Excise (All) Principal Chief Commissioners/Chief Commissioners of Central Excise of Central Excise & Customs (All) Director General, Directorate General of Central Excise Intelligence Principal Commissioners/Commissioners of Central Excise (All) Principal Commissioners/Commissioners of Central Excise & customs (All) Web-master, CBEC Madam/Sir, Sub: Clarification regarding availment of CENVAT credit after six months-reg. Attention is invited to the Notification of the Government of India in the Ministry of Finance, Department of Revenue No. 21/2014-CE (NT) dated 11.07.2014, vide which, inter alia, amendment was made in Rule 4(1) and 4(7) of CENVAT Credit Rules, 2004 (CCR, 2004) to prescribe that manufacturer or output service provider shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub-rule (1) of Rule 9. 2. Concerns have been expressed by trade that in view of above changes, the re-credit taken in following three situations may be hit by the time limit of six months prescribed: i. 3rd proviso to Rule 4(7) of CCR, 2004 prescribes that if the payment of value of input service and service tax payable is not made within three months of date of invoice, bill or challan, then the CENVAT Credit availed is required to be paid back by the manufacturer or service provider. Subsequently, when such payment of value of input service and service tax is made, the amount so paid back can be re-credited. ii. According to Rule 3(5B) of CCR, 2004, if the value of any input or capital goods before being put to use on which CENVAT Credit has been taken, is written off or such provisions made in Books of Account, the manufacturer or service provider is required to pay an amount equal to credit so taken. However, when the inputs or capital goods are subsequently used, the amount so paid can be re-credited in the account. iii. Rule 4(5)(a) of CCR, 2004 prescribes that in case inputs sent to job worker are not received back within 180 days, the manufacturer or service provider is required to pay an amount equal to credit taken on such inputs in the first instance. However, when the inputs are subsequently received back from job worker, the amount so paid can be re- credited in the account. 3. The matter has been examined. The purpose of the amendment made by Notification No. 21/2014-CE (NT) dated 11.07.2014 is to ensure that after the issue of a document under sub-rule (1) of Rule 9, credit is taken for the first time within six months of the issue of the document. Once this condition is met, the limitation has no further application. It is, therefore, clarified that in each of the three situations described above pertaining to Rule 4(7), Rule 3(5B) or Rule 4(5) (a) of CCR, 2004, the limitation of six months would apply when the credit is taken for the first time on an eligible document. It would not apply for taking re-credit of amount reversed, after meeting the conditions prescribed in these rules 4. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. Hindi version follows. F. No. 267/72/2013-CX.8 (Pt) Shankar Prasad Sarma OSD, CX.8 |
NEW DELHI, NOV 20, 2014: THE issue before the Bench is - Whether when the assessee facing Customs duty evasion charge deposits certain sums as per High Court's bail order, the same cannot be construed as penal in nature till the time adjudication is pending. And YES is the answer of the Tribunal.
Facts of the case
A) The assessee incurred expenditure for hiring lawyers and other support services to get the bail for him, as the assessee was in judicial custody due to his arrest by DRI in the Custom Duty Evasion case. AO made disallowance of the same. The CIT(A) held that the expenditure was incurred for defending the assessee in criminal proceedings initiated by the Department of Revenue Intelligence (DRI) and was an expenditure which was of personal in nature and not allowable under the provisions of the Act.
B) The assessee made payment as per direction of High Court of Delhi given in the bail order which enlarged the assessee on bail in the criminal case of Custom Duty Evasion. The Assessing Officer disallowed the amount by treating the same as penal in nature, by invoking the provisions under Explanation to section 37(1).
A) The assessee incurred expenditure for hiring lawyers and other support services to get the bail for him, as the assessee was in judicial custody due to his arrest by DRI in the Custom Duty Evasion case. AO made disallowance of the same. The CIT(A) held that the expenditure was incurred for defending the assessee in criminal proceedings initiated by the Department of Revenue Intelligence (DRI) and was an expenditure which was of personal in nature and not allowable under the provisions of the Act.
B) The assessee made payment as per direction of High Court of Delhi given in the bail order which enlarged the assessee on bail in the criminal case of Custom Duty Evasion. The Assessing Officer disallowed the amount by treating the same as penal in nature, by invoking the provisions under Explanation to section 37(1).
In appeal, the CIT (A) granted relief to the assessee. The CIT(A) held that after the search operation was carried out by the DRI, no adjudication in the case of the assessee had taken place by the DRI authorities. It was held that till the time the adjudication took place, the ascertainment of duty and penalty, if any, could not be determined. It was held that the amount paid by the assessee was nothing but an advance towards payment of additional customs duty which was not a penal payment. On the alternate argument of the assessee, the CIT(A) held that there was no requirement on the part of the assessee to prove the incurring of the liability prior to payment to be entitled to deduction in the year of payment. It was held that even if the advance payment towards duty was made, it would be allowed u/s 43B.
Assessee submitted that the fee paid to the lawyers was on account of assessee's arrest by the DRI on the allegation on evasion of Custom Duty, hence, authorities below denied the claim of the assessee without any legal and justified reason.
Revenue submitted that the impugned claimed expenses were incurred by the assessee to defend himself in a criminal case in which the assessee was arrested for the charge of evasion of Custom Duty which is certainly out of ambit of his business or profession activities and expenditure so incurred could not be deducted as business expenditure in the computation of business income of the assessee.
Having heard the parties, the tribunal held that,
A) ++ In the cases where assessee is able to demonstrate positively that the claimed expenditure on legal fees and proceedings is in extricably or proximately related to caring on the business of the assessee more effectively then the same shall be allowable. However, in the cases where the given or claimed expenditure on legal fees and proceedings is remotely connected or unconnected to caring on of business of the assessee, then the same may not be allowable u/s 37 of the Act. Applying this to the facts in extant case, it can be safely inferred that expenditure to defend in custom duty evasion criminal case, having no connection with caring on of business, is held to rightly disallowed by the AO and same disallowance was upheld by the CIT(A) on cogent and reasonable basis. Ergo the assessee's contentions are jettisoned;
++ the assessee was arrested in Custom Duty Evasion criminal case by the DRI and the payment of legal expenses and fees to the lawyers was made to defend and to secure bail for the assessee in that case. In this situation respectfully following the decision of Supreme Court in the case of CIT Vs. H. Hirjee, we reach to the logical conclusion that the authorities below were right in holding that the payment of legal fees and expenses towards defending in a criminal prosecution not allowable as business expenditure because the same was not expended wholly and exclusively for the purpose of business. Accordingly, ground nos. 2 & 3 of the assessee are dismissed;
B) ++ The assessee made payment of Rs.70 lacs as per direction of High Court of Delhi given in the bail order dated 01.02.2007 which enlarged the assessee on bail in a criminal case of Custom Duty Evasion. At the time of payment the custom duty assessment was pending and yet to be completed in future. Obviously, when it is found that the assessee has evaded custom duty then the penalty is obvious and leviable as per the relevant provisions of the Act but until and unless assessment is not completed the amount of custom duty/additional custom duty, interest thereon and penalty cannot be ascertained and in this situation impugned payment made by the assessee cannot be held as penalty or penal in nature at any stretch of imagination;
++ CIT(A) rightly held that till the time the adjudication takes place ascertained of duty and penalty, if any, cannot be determined. The CIT(A) further went to hold that as such situation takes place the amount deposited by the assessee shall first be appropriated towards the custom duty and balance shall go towards interest, if any, and the balance amount so paid, if any, shall be thereafter appropriated towards penalty, if levied, in the case of assessee. We are also in agreement with the findings of the CIT(A) wherein he accepted the alternate argument of the assessee that the additional custom duty of Rs.70 lacs paid by the assessee is an allowable expenditure u/s 43B of the Act. Respectfully following the decision of Special Bench of the ITAT, Chandigarh in the case of DCIT Vs. Glaxo Smithkline Consumer Healthcare Ltd. we hold that section 43B allow deduction of impugned payment as additional custom duty irrespective of the previous year in which the liability to pay such sum was raised against the assessee. Accordingly, we are unable to see any perversity, ambiguity or any other valid reason to interfere with the impugned order and we uphold the same.
Assessee submitted that the fee paid to the lawyers was on account of assessee's arrest by the DRI on the allegation on evasion of Custom Duty, hence, authorities below denied the claim of the assessee without any legal and justified reason.
Revenue submitted that the impugned claimed expenses were incurred by the assessee to defend himself in a criminal case in which the assessee was arrested for the charge of evasion of Custom Duty which is certainly out of ambit of his business or profession activities and expenditure so incurred could not be deducted as business expenditure in the computation of business income of the assessee.
Having heard the parties, the tribunal held that,
A) ++ In the cases where assessee is able to demonstrate positively that the claimed expenditure on legal fees and proceedings is in extricably or proximately related to caring on the business of the assessee more effectively then the same shall be allowable. However, in the cases where the given or claimed expenditure on legal fees and proceedings is remotely connected or unconnected to caring on of business of the assessee, then the same may not be allowable u/s 37 of the Act. Applying this to the facts in extant case, it can be safely inferred that expenditure to defend in custom duty evasion criminal case, having no connection with caring on of business, is held to rightly disallowed by the AO and same disallowance was upheld by the CIT(A) on cogent and reasonable basis. Ergo the assessee's contentions are jettisoned;
++ the assessee was arrested in Custom Duty Evasion criminal case by the DRI and the payment of legal expenses and fees to the lawyers was made to defend and to secure bail for the assessee in that case. In this situation respectfully following the decision of Supreme Court in the case of CIT Vs. H. Hirjee, we reach to the logical conclusion that the authorities below were right in holding that the payment of legal fees and expenses towards defending in a criminal prosecution not allowable as business expenditure because the same was not expended wholly and exclusively for the purpose of business. Accordingly, ground nos. 2 & 3 of the assessee are dismissed;
B) ++ The assessee made payment of Rs.70 lacs as per direction of High Court of Delhi given in the bail order dated 01.02.2007 which enlarged the assessee on bail in a criminal case of Custom Duty Evasion. At the time of payment the custom duty assessment was pending and yet to be completed in future. Obviously, when it is found that the assessee has evaded custom duty then the penalty is obvious and leviable as per the relevant provisions of the Act but until and unless assessment is not completed the amount of custom duty/additional custom duty, interest thereon and penalty cannot be ascertained and in this situation impugned payment made by the assessee cannot be held as penalty or penal in nature at any stretch of imagination;
++ CIT(A) rightly held that till the time the adjudication takes place ascertained of duty and penalty, if any, cannot be determined. The CIT(A) further went to hold that as such situation takes place the amount deposited by the assessee shall first be appropriated towards the custom duty and balance shall go towards interest, if any, and the balance amount so paid, if any, shall be thereafter appropriated towards penalty, if levied, in the case of assessee. We are also in agreement with the findings of the CIT(A) wherein he accepted the alternate argument of the assessee that the additional custom duty of Rs.70 lacs paid by the assessee is an allowable expenditure u/s 43B of the Act. Respectfully following the decision of Special Bench of the ITAT, Chandigarh in the case of DCIT Vs. Glaxo Smithkline Consumer Healthcare Ltd. we hold that section 43B allow deduction of impugned payment as additional custom duty irrespective of the previous year in which the liability to pay such sum was raised against the assessee. Accordingly, we are unable to see any perversity, ambiguity or any other valid reason to interfere with the impugned order and we uphold the same.
Mere claiming forex fluctuation loss under wrong provision won't lead to levy of concealment penalty on assessee
IT : Merely because assessee had claimed deduction of foreign exchange fluctuation loss on account of acquisition of fixed assets wrongly under section 37 instead of dealing same under section 43A, no penalty would be levied under section 271(1)(c)
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