‘Excise duty is payable on all goods
fabricated at construction sites’
CHATROOM
T N C RAJAGOPALAN
We had re-imported goods
that had been exported by us
and rejected by the buyer,
who found them to be
defective. We are not claiming
any exemption, as the time
limits have passed. We are
ready to pay duties as per
Section 20 of the Customs Act,
1962. The Customs say that in
that case, the goods have to be
valued as per Section 14 of the
Customs Act, 1962 read with
the related Customs
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Valuation (Determination of
Price of Imported Goods)
Rules, 2007. They rejected our
declaration of value as
declared at the time of export,
on the grounds that the value
declared at the time of export
was low. We seek your views
on whether the stand taken
by the Customs is correct.
On almost identical facts, the
Tribunal has held, in the case
of Emkay (India) Rubber Co.
Ltd. [2012 (286) ELT 699 (Tri.
Del.)], that the said Valuation
Rules should not be applied in
case of re-imports and that the
value declared at the time of
export must be adopted for the
assessment of duty. In that par-
ticular case, the importer had
availed himself of the exemp-
tion under notification no.
158/95-Cus dated 14.11.1995 but
failed to re-export the goods in
time and so, the duties became
payable. However, in my opin-
ion, that variation in the facts
of that case does not take away
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the significance or application
of the rationale of that judg-
ment in your case.
We fabricate certain items
like windows, doors, etc., at
the construction site and fix
them on to buildings. Are we
required to pay excise duty on
the items?
If the goods that come into
existence at the site are move-
able, even through you may
fix them on to immovable
structures, they will be excis-
able, as held by the Larger
bench of the Tribunal in the
case of Mahindra and
Mahindra Ltd. [2005 (190) ELT
621 (Tri.LB)]. But, S. No. 206 of
the notification no. 12/2012-
CE dated 17.3.2012 exempts ‘all
goods fabricated at site of work
for use in construction work at
such site’ falling under the
headings 7305 or 7308 from
the whole of excise duty. You
may examine whether your
goods fall under the said
headings and the expressions
used therein, and accordingly
claim the exemption.
Our client in a Special
Economic Zone (SEZ) has
given us a copy of Form-A1,
and says that on the basis of
that Form A-1, we should not
charge service tax. Can we
accede to his request?
Notification no. 40/2012-ST
dated June 20, 2012 says that
where the specified services
received in a SEZ and used for
the authorised operations are
wholly consumed within the
SEZ, the person liable to pay
service tax has the option not
to pay the service tax ab initio.
The only condition for not
charging service tax is to obtain
Form A-1 duly verified by the
Specified Officer and a list of
services approved by the
Approval Committee. If the
SEZ unit/developer has given
those documents, you need
not charge service tax.