Excise: valuation of physician samples manufactured as job work It is now settled that physician samples that are distributed free by the manufacturer must be valued by adopting, pro rata, the value mentioned on the pack of identical goods. But what if the manufacturer sells the samples to the brand owner, who in turn distributes them? The Tribunal has held, following its earlier decisions on the subject, that such samples are to be valued on transaction value basis. The decision to this effect, Final Order 420 to 438/2012 dated 1 May 2012 of CESTAT, Chennai, in the case of Allianz Bio Sciences & Others v CCE Puducherry, is reported in Taxindiaonline.com. See http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15042.

1. UDYOG TAX NEWS FLASH
28th MAY 2012
Anti dumping duties extended: zinc oxide, white cement
The central government has, by notification 27/2012-Customs (NT) dated 18 May 2012, extended the anti
dumping duty on zinc oxide from China, levied under notification 64/2007-Customs dated 7 May 2007. The
latter notification will now be valid uptil and inclusive of 6 May 2013. See http://cbec.gov.in/customs/cs-
act/notifications/notfns-2012/cs-add2012/csadd-27-2012.htm
The central government has, by notification 28/2012-Customs (NT) dated 21 May 2012, extended the anti
dumping duty on white cement from UAE and Iran, levied under notification 56/2007-Customs dated 12
April 2007. The latter notification will now be valid uptil and inclusive of 11 April 2013. See
http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-add2012/csadd-28-2012.htm.
Drawback rates for gold and silver jewellery revised
The rates of duty drawback given on export of articles of
jewellery and parts thereof of gold and silver have been
revised vide notification 46/2012-Customs (NT) dated 24 May
2012. The notification can be seen at
http://cbec.gov.in/customs/cs-act/notifications/notfns-
2012/cs-nt2012/csnt46-2012.htm.
New procedure at Vallarpadam International Container
Terminal
Vallarpadam container terminal at Kochi had been facing
various teething troubles, including the insistence of customs
authorities that every imported container must be taken to
the CFS for customs inspection. This added to the cost as well
as to congestion at the terminal. Now the Director General of
Export Promotion has reportedly formulated a procedure to
ease the problem. Under this, containers that are being
transhipped, as well as containers that are being exported or
imported from the port, are to be cleared at the SEZ, while
only containers that have originated inland or are being
transported inland are to be cleared at the CFS. Reports on
this can be seen at
http://www.thehindubusinessline.com/industry-and-
economy/logistics/article3446399.ece?homepage=true&ref=wl_home.
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. Karaikal ICD a permitted port under export promotion schemes
The central government has issued notification 37/2012-Customs dated 24 May 2012, under which thirty
one notifications issued under various export promotion schemes have been amended to include Karaikal
ICD in the list of permitted ports under the scheme. The notificaton can be seen at .
http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-tarr2012/cs37-2012.htm
Amendment of bill of entry to include goods not declared
An importer filed bill of entry for one invoice, but the consignment contained goods covered under two
invoices. The goods were cleared under the electronic system, without examination, and out of charge order
was issued. Thereupon the importer realised his mistake and presented the second invoice and sought
amendment of the bill of entry. The department, instead, confiscated the goods and imposed penalty on the
importer. This was struck down by the CESTAT by Final order C/A/9612-CUS dated 15.3.2012 of Delhi bench
in the case of Commissioner of Customs, New Delhi, v The Energy
Research Institute. The CESTAT held that section 149 of the Customs
Act allows for such correction.
Excise: valuation of physician samples manufactured as job work
It is now settled that physician samples that are distributed free by
Combo of Indirect
the manufacturer must be valued by adopting, pro rata, the value
mentioned on the pack of identical goods. But what if the
manufacturer sells the samples to the brand owner, who in turn Tax Integratable
distributes them? The Tribunal has held, following its earlier decisions
on the subject, that such samples are to be valued on transaction with Any ERP
value basis. The decision to this effect, Final Order 420 to 438/2012
dated 1 May 2012 of CESTAT, Chennai, in the case of Allianz Bio Modules of iTAX
Sciences & Others v CCE Puducherry, is reported in
Taxindiaonline.com. See  Excise
http://www.taxindiaonline.com/RC2/inside2.php3?filename=bn
ews_detail.php3&newsid=15042.  Service Tax
 VAT and CST
Excise: Cenvat credit on boiler components: clarifications galore
Last week we had carried an item regarding re-clarification issued by  TDS & e-TDS
the CBEC on eligibility of boiler components to Cenvat credit at the
buyer’s end, to the effect that items used for foundation or support  EOU
structures were not eligible. Earlier the CBEC had clarified that
structural components of boilers were eligible for Cenvat credit. A  SEZ
popular taxation portal had questioned the need for this clarification,
and had also slammed the re-clarification as confusing, till the
Member concerned in the CBEC telephoned and patiently explained
the matter to them. See report in
http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15062 .
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. In fact, the whole confusion has arisen because the denial of credit is being interpreted as ‘re-classification’
of the goods, which it is not. The Cenvat Credit Rules exclude items that perform certain functions,
irrespective of their classification codes; so there is no contradiction in their classification as boiler
components and denial of Cenvat credit on the ground of the type of function that they perform as boiler
components.
Service of order in central excise: speed post not a valid means
The central excise department despatched an adjudication order by speed post to the assessee. Two years
after the order, it began recovery proceedings pursuant to the order, and at that point the assessee, who
claimed that he had not received the order, asked for and received a copy thereof. He went in appeal to the
Tribunal, which dismissed his appeal as time-barred, taking it that he must have received, two years back,
the order that had been despatched by speed post.
The High Court struck down this and allowed the appeal of the assessee, because section 37C of the Central
Excise Act requires that an order must be served by tendering it or by sending it by registered post with
acknowledgement due, to the person for whom it is intended or his authorised agent. Despatch by speed
post does not satisfy the requirements of section 37C, hence the contention of the assessee that the order
had not been served on him was accepted. It may be noted that section 37C is applicable to service tax also.
For customs, the corresponding provision in section 153 of the Customs Act is under amendment to include
provision for service by a courier recognised by the Commissioner of Customs.
The Bombay High Court order dated 3 Feb 2012 in Central Excise Appeal no. 100 of 2011, Amidev Agro Care
P Ltd v Union of India, can be viewed at http://bombayhighcourt.nic.in by entering these details in the query
form.
Intellectual Property Service: what is “transfer of the right to use”?
Eicher Good Earth gave TafeMotors & Tractors sole right to Visit
use the trade mark ‘Eicher’ in respect of tractors, and www.udyogsoftware.com
received a sum in consideration. The permission was in Call us on
perpetuity, but carried certain conditions. The central excise
department demanded service tax on this transaction, which
9320124365
Eicher resisted on the ground that this was not a ‘temporary or
transfer’ as covered in the taxable category in Section 022-67993535
65(55a) of the Finance Act 1994, but was a permanent
transfer amounting to sale, which was not exigible to service
Update Written
tax. The Tribunal found that it was not a transfer at all,
By Radha Arun,
because if the conditions were not satisfied, the trade mark
would revert to the licensor. Hence the transaction was Consultant To
neither covered or excluded from Section 65(55a) but was Udyog Software ( India) Ltd
taxable under Section 65(55b) of the Finance Act 1994 as
permission to use or enjoy an intellectual property right. The
CESTAT Delhi Final Order no. ST/A/23/12-CU (DB) dated
28.8.2011 in the case of Eicher Good Earth v Commissioner
of Service Tax, New Delhi, is reported in both
Taxindiaonline.com and Taxmanagementindia.com.
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