CA Final – Existing Syllabus – Indirect Taxes – November, 2009 Attempt all questions. PART—A Q1(a) Briefly explain the following with reference to the provisions of the Central Excise Act, 1944 : (i) Adjudicating authority (ii) Excisable goods (4 marks) Q 1(b) Mention the last date of filing the following returns under the Central Excise Rules, 2002 : (i) ER-4 for the financial year 2009-10 (ii) ER-7 for the financial year 2009-10 (2 marks) Q1(c) Distinguish between compounded levy scheme and duty based on annual production capacity under Central Excise (4 marks) Q1(d) WM Ltd. is manufacturing a product which is captively consumed to produce a final product, which is exempt from the payment of excise duty. The intermediary product is having a distinct market of its own. The company is of the view that since the final product is exempt, no duty liability arises on intermediary product also. The department objected the view of the assessee. Discuss, with reference to a decided case law, if any, whether the view of company is justifiable ? (5 marks) Q1(e) An assessee sold certain goods to PQR Company Limited for Rs. 20.000 on 09.09.2009. The buyer is a related person as defined under Section 4(3)(b) of the Central Excise Act, 1944. The buyer did not sale the goods but used it as intermediary product. The" cost of production” of the goods was 16,000. What should be the assessable value ? What should be the assessable value, if the goods were sold to unrelated person for Rs. 20,000, who also used it as intermediary product? You may assume that the price charged from the buyer is excluding excise duty and other taxes (5 marks) Q2(a) M/s. XYZ Ltd. shifted its factory from Sitapura to Rampur and transferred all the available inputs and capital goods to the new site. The inputs, capital goods and the balance of unutilised CENVAT credit were duly received and accounted for in the registers of the new unit. The said balance of unutilised CENVAT credit transferred was Rs. 8,00,000. However, the quantum of CENVAT credit attributable to the inputs and capital goods so transferred to the new site was Rs. 6,00,000 only. The Department raised the plea that the assessee was entitled to transfer only Rs. 6,00,000 of CENVAT credit and not the entire balance of unutilized credit of Rs. 8,00,000. Explain, with the help of a decided case law, if any, whether Department's plea is justified in law ? (4 marks) Q2(b) What are the circumstances under which the certificate of registration can be revoked or suspended under central excise ? (3 marks) Q2(c) To whom should the matter be referred in a case where the Committee of Chief Commissioners of Central Excise differs in its opinion as to the legality or propriety of the decision or order of the Commissioner of Central Excise and how the matter will be settled under Section 35E(1) of the Central Excise Act, 1944 ? (3 marks) Q2(d) Discuss in brief the powers of Settlement Commission to grant immunity from prosecution (3 marks) Q2(e) What is the difference between short levy and short payment ? (2 marks) Q3(a) M/s. Silver Enterprises is manufacturing packing material namely printed cartons of paper and paper board with brand name of another company. Its turnover for the year 2008-09 was Rs. 2 crore and in the year 2009-10 it is expected to increase by 50 %. The firm has approached you as a consultant whether it is eligible for concession under Notification No. 8/2003. dated 01.03.2003 as amended. Is exemption available to the firm? If yes, what is the limit of turnover, for which the exemption is available for both the years, i.e. 2008-09 and 2009-10? (5 marks) Q3(b) Which reasons shall not be considered as special and adequate for awarding sentence of imprisonment for a term of less than six months as per section 9(3) of Central Excise Act, 1944? (4 marks) Q3(c) How can the goods kept in warehouse for the purpose of export be diverted for home consumption? Explain briefly (4 marks) Q3(d) Can department file appeal in respect of some assessee, if in respect of some years, no appeal was filed involving identical dispute ? (2 marks) PART—B Q4(a) Briefly explain the following with reference to the Customs valuation (Determination of value of Imported Goods) Rules, 2007 - (i) Goods of the same class or kind (ii) Computed value (6 marks) Q4(b) Mr. Vasu, the assessee, was summoned under Section 108 of the Customs Act, 1962, to give his statement in the inquiry. He filed the application for anticipatory bail in the District and Sessions Court which was disposed on the ground of being premature. However, he later moved to the High Court, which granted Kim anticipatory bail with a direction to the authorities that he should not be arrested without giving a seven day's prior notice to him. Revenue contended that the order passed by the High Court was illegal and erroneous. Explain, with the help of a decided case law, if any, whether the stand taken by Revenue is sustainable in law ? (5 marks) Q4(c) 'Goods manufactured or produced in India, which were earlier exported and thereafter imported into India will be treated at par with other goods imported into India’. Is the proposition correct or any concession is provided on such import ? Discuss briefly (5 marks) Q4(d) Ascertain whether the exporter is entitled to duty drawback in the following independent cases and if yes, what is the quantum of such duty drawback (i) FOB value of goods exported Rs. 50,000. Rate of duty drawback on such export of goods is 1% (ii) FOB value of 2,000 kgs goods exported Rs. 2,00,000. Rate of duty drawback on such export Rs. 30 per kg. Market price of goods Rs. 50,000 (in wholesale market) (4 marks) Q5 (a) Assessable value of certain goods imported from USA is Rs. 10,00.000. The packet contains 10,000 pieces with maximum retail price Rs. 200 each. The goods are assessable under Section 4A of the Central Excise Act, l944, after allowing an abatement of 40%. The excise duty rate is 8% advalorem. Calculate the amount of Additional duty of Customs under Section 3(1) of the Customs Tariff Act, 1975; assuming basic customs duty @ 10% advalorem (4 marks) Q5(b) What are the provisions made under the Customs Act, 1962 regarding control of customs over the warehoused goods ? (4 marks) Q5(c) What are the orders that are appealable to High Court under the Customs Act, 1962 ? Can delay in filing appeal be condoned by High Court? (4 marks) Q5(d) What are the provisions made under the Customs Act, 1962, regarding personal hearing and order under advance ruling ? (3 marks) PART—C Q6(a) State with reasons in brief, whether Service tax is payable in the following cases: (i) Services provided to Special Economic Zone (SEZ) unit and SEZ developer, except where services are wholly consumed within SEZ (ii) Services provided by SEZ to DTA (Domestic Tariff Area) (iii) Services provided by Indian agents undertaking marketing in India of goods of a foreign seller (2 x 3 = 6 marks) Q6(b) Briefly state the concept of export of taxable services under rule 3 of the Export of Services Rules, 2005 (3 marks) Q6(c) Ascertain whether the refund of Service tax paid on input services can be claimed in the following cases - Total credit of Service Tax on input services Rs. 6,000. Total turnover of output service Rs. 30,000. Output service exported Rs. 20,000 (3 marks) Q6(d) Explain the provisions of best judgment assessment provided under Section 72 of the Finance Act, 1994, as amended (3 marks)
CA Final – Existing Syllabus – Indirect Taxes – May, 2009 Question Nos. 1, 6 and 9 are compulsory. In addition thereto, answer any two questions from part A and any one question from part B. Q 1 (a) Briefly explain the following with reference to the provisions of the Central Excise Act, 1944 as amended by the Finance Act, 2008 : (i) Deposit of duty of excise duty collected from the buyer under Section 11DD(1). (ii) Payment of interest on pre-deposit made by an appellant under section 35FF. (b) Explain the provisions of section 3A of the Central Excise Act, 1944 regarding duty payable on the basis of capacity of production in respect of notified goods (c) X Ltd. of Kanpur was receiving goods in semi-finished condition from its sister concern based at Mumbai. After carrying out some operations, it cleared the goods at lower value than the landing cost of semi-finished goods received from the supplier. After verification of company’s records, Revenue Department alleged that the value of the intermediate goods had been inflated by the supplier to pass on excess cenvat credit and hence, department wanted to disallow the excess credit so availed as per provisions of rule 14 of the Cenvat Credit Rules, 2004. Explain whether the contention of the Department is correct, giving reference to decided case law, if any (d) Discuss the validity or otherwise of the following statements giving reasons to support your answer: (i) Erroneous claim made by the assessee earlier precludes him from subsequently making a claim for correct classification. (ii) Omission to give correct information be construed as ‘suppression of facts’ for the purpose of the proviso to section 11 A of the Central Excise Act, 1944 [4+5+5+6 = .20 marks] Q 2 (a) Assessee purchased duty paid M.S. tubes from its manufacturers and cut into requisite length and were put into the swaging machine for undertaking swaging process whereby dies fitted in the machine imparted ‘folds’ to flat surface of M.S. Tube/Pipe. Department’s view is that ‘swaging process’ amounts to manufacture whereas assessee denies. Discuss whether the Department’s contention is correct by referring to section 2(f) of the Central Excise Act, 1944. You can take the help of decided case law, if any. (b) Briefly explain the provisions relating to re-entry of the goods cleared for export under bond but not actually exported, in the factory of manufacturer as per notification issued under rule 19 of the Central Excise Rules, 2002. (c) Raj & Co. furnish the following expenditure incurred by them and want you to find the assessable value for the purpose of paying excise duty on captive consumption. Determine the cost of production in terms of rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and as per CAS-4 (cost accounting standard) (i) Direct material cost per unit inclusive of excise duty at 10% - Rs. 880/- (ii) Direct wages - Rs. 250/- (iii) Other direct expenses - Rs. 100/- (iv) Indirect materials - Rs. 75/- (v) Factory Overheads – Rs. 200/- (vi) Administrative overhead (25% relating to production capacity) Rs.100/- (vii) Selling and distribution expenses – Rs. 150/- (viii) Quality Control - Rs. 25/- (ix) Sale of scrap realized - Rs. 20/- (x) Actual profit margin - 15% [5+4+6 = 15 marks] Q 3 (a) Is there any discretion under section 11AC of the Central Excise Act, 1944 to impose penalty less than the amount equal to duty evaded? Briefly explain based on case law, if any. (b) Explain eligibility of Cenvat credit in each of the following occurrences during the month of January, 2008 for an assessee : (i) Assessee received a consignment of inputs on which excise duty paid was Rs. 12,000. The invoice is dated 10th January, 2008. The transporters delivered the goods on 1st February, 2008. (ii) Inputs on which cenvat credit availed earlier Rs. 5,000/- were sent to production centre and on its way, the inputs were completely damaged due to careless handling. Inputs have become unfit for use. (iii) Cenvat credit of Rs. 20,000 was taken on certain inputs. Due to long storage, they have become unfit and were sold as scrap for Rs. 5000 and excise duty is 14.42%. (c) S & Co., a small scale unit, had cleared goods of the value of Rs. 750/- lakhs during the financial year 2007-08. Records show that the following clearances were included in the total turnover of Rs. 750 lakhs : (i) Total exports during the year – 200 lakhs (30% of total exports were to Nepal). (ii) Job-work in terms of Notification No. 214/86 – 50 lakhs (iii) Job-work in terms of Notification No.83/94-E – 50 lakhs (iv) Clearances of excisable goods without payment of duty to a 100% E.O.U.- 20 lakhs (v) Goods manufactured in rural area with others brand - 100 lakhs. Find out whether the unit is eligible to avail concession for the year 2008-09, under Notification No. 8/2003-CE dated 1st March, 2003, giving reasons for your answer (3+6+6 = 15 marks). Q 4 (a) Discuss with reference to the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, the following: (i) Goods sold only through inter-connected undertaking (ii) Valuation in case of job worker (b) ‘As per section 11B(2) of the Central Excise Act, 1944 refund shall be granted to the applicant only in specified cases otherwise shall be credited to “Consumer Welfare Fund.” You are required to explain briefly such cases. (c) Rule 9(2) of the Central Excise Rules, 2002 provides for exemption from registration to specified categories of persons. Explain briefly those categories [6+5+4 = 15 marks] Q 5 (a) State the categories of cases that cannot be settled as per Section 32E of the Central Excise Act, 1944. (b) Write a brief note on the following with reference to the Central Excise Act, 1944 : (i) Tampering or altering MRP after removal (ii) Remission of duty on lost/or destroyed goods. (c) Under which circumstances, the appellant shall be entitled to produce before the Commissioner of Central Excise (Appeals) additional evidence as per rule 5 of the Central Excise Appeal Rules, 2002 [5+6+4 = 15 marks] PART – B Q 6 (a) As per Section 15 of the Customs Act, 1962, briefly discuss the date for determining the rate of duty and tariff valuation of imported goods. (b) Referring to Section 25 of the Customs Act, 1962 discuss the following - (i) General exemption (ii) Special exemption. (c) The assessee imported capital goods and deposited them in the warehouse. The said goods were not removed from the warehouse within the period permitted under Section 61(1)(a) i.e. five years. Subsequently, the assessee filed an application for relinquishment of title of such warehoused goods. The department contended that since the assessee did not file an application for extension of warehousing period before the expiration of five year period fixed under section 61(1)(a), after expiration of the said period, the goods could no longer be termed as ‘warehoused goods’. Therefore, the assessee lost its title to the same and consequently it lost its right to relinquish its title thereto. It was further claimed that the relinquishment of title to the said goods ought to have been made by the assessee before the expiration of the warehousing period and not thereafter and therefore the goods were ‘deemed to have been improperly removed from the warehouse’. Consequently the assessee became liable to pay duty, penalty and interest with respect to the said goods as provided under Section 72(1)(b) of the Customs Act, 1962. Discuss whether the contention of the department is correct, by referring to case law, if any (d) K imported some old machinery from London claiming that the machinery was fully exempted from customs duty under a notification. Assistant Commissioner of Customs, the authority in original, differed and held that the machinery so imported was covered under different headings and attracted customs duty. Therefore, K had to furnish bank guarantee for duty payable and for release of machine. Subsequently, the Assistant Commissioner of Customs ordered to encash the bank guarantee to realize the duty. This order was issued to K and immediately thereafter, the Customs Department invoked bank guarantee by sending request to bank for making payment to them. K contended that order of the Assistant Commissioner was appealable and the period of filing appeal was yet to expire, hence the action of the department was not correct. You are required to comment whether the action of Customs Department is correct in law based on decided case law, if any (e) Whether the right of warehouse-keeper to recover the warehousing charges from the sale proceeds of the goods kept therein is superior to the right of the Revenue to recover Custom duty. Answer briefly by referring to Section 150(2)(b) of the Customs Act, 1962 [3+4+5+5+3 = 20 marks] Q 7 (a) Compute the assessable value and Custom duty payable from the following information : (i) F.O.B. value of machine – 8,000 UK Pounds (ii) Freight paid (air) – 2,500 UK Pounds (iii) Design and development charges paid in UK – 500 UK Pounds (iv) Commission payable to local agent @ 2% of F.O.B. in Indian Rupees (v) Date of bill of entry – 24.10.2007 (Rate BCD 20%, Exchange rate as notified by CBEC Rs. 68 per UK Pound) (vi) Date of entry inward – 20.10.2007 ( Rate of BCD 18%, Exchange rate as notified by CBEC Rs. 70 per UK Pound) (vii) C.V.D. payable @ 16% plus education cess as applicable (viii) Special C. V. D. – as applicable (ix) Insurance charges actually paid but details not available. Q7(b) What is ‘redemption fine’ in lieu of confiscation? What is the limit for imposing redemption fine under Section 125(1) of the Customs Act, 1962? (c) Briefly explain the provisions of Section 28BA of the Customs Act, 1962 regarding provisional attachment of property pending adjudication [6+4+5 = 15 marks] Q 8 (a) If any duty demanded or drawback paid is recoverable from a person, what is the procedure envisaged under Section 142 of the Customs Act, 1962? (b) Briefly discuss the provisions in relation to interest on drawback as per Section 75A of the Customs Act, 1962. (c) What is the time-limit provided for issuance of show-cause notice in section 28 of the Customs Act, 1962? (d) What are the orders of Commissioner (Appeals) not appealable to Appellate Tribunal as per section 129(A) of Customs Act, 1962? [5+3+4+3 = 15 marks] Part - CQ 9 (a) State with reason whether Service tax liability arises in the following cases - (i) Services provided by ‘Angadia’ in undertaking delivery of documents or goods received from a customer to another person for a consideration (ii) Commission received by distributors for distribution of mutual fund units (iii) Consultancy services in the field of Computer software engineering by Consulting Engineer (b) (i) What is the exemption provided to practicing Chartered Accountants under Notification No. 25/2006-ST dated 13.07.2006? (ii) Define the term ‘Gross amount charged’ as per Explanation (c) to Section 67 of Finance Act, 1994, as amended, with reference to associated enterprises. (iii) M, an assessee, fails to pay service tax of Rs. 15 lakhs payable by 5th January. He pays the amount on 16th January. What is the penalty payable by M? [6+9 = 15 marks]
CA Final – Existing Syllabus – Indirect Taxes – November, 2008 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from part A and any one question from part B. PART – A Q 1 (a) Briefly explain the following with reference to the provisions of the Central Excise Act, 1944 : (i) Curing (ii) Broker or Commission agent (4 marks). Q 1(b) SC Ltd. is a manufacturer of caustic soda, cement etc. It uses LSHS (Low Sulphur Heavy Stock) as fuel for generating electricity which in turn captively consumed for the manufacture of final products. It has claimed CENVAT credit on the reasoning that this is used ‘in relation to manufacture of final products’ and hence this is input. However the department did not allow the credit as LSHS has been used to generate electricity, which is not excisable and hence cannot be considered as input used as fuel. State with reasons whether the action taken by the department is covered by the CENVAT Credit Rules, 2004. You may take help of the decided case law(s), if any (4 marks). Q 1(c) Explain the term ‘normal transaction value’ under Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. How the term is used for valuation of excisable goods? (4 marks) Q 1(d) A particular product of a manufacturer was exempt from duty. Subsequently, central excise duty was imposed on it. The manufacturer assessee continued to sell the product without any change in selling price. Later, he realized that he had paid higher quantum of duty. He filed a refund claim stating that there was no change in price before and after imposition of duty and hence the burden of duty has not been passed on to the buyer. Will his stand for refund claim be acceptable? Discuss briefly. (4 marks) Q 1(e) State in brief the penal provisions under the Central Excise Act, 1944 and rules made thereunder if a manufacturer of excisable goods does not apply for registration (4 marks). Q 2 (a) P. Ltd. manufactures two products namely ‘A’ and ‘B’. A is a specified product under Section 4A of the Central Excise Act, 1944. The sale prices of both the products are Rs. 50 per unit and Rs. 30 per unit respectively. The sale prices of both the products included 14% basic excise duty plus 2% education cess and 1% secondary and higher education cess. Central Sales tax @ 3% is also included in both the selling prices. 1,00,000 units each of the two products were removed from the factory for sale. Calculate the total excise duty liability of P Ltd. on both the products assuming that 40% abatement is permissible under section 4A on product A (b) What is the ‘relevant date’ for claiming refund under Section 11B of the Central Excise Act, 1944 ? (c) What are the documents required to be submitted for filing claim of rebate by an exporter? (d) K Ltd. is a manufacturer of glass fibre reinforced plastics, which are used for roofing sheets and partitions. It is manufactured by impregnating plastics with glass to give stiffness and increase insulated capacity. Mention the relevant rule of ‘General Interpretative Rules’, which is applicable here for the classification of the product (5+4+4+2 = 15 marks) Q 3(a) Briefly explain the provisions of sub rule 5B of rule 3 of the CENVAT Credit Rules, 2004 regarding the value of input or capital goods, on which CENVAT credit has been taken, is written off fully, before being put to use. (b) Discuss briefly the provisions of rule 4(4) of the Central Excise Rules, 2002 regarding storage of non-duty paid goods outside the factory. (c) Mention any four important types of bonds with their purpose for use under the Central Excise laws. (d) Write a note on publication of information in respect of certain persons in certain cases under the Central Excise Act, 1944 (4+4+4+3 = 15 marks]. Q 4(a) State the matters, which can be referred for advance ruling under Section 23C of the Central Excise Act, 1944. (b) What are the goods bearing the brand name or trade name of others, eligible for exemption available to small-scale units? (c) A manufacturer purchased certain inputs from Z. The assessable value was Rs. 20,000 and the Central Excise duty was calculated at Rs. 3,296 making a total amount of invoice at Rs. 23,296. However, the buyer manufacturer paid only Rs. 20,800 to Z in full settlement of this bill. How much CENVAT credit can be availed by the manufacturer and why? (d) A merchant manufacturer gets the goods manufactured according to his design and specifications from a job worker. Who will be called as manufacturer under the Central Excise law? [5+5+3+2 = 15 marks] Q 5(a) Discuss whether remission of duty will be granted under the Central Excise Act, 2002, in the following cases : (i) Loss of molasses due to auto combustion in Sugar factory (ii) Normal evaporation, storage and handling losses of petroleum products. (iii) There was natural calamity in the factory, but the department was not intimated in time. (b) What do you mean by scrutiny of assessment in view of the self-assessment procedure under Central Excise? (c) SP Ltd. purchased capital goods worth Rs. 11,44,200, inclusive of excise duty @ 14.42%, on 1.04.2007. CENVAT credit attributable on such capital goods was duly accounted for. You are required to compute the amount of Cenvat credit to be reversed, if the capital goods were removed, after being used, on 2.11.2008. (d) State the obligation of a Small-scale Unit to file declaration under the following circumstances : Year 2006-07- Turnover Rs 45 lakhs; Year 2007-08 - Turnover Rs. 80 lakhs, Year 2008-09 anticipated Turnover Rs 100 lakhs (6+3+3+3 = 15 marks) Part BQ 6 Q 6(a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following: (i) Bill of Export (ii) Import Report (4 marks) Q 6 (b) Answer the following with reference to the provisions of Sec 14 of the Customs Act, 1962 and the rules made thereunder: (i) What shall be the value if there is a price rise between the date of contract and the date of actual importation (ii) Whether the payment for post-importation process is includible if the same is related to imported goods and is a condition of sale of the imported goods (iii) Bill of entry was filed on 27th Oct, 2008. Will you apply the exchange rate notified by Central Board of Excise and Customs on 25-9-2008 or 25-10-2008? (6 marks) Q 6 (c) BL Ltd imported Superior Kerosene Oil (SKO) and stored in a warehouse. An ex-bond bill of entry for home consumption was filed and duty was paid as per rate prevalent as on the date of presentation of such bill of entry and the order for clearance for home consumption was passed. On account of highly combustible nature of SKO, the importer made an application to permit storage of such kerosene oil in the same warehouse until actual clearance for sale/use and the application was allowed. When the goods were actually removed from the warehouse, the rate of duty got increased. The department demanded the differential duty. The company challenged the demand. Whether it will succeed. Discuss briefly taking support of decided case law(s), if any (5 marks) Q 6 (d) What conditions are to be fulfilled by the importer to make the imported goods eligible for preferential rate of duty prescribed by the Central Government by notification u/s 25 of the Customs Act, 1962 (5 marks) Q 7 (a) Briefly explain the law relating to private warehouses. What are the guidelines for storage of sensitive goods in such warehouses? (b) Who has the powers to (i) Appoint Inland Container Depots (ii) Appoint Land Customs Station (iii) Specify limits of Customs Area (iv) Appoint Public Warehouse at places notified under Customs Act, 1962 (c) Explain the provisions of Sec 146 of the Customs Act, 1962 regarding licensing of Customs House Agents (CHA) (6+4+5 = 15 marks) Q 8 (a) Explain the obligation cast on person-in-charge on arrival of vessels or aircrafts in India under Section 29 of the Customs Act, 1962 (b) Explain the term “Joint Venture in India” under the explanation to Sec 28E(c) of the Customs Act, 1962 for the purposes of advance ruling. (c) A show cause notice demanding customs duty was issued in case of clearances made by 100% Export Oriented Undertaking (EOU) to Domestic Tariff Area (DTA). Is the show cause notice defective in law?. (d) What do you mean by assessment of goods under Customs Act, 1962 (5+5+3+2 = 15 Marks)
Part – C
Q 9 (a) Explain in brief the manner of determination of value as per rule 3 of Service tax (Determination of Value) Rules, 2006. (b) What action can be taken by the department in case of misuse of Service tax credit? (c) The value of service provided by a consulting engineer is Rs. 10,00,000. He has paid Rs. 50,000 as cess under Section 3 of the Research and Development Cess Act, 1986. What is the amount of Service tax payable by him? (d) Whether a manufacturer of excisable goods, who has paid Service tax on freight, can himself take credit of Service tax paid, if such transportation service is in relation to the manufacture and clearance of his final products? (e) The goods manufactured by a company got destroyed by fire. The payment of duty was ordered to be remitted. Is the company required to reverse the CENVAT credit taken on input services used in manufacture of such destroyed goods? (4+3+3+3+2 = 15 marks]
CA Final –
Existing Syllabus – Indirect Taxes – May, 2008 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from
part A and any one question from part B. PART
– A Q 1 (a) Briefly explain any two of the following with reference to the central Excise Rules , 2002: (I) Assessee (ii) Daily stock account (iii) Large tax payer (2 x 2 = 4 marks) Q 1(b) M/s Khan Ltd ., is a small scale unit , manufacturing plastic name for motor vehicles as per specification provided to them by their customs , who are vehicle manufacturers . For purposes of classification under the first schedule to the central Excise Tariff Act , 1985 the assessee has claimed that the plastic name plates are “ parts and accessories of motor vehicles “ The central Excise Department has proposed classification as “ other plastic products “ in respect of these plastic name plates . The department ‘s view is that the motor vehicle is complete without the affixation of name plates and cannot be treated as a part of the motor vehicle . write a brief note on whether the stand taken by the department is correct in law (4 marks) Q 1(c) Discuss briefly the validity of the following statements with reference to the Cenvat Credit Rules , 2004 : (i) Basic Excise duty credit can be utilized both for payment of Basic Excise duty and Education cess and secondary and Higher Education cess (ii) Cenvat credit on inputs lying in stock or in process or contained in the final product shall be revered when the final product is subsequently exempted unconditionally in terms of an exemption notification issued under section 5A of the central Excise Act , 1994 (3 x 2 = 6 marks) Q 1(d) State briefly whether the following circumstances would constitute “ manufacture “ for purpose of section 2(f) of the Cenvat excise Act , 1944: (i) Both inputs and the final product fall under the same tariff heading under the fist schedule to the central Excise Tariff Act , 1985 ( Tariff Act ) (ii) Input and final product fall under different tariff headings of the Tariff Act (3 x 2 = 6 marks) Q 2.(a) Explain briefly with reference to Rule 21 of the central Excise Rules , 2002 relating to remission of duty the following : (i) Can remission of duty be granted on goods cleared from the factory after payment of duty , but which were destroyed by fire in transit (ii) Upon grant of remission of duty the Cenvat credit on inputs in final product has to be reversed (2 x 2 = 4 marks) Q 2(b) An unit availing small scale exemption in terms of Nofn No . 8/ 2003 –C.E., dated 1.3.2003 as amended during the year 2006 -07 found that it has exceeded the exemption limit by Rs . 20 lakhs . Accordingly , appropriate duty was paid after obtaining registration and in accordance with the prescribed procedure. In the year 2007 -08 the unit estimates that the aggregate value of clearances for the purpose of the aforesaid notification would be Rs. 140 lakhs. Write a brief note on the steps to be adopted for the purpose of duty compliance with the requirements of the aforesaid notification and the requirements of the Cenvat Excise Act, 1944 and the Rules made there under (5 marks) Q 2(c) Write a note on the valuation of goods on the basis of retail sale price under section 4A of the central excise Act ,1944 (6 Marks). Q 3(a) With reference to the Central Excise Act , 1944 and the Rules made there under write a brief note on the circumstances when personal penalty could be imposed on a director of a company or a partner of a firm or an employee or a transporter . (4 marks ). Q 3(b) M/s MM & Co. a machinery manufacturer effected clearances from its factory with effect from 1.4.2006 by payment of duty under protest and had also filed an appeal against the order for payment of duty . On 15.5.2006 one of its customers M/S BB & Co. had purchased the machines from M/S MM & Co. on 23.5.2007 the appeal filed by M/S MM& Co. was decided in favour of M/s MM & Co. pursuant to the said order in the appeal filed by M/S MM & Co., its customer M/S BB & Co. filed a refund claim on 1.6.2007 claiming refund of duty suffered by M/S BB & Co. . This claim for refund of duty was rejected by the department on the ground of ‘ unjust enrichment ‘ as well as on the ground of ‘ limitation ‘. Explain briefly with reference to section 11B of the central Excise Act 1944 whether the action of the department is correct in law (5 marks) Q 3(c) Explain briefly the following with reference with reference to the provisions of the central Excise Rules, 2002 and relevant notification issued there under with regard to e- payment of duty : The threshold limit for mandatory e- payment of duty - (i) How and in what manner the time of payment would be reckoned under the e-payment system ? (ii) The due dates for payment of duty under the e- payment scheme in respect of an assessee ( 3 x 2 = 6 marks) Q 4(a) State briefly the procedure to be adopted for clearance of ‘ prototypes’ which are sent for trial or development test from the factory in terms of the central Excise Rules, 2002 (2 marks) Q 4(b) Will omission on the part of the assessee to provide correct information constitute ‘suppression of facts’ for purpose of the proviso to section 11A of the central Excise Act ,1944 .write a brief note with reasons (3 marks) Q 4(c) Briefly examine the provision relating to ‘ settlement commission ‘under the central Excise Act , 1944 with particular reference to the changes brought in by the finance Act , 2007. (5 Marks) Q 4(d) M/s smart Ltd ., manufacture certain excisable goods that are exempt from duty in terms of a notification provided cenvat credit of duty paid on input is not taken by the manufacturer M/s smart Ltd ., had taken the credit of duty paid on inputs , but reversed the same before its utilization . The department denied the benefit of exemption on the ground that once the credit is taken it is immaterial whether the same is reversed before or after utilization of such credit . state briefly whether the action of the department is correct under the central Excise Act and Rules made there under with reference to decided case law if any . (5 Marks) Q5(a) State briefly the provisions of the central Excise Act , 1944 relating to arrest of a person (3 marks) Q 5(b) write short notes on the following : Marks - (i) Desk review under Excise Audit , 2000 (ii) Duty drawback under section 37 of the central Excise Act, 1944 (3 x 2 = 6 marks) Q 5(c) Based on the following particulars arrive at the Cenvat credit available on clearance of goods to Domestic Tariff Area (DTA ) from an Export oriented unit (EOU) Assessable value Rs 20 lakhs, Basic customs duty 10%, Excise duty 16%, Education cess 2%, Secondary and Higher Education cess 1%. Vat payable under state VAT law 4% (6 marks) PART – B Q 6(a) Explain briefly with reference to the provisions of the customs Act , 1962 the following :(1) Appointment of officers of customs (2) Tariff value (2 x 2 = 4 marks) Q 6(b) M/S Hind IT Co. imported laptops with Hard Disc Drivers (HDD) preloaded with operating software like windows XP, XP home etc . The department has claimed that the said laptop along with the operating software was classifiable and assessable as a single unit . It is the claim of the assessee that software loaded HDD should be classified and assessed separately as an exemption is available as per notification issued under section 25 (1) of the customs Act 1962 . Decide with a brief note whether the action proposed by the department is correct in law (4 marks) Q 6(c) Write a note on “ project Imports “ under the customs Tariff Act , 1975 enumerating the eligible projects and the minimum investment criteria if any (6 marks) Q 6(d) XYZ Industries Ltd , has imported certain equipment from Japan at an FOB cost of 2,00,000 Yen (Japanese ) .The other expenses incurred by M/S XYZ industries in this connection are as follows : (i) Freight from Japan to Indian port 20,000 yen (ii) Insurance paid to Insurer in India Rs 10,000 (iii)Designing charges paid to consultancy firm in Japan 30,000 yen (iv)M/s XYZ Industries had expended Rs. 1,00,000 in India for certain development activities with Respect to the imported equipment (v)XYZ Industries had incurred road transport cost From Mumbai port to their factory in Karnataka Rs.30,000 (vi)The central Board of Excise and customs had notified For purpose of section 14(3) of the customs Act, 1962 exchange rate of 1 yen = Rs . 0.3948. The inter bank exchange rate was 1 yen = Rs .0.40 (vii) M/s XYZ Industries rate had effected payment to the Bank based on exchange rate 1 yen = Rs. 0.4150 (viii) The commission payable to the agent in India was 5% of FOB Cost of the equipment in Indian Rupees. Arrive at the assessable value for purposes of customs duty under the customs Act, 1962 providing brief notes wherever required with appropriate assumptions (6 marks) Q 7(a) Explain briefly with reference to the provisions of the Customs act , 1962 whether the owner of the warehoused goods has the right to relinquish his title to such goods after the expiration of the warehousing period or the extended warehousing period as the case may be and also state whether any charges shall become payable upon such relinquishment (5 marks) Q 7(b) State briefly an five illustrative cases under the Customs , Central Excise Duties and service – tax Drawback Rules , 2006 , where the all industry Drawback rates will not apply (5 marks) Q 7(c) State briefly the provisions of the customs Act , 1962 relating to payment of interest in case of provisional assessment (5 marks) Q 8(a) State briefly with reference to the provisions of section 27 of the customs Act , 1962 whether the principle of “ unjust enrichment “ will apply in the following cases : (i) Refund of wrongly encashed bank guarantee (ii) Refund of excise interest paid by the assessee (iii) Refund of duty on car imported for personal use (2 x 3 = 6 marks) Q 8(b) The Committee of Commissioners of Customs is empowered under the Customs Act , 1962 to direct the filing of an appeal before the Appellate Tribunal in certain case while in certain others it may direct an application to be filed before the Appellate Tribunal for determination of such points arising out of the decision or order as may be specified by the said committee . write a brief note on the powers of the committee of commissioners of customs bringing out the difference in the exercise of such powers (4 marks) Q 8(c) State in brief the provisions under the Customs Act , 1962 that seek to prohibit the import of goods infringing intellectual property rights (IPR) (5 marks) Part C
Q 9(a) State briefly whether the following service under the finance Act , 1994 relating to service tax are taxable service . (Answer any three) (i) Service provided in the state of Rajasthan by a person having a place of business in the state of Jammu and Kashmir (ii) Service provided from India for use outside India (iii) Service provided from outside India and received in India by individual otherwise than for purpose of use in business or commerce (iv) Service provided to an Export oriented unit (3 x 2 = 6 marks) Q9(b) Briefly state the provisions under the service Tax Rules , 1994 relating to filing of returns and also state any late fee payable for delay in filing of returns (3 marks) Q9(c) Answer the following with reference to the finance Act, 1994 as amended relating to applicability of service tax : (i) Sale of Lottery ticker (ii) Depository service and Electronic Access to Securities Information Service (EASI) provided by the central Depository Service India Ltd (iii) Service provided by educational institutional like IIMs by charging a fee from prospective employers like corporate houses regarding recruiting candidates through candidates through campus interviews (2 x 3 = 6 marks) CA Final – New
Syllabus – Indirect Taxes – November, 2007 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from
part A and any one question from part B. PART
– A Q
1(a) Briefly explain any two of the following with reference to the
provisions of the Central Excise Act, 1944 : (i) Manufacture and
processing (ii) Dutiability of site related activities (iii) Labelling
and branding activities. (b) Explain briefly the meaning of “Trade
parlance test” in matters relating to classification under the Central
Excise Act, 1944 and the Central Excise Tariff Act, 1985. (c) Discuss
the validity or otherwise of the following statements with brief
reasons: (i) An assessee would lose the benefit to pay duty in monthly
installments if he made a default in payment of duty by due date and the
same is discharged beyond period of 30 days from the due date in terms
of Rule 8 of the Central Excise Rules, 2002. (ii) Excise duty is payable
on intermediate goods, manufactured by factory A which are removed
without payment of duties of excise for use in the manufacture of
subject goods, namely machines, in factory B of a Large Tax Payer Unit
under Rule 12BB of the Central Excise Rules, 2002. (d) Answer briefly in
the context of refund of CENVAT credit under Rule 5 of the CENVAT Credit
Rules, 2004 the following. (i) Under what circumstances will the benefit
under the Rule be available for inputs or input services (ii) How is the
manufacturer or provider of output service allowed to utilize the CENVAT
credit in respect of inputs or the input services (4+4+6+6 = 20 marks) Q
2 (a) M/s KE Ltd., manufactured elastics with brand name of M/s XYZ
Ltd., who in turn used these elastics in the manufacture of other
excisable goods. These elastics were never sold in the open market. The
general public only received the manufactured excisable goods. M/s KE
Ltd., claimed the exemption based on value of clearances (SSI) in terms
of Notfn. No. 8/2003-C.E., dated 1.3.2003 on the ground that they did
not use the brand name on the final product and that the brand name was
used only in respect of the goods meant for captive consumption. This
claim was disputed by the Excise Department on the basis that it is
immaterial whether the ultimate customer got only the final product and
the use of the brand name even if not sold in the open market would
convey to the customer that the elastics had connection with the owner
of the brand name. Briefly discuss whether the stand of the Department
is valid in law? (b) With reference to the CENVAT Credit Rules, 2004
discuss briefly whether the following statements are correct or not. (i)
CENVAT credit cannot be taken on the inputs lying in stock on the date
when the final product becomes dutiable because the said product was
initially exempt (ii) CENVAT credit of duties of excise on inputs can be
availed on the basis of an invoice, while credit of service tax paid on
input services can be availed only upon payment of the full invoice
value including service tax. (iii) In case of transfer of ownership of
the factory by way of sale alongwith inputs and capital goods the
unutilized input credit shall lapse (c) Briefly answer with reference to
the provisions of the Central Excise Valuation (Determination of Price
of Excisable Goods) Rules, 2000 whether in the following cases any
notional interest on the advance received is includible in the value for
purpose of assessment : (i) Assessee sells his goods against full
advance payment to X. He also sells such goods to Y without any advance
payment at the same price per unit. (ii) A the assessee manufactures and
supplies certain goods as per design and specification of B. A takes 50%
of the price as advance against these goods and there is no sale of such
goods to any other buyer (5+6+4 = 15 marks) Q
3(a) M/s PQR Ltd. were granted a refund by the Appellate Authority under
the Central Excise Act, 1944. The jurisdictional Asst. Commissioner of
Central Excise has issued a notice under Section 11A of the Central
Excise Act, 1944 demanding the amount of refund on the ground that such
a refund is erroneous. Briefly discuss whether the action taken by the
Asst. Commissioner of Central Excise is valid in law. (b) Answer briefly
with reference to Rule 21 of the Central Excise Rules, 2002 (Regarding
remission of duty and destruction of goods) the following: (i) The
circumstances under which remission of duty may be ordered (ii) The
manner of destruction. (c) Briefly explain the procedure for removal of
goods by an hundred percent export oriented unit for domestic tariff
area. (d) Write a brief note on “electronic maintenance of records and
preparation of returns and documents” under the Central Excise Rules,
2002 (4+4+4+3 = 15 marks) Q
4(a) Section 35C(2) of the Central Excise Act, 1944 provides that the
Appellate Tribunal, may at any time within six months of the date of the
order, with a view to rectifying and mistake apparent from the record
amend any order passed by it. Briefly illustrate with two examples as to
what would constitute “mistake apparent from the record” for the
purpose of this provision (b) Briefly explain the provisions under the
Central Excise Act, 1944 relating to special audit in cases where credit
of duty availed or utilized is not within the normal limits (c) Write a
brief note on the following with reference to the Central Excise Act,
1944 and Rules made thereunder : (i) Cancellation of Export documents
(ii) Bond to be executed by 100% EOU’s for obtaining indigenous goods
without payment of duty (iii) Execution of bond by Government
undertaking (5+4+6 = 15 marks). Q
5(a) Discuss briefly the validity of the following statement with
reference to the powers of the Central Excise Department to launch
prosecution proceedings under Section 9 and Section 9AA of the Central
Excise Act, 1944 : “Confiscation and penalty in departmental
adjudication and prosecution in criminal proceedings are independent and
do not amount to double jeopardy.” (b) Write a brief note on the
procedure for warehousing of excisable goods removed from a factory or
warehouse with reference to Rule 20 of the Central Excise Rules, 2002.
(c) State briefly the procedure to be followed by the Authority for
Advance Ruling under Section 23D of the Central Excise Act, 1944 on the
receipt of an application (d) Write a brief note on the duty of excise
not levied or short levied as a result of general practice that is
notified as not recoverable under Section 11C of the Central Excise Act,
1944 (4+4+4+3 = 15 marks) PART –B Q
6(a) Explain briefly with reference to the provisions of the Customs
Act, 1962 any two of the following. : (i) “Import” and
“Importer” (ii) Meaning of “Assessment” (iii) “Home
consumption” and “Clearance for warehousing” (2 x 2 = 4 marks) Q6(b)
XYZ ice cream company imported cone containers made from printed
Aluminium foils which according to the assessee were classifiable under
Chapter 76 : “Aluminium and Articles thereof” in Section XV of the
first schedule to the Central Excise Tariff Act, 1975. According to the
revenue these were classifiable under Chapter 48 : “Paper and
Paperboard; articles of paperpulp, of paper or paperboard.” The
revenue’s view was that where composite goods are made of different
components and cannot be classified by reference to Rule 2 of the
Interpretative Rules, then the classification has to be according to the
principles contained in Rule 3, the classification has to be as if they
consisted of the material or components which gave them their essential
criteria. Since the contents of the material in this case was 70.7%
paper, that was the essential component of the cone containers for ice
cream and merit classification under Chapter 48. The chapter notes to
Chapter 48 read as follows: Notes : 1. -_
2. This chapter does not cover; (a) - -
- - (n) Metal foil
backed with paper or paperboard (Section XV). - - Discuss briefly
whether the action proposed by the Revenue is correct in law (4 marks) Q
6(c) Examine the validity of the following statements with reference to
the Customs Act, 1962 giving brief reasons (Answer any three). : (i)
Service charges paid to canalizing agent are not includible in the
assessable value of imports (ii) Design and engineering charges are
includible in the assessable value of the imported goods only if the
goods imported are specifically manufactured on the basis of the design
and engineering specification provided by the importer. (iii) Inspection
charges are not includible in the assessable value of the imported
goods, if contract does not specify for certification by an independent
agency (iv) Goods exempt from basic customs duty would automatically be
exempt from additional duty of customs (3 x 2 = 6 marks). Q6(d)
(i) With reference to Section 125 of the Customs Act, 1962 briefly
explain the following : (a) Option to pay fine in lieu of confiscation.
(b) Whether this fine once paid could be claimed as a refund if the
importer decides to abandon the goods (ii) Briefly explain the provision
of Section 89 of the Customs Act, 1962 with regard to supply of ship
stores (4 +2 = 6 marks) Q7(a)
M/s HIL imported copper concentrate from different importers. At the
time of import the seller issues a provisional invoice and the goods are
provisionally assessed under Section 18 of the Customs Act, 1962 based
on the invoice. When the final invoice is raised based on the price
prevalent in the London Metal Exchange on a predetermined date based on
the covenant in the contract between the buyer and seller the
assessments are finalized on such invoices. M/s HIIL had filed two
refund claims arising out of the finalization of the Bills of Entry by
the authorities on 1.3.2006 and on 15.3.2006. With effect from 14.7.2006
(Presidential assent on 13.7.2006) Section 18 of the Customs Act, 1962
was amended with the insertion of certain provisions in terms of which
it became necessary for the assessee to prove that they had not passed
on the amount to their customers. Based on this amendment the department
has rejected the refund claims. Discuss in the light of decided case
law, if any, whether the action of the department is correct in law? (b)
M/s RIL Ltd. claimed duty drawback in respect of its export products.
Over 97% of the inputs by weight of the product were procured
indigenously and were not excisable. All industry rates under the
Customs and Central Excise Duties Drawback Rules, 1995 were fixed taking
into account the incidence of customs duty on imported product inputs.
Explain briefly with reference to Rule 3(i)(ii) of the said rules
whether the claim of M/s RIL will merit consideration by the authorities
(c) In the context of Section 65 of the Customs Act, 1962 dealing with
waste or refuse during the manufacturing operations or other processes
done in the warehouse. : (i) Examine the validity of the following
statement with brief reasons: “If finished products are cleared for
home consumption on payment of appropriate import duty of customs, then
appropriate duty of customs should be levied on the imported goods
context in the waste or refuse.” (ii) Explain briefly “relevant
date” for determination of rate of duty leviable on the import
material content in the waste or refuse (5+4+6 = 15 marks) Q
8(a) Briefly explain the salient features of the Customs Act, 1962
relating to Special Economic Zones. (b) Explain briefly the provisions
of Section 28(1A) of the Customs Act, 1962 in respect of a person who
voluntarily deposits fully duty demanded along-with interest and
applicable penalty. (c) Write a brief note on the provisions of Section
28BA of the Customs Act, 1962 regarding property that may be attached
provisionally to protect the interest of revenue in certain cases (5 x 3
= 15 marks) PART
– C Q
9(a) Service Tax (Determination of Value) Rules, 2006 (Valuation Rules)
and Taxation of Services (Provided from outside India and received in
India) Rules, 2006 (Import Rules) came into force from 19.04.2006.
Answer the following with reference to the said Rules : (i) Expenditure
or costs incurred by the service provider as a “Pure agent” of the
recipient of service shall be excluded from the value of the taxable
service. Who is a ‘pure agent” under the Valuation rules? (ii) What
is the value of taxable service in the case of service provided from
outside India under the Valuation Rules? (iii) What are the three
categories specified in rule 3 of the Import Rules? (b) Answer the
following with reference to the Finance Act, 1994 and the Rules made
thereunder relating to Service tax : (i) Intimation regarding change in
details furnished by an assessee in Form ST-I. (ii) Cancellation of
registration certificate. (iii) Adjustment of excess amount paid toward
service tax liability for the subsequent period. (c) Answer any three of
the following with reference to the Finance Act, 1994 as amended
relating to applicability of service tax : (i) Manpower recruitment
agency services in respect of staff not contractually employed by the
recipient of service but who come under his direction. (ii) Business
support services in the context of “Outsourced services” (iii)
Construction of roads, airports, railways bridges, tunnels in the
context of “site preparation and clearance, excavation earth moving
and demolition services” (iv) Clearing and Forwarding Agent’s
Services (6+3+6 = 15 marks). CA Final – New
Syllabus – Indirect Taxes – May, 2007 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from
part A and any one question from part B. Part – A Q 1 (a) Briefly explain any two of the following with reference to the provisions of Central Excise Act, 1944 : (i) Adjudicating Authority (ii) Central Excise Officer (iii) Duty paid under protest. (b) What is the period of validity of registration certificate granted by the Appropriate Excise Authority? (c) Discuss the validity or otherwise of the following statements, with reasons : (i) Input cleared as such to a job worker on 01.10.2006, was not returned in 180 days, assessable value being Rs. 20,000, Excise duty @ 16.32%, 50% of the inputs were received on 1.04.2007. In this situation, no Cenvat will be allowed in the year ending on 31.03.2007. (ii) Captive consumption of excisable goods should always be valued on the basis of sale price of similar goods manufactured by others. (d) State the offences under Rule 25(1) of Central Excise Rules. (e) A2Z & Co., manufactured Shikai Powder. They purchased Shikai seeds, crushed them and sold the same. The assessee did not pay excise duty on such powder contending that such powder was not an excisable goods. However, the Central Excise department treated the said goods as excisable goods by classifying under the chapter heading “3305.99 - Cosmetic or toilet preparations, essential oil etc – preparations for used on the hair – other.” Discuss on the validity of the contention of the assessee. (4+2+6+4+4 = 20 marks) Q 2 (a) M/s P Ltd. manufactured concentrates of non-alcoholic beverages and sold it to various bottlers. The bottlers after processing the concentrates bottled the outcome and sold the same. Under the agreement between P. Ltd. and the bottlers, P Ltd. was required to advertise the finished products. Subsequently, the bottlers formed S Ltd. to work as a centralised agency for the advertisement of the finished products. The shareholders as well as the directors of S Ltd. were the representatives of the bottlers. Determine whether or not the expenses of advertisement incurred by S Ltd. to advertise aerated products manufactured by the third party i.e. bottlers, is includible in the assessable cost of concentrate manufactured by P Ltd. (b) Examine the validity of the following statements.(i) Purchased a plant for Rs. 1,16,320 cum-duty price. Excise duty rate 16.32% on 12.12.2006 and received the plant into the factory on 05.04.2007 Cenvat allowed will be only Rs. 8,160 for the year ended on 31.03.2007. (ii) An assessee purchased inputs weighing 400 tons. The duty paid on inputs was Rs. 4,000. During transit, 20 tons of the inputs were destroyed. The destroyed quantity of ‘inputs’ does not qualify to be ‘inputs’ within the meaning of Cenvat Credit Rules, 2004. (c) Explain the non-applicability of “Transaction value” with reference to Section 4 of Central Excise Act, 1944. (d) What is “Exempted goods” under Cenvat Credit Rules? (4+4+5+2 = 15 marks) Q 3 (a) The appellants were the manufacturers of rubber products. Some of the defective goods were returned by the buyers and the appellants took Cenvat credit of the duty originally paid under Rule 16 of Central Excise Rules, 2002. Defective goods were reprocessed, which activity however yielded only scrap and scrap was cleared on payment of duty. Department claimed that Cenvat credit taken by the appellants should be reversed since reprocessing did not amount to ‘manufacture’ whereas appellants argued that the process cannot be anything other than ‘manufacture’ in as much as the defective goods returned by their buyers were put to normal process of manufacture. Offer your comments to the appellants referring to decided case law. (b) What are the provisions regarding general exemption to SSI units? (c) M/s P. Ltd. used to label its products with a foreign brand and claimed exemption under a notification. The classification list was approved by the department after carrying out verifications and all returns were regularly filed. The invoice containing description of goods were also regularly approved by the department. The department denied the benefit of exemption to the assessee by invoking extended period of limitation under Section 11A on the ground that it failed to declare the particulars regarding affixing of labels. Is the department justified? (5+5+5 = 15 marks) Q 4 (a) Explain whether a person who is neither a producer nor a curer not a manufacturer of excisable goods, but he only stores such goods in a warehouse, can be called upon to pay the duties of excise on such goods? (b) “The value of price support incentives received from the raw materials supplier should be included in the assessable value of the final products”. Do you agree? Explain. (c) Briefly explain the procedure to be adopted in respect of exported goods subsequently re-imported and returned to factory. (d) Explain the concept of ‘Provisional Assessment’ under Rule 7 of the Central Excise Act, 2002. (3+3+4+5 = 15 marks). Q 5 (a) Discuss the power of Central Government to amend first and second schedules of Central Excise Tariff. (b) What would be the outcome, if retail price is not indicated or wrongly indicated at the time of removal? (c) State the non-application of provisions of unjust enrichment under Section 11B(2) of Central Excise Act, 1944. (d) State the powers of Settlement Commission under Section 32 of Central Excise Act, 1944 (3+3+4+5 = 15 marks). PART – B Q 6 (a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following : (i) Conveyance (ii) Dutiable goods (iii) India. (b) State the situation in which the proper officer is authorized to issue show-cause notice under Section 28 of Customs Act, 1962 and also time limit. (c) The assessee M Ltd. entered into a joint venture with a foreign collaborator N for promotion and selling antennas, accessories and other communication equipment. The agreement between them indicates that N owned majority of equity shares in M Ltd. Technical services were provided by N to M Ltd. for various functions that were carried out in respect of manufacture of antenna system in India, for which technical service fee was paid to N by M Ltd. Based on the above facts, the department opined that both M Ltd. and N were related person in terms of Rules 2(2)(1) and 2(2)(iv) of the Customs Valuation (Determination of Price of Imported goods) Rules, 1988 and that the technical fee paid by M Ltd. was includible in the assessable value of the imported components in terms of Rule 9(1)(c) of the Rules. Decide referring to decided case law. (d) From the following particulars, calculate assessable value and total custom duty payable? (i) Date of presentation of bill of entry : : 20.06.2006 [Rate of BCD 25%; Exchange Rate : Rs. 43.60 and rate notified by CBEC Rs. 43.80]. (ii) Date of arrival of goods in India: 30.06.2006 [Rate of BCD 20%; Exchange Rate : Rs. 43.90 and rate notified by CBEC Rs. 44.00]. (iii) Rate of Additional Customs Duty : 16%. (iv) CIF value 2,000 US Dollars; Air Freight 500 US Dollars, Insurance cost 100 US Dollars [Landing charges not ascertainable]. (v) Education cess applicable 2%. (vi) Assume there is no special CVD (4+5+5+6 = 20 marks) Q 7 (a) After visiting USA, Mrs. & Mr. X brought to India a lap-top computer valued at Rs. 80,000, personal effects valued at Rs. 90,000 and a personal computer for Rs. 52,000. What is the customs duty payable? (b) Write a brief note on the following with reference to the Customs Act, 1962: (i) Remission of duty on imported goods lost; (ii) Pilfered goods. (c) State the requirements to be satisfied to accept ‘transaction value’ under rule 4(2) of Customs Valuation Rules (3+6+6 = 15 marks). Q 8 (a) Enumerate the penalties in respect of improper exportation of goods under Section 114 of Customs Act. (b) State the difference between transit and transshipment of goods under the provisions of Customs Act. (c) State the ingredients in the case of seizure under Section 123 of Customs Act. (d) Explain the provisions under Section 15 of the Customs Act for determining the rate of duty and tariff valuation of imported goods (3+4+4+4 = 15 marks). PART – C Q 9 (a) State whether in the following cases service tax is payable, with reason (i) Temporary transfer of any intellectual property right. (ii) Canteens in office run by the canteen contractor providing service directly to employees/workmen. (iii) Business auxiliary service provided by commission agents in relation to sale of agricultural produce. (b) M/s TCCL, providing management consultancy to its client, do not maintain any separate accounts and have paid Rs. 1,00,000 as service tax and excise duty towards input services and input material/capital goods used by them. They have used the inputs for partially exempted and partially taxable services. They are now providing the output services for which current tax liability is Rs. 1,40,000. How much credit out of Rs. 1,00,000 can be availed by them for paying output service tax liability, if they do not maintain any separate accounts. (c) Mr. AJAR, a Charted Accountant, raised an Invoice for Rs. 28,060 (25000+3060 service tax) to a client on 20.01.2007. The client, however, has paid a lump-sum of Rs. 26,000 on 28.04.2007 for full and final settlement: (i) How much service tax Mr. AJAR has to pay and when does this tax become due for payment? (ii) What will be his liability, if client refuses to pay service tax and pays only Rs. 25,000 in total? (d) (i) The service provider is abroad. He renders service to a subsidiary of an Indian Company located abroad. Payment to him is done by holding Indian Company. Does this attract service tax? (ii) What do you understand by ‘Centralised Registration’? (3+4+4+4 = 15 marks).
CA Final – New Syllabus – Indirect Taxes – November, 2006 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from part A and any one question from part B. PART – AQuestion Nos. 1, 6 and 9 are compulsory. In addition, thereto, Answer any two questions from Part—A and one question from Part—B. PART—A Q 1(a) Briefly explain any two of the following with reference to the provisions of the CENVAT Credit Rules, 2004: (i) Job work (ii) Principal inputs (iii) Deemed Cenvat Credit (2 x 2 = 4 marks) (b) Briefly examine the correctness or otherwise of any two of the following statements with reference to the Central Excise Act, 1944 giving reasons to support your answers : (i) Parts used for repair or replacement during warranty period are excisable. (ii) In case of samples distributed free, valuation should be adopted on the basis of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 i.e. cost of production plus 10%. (iii) Exemption from duty does not mean exemption from registration (3 x 2 = 6 marks).(c) M/s. Super Pipes Ltd. is engaged in the manufacture of m.s. galvanized pipes. The excise department has required the assessee to include the cost of galvanization in the assessable value of the m.s. galvanized pipes for the purposes of determination of excise duty. The assessee claims that as the process of galvanization does not amount to manufacture, the cost of galvanization is not includible in the assessable value of the said pipes made from H.R. coils. Briefly discuss whether the stand taken by the assessee is correct with reference to the provisions of the Central Excise Act, 1944 (5 marks). (d) "Everything that is sold is not necessarily a marketable commodity chargeable to excise duty under the provisions of the Central Excise Act, 1944." (5 marks) Q2.(a) Answer in brief the following questions relating to provisions made under rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001 : (i) What will be the consequences in case the goods received at concessional rate are not used for the intended purpose ? (ii) Whether a manufacturer receiving the subject goods can return such goods to the original manufacturer. (iii) When will the subject goods be deemed as not having been used for the intended purpose (2 x 3 = 6 marks) (b) Discuss briefly whether refund effected by the Central Excise Department pursuant to orders of court in respect of a bank guarantee towards disputed excise duty encashed by the department, would be subject to the provisions of Section 11B of the Central Excise Act, 1944 relating to "unjust enrichment." (4 marks) (c) A manufacturer of cameras sells leather cases/soft cases and instruction manuals along with the cameras. The cost of such cases and manuals were being charged separately apart from the cost of the camera. The excise department has claimed that the cost of such cases and manuals should be included in the assessable value of the camera. According to the excise department as per Rule 5 of the Interpretative Rules for Central Excise Tariff brought into force from 28-2-2005, cases for camera, musical instruments, drawing instruments, necklaces etc. specially shaped for that article, suitable for long-term use will be classified along with that article, if such articles are normally sold along with such cases. Examine briefly with the help of decided case law, if any, whether the stand taken by the department is correct in law (5 marks) Q 3(a) Briefly explain the provisions relating to compounding of offences with reference to section 9A of the Central Excise Act, 1944 and Rule 6 of the Central Excise (Compounding of Offences) Rules, 2005 dealing with the power of the Compounding authority (3 marks).(b) M/s. Solid Cement Ltd., is engaged in the manufacture of Cement. Explosives are used for blasting the mines in order to excavate limestone, which is used in the manufacture of cement/clinkers in the factory situated at some distance away from the mines. Cenvat Credit on explosives has been denied by the excise department on the ground that the explosives are not used as inputs "within the factory of production". You are required to advise with reference to the Cenvat Credit Rules, 2004 whether the stand taken by the department is correct. (c) A Small Scale Industrial unit (SSI) is required to pay the following Central Excise duties by January 15, 2006 for clearances effected from its factory in respect of final products manufactured during the month of December, 2005 - Basic Excise Duty (B.E.D.) : Rs. 36,000; Special Excise Duty (S.E.D.) : Rs. 18,000; National Calamity Contingent Duty (N.C.C.D.) : Rs. 1,000; Education Cess (E.C.) : 2% of B.E.D. + S.E.D. + N.C.C.D. Balances available as credit at the beginning of the month i.e. December, 2005 were as follows : B.E.D. : Rs. 24,000, N.C.C.D. Rs. 2,000, E.C. Rs. 600. No inputs were received during the month. However, certain inputs were received on January 1, 2006 on which total duty paid by the suppliers of input was as follows : B.E.D. : Rs. 16,000, E.C. : Rs. 320. Excise duty paid on Capital goods received during the month was as follows : B.E.D. : Rs. 40,000, E.C. : Rs. 800. For the month of December, 2005 you are required to determine : (i) the credit available for utilisation; (ii) the permissible extent to which such credit available may be utilised against payment of B.E.D., S.E.D., N.C.C.D. and E.C; and (iii) the B.E.D., S.E.D. and E.C. payable through account current (P.L.A.) (4+2+2 = 8 marks). Q4 (a) Write a brief note on the powers of review to be exercised by Committee of Chief Commissioners under section 35B and section 35E of the Central Excise Act, 1944 (3 marks)..(b) With regard to exports under the Central Excise Act, 1944 write a brief note on : (i) Who is authorised to sanction rebate claim ? (ii) The time limit for the filing of such rebate claim (2x2 = 4 marks).(c) Write short note on "submission of list of records" under Rule 22(2) of the Central Excise Rules, 2002 (4 marks) (d) With reference to Rule 8(3) and Rule 8(3A) of the Central Excise Rules, 2002 explain in brief the consequences, if duty is not paid fully on the due date or within 30 days after the due date (4 marks). Q5 (a) Briefly comment with reasons on any two of the following statements : (i) Section 35C(2A) of the Central Excise Act, 1944 curtails the power of the Appellate Tribunal to grant stay beyond six months. (ii) Two factories located in the same premises are to be considered as one factory for the purpose of arriving at the "aggregate value of clearances" in terms of Small Scale Exemption Notification No. 8/2003-C.E., dated 1-3-2003. (iii) The Central Excise Officer in-charge of a warehouse may permit export without physical storage of the goods in the warehouse (3 x 2 = 6 marks).(b) (i) Briefly explain with reference to Section 11A of the Central Excise Act, 1944 as to who is authorised to issue a show cause notice (ii) A show cause Notice under section 11A of the Central Excise Act, 1944 was issued by Superintendent of Central Excise and the case was adjudicated by a Deputy Commissioner. This was inspite of their being in existence a circular of the Central Board of Excise and Customs to the effect that the same ought to be done by a Commissioner. Explain briefly whether the action in the present case is sustainable in law (2+3 = 5 marks)..(c) Explain briefly the provisions relating to charging of interest under section 11DD of the Central Excise Act, 1944 (4 marks). PART—B Q6 (a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following : (i) Customs port (ii) Goods (iii) Stores (2 x 2 = 4 marks) (b) Examine briefly the powers of the department, if it is not satisfied with an order made under section 47 of the Customs Act, 1962 pursuant to which goods have been cleared. (3 marks).(c) An importer imported certain inputs for manufacture of final product. A small portion of the imported inputs were damaged in transit and could not be used in the manufacture of the final product. An exemption notification was in force providing exemption in respect of specified raw materials imported into India for use in manufacture of specified goods, which was applicable to the imports made by the importer in the present case. Briefly examine whether the importer could claim the benefit of the aforesaid notification in respect of the entire lot of the inputs imported including those that were damaged in transit (3 marks).(d) Write short notes on the following with reference to the provisions of the Customs Act, 1962 : (i) Relevant dates for submission of refund application (ii) Prohibition and regulation of drawback (3 x 2 = 6 marks).(e) State briefly the provisions of section 17 of the Customs Act, 1962 relating to assessment of goods (4 marks). Q7 (a) What will be the dates of commencement of the definitive anti-dumping duty in the following cases under section 9A of the Customs Tariff Act, 1975 and the Rules made thereunder : (i) where no provisional duty is imposed; (ii) where provisional duty is imposed (iii) where anti-dumping duty is imposed retrospectively from a date prior to the date of it of provisional duty (2 x 3 = 6 marks).(b) M/s. Pure Energy Ltd. is engaged in oil exploration and has imported software containing seismic data. The importer is entitled to exemption from Customs duty subject to the condition that an "essentiality certificate" granted by the Director General of Hydrocarbons is produced at the time of importation of the goods. The certificate was not made available to the importer within a reasonable time by the Director General of Hydrocarbons. The Customs department rejected the importers claim for exemption. Examine briefly whether the department's action is sustainable in law (4 marks)..(c) (i) Briefly explain the powers of officers of Customs under section 5 of the Customs Act, 1962. (ii) With reference to section 6 of the Customs Act, 1962 examine briefly whether the Central Government could entrust any functions of the Central Board of Excise and Customs or any officer of Customs to any officer of any other department (2+3 = 5 marks).. Q 8. (a) Write a brief note on any two of the following with reference to the Customs Act, 1962 : (i) Fine and Penalty (ii) Rules and Regulations (iii) Power to search persons under section 100 and section 101 (3 x 2 = 6 marks).(b) Explain briefly if the Authority for Advance Ruling could entertain applications from residents with specific reference to section 28E(C) of the Customs Act, 1962 (3 marks)..(c) Write a brief note on "remission of duty in case of volatile goods" under section 70 of the Customs Act, 1962 (3 marks).(d) Briefly explain "standard unit of quantity" with reference to the First Schedule to the Customs Tariff Act, 1975 (3 marks). PART—C Q 9(a) Export of Services Rules, 2005 were made effective from March 15, 2005. Answer the following questions with reference to the said Rules :(i) What are the three categories of taxable services dealt with under Rule 3 ? (ii) What are the three options available to exporter of taxable services under these Rules for claiming exemption or rebate of service tax ? (3 x 2 = 6 marks).(b) With reference to the Finance Act, 1994 as amended and the rules made thereunder relating to service tax, state whether registration is required or not in the case of the following persons or class of persons : (i) Input service distributor (ii) Small service provider whose aggregate value of taxable service is Rs. 3,50,000 per annum (iii) Indian based recipient of taxable services provided from abroad by a non-resident not having any place of business in India (1 x3 = 3 marks).(c) Answer any three of the following with reference to the Finance Act, 1994 as amended relating to applicability of service tax : (i) Entrance fee and life membership fee paid by members of a club providing various services and facilities and organising get togethers and functions for its members (ii) Construction of residential complex having ten bungalows (iii) Selling of SIM (Subscribers Identification Module) Card and the process of activation thereof by mobile cellular telephone companies (iv) Study material or written test provided by Commercial Training and Coaching Centre (2 x 3 = 6 marks) CA Final – New Syllabus – Indirect Taxes – May, 2006 Question Nos. 1, 6 and 9 are compulsory. Answer any two questions from part A and any one question from part B. PART – AQ 1 (a) Briefly explain any two of the following with reference to the provisions of Central Excise Act, 1944 : (i) Wholesale dealer (ii) Factory (iii) Dutiability of Waste and Scrap. (b) With reference to Cenvat Credit Rules, 2004, discuss giving reason whether the following statements are True or False: (i) Credit of duties of excise on inputs will not be available if inputs are used in intermediate product, which is exempt from duty, even though the final product is dutiable (ii) A manufacturer can sell the inputs on which Cenvat has already been availed of, as they are, provided he pays the amount equal to the credit availed. (iii) A manufacturer is eligible for Cenvat Credit in the cases stated below: (1) Inputs used in trial runs (2) Materials used for maintaining factory building (c) With reference to Central Excise Act, 1944 and the rules thereunder, whether the following persons require registration or not? Explain briefly : (i) Persons, who manufacture excisable goods chargeable to ‘nil’ rate of duty (ii) Central Government undertakings manufacturing excisable goods (iii) 100% EOU. (d) ABC Company imported medicines in pallets with one big box containing assorted medicines in smaller units which were, then, repacked in thermocole boxes of different sizes which again were put into cardboard boxes. The cardboard boxes were in turn labelled containing, interalia, the name of the medicine, the name of the manufacturer, the quantity, batch no., manufacturing date, expiry date and name of the marketing agency. The department relying upon note 5 to chapter 30, claimed that the activities as aforesaid amounts to manufacture i.e. bulk pack to retail pack. Decide whether the above activities tantamount to manufacture (4+6+6+4 = 20 marks). Q 2 (a) The assessee was a manufacturer of I. C. Engine parts like piston and gudgeon pins. He used to procure from the market piston rings and circlips and supply along with the items that he had manufactured to the buyers. He was also selling these procured items separately. The department contended that those bought-out items and supplied along with the manufactured items were part of piston assembly and therefore, their value should be included with the value of the piston assemblies cleared by him. But, the assessee contented that the piston rings and circlips were all different part of I. C. Engine and therefore they are not to be considered as parts of another item. Decide whether the contention of the department is correct or not (b) Explain whether an application from an NRI for advance ruling under Sec. 23C regarding determination of whether a certain process would amount to manufacture is maintainable? (c) State the procedure for valuing excisable goods that are to be sold from Depot/branch or a consignment agent under Central Excise Valuation Rules, 2000 (6+4+5 = 15 marks). Q 3 (a) Explain the provision regarding maintenance of daily stock account of stored goods under rule 10(1) of Central Excise Rules. (b) Write a short note on the procedure in respect of exported goods subsequently re-imported and returned to factory (c) Comment on the following: (i) Excise department cannot challenge the responsibility of MRP printed on the package (ii) If any excisable goods are exempted from duty of excise absolutely, the manufacturer of such goods will be bound to avail of the exemption (iii) SSI units whose turnover exceeds Rupees 90 lakhs per annum have to give a declaration in the prescribed form (iv) Annual Financial Information Statement (ER-4) is required to be submitted by the assessees paying duty of Rs. 4 crores or above per annum through PLA (d) What is CT-1 certificate? [4+5+4+2 = 15 marks] Q 4 (a) A SSI unit has effected clearances of goods of the value of Rs. 475 lacs during the Financial Year 2005-06. The said clearances include the following: (i) Clearance of excisable goods without payment of excise duty to a 100% EOU unit. Rs. 120 lacs (ii) Job work in terms of notification no : 214/86 CE, which is exempt from duty – Rs. 75 lacs (iii) Export to Nepal and Bhutan – Rs. 50 lacs (iv) Goods manufactured in rural area with the brand name of the others – Rs. 90 lacs. Examine with reference to the notification governing SSI, under the Central Excise Act whether the benefit of exemption would be available to the unit for the Financial Year, 2006-07 (b) (i) Whether provisional assessment can be initiated by the department of excise? (ii) What is the remedy available with the department in case Assessing Officer does not find the self-assessment filed by the assessee in order? (c) State the provisions relating to confiscation and penalty under Cenvat Credit Rules, 2004 [5+5+5 = 15 marks]. Q 5 (a) Write a note on duty payment ‘Under Protest’ with reference to the Central Excise Act, 1944 and the rules made thereunder (b) What are the orders that are appealable to Supreme Court under Central Excise Act, 1944? (c) Explain briefly the provisions relating to ‘Special Audit’ in certain cases under Section 14A of the Central Excise Act, 1944. (d) What is Consumer Welfare Fund? How is this fund utilised? [3+3+5+4 = 15 marks] Part – BQ 6 (a) Briefly explain with reference to the provisions of the Customs Act, any two of the following: (i) Indian customs waters (ii) Person-in-charge (iii) Foreign going vessel or aircraft (b) M/s AJ imported some inputs and paid Basic Customs duty Rs. 5 lakhs, surcharge on customs duty Rs. 50,000 and CVD Rs. 1 lakh. Calculate the amount that he can claim as Cenvat credit. Would it make any difference, if the assessee is not a manufacturer, but a service provider? (c) Explain the meaning of : (i) Similar goods (ii) Identical goods (d) Briefly elucidate the meaning of “Importer” under the Customs Act. (e) (i) If the applicant does not co-operate or obtains order by fraud, whether the Settlement Commission is empowered to send the case back to the officer for further action as per law? Answer in the light of amended provisions of Sec. 127 MA of Customs Act, 1962 (ii) What is meant by ‘Boat notes’? (4+3+6+2+5 = 20 marks] Q 7 (a) What is the purpose of Interpretation rule regarding Customs Tariff? Do they form part of the tariff schedule? Explain the ‘Akin Rule’ of interpretation (b) What do you understand by first appraisement and second appraisement systems under the Customs Act 1962? (c) State the procedure for clearance of goods imported by post (d) Can the rate of drawback by exporter be determined provisionally? Briefly explain [4+4+5+2 = 15 marks]. Q 8 (a) M/s XYZ Ltd. were liable for the duty assessed and payable on certain import which, it paid under protest and filed a claim for refund of duty on the ground that duty had been wrongly levied. On rejection of claim for refunds, the assessee filed an appeal before Tribunal which was also dismissed on the ground that as no appeal had been filed against the assessment order, the refund claim was not maintainable. Assessee seeks your advice for remedy. Discuss whether the stand taken by the Tribunal is correct (b) Write a note on warehousing period under Section 61 of the Customs Act, 1962. (c) What is residual method of valuation? Bring out your answer with reference to the Customs Valuation (determination of price of Imported Goods) Rules, 1988 [5+4+6 = 15 marks]. Part – CQ 9. (a) Explain whether the following activities come under the service tax liability (i) Reimbursement of expenses like Cess, Customs duty, port dues claimed by Customs Housing Agents (ii) Surveillance fee collected by a Credit rating agency (iii) Transporters who are rendering “Express Cargo Service” for door delivery (b) (i) M/s Renu Consultants are a labour contractor of manpower to M/s. Sanu Creations. They charge to the principal employer for the wages of their labour which amounts to Rs. 1,20,000 plus their service charges of Rs. 12,000 for arranging the labour. The issue is whether service tax is payable on the gross amount charges by them or only their charges for labour. Examine the case and advice suitably (ii) For providing Beauty Treatment Services, a parlour uses materials such as cosmetics and toilet preparations. Whether the cost of such materials will be included in the value of taxable service? Whether any abatement is admissible on account of the value of materials consumed in providing the service? (c) (i) What is the time limit under Rule 4A for raising/issuing an Invoice for services? (ii) What is the due date for monthly/quarterly payment of Service tax? (6+7+2 = 15 marks] C.A. FINAL – Group II - (New Syllabus) November 2005 Question Nos 1, 6 and 9 are compulsory. PART – AQ 1 (a)(i) Discuss in brief the concept of ‘Deemed Manufacture’. (ii) TCL purchases duty paid metal rods and draws them into wire of a thinner gauge. Both the items fall under different tariff headings. The assessee claims that the process undertaken by him does not amount to manufacture. You are required to advise with reference to the present position of law in this regard (b) With reference to Cenvat Credit Rules, 2004, discuss giving reason whether the following statements are true or false (i) Credit of duties of excise on inputs can be availed irrespective of whether payment is made or not against the invoice, whereas credit of service tax on input services can be availed only after making payment of the invoice (ii) An input service distributor is comparable to dealers under the CENVAT Scheme of inputs and capital goods (iii) The manufacturer shall not be allowed to transfer unutilized input credit in case of transfer of ownership of the factory by way of sale along with the inputs and capital goods (iv) A manufacturer availing Cenvat Credit on inputs without ensuring that excise duty indicated in the invoice has been paid on such inputs, is liable to a penalty. (c) ABC, an assessee availing the SSI exemption scheme paid Central Excise duty of Rs. 10,000 for the goods cleared in the month of March, 2005 on April 15, 2005. Discuss whether any interest will be charged from ABC for late payment of duty. If yes, what will be the interest liability? (8+8+4 = 20 marks) Q 2 (a) (i) Define retail sale price in the light of provision of Section 4A of Central Excise Act, 1944 (ii) What are the conditions under which MRP based valuation shall apply under Central Excise (iii) What legal / penal actions can be taken in case the retail sale price is not mentioned or is unduly tampered after the removal? (b) Asha Ltd., supplies raw material to a job worker Kareena Ltd. After completing the job-work, the finished product of 5,000 packets are returned to Asha Ltd. putting the retail sale price as Rs. 20 on each packet. The product in the packet is covered under MRP provisions and 40% abatement is available on it. Determine the assessable value under Central excise law from the following details : * Cost of Raw material supplied Rs. 30,000/- * Job worker’s charges including profit Rs. 10,000/- * Transportation charges for sending the raw material to the job worker Rs. 3,000/- * Transportation charges for returning the finished packets to Asha Ltd. Rs. 3,000/- (12+3 = 15 marks) Q 3. (a) Answer in brief the following questions relating to export without payment of duty other than to Nepal and Bhutan under Rule 19 of the Central Excise Rules, 2002: (i) What is the type of bond to be executed? Who is exempted from furnishing such bond? (ii) What is the export document for the export clearance? How many copies are required to be prepared for it? (iii) Is it necessary to prepare an invoice also? If yes, how should it be prepared? (iv) What will be the duty payable, if goods are not exported within six months after clearance? (b) Does the bar of unjust enrichment apply to all types of refunds? Does the refund of penalty attract such bar? (c) State the various circumstances when goods are liable for confiscation under the Central Excise Law. Can the assessee get back the confiscated goods and if so how? (8+2+5 = 15 marks) Q 4 (a) Discuss whether remission of duty shall be granted or not, in the following cases, under the Central Excise Rules, 2002 : (i) Excisable goods manufactured in the factory are claimed by the manufacturer as unfit for consumption or for marketing (ii) Duty paid goods were damaged due to breakage in handling (iii) Finished goods entered in Daily Stock Account (DSA) were stolen from the factory (b) With reference to Rule 12(2) of the Central Excise Rules, 2002, explain in brief the main provisions of the Return in form E.R.-4, to be filed with the Central Excise Department by an assessee. What is the maximum penalty leviable for non-submission or late submission of E.R.-4 return? (c) Write a brief note on power of rectification of mistakes given to Appellate Tribunal under Section 35C(2) of Central Excise Act. Whether power of rectification includes the power to review the order also? (6+4+5 = 15 marks) Q 5 (a) Write short notes on the following : (i) Place of Removal (ii) Interest u/s 11AB (b) What is Personal Ledger Account or PLA? How is it maintained? (c) Briefly explain the procedure for removal of goods by a unit which is an 100% EOU for Domestic Tariff Area (6+5+4 = 15 marks) Part B Q 6. (a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following : (i) Adjudicating Authority (ii) Customs area (iiii) Smuggling (b) State briefly the provisions of refund on anti-dumping duty in certain cases. (c) Assessable value of an item imported is Rs. 1,00,000/-. Basic Customs duty is 20% and additional duty of customs is 16%, education cess is 2% on duty. Compute the amount of total customs duty payable. Also state the amount of credit available to importer and how can it be utilized by him (d) Your client loaded a Machine on the vessel for export. He has paid import duty and central excise duty on the components used in the manufacture. The vessel set sail from Mumbai, but runs into trouble and sinks in the Indian territorial waters. The customs department refuses to grant duty drawback for the reason that the goods have not reached their destination. Advise your client citing case law, if any. (e) India Car Co. is manufacturing passenger cars and has entered into a joint venture agreement and collaboration with Videshi Car Co. - - India Car Co. imported from Videshi Car Co. a shipment of 24 CKD packs (completely knocked down condition) of passenger car components. They filed Bill of Entry for clearing the goods, which were claimed to be components of motor cars. They also claimed benefit of a Notification exempting components, including components of motor cars in semi-knocked down packs and completely knocked down packs. The Adjudicating Authority held that the imported components being complete cars in CKD packs, had the essential character of the finished product and as such the consignment were to be treated as Motor Cars and not components. It was also held that India Car Co. was not entitled to the benefit of the notification as the notification was only for components. The questions for consideration are : (i) Whether the CKD packs imported into the country could be considered to be Motor Cars for the purpose of classification and clearance? (ii) Whether India Car Co. were entitled to the benefit of exemption notification? (4+2+4+4+6 = 20 marks) Q 7 (a) Explain the Doctrine of unjust enrichment with respect to refund of duty. Are there any exceptions to it and if so enumerate them? (b) When is the Redemption fine imposed? Whether this fine under Section 125 of the Customs Act, once paid, be claimed as refund, in case the importer decides to abandon the goods? (c) Explain briefly the provisions regarding drawback allowable on re-export of duty paid goods as such (5+5+5 = 15 marks) Q 8 (a) What is the crucial/relevant date for determination of rate of duty under Customs Act in following cases? (i) Clearance of Baggage (ii) Goods cleared for home consumption from a warehouse under Section 68 of the Customs Act (iii) Goods entered for export under Section 50 (b) Write short notes on the following with reference to the Customs act, 1962 : (i) Interest on drawback (ii) Power to arrest (c) Briefly discuss the provisions of the Customs act, 1962 regarding rejection of an application for advance ruling (6+6+3 = 15 marks) PART – CQ 9(a) (i) Certain abatement /exemption of the gross amount charged, has been notified, for computing the value of some taxable services. What are the conditions to be fulfilled to avail such partial exemption? (ii) What is the percentage of abatement granted in the following cases? (i) Services provided by a tour operator (ii) Services provided by an outdoor caterer supplying food also (iii) A Commercial concern providing construction service where the gross amount charged includes the value of goods and material (iv) Goods transport agency providing taxable service and paying service tax itself (b) Enumerate the specified services, other than accounting and auditing, provided by a practicing Chartered Accountant, liable to service tax (c) Hotel Marudhar Palace charges 10% of the bill amount as service charges and Department has asked them to pay Service tax on it. The assessee has submitted that the amount @ 10% collected from customers is subsequently disbursed among the staff, therefore it is not part of their income and cannot be included in the gross amount charged by them. Examine the case and advise suitably (6+6+3 = 15 marks) C.A. FINAL – Group II - (New Syllabus) May 2005 Question Nos 1, 6 and 9 are compulsory. Part A Q 1 (a) Briefly explain any two of the following with reference to the provisions of Cenvat Credit Rules, 2002: (i) Exempted goods (ii) Final products (iii) First stage dealer (b) What are the situations where transaction value under Section 4 of the Central Excise Act does not apply (c) A trader supplies fabrics to independent processor. Cost of fabrics is Rs. 1,150. The processor charges Rs. 450 which includes Rs. 350 as processing charges and Rs. 100 as his profit. After processing goods are sent back to the trader, who sells them at Rs. 1,800. Transport charges for receiving goods at the premises of the processor is Rs. 50 and the transport charges for sending goods after processing is Rs. 60. Please determine the assessable value of the goods under Section 4 of the Central Excise Act. (d) Before 1.3.2003, light diesel oil was one of the inputs as per the definition of input given in Cenvat Credit Rules. M/s Rim purchased duty paid light diesel oil in January, 2003 and availed of Cenvat Credit. On 4.1.2003, when input definition was amended to exclude LDO, department asked the Company Rim to reverse the amount of Cenvat Credit in respect of the stock of LDO with them as on 1.3.2003. Advise M/s Rim as whether they have to reverse the credit? (The date 4-1-2003 seems to be wrong. Correct date should be 1-3-2003)(4+4+6+6 = 20 marks) Q 2 (a) Explain briefly with reference to the provisions of the Central Excise Act the term “Deemed Manufacture”. (b) Discuss the provisions of the Central Excise Act relating to collection of amount by a person from his buyer in Excess of the Duty assessed or determined and paid on any excisable goods. (c) When a person shall be deemed to be related person for the purpose of valuation under the Central Excise Act. (d) Describe Power to Summon persons under the Central Excise Act (3+4+4+4 = 15 marks). Q 3 (a) Is there any exception to the Rule that Central Excise Duty is payable by a producer or manufacturer of goods on removal thereof from the factory and duty is payable by someone else? (b) What are the dates for determination of rate of Central Excise Duty under Central Excise Rules, 2002. (c) Please discuss the manner of payment of duty under Central Excise Rules, 2002 (Rule 8 only). (d) M/s SYL purchase film from the manufacturer thereof on payment of appropriate Central Excise Duty. They undertake the processes of Lamination/metallisation of the said film. The department directs them to pay Central Excise Duty as the processes undertaken by them amount to manufacturer (The word should be ‘manufacture’). Please offer your comments with the help of decided case law (2+3+4+6 = 15 marks). Q 4 (a) Does the Maxim “Latter the Better” apply in classifying the excisable goods? (b) Mention briefly the provisions regarding export under bond to Nepal where payment of duty is in freely convertible currency. (c) Deputy Commissioner Central Excise passes an adjudication order classifying the goods manufactured by MTZ under heading 85.42 and charges duty @ 16% Ad Valorem. MTZ pays the duty without challenging the adjudication order. After 4 months they realise that partial exemption under a notification was available to goods manufactured by them. They file a claim for refund of duty paid in excess on the ground that benefit of exemption can be claimed at any time. Are MTZ entitled to the refund of duty claimed in time (Note – Presume that principle of unjust enrichment does not apply) (3+6+6 = 15 marks) Q 5 (a) In what circumstances additional evidence can be produced by an appellant before the Commissioner Appeals (Central Excise)? (b) M/s RKR Manufacture Footwear bearing the brand name “Lotus” which is owned by M/s. Lotus Industries Ltd. for manufacture of detergent powder. When the department disallowed the benefit of Small Scale exemption under Notification No. 9/2003-C.E. on the ground that their goods are bearing brand name of another person, M/s R.K.R. contended that M/s Lotus Industries Ltd. owns brand name ‘Lotus’ only for detergent power and not for footwear. Decide the case with reasons and mention case law, if any. (c) “Mere selling of a commodity does not mean it is marketable”? Elucidate (5+5+5 = 15 marks) Part – B Q 6 (a) Briefly explain with reference to the provisions of the Customs Act any two of the following : (i) Entry (ii) Prohibited goods (iii) Warehouses. (b) A material was imported by air at CIF price of 5,000 US$. Freight paid was 1,500 US$ and insurance cost was 500 US$. The banker realized the payment from importer at the exchange rate of Rs. 45 per dollar. Central Board of Excise and Customs notified the exchange rate as Rs. 44.50 per US$. Find the value of the material for the purpose of Levying duty. (c) Discuss the provisions regarding ‘Transit of Goods’ and ‘Transshipment of goods’ without payment of duty under the Customs Act. (d) State the circumstances under which a revision petition can be filed before the Central Government under the Customs Act. (e) Write a note on project import and mention eligible projects (4+4+4+4 = 16 marks) Q 7 (a) Explain with reference to the Customs Act (i) Conditions for filing application to settlement commission. (ii) Service of order etc. under Section 153 of the Customs Act. (b) Mention the orders against which appeal lies to the Supreme Court under Section 130E of the Customs Act. (c) Briefly explain the time limit for issuing show cause notice for demanding customs duty short paid (3+2+5+5 = 15 marks). Q 8 (a) When the ship on its arrival from Dubai was searched by the Customs Officer, they found 2,000 biscuits of Gold kept concealed in the ceiling of one of the unoccupied Cabin. The Chief cook of the ship admitted the concealing of the Gold. The Captain of the ship deposed in his statement that he alongwith Chief Engineer and Chief Officer had inspected the vessel for contraband and inspection did not reveal anything. No Evidence was also found that captain was involved in the smuggling of Gold. Discuss whether the ship is liable to confiscation under the Customs Act. (b) M/s. XYZ, a 100% export oriented undertaking (100% EOU in short) imported DG sets and furnace oil duty free for setting up captive power plant for its power requirements for export production. They used the power so generated for export production but sold surplus power in domestic tariff area. Is customs department justified in demanding duty on DG sets and furnace oil as surplus power has been sold in Domestic Tariff Area. (c) Mention the circumstances under which goods are considered to have been removed improperly from a warehouse under the Customs Act (5+5+5 = 15 marks) Part – C Q 9 (a) Whether Service Tax under the provisions of Finance Act, 1994 is chargeable on the following services : (i) Use of the precincts of a Religious place as a Mandap (ii) Payment of service is received in India in convertible Foreign exchange (iii) An interior decorator provides service of beautification of spaces in Srinagar (iv) Services provided by a sub-broker to an investor (b) (i) Mention the issues on which advance ruling can be sought in service Tax matter (ii) When does an advance ruling on Service Tax become void ab initio (8+7 = 15 marks). C.A. FINAL – Group II - (New Syllabus) November 2004 Question Nos 1, 6 and 9 are compulsory. Part A Q 1 (a) State briefly the provisions of the CENVAT Credit Rules, 2002 in respect of removal of inputs and capital goods on which CENVAT credit has been availed in any two of the following cases: (i) Capital goods removed in good condition after being put to use for a period of two years in respect of which period depreciation under the Income-tax Act, 1961 was claimed (ii) An input becomes a waste and is sold as scrap (iii) Sale of the factory along with the said inputs and capital goods (b) Briefly explain the provisions of the Central Excise Act, 1944 pertaining to “Related persons”. (c) Write a brief note on the following with reference to Notification Nos. 8/2003-CE and 9/2003-CE dated 01-03-2003 relating to small scale units: (i) determination of ‘value’ for the purposes of the said notifications; (ii) availability of CENVAT Credit on capital goods under the said notifications; (iii) treatment in respect of ‘Clearances of excisable goods without payment of duty’ as specified in the said notifications. (d) (i) Discuss briefly with reference to the provisions of the Central Excise Act, 1944 whether the following process would amount to ‘manufacture’. XYZ Corporation is engaged in the process of mixing aluminium paste, metal lacquer and thinner resulting in the production of aluminium paint having a shelf life of 8-10 hours. (ii) Explain briefly whether duty liability under the Central Excise Act, 1944 will be attracted in the following case : MN & Co. engaged in the manufacture of Vanaspati oil used activated clay for deodoring, bleaching and decolouring of oil. As a result of this processing, the activated clay was transformed into “spent earth” which was nothing but the residue of activated clay. The activated clay residue had lost its absorbent character during the course of refining and bleaching of oil. Excise Department sought to classify the “spent earth” under Central Excise tariff chapter Heading No. 1507, which reads as : “residues resulting from treatment of fatty substances or animal or vegetable waxes.” [4+4+6+6 = 20 marks] Q 2 (a) (i) PQR Ltd. who are in the manufacture of excisable goods had the practice of providing full reimbursement to all its dealers towards the value of damaged goods. The company used to charge a certain sum towards the cost of freight in the return of the damaged goods to it. No other consideration was received by the company. The Central Excise Department has issued a show cause notice that the return freight in respect of damaged goods has to be included in the assessable value for purposes of duty. Examine briefly the correctness in law of the show cause notice. (ii) State briefly whether “damage discount” is permissible as a deduction for purpose of arriving at the assessable value under Section 4 of the Central Excise Act, 1944 (b) Write a brief note on the following exemption notifications issued under the Central Excise Act, 1944: (i) Power not to recover duty of excise not levied or short-levied as a result of general practice, under Section 11C (ii) Power to grant exemption from duty of excise under Section 5A (c) Briefly enumerate the specified categories of persons/premises that have been exempted in terms of Rule 9(2) of the Central Excise Rules, 2002 from obtaining registration under Section 6 of the Central Excise Act, 1944 [4+5+6 = 15 marks]. Q 3 (a) Briefly explain the procedure with respect to “Provisional Assessment” under the Central Excise Rules, 2002. (b) Write a brief note on : “Export under bond to Nepal where payment is in freely convertible foreign currency” with reference to the Central Excise Act, 1944 and the Rules. (c) With reference to Rules 12 and 17(3) of the Central Excise Rules, 2002 and Rule 7(5) of the CENVAT Credit Rules, 2002, explain in brief the main contents of the Returns to be filed with the Central Excise Department by an assessee in Form E.R. – 1, E. R. – 2 and E. R. – 3 (4+5+6 = 15 marks). Q 4 (a) State briefly against whom prosecution may be launched in the case of “offences by companies” under Section 9AA of the Central Excise Act, 1944 (b) Write short notes on the following with reference to the Central Excise Act, 1944 and the Rules made thereunder: (i) Duty payment “under protest” (ii) “Refund claim” under Section 11B (c) State in brief the provisions relating to “Invoice” under Rule 11 of the Central Excise Rules, 2002 (3+6+6 = 15 marks). Q 5 (a) State briefly as to who can make an application for “Advance Ruling” under Section 23A of the Central Excise Act, 1944 (b) Discuss briefly the power of the Appellate Tribunal to order “rectification of mistake” under Section 35C of the Central Excise Act, 1944 (c) Explain briefly the provisions relating to “special Audit” in certain cases under Section 14A of the Central Excise Act, 1944. (d) State the provisions of Rule 17 of the Central Excise Rules regarding removal of goods by a 100% Export Oriented Undertaking for Domestic Tariff Area (3+3+4+5 = 15 marks). Part B Q 6 (a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following: (i) Goods (ii) Person in charge (iii) Foreign going vessel (b) (i) C and Co. imported second hand machinery and declared the transaction value in the Bill of Entry filed for purposes of assessment to import duty. The Assistant Commissioner of Customs ignored the transaction value and based on Charted engineer’s certificate showing that the machinery was in working condition and had a residual life of 10 years he completed the assessment under Rule 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 after allowing maximum depreciation of 70%. Discuss briefly giving reasons whether the action of the Assistant Commissioner is valid in law (ii) Due to congestion in the ports or non-availability of deep draught, all ports are not navigable upto the jetty. Goods have to be discharged or transhipped at the outer anchorage with the help of barges. The charges associated with the delivery of cargo at outer anchorage are called “barging/lighterage charges”. State giving reasons whether such charges have to be included for purposes of determination of assessable value under the Customs Valuation (Determination of price of Imported Goods) Rules, 1988. (c) Explain briefly the provisions of Rule 3 of the General rules for the interpretation of the first schedule to the Customs Tariff Act, 1975. (d) State briefly the provisions of the Customs Act, 1962 relating to filing of “Import Bill of Entry” (4+6+4+6 = 20 marks). Q 7 (a) State whether the principle of “unjust enrichment” applies to refund of export duty under the Customs Act, 1962 (b) Write short notes on the following with reference to the Customs Act, 1962: (i) Duty on pilfered goods (ii) Reimportation of goods (c) XYZ Co. the assessee has claimed before the Customs Authority that since the exports of goods in its case attracted no duty, the value for purposes of Customs Act, 1962 to be declared shall be the value of the goods, which he expects to receive on sale of goods in the overseas market. Briefly discuss giving reasons whether the stand taken by XYZ Co. is correct. (d) State in brief the features of “Special Economic Zone” with reference to the Customs Act, 1962 (2+4+3+6 = 15 marks). Q 8 (a) Explain briefly the procedure for clearance of warehoused goods for home consumption under Section 68 of the Customs Act, 1962. (b) State in brief with reference to the provisions of Section 129A of the Customs Act, 1962 the matters relating to which no appeal shall lie before the Appellate Tribunal (c) Enumerate briefly the penalties under Section 114 of the Customs Act, 1962 for attempt to export goods improperly. (d) Explain the manner of filing drawback claim under the Duty Drawback Rules pursuant to Section 74 of the Customs Act, 1962 (3+3+4+5 = 15 marks) Part C Q 9 (a) Answer any four of the following with reference to the Finance Act, 1994 as amended relating to applicability of Service Tax: (i) One professionally qualified engineer with one non-professionally qualified engineer rendering engineering consultancy services under the name and style of ABC Consultancy Pvt. Ltd. (ii) Business Auxiliary services provided by a Commission Agent (iii) An institute providing pre-school coaching and training (iv) Ship repair services including dry docking within port premises (v) Blood test and analysis services provided by a Commercial pathology laboratory (b) Answer any two of the following with reference to the provisions of the Finance Act, 1994 as amended relating to service tax - (i) Services rendered after 1.7.2003 under a maintenance contract of machinery entered into prior to the effective date i.e., 1.7.2003 and in respect of which the bill has been raised and the value in full received from the customer prior to 1.7.2003 (ii) What is the date of payment of service tax where the amount of service tax is paid by cheque and is presented to the designated bank on April 25, 2004 and realised by the bank on April 27, 2004. Whether any interest and penalty is attracted in this case (iii) Whether service tax credit availed on input services during the period April 1, 2004 to April 24, 2004 can be utilized for the payment of service tax on the output services provided for the month/quarter ended March 2004, which is due for payment of April 25, 2004 (c) Briefly discuss the provisions of the Finance Act, 1994 as amended relating to service tax with respect to any one of the following taxable services: (i) Event Management (ii) Video Tape Production Services (8+4+3 = 15 marks). C.A. FINAL – Group II - (New Syllabus) May 2004 Question Nos 1, 6 and 9 are compulsory. Q 1. (a) Briefly explain the following with reference to the provisions of the Central Excise Act, 1944/Central Excise Tariff Act, 1985 (i) Dutiability of site related activities and immovable property (ii) Emergency power of the Central Government to increase duty of Excise (b) Determine the cost of production on manufacture of the under-mentioned product for purpose of captive consumption in terms of Rule 8 of the Central Excise Valuation (DPE) Rules, 2000 - Direct material – Rs 11,600, Direct Wages & Salaries – Rs 8,400, Works Overheads – Rs 6,200, Quality Control Costs – Rs 3,500, Research and Development Costs – Rs 2,400, Administrative Overheads – Rs 4,100, Selling and Distribution Costs – Rs 1,600, Realisable Value of Scrap – Rs 1,200. Administrative overheads are in relation to production activities. Material cost includes Excise duty Rs. 1,600. (c) A Small Scale Unit (SSI) has effected clearances of goods of the value of Rs. 360 lakhs during the financial year 2003-04. The said clearances include the following: (i) Clearance of excisable goods without payment of Excise duty to a 100% EOU unit : Rs. 40 lakhs. (ii) Export to Nepal and Bhutan : Rs. 50 lakhs. (iii) Job-work in terms of Notification No. 214/86 C.E., which is exempt from duty : Rs. 60 lakhs. (iv) Goods manufactured in rural area with the brand name of others: Rs. 70 lakhs. Write a brief note with reference to the Notifications governing SSI under the Central Excise Act whether the benefit of exemption would be available to the unit for the financial year 2004-05 (d) State briefly with reasons whether credit under the CENVAT RULES, 2002 would be available in any two of the following cases: (i) Inputs are pilfered from the store-room (ii) Inputs used in intermediate product, which is exempt from duty, but the final product is dutiable (iii) Final product is cleared in durable and returnable packing material (6+5+5+4 = 20 marks) Q 2. (a) Explain briefly the expression “Place of Removal” with reference to the Central Excise Act, 1944. (b) Write a short note on the ‘Rules for the Interpretation’ of the schedule to the Central Excise Tariff Act, 1985 (c) Explain the penal provisions under the Central Excise Act, 1944 and the Central Excise Rules, 2002 in the following cases: (i) Rule 25 of the Central Excise Rules, 2002 (ii) Sec. 11AC of Central Excise Act, 1944 (3+5+7 = 15 marks). Q 3 (a) “Issue of Show Cause Notice (SCN) within the prescribed time limit is a mandatory requirement to sustain any demand of Central Excise Duty.” Write a brief note on this statement and explain whether there are any circumstances under the Central Excise Act, 1944, when the issue of SCN is not required (b) Explain the meaning of the expression “Bond” as it is understood in Central Excise Law and enumerate any five circumstances when a Bond is required to be executed (c) Write a short note on the obligations of the person, who has collected Excise duty from the buyer under Section 11D of Central Excise Act, 1944 (4+6+5 = 15 marks] Q 4 (a) State briefly the procedure for Warehousing of Excisable goods removed from a factory or warehouse (b) A manufacturer who exports goods gets his inputs without payment of duty under Notification No. 43/2001-CE(NT) dated 26-06-2001. Briefly state with reasons whether the manufacturer could export the goods under claim of rebate of duty under rule 18 of Central Excise Rules, 2002 (c) Sec 35F of Central Excise Act, 1944 stipulates that duty and penalty will have to be paid unless an appropriate stay is obtained. Briefly state the criteria required to be satisfied for grant of stay/waiver of pre-deposit and admission of appeal [6+4+5 = 15 marks]. Q 5. (a) Explain briefly the effect of “Explanation” to Section 4(1) of Central Excise Act, 1944 added by the Finance Act, 2003. (b) Write a brief note detailing the circumstances under which an assessee can approach the settlement commission under the Central Excise Act (c) XYZ Co. is the manufacturer of Product A and has been effecting clearances on payment of duty while availing MODVAT/CENVAT credit on the inputs used in the manufacture of Product A. An exemption Notification was issued on June 4, 1996 purporting to exempt Product A from excise duty. However till 31-12-1996 XYZ Co. continued to pay duty on its clearances and availed MODVAT credit on the inputs. Subsequently XYZ Co. decided to take the benefit of the exemption Notification and refrained from taking MODVAT credit on the inputs. A show Cause Notice (SCN) was issued on 1-1-97 requiring XYZ Co. to reverse the MODVAT credit availed on the clearances effected between 4-6-96 and 31-12-96 on payment of duty. The reason for this according to the SCN was that no MODVAT credit on inputs is available when the final product is exempt from duty. Certain changes were effected to the said exemption Notification on 1-3-1997 purporting to limit the exemption and correspondence ensued between the Department and XYZ Co. While so, and when the SCN issued on 1-1-1997 was still pending adjudication a second SCN was issued on 1-6-2001 demanding duty from 1-1-97 to 31-05-2001 on the clearances of product A pursuant to the Proviso to Sec. 11A of the Central Excise Act invoking the extended period of limitation. The second SCN alleged fraud and suppression on the part of XYZ Co. Briefly examine with reasons: (i) Whether the departmental stand in the SCN issued on 1-1-1997 is sustainable in law; (ii) Whether the department could invoke the extended period of limitation in respect of the second SCN issued on 1-6-2001 in the facts and circumstances [3+6+6 = 15 marks] PART – B Q 6 (a) Explain briefly with reference to the provisions of the Customs Act, 1962 any two of the following: (i) Ad hoc exemptions (ii) Entry outward (iii) Warehousing stations (b) A person makes an unauthorized import of goods liable to confiscation. After adjudication, Assistant Commissioner provides an option to the importer to pay fine in lieu of confiscation. It is proposed to impose a fine (in lieu of confiscation ) equal to 50% of margin of profit. From the following particulars calculate the maximum amount of fine that can be imposed : Assessable value – Rs 50,000, Total duty payable – Rs 20,000, Market value – 1,00,000. Also calculate the amount of fine and the total payment to be made by the importer to clear the consignment (c) State in brief the provisions of the Customs Act, 1962 relating to filing of “Import Manifest/Report”. (d) Explain briefly with respect to the provisions of the Customs Act, 1962: (i) Denaturing/Mutilation of imported goods (ii) Declaration by owner of Baggage [4+6+5+5 = 20 marks] Q 7 (a) Explain with reference to the provisions of Sec. 50 of the Customs Act, 1962 and the Shipping Bill and Bill of Export (Form) Regulations, 1991 as to what is meant by a “Shipping Bill” (b) State with reference to the provisions of the Customs Act, 1962 the procedure for disposal of goods not cleared within a specified period (c) Briefly explain the time limit for purposes of filing a refund claim under the provisions of Section 27 of the Customs Act, 1962 (d) Briefly discuss the provisions of Sec. 130 of the Customs Act, 1962 with regard to filing of Appeal before the High Court [3+4+4+4 = 15 marks]. Q 8 (a) An exporter obtained inputs on payment of Customs duty and has availed CENVAT credit. Advise whether he could avail Duty Draw Back also under Section 75 of the Customs Act, 1962, if imported inputs are used in the manufacture of goods, which are then exported. (b) An importer has imported certain goods, which are not eligible for import as per Import Policy. The offending goods have been confiscated. The importer wishes to re-export the goods. Can permission be given for re-export? State briefly what are the other consequences of such import (c) (i) Explain whether the costs and services as given in Rule 9 of the Customs Valuation Rules, 1988 are to be added to the value of the identical goods or similar imported goods under Rule 5 & 6 respectively (ii) Explain briefly: Every detention is not seizure, but seizure always includes detention in Customs Law (4+6+5 = 15 marks]. PART C Q 9 (a) Answer any four of the following with reference to the Finance Act, 1994 as amended relating to applicability of Service tax: (i) Retired lone Professor running individually a private coaching centre (ii) Labour contractor supplying unskilled labour for doing work on temporary basis (iii) Speed Post Services provided by Post Office (iv) Technical Consultancy Services provided by foreign technician visiting India. (v) Information Technology Services (b) Explain in brief the provisions of the Service Tax Credit Rules, 2002, if input service is partly used for taxable service and partly for exempt or non-taxable service (c) Briefly discuss the provisions of the Finance Act, 1994 as amended relating to service tax with respect to any one of the following services : (i) Courier Agency (ii) Real Estate Agent (8+4+3 = 15 marks]. C.A. FINAL – Group II - (New Syllabus) November 2003 Question No. 1,
6 and 9 are compulsory. PART – A Q 1 (a) Explain any two of the following terms with reference to the Central Excise Act, 1944/Central Excise Tariff Act, 1985 : (i) Adjudicating Authority (ii) Factory (iii) Manufacture under the Central Excise Tariff Act, 1985. (b) Briefly describe whether “Assembly” would tantamount to “Manufacture” under the Central Excise Act, 1944. (c) (i) Explain briefly with reference to the provisions of the Central Excise Act, 1944 and the Central Excise Valuation (DPE) Rules, 2000 as to how assessable value is determined in a case where the raw material is provided by the customer. (ii) State whether the following items are includible in the assessable value under Sec. 4 of the Central Excise Act 1944 and the Central Excise Valuation (DPE) Rules, 2000 : (a) Optional Sales Service/Warranty charges (b) Installation erection and Commissioning expenses. (d) Briefly state whether the classification of goods could be altered by the Central Excise Department [(2 x 2)4+5+(2+4)6+5 = 20 marks] Q 2 (a) Describe the procedure for removal of excisable goods on payment of duty under the ‘Self Removal Procedure.” (b) (i) A R&D Unit (Research and Development Unit) that enjoyed exemption from payment of Customs Duty, acting under a bona fide belief that it need not pay Central Excise Duty, marketed some of the equipments manufactured by it during the year 2000-2001. The Central Excise Department has issued a Notice to show cause in August 2003 as to why duty should not be demanded on the equipments cleared by the R&D Unit during the year 2000-01. The said Notice has invoked the extended period of limitation under Section 11A of the Central Excise Act, 1944. Examine briefly the validity of the Notice issued by the Central Excise Department. (ii) State the provisions of the Central Excise Act, 1944 relating to payment of interest on delayed payment of refunds. (c) (i) What is the period of validity of the registration Certificate granted by the Appropriate Excise Authority? (ii) Mention in brief the penal provisions under the Central Excise Act, 1944, if a manufacturer of excisable goods does not apply for Registration. [5+(3+2)5+(2+3)5 = 15 marks] Q 3 (a) What are the requirements of ‘Dealers Invoice” as per the Central Excise Rules, 2002 and the Cenvat Credit Rules, 2002? (b) Explain briefly what is meant by ‘CT-1 Certificate’. (c) On March 15, 2003; XYZ Co. Ltd., who are manufacturers of industrial needles cleared a consignment on payment of appropriate duty of excise from its factory in Tiruvottiyer. The said consignment cleared from the factory to PQR Ltd. was returned on March 20, 2003 to the same factory as they were found to be defective. Upon receipt of the defective needless as inputs in their factory at Tiruvottiyer, XYZ Co. Ltd. took credit of the duty already paid at the time of clearance of the goods on March 15, 2003. On March 25, 2003 XYZ Co. Ltd. were able to rectify the defects and dispatch the goods by utilizing the credit available in the Cenvat account of an amount equal to the Cenvat credit taken at the time, when the defective goods were received in the factory on March 20, 2003. When the goods were returned back on March 25, 2003 to PQR Ltd., under cover of excise invoice showing payment of duty by XYZ Co. Ltd. the excise authority raised two objections: (i) That since no manufacturing activity was involved in the rectification of the defective needles the amount paid by XYZ Co. Ltd., at the time of clearance of the rectified needles, which was the same amount taken as input credit cannot be considered as duty of Excise levied under the Central Excise Tariff Act, 1985. (ii) XYZ Co. Ltd. should have made actual payment of duty in cash and was not entitled to pay excise duty by adjustment from their Cenvat Credit Account on March 25, 2003. - - Briefly discuss with reference to the provisions of the Central Excise Rules, 2002 and the Cenvat Credit Rules, 2002 whether the stand taken by the Central Excise Authority is correct in law [8+2+5 = 15 marks] Q 4 (a) Discuss whether remission of Central Excise Duty will be granted in the following cases under the Central Excise Rules, 2002 - (i) Goods were not fully manufactured and lost by natural causes before entry in the “Daily Stock Account”. (ii) Goods (fully manufactured) were lost during transportation of the same to the customer’s business premises due to unavoidable accident. (iii) Goods (fully manufactured) were lost by fire before removal from the factory and the assessee has received a claim from the insurance company (b) What are the documents required for filing claim of rebate of Central Excise Duty by an Exporter of goods? (c) Write a short note on “Submission of Records” under Rule 22 of the Central Excise Rules, 2002. [(3 x 2)6+6+3 = 15 marks] Q 5 (a) Write a short note on production of Additional Evidence before the Commissioner (Appeals) under the Central Excise Act, 1944. (b) Briefly explain the power of Arrest under Sec. 13 and Sec. 18 of the Central Excise Act, 1944. (c) M/s Bharat Soap Company, a small scale unit manufacture soaps and supply the same to “Thar Hotel”. The soaps bear the brand name of the hotel and also its logo. The soaps are kept in the living rooms, kitchen etc. in the Hotel. M/s. Bharat Soap have approached you as their consultant whether their Small Scale Unit will be eligible for the concession provided under the Central Excise Act 1944. Write a brief note explaining the relevant provisions and whether the unit is eligible for the concession [6+4+5 = 15 marks] PART – B Q 6 (a) Briefly explain with reference to the provisions of the Customs Act, 1962, any two of the following : (i) Costal goods (ii) Customs Area (iii) Derelict, Jetsam, Flotsam and Wreck. (b) M/s Agarwal Industries imported by Air from USA certain goods at CIF value US $ 6,500. Air freight US $ 1,400 and insurance charges US $ 100 were also paid. Bill of Entry was presented on 28-02-03, but the Entry Inward was granted on 10-03-03. Other relevant information is as follows: Rate of Exchange as announced by CBEC - US $ 1 = Rs. 46.80 as on 28-02-03 and Rs. 46.60 as on 10-3-03. - - Rate of Exchange as announced by RBI US $ 1 = Rs. 46.70 as on 28-02-03 and Rs. 46.50 as on 10-03-03. - - Rate of Custom Duty - * Basic Customs Duty - 30% as on 28-02-03 and 25% as on 10-03-03 * Additional Customs Duty - 16% as on 28-02-03 and 16% as on 10-03-03 * Special Additional Duty - 4% as on 28-02-03 and 4% as on 10-03-03. - - - The same goods are exempt from excise duty in India, if manufactured without the aid of power. - - Compute the Assessable Value and give the rates of Basic, Additional and Special Additional Duty to be adopted in this case, as also the basis for arriving at the Basic, Additional and Special Additional Duty (Actual duty calculations need not be given). Clearly show your assumptions. (c) Explain briefly the meaning of any two of the following with reference to the Customs Act 1962 : (i) Rules and Regulations (ii) Dutiable goods and Imported goods (iii) Protective duty and Safeguard duty. (d) When can the ‘transaction value’ be accepted under the Customs Act, 1962 and the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 even if the buyer and seller are related persons? Write a brief note. [(2 x 2)4+7+(2+2) 4+5 = 20 marks] Q 7 (a) Explain the terms ‘First check procedure’ and ‘Second check procedure’ under the Customs Act, 1962. (b) State the provisions of transshipment of goods without payment of duty under Sec. 54 of the Customs Act, 1962. (c) Write a brief note on the owner’s right to deal with the warehoused goods under Sec. 64 of the Customs Act, 1962. [4+5+6 = 15 marks] Q 8 (a) (i) What is export for the purposes of ‘Duty drawback’ under the Customs Act, 1962 ? (ii) State the cases in which refund of Customs Duty is available under Sec. 26 of the Customs Act, 1962. (b) Explain briefly the provisions of Sec. 122 of the Customs Act, 1962 regarding adjudication for purposes of confiscation and penalties. (c) P, a Non-resident intends to import certain goods, but has entertained some doubts about their classification. P’s friend has obtained an ‘Advance Ruling’ under chapter VB of the Customs Act, 1962 from the Authority for Advance Rulings on an identical point. P proposes to adopt the same ruling in his cases. P has bought your advice as his consultant whether he could adopt the said ruling in the case of P’s friend. Explain with reasons. [(4+4)8+4+3 = 15 marks] PART – C Q 9 (a) Answer any four of the following with reference to the Finance Act, 1994 as amended relating to applicability of Service tax: (i) Services rendered by a broker of the Delhi Stock Exchange to a broker of the Chennai Stock Exchange. (ii) A practicing Chartered Accountant also provides manpower recruitment services to his client. (iii) Initial deposit made by subscriber at the time of application for a telephone connection. (iv) Cargo handling services in relation to Agricultural Produce and Cold Storage. (v) Services by a consulting engineer relating to Computer Software. (b) Answer any two of the following with reference to the provisions of the Finance Act, 1994 as amended relating to Service tax. (i) Is Service tax payable as services provided to a developer or an unit in the Special Economic Zone (SEZ)? (ii) When could an assessee surrender his Certificate of Registration under Service tax? (iii) Whether an assessee could claim refund of the input service tax credit under Rule 4 of the Service Tax Credit Rules, 2002? (c) Briefly discuss the provisions of the Finance Act, 1994 as amended relating to Service tax with respect to any one of the following taxable services: (i) Event Management (ii) Convention. [(4 x 2) 8+ (2 x 2) 4+3 = 15 marks] C.A. FINAL – Group II - (New Syllabus) May 2003 Question No. 1,
6 and 9 are compulsory. PART – A Q 1 (a) (i) What type of duties are levied under Section 3 of the Central Excise Act, 1944? (ii) What are the basic conditions for levy of duty under Section 3 of the Central Excise Act, 1944? (b) “The manufacture and production of goods is the event attracting the levy of excise duty.” Briefly examine whether a change in Tariff Heading/Sub-heading under the Central Excise Tariff Act, 1985 is also required between the input material and the resultant finished product so as to render such finished products liable to duty. (c) Briefly state whether the duty payable on the “inputs” or “capital goods” on which CENVAT credit has been taken could be removed from the factory “as such” under Rule 3 Sub-rules (4) and (5) of the CENVAT credit Rules, 2002 upon availing the facility of fortnightly payment of duty as prescribed under Rule 8 of the Central Excise Rules, 2002. (d) Agricultural Implements Ltd., sold farm equipments to the agriculturists on ex-factory basis upon payments made before dispatch of the goods. Agricultural Implements Ltd., at the request of their customers arrange for payment of freight and transit insurance and for the dispatch of the goods to the destination. The Department’s view is that since freight and transit insurance has been paid by Agricultural Implements Ltd., and since they have also arranged for the transport of goods, there is no ex-factory delivery of goods and the cost of insurance and freight has to be included to the price for purposes of determination of value and excise duty should be payable on such basis. Briefly examine whether the contention of the department is correct in law [5 x 4 = 20 marks]. Q 2 (a) (i) Explain briefly the obligation of manufacturer of dutiable and exempted goods under Rule 6 of the CENVAT Rules, 2002. (ii) Explain briefly the conditions upon which transfer of credit from one factory to another is permitted under Rule 7 of the CENVAT Rules, 2002. (b) State briefly with reference to the Central Excise Act, 1944 and the Rules whether the following category of persons require registration or not : (i) Central Government undertaking manufacturing goods liable to Excise duty; (ii) Second stage Dealer; (iii) 100% Export oriented undertaking; (iv) Persons, who manufacture excisable goods chargeable to nil rate of duty; (v) Persons holding private warehouses. [10+5 = 15 marks] Q 3 (a) How are the following goods classified under the Central Excise Tariff Act, 1985? (i) Incomplete or unfinished goods having the essential characteristics of finished goods. (ii) Finished goods that are removed in an unassembled condition or in a disassembled condition such as semi-knocked down or completely knocked down condition. (b) Briefly discuss the provisions of the Central Excise Act, 1944 and the Rules regarding ordering of Provisional Assessment and finalisation of such Assessment. (c) Explain briefly the provisions of Rule 19 of the Central Excise Rules, 2002 regarding Exports without payment of duty other than to Nepal and Bhutan. [5+5+5 = 15 marks] Q 4 (a) (i) Write a brief note on the orders passed that are appealable to the Supreme Court of India under Section 35L of the Central Excise Act, 1944. (ii) State briefly the powers of the Central Government under Section 37 of the Central Excise Act, 1944 to make Rules under the Act. (b) Briefly explain the provisions of Rule 21 of the Central Excise Rules, 2002 regarding Remission of Duty. (c) (i) Explain the provisions of Rule 25 of the Central Excise Rules, 2002 regarding confiscation of goods. (ii) Briefly state the powers of the Central Government under Section 35EE of the Central Excise Act, 1944 relating to Revision of orders passed. [6+4+5 = 15 marks] Q 5 (a) Briefly explain whether the following units are eligible for the benefits under Notification No. 8/2002-CE dated 1.3.2002 and Notification No. 9/2002-CE dated 1.3.2002 during the financial year 2002-03 as Small Scale Industry : (i) ABC Ltd. had registered a turnover for the purposes of the above Notifications of Rs. 3.2 crores in the financial year 2001-2002. Due to recession in the industry, they anticipate a fall in turnover of 20% in 2002-03, when compared to the year 2001-02. (ii) XYZ Ltd. has started its manufacturing operations in the year 2002-03 with an investment of Rs. 3.5 crores in plant and machinery and hope to achieve a sales turnover of Rs. 2 crores in 2002-03. (b) Write short notes on any two of the following : (i) Scope of Excise Audit 2000 (ii) Binding nature of the circulars issued by the Central Board of Excise and Customs. (iii) Advance ruling under the Central Excise Act, 1944. (c) Briefly explain the concept of ‘unjust enrichment’ as it occurs under Section 11B of the Central Excise Act, 1944 and state the exceptions to this concept contained in Section 11B(2) of the Central Excise Act, 1944. [4+6+5 = 15 marks] PART – B Q 6 (a) (i) Gujarat Dry Fruits Ltd. imported dry fruits and declared the value as under :
It was found that imports were also made by some other dealers as indicated below :
The Customs Department has sought to assess the imports made by Gujarat Dry Fruits Ltd. as “contemporaneous imports” under Section 14 read with Rule 5 of the Customs Valuation Rules, 1988. Briefly examine whether the action proposed by the department is correct. (ii) RI is an indenting agent of an Italian company. The agreement provides for payment of 20% commission on the imported equipments supplied by RI to users in India. However in respect of RI’s own requirements of the equipment supplied by the Italian company, no commission was payable as there was to be no value addition by the indenting agent. The department wants to enhance the values of the imports by 20% as according to them the Indenting Agent is a “Related person”. Examine briefly whether the stand taken by the department is correct with reference to Section 14 of the Customs Act, 1962 and Rule 9 of the Customs Valuation Rules, 1988 regarding “costs and services” and Rule 2(2) regarding “Related persons”. (b) State briefly the provisions relating to confiscation of conveyances under Section 115 of the Customs Act, 1962. (c) Explain briefly the provisions relating to “Baggages” under the Customs Act, 1962 and the Rules framed thereunder. [10 (7+3) +5+5 = 20 marks] Q 7 (a) Write short notes with reference to the Customs Act, 1962 : (i) Product specific safeguard duties (ii) Special Economic Zone (iii) Duty Deferment. (b) Explain the provisions of Section 67 and Section 69 of the Customs Act, 1962 with respect to the following : (i) Transfer from one warehouse to another (ii) Clearance for exportation. [9+6 = 15 marks] Q 8 (a) Explain briefly the provisions of Section 74 and Section 75 of the Customs Act, 1962 relating to duty drawback. (b) Write short notes on any two of the following with reference to the Customs Act, 1962 : (i) Stores (ii) Import Manifest (iii) Postal Articles. (c) Briefly explain the powers of the settlement commission under the Customs Act, 1962. [5+6+4 = 15 marks] PART – C Q 9 (a) Answer any four of the following with reference to the Finance Act, 1994 as amended, relating to applicability of Service tax : (i) Jobbing transactions entered into on principal to principal basis between members of the same Stock Exchange. (ii) Service to a policyholder by an insurer carrying on Life Insurance business (iii) Activity of printing and publishing Telephone Directories, Yellow Pages or Business Directories. (iv) Services rendered in relation to merger and acquisition of a management consultant. (v) Services rendered regarding legal or taxation consultancy by a Chartered Accountant. (b) Answer any two of the following with reference to the provisions of the Finance Act, 1994 as amended relating to Service Tax (i) Are services provided in the State of Jammu and Kashmir liable for Service tax? (ii) What are the due dates for filing of returns under the Service Tax Law? (iii) Does the doctrine of ‘unjust enrichment’ apply to payment under the Service Tax Law? (c) Briefly discuss the provisions of the Finance Act, 1994 as amended, relating to Service tax with respect to any one of the following taxable services : (i) Consulting Engineer (ii) Credit Rating Agency. [8+4+3 = 15 marks] C.A. FINAL – Group II - (New Syllabus) November 2002 Question No. 1,
6 and 9 are compulsory. PART – A Q 1. (a) (i) Explain Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. (ii) M/s OTV Ltd. manufacture T.V. sets. They had sent the T.V. sets from their plant to their depot at Jammu. The depot sold the same at Rs. 12,000 on 1.8.2002 and at Rs. 12,500 per set on 10.8.2002. Please mention what would be the value of the T.V. sets removed from the factory on 3.8.2002 and 10.8.2002. [3+5 = 8 marks] (b) (i) “Manufacture” implies a change, but every change is not manufacture. Elucidate this statement supported by at least one decided case. (ii) M/s XYZ Distillery purchased yeast from the market and mixed the same with molasses. The mixture called ‘wash’ is used for production of alcohol. M/s XYZ contends that “Wash” is not excisable as it has no shelf life of more than 8 hours. Please offer your considered views. [4+4 = 8 marks] (c) A public sector undertaking has given a turnkey contract to M/s B.S.Ltd. for erection, installation and commissioning of a Central Air-conditioning plant. The Central Excise Officer raises a demand for Central Excise duty on M/s. B.S.Ltd. in respect of the installed plant. Please examine with the help of decided case laws as to whether the Duty of Excise is payable on the plant. [4 marks] [Total 20 marks] Q. 2. (a) (i) What are the various documents on the strength of which CENVAT Credit can be taken under CENVAT Credit Rules, 2002? (ii) What is the restriction imposed on the CENVAT Credit in respect of inputs manufactured by a 100%E.O.U. and used by a manufacturer in domestic tariff area under CENVAT Credit Rules, 2002. (b) Briefly discuss with reasons whether in the following cases CENVAT Credit is available to an assessee and, if yes to what extent? (i) An assessee purchased inputs weighing 1,000 Kgs. The duty paid on the inputs was Rs. 10,000. During transit, 500 Kg. inputs were destroyed. (ii) M/s ABC imported inputs from abroad and got them cleared from customs on payment of Basic Customs duty Rs. 25,000, Additional Customs duty Rs. 20,000 and Special Additional duty of Customs Rs. 5,000. [5+4+3+3 = 15 marks] Q. 3. (a) Mention briefly the provisions of section 14A and section 14AA of Central Excise Act relating to Special Audit. (b) (i) Which is the forum for obtaining stay of demand of duty excise confirmed by a Commissioner of Excise and what are grounds for obtaining a stay of demand of duty? (ii) Under what circumstances refund of Central Excise duty will be made to the claimant instead of being deposited in Consumer Welfare Fund [5+5+5 = 15 marks]. Q. 4. (a) Write short notes on any two of the following under the Central Excise Act, 1944: (i) Certificate Action (ii) Presumption as to Documents (iii) Settlement Commission (b) Explain briefly the provisions relating to duties of excise collected from the buyer to be deposited with Central Government under Section 11D of the Central Excise Act, 1944. (c) Examine briefly the following with reference to Section 9AA and Section 9C of the Central Excise Act, 1944. (i) Whether Criminal Prosecution would lie against a Company before a Court of Law. (ii) To what extent are Directors of the Company responsible for offences committed by the company? [(3x 2)6+4+2+3 = 15 marks] Q. 5. (a) Under what circumstances, the small scale exemption will be available to the Excisable Goods bearing the brand name of another person under Notification No. 8/2001-C.E. dated 1.3.2001 ? (b) What are various clearances, whose value shall not be taken into account for the purpose of determining the aggregate value of clearances for Home Consumption under Notification No. 9/2001-C.E. dated 1.3.2001? (c) (i) When penalty equal to the amount of duty can be imposed under the Central Excise Act? (ii) Under what circumstance such penalty shall be reduced to twenty five percent statutorily? [5+5+2+3 = 15 marks] PART – B Q. 6. (a) Infotech Limited has imported a machine from Japan at an FOB cost of 50,000 yen (Japanese). The other expenses incurred are as follows: (i) Freight from Japan to Indian Port 5,000 yen. (ii) Insurance paid to insurer in India Rs. 2,500. (iii) Designing charges paid to consultancy firm in Japan 7,500 yen. (iv) M/s Infotech spent Rs. 25,000 in India for development work connected with the machine. (v) Transportation cost from Indian Port to factory Rs. 7,500. (vi) Central Government had announced exchange rate of 1 yen = Rs. 0.40 by Notification under Section 14(3) of the Customs Act, 1962. The exchange rate prevailing on that day in the market was 1 yen = Rs. 0.4052. (vii) M/s. Infotech made payment to the Bank based on an exchange rate of 1 yen = Rs. 0.4150. (viii) The Commission payable to the agent in India was at 5% of the FOB price in Indian Rupees. The rate of Customs duty is 35%. Similar goods are subject to 15% excise duty in India. Clearly showing your workings to arrive at the total Assessable value in Rupees for purposes of Levy of Customs duty. (b) Briefly explain the provisions relating to claim for refund of Customs duty paid in excess under the Customs Act, 1962. (c) Explain briefly the meaning of “first appraisement” and “second appraisement” systems under the Customs Act, 1962. [10+5+5 = 20 marks] Q. 7. (a) Write short notes with reference to Customs Act and Customs Tariff Act : (i) Protective duties (ii) Identical goods. (iii) Classes of Officers of Customs (b) Write briefly the procedure for getting permission for Private Warehouse. [9+6 = 15 marks] Q. 8. (a) XYZ Company Limited exported a consignment of manufactured goods. The company has paid import duty and Central Excise duty on the components used in the manufacture. A duty drawback rate has been fixed for these goods. The ship carrying the consignment runs into trouble and sinks in the Indian territorial waters. The Customs Department has refused to grant drawback for the reason that the goods have not reached their destination. As a consultant for M/s XYZ Limited you are required to prepare a brief note with reasons whether the stand taken by the Customs Department is correct in law. (b) Write short notes on any two of the following: (i) Prohibited goods. (ii) Bonded Warehouse (iii) Transit of goods and transshipment of goods (c) Write a short note on “relevant date for determining the duty rate and tariff valuation for imported goods” [5+6+4 = 15 marks] PART – C Q. 9. (a) Answer any four of the following questions - (i) Under which Act is the Service tax levied? (ii) At what rate is Service tax levied? (iii) When is Service tax payable? (iv) Is Service tax payable on advances received by Service provider? (v) When was service provided by a practicing Chartered Accountant brought within the purview of Service Tax? [ 1x4 = 4 marks] (b) Answer any two of the following as to whether the same is to be included for purpose of determining the value of Taxable Service: (i) The cost of parts or accessories sold to the customer during the course of repair of motor cars. (ii) The aggregate of commission or brokerage charged by a broker on the sale or purchase of securities (iii) The Cost of unrecorded magnetic tape or storage devices sold to the client during the course of providing the service [2 x 2 = 4 marks]. (c) (i) Please briefly mention the provisions for issuing notice in respect of taxable service escaping assessment. (ii) Define any one of the following terms in relation to Service tax: (a) Mandap (b) Facsimile (FAX) (c) Practicing Chartered Accountant. [5+2 = 7 marks] [Total 15 marks]. |