Rules for refund of anti-dumping duty Anti-dumping duty, while worked out by the designated authority on the basis of dumping margin, is generally notified as a specific amount. In other words, the notification will require that on all imports of the specified item from the specified exporter / country, a fixed duty of Rs xx will be levied and collected. However section 9AA of the Customs Tariff Act 1975, under which the duty is levied, allows for refund if the anti-dumping duty is in excess of actual margin of dumping in a particular case. In practice, the procedure for determination of whether refund was eligible was not clear, and the field formations lacked the necessary expertise to process such a claim.

1. UDYOG TAX NEWS FLASH
21st JANUARY 2012
Update 20 January 2012
Major changes in customs and excise duties on gold and silver
Major changes have been made in the import duty tariff for gold, silver, diamonds and platinum, by
notifications 1/2012-Customs, 2/2012-Customs, and 3/2012-Customs, all dated 16 January 2012,
which can be seen at the CBEC site, at http://cbec.gov.in/customs/cs-act/notifications/notfns-
2012/cs-tarr2012/cs01-03-2012.pdf.
The changes have essentially consisted in shifting the duty base from unit (rupees per 10 grams) to
percentage of value. This takes advantage of the rising prices of the items. At the same time, clearly
to pre-empt underinvoicing, the tariff values for the purpose of customs duties have been fixed under
notification 3/2012-Customs(NT) dated 16 January 2012: see http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-nt2012/csnt03-2012.htm, and http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-nt2012/csnt04-2012.htm,
In line with this, the duties payable on sale of
these items from an export-oriented
undertaking to the domestic tariff area have
also been changed to ad valorem rates, vide
notification 3/2012-CE dated 16 January
2012 that amends notification 23/2003-CE.
This can be downloaded at
http://cbec.gov.in/excise/cx-act/notfns-
2012/cx-tarr2012/ce03-2012.htm.
Similarly, excise duties on gold and silver
have been shifted to value base, under
notification 2/2012-CE dated 16 January
2012, which can be seen at
http://cbec.gov.in/excise/cx-act/notfns-
2012/cx-tarr2012/ce02-2012.htm.
According to reports, the changes will
generate additional revenue of Rs 500 to 600
crores in the balance fiscal year.
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 1

2. Re-credited SAD in DEPB / Reward scheme can be used upto 31 March
A special additional duty of customs (SAD) of 4% is levied on most imports, to countervail the VAT
that would be payable on like items manufactured and sold in India. This SAD is refundable if the
item is subsequently sold on payment of VAT. Where SAD is debited in a DEPB/ Reward scheme
scrip instead of payment in cash, the refund too is given by re-credit in the scrip. Under Circular
30/2011-Customs dated 19 July 2011, a time limit upto 15 September 2011 had been prescribed for
use of the re-credited amounts. This has now been extended upto 31 March 2012.
Safeguard duty imposed on pthalic anhydride
Increased imports of pthalic anhydride into India were found to be causing serious injury to domestic
industry. The Director-General (Safeguard) found that the situation necessitates imposition of a
provisional safeguard duty. Accordingly the government has imposed a safeguard duty of 10% on
the import of pthalic anhydride into India, for a period of 180 days, by notification 1/2012-Customs
(SG) dated 17 January 2012. See the notification at http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-sg2012/cssg01-2012.htm.
It may be noted that safeguard duty, unlike anti-dumping duty, is not country-specific or exporter-
specific. However, the law provides that if the source of the goods is a developing country, then the
duty may not be levied unless imports from that country three per cent of the total imports of that
article into the country. If the source of the article is more than one developing country, then the duty
may not be levied unless the aggregate imports from these countries exceeds nine per cent of the
total imports of the article into the country.
Changes in tariff values of brass scrap and poppy
seeds
The CBEC has notified changes in tariff value of
brass scrap (all grades) to USD 4007 per MT and of
poppy seeds to USD 1970 per MT. The notification,
number 2/2012-Customs (NT) dated 13 January
2012 can be seen at http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-nt2012/csnt02-
2012.htm.
Rules for refund of anti-dumping duty
Anti-dumping duty, while worked out by the
designated authority on the basis of dumping
margin, is generally notified as a specific amount. In
other words, the notification will require that on all
imports of the specified item from the specified
exporter / country, a fixed duty of Rs xx will be
levied and collected. However section 9AA of the
Customs Tariff Act 1975, under which the duty is
levied, allows for refund if the anti-dumping duty is
in excess of actual margin of dumping in a
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 2

3. particular case. In practice, the procedure for determination of whether refund was eligible was not
clear, and the field formations lacked the necessary expertise to process such a claim.
Now the central government has amended the Custom Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995,
to put in place a procedure for determining whether dumping duty has been collected in excess of the
margin of dumping. These changes are notified under notification 6/2012-Customs(NT) dated 19
January 2012.
The central government has also notified a new set of rules under notification 5/2012-Customs(NT)
dated 19 January 2012 to govern such refunds. The new rules are called the Refund of Anti-Dumping
Duty (Paid in Excess of Actual Margin of Dumping) Rules, 2012. In terms of these rules, the
provisions of unjust enrichment will apply to the refunds.
The new rules for refund, as well as the amendments that provide for determination of amount paid
in excess of margin of dumping, can be downloaded at http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-nt2012/csnt05-06-2012.pdf.
Circumvention of anti-dumping duty defined
In the same notification 6/2012-Customs(NT) dated 19 January 2012, referred to above, an important
amendment to the rules for anti-dumping duty
has defined what constitutes ‘circumvention’
of anti-dumping duty. A new rule 25 has been
inserted for the purpose. Under this rule,
(1) If an article that is subject to anti-dumping
duty is imported in unassembled, semi-
finished or incomplete form and the operation
is completed in India, it shall be considered to
circumvent the anti-dumping duty if (i) the
operation commenced or increased after, or
just prior to, the imposition of the anti-
dumping duty; and (ii) the value consequent
to the assembly, finishing or completion of
the article is less than 35% of the cost of the
assembled, finished or completed article, not
including the value of the imported parts and
also not including intellectual property costs
and consultancy charges.
(2) If the description, name or composition of
the article are altered by some process in
the exporting country before export, this is
considered circumvention.
(3) If the article that is subject to anti-
dumping duty is imported through some other
exporter or country not subject to anti-
dumping duty, by a change in the trade
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 3

4. practice or pattern of sales, this is considered circumvention.
The Designated Authority will carry out investigations to determine whether there has been
circumvention in terms of this rule.
Service tax on prepayment of loans
In these columns we had earlier reported the issue of service tax being demanded from banks and
financial institutions on foreclosure charges. This was stated to be part of the value of the service of
giving loans. In a case of SIDBI, the Tribunal at Delhi had held that early closure of a loan account
was not a service but was termination of service. Now the Ahmedabad bench of the Tribunal has
differed with this view, and held that the charges are taxable. The case is reported as HUDCO v
CST, 2011-TIOL-1606-CESTAT-AHM.
Visit
www.udyogsoftware.com
Call us on
9320124365
or
022-67993535
Update Written
By Radha Arun,
Consultant To
Udyog Software ( India) Ltd
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 4