Power given to cost accountant / chartered accountant to inspect records for audit The government may appoint a cost accountant or chartered accountant for valuation audit or Cenvat credit audit of the accounts of an assessee, under sections 14A and 14AA respectively of the Central Excise Act 1944. Now the government has amended the Central Excise Rules 2002 to provide legal backing for inspection of records by such an auditor. Rule 22 of the Central Excise Rules 2002 has been amended to this effect by notification 22/2012-CE(NT) dated 30 March 2012, which can be seen at http://cbec.gov.in/excise/cx-act/notfns-2012/cx-nt2012/cent22-2012.htm.

1. UDYOG TAX NEWS FLASH
7th APRIL 2012
Import and export of hazardous waste prohibited
The central government has prohibited the import as well as export of hazardous waste. The list of banned
items is in Schedule VI to the Hazardous Waste (Management, Handling and Transboundary Movement)
Rules, 2008, issued under the Environment (Protection) Act, 1986. The notification can be seen at
http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-nt2012/csnt31-2012.htm.
Stuctural parts of boiler: Cenvat credit admissible
The CBEC has issued a beneficial circular to set at rest a long standing controversy about Cenvat credit on
parts of boilers. The circular informs us that field formations were denying credit on structural parts of
boilers to purchasers of boilers by classifying these at the buyer’s end under chapter 73 and invoking the
exclusion from the category of ‘inputs’ in Rule 2(k) that keeps out
“(B) Any goods used for
(a)…
(b) laying of foundation or making of structures for support of capital goods.”
The CBEC has found that the classification under chapter 73 is incorrect, and that the structural parts must
be classified as parts of boilers under heading 8402. Further it has instructed its field formations that parts of
boilers are covered in the definition of input in Rule 2(k) as –
“(iii) all goods used for generation of electricity or steam for captive use”.
The CBEC circular speaks of purchased
structural parts of boilers. Boilers are also
commonly fabricated, assembled and erected
in-house in factories; it is hoped that this
circular will be useful to settle a similar
controversy about material purchased for
making these structural parts. The circular can
be seen at http://cbec.gov.in/excise/cx-
circulars/cx-circ12/964-2012cx.htm
Power given to cost accountant / chartered
accountant to inspect records for audit
The government may appoint a cost accountant
or chartered accountant for valuation audit or
Cenvat credit audit of the accounts of an
assessee, under sections 14A and 14AA
respectively of the Central Excise Act 1944. Now
the government has amended the Central
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 1

2. Excise Rules 2002 to provide legal backing for inspection of records by such an auditor. Rule 22 of the Central
Excise Rules 2002 has been amended to this effect by notification 22/2012-CE(NT) dated 30 March 2012,
which can be seen at http://cbec.gov.in/excise/cx-act/notfns-2012/cx-nt2012/cent22-2012.htm.
Excise duty at 14% for naptha and other specified petroleum oils & oils obtained from bituminous material
In notification 12/2012-CE dated 17 March 2012, an effective rate of 14% had been stipulated for food grade
hexane. This rate has now been extended to naptha, vide notification 21/2012-CE dated 30 March 2012,
which can be seen at http://cbec.gov.in/excise/cx-act/notfns-2012/cx-tarr2012/ce21-22-2012.pdf,
The rate of 14% has also been extended to specified petroleum oils and oils obtained from bituminous
material by substituting a new entry for entry no. 15 of notification 18/2012-CE dated 17 March 2012,by
notification 22/2012-CE dated 30 March 2012, which too can be seen at http://cbec.gov.in/excise/cx-
act/notfns-2012/cx-tarr2012/ce21-22-2012.pdf. The list in the notification, covered by the 14% rate is
decoded as follows:
2710 12 11 to 2710 12 13. This covers (i) 2710 12 11 Special boiling point spirits (other than benzene, toluol)
with nominal boiling point range 55 - 115 degrees Celsius; (ii) 2710 12 12 Special boiling point spirits (other
than benzene, benzol, toluene and toluol) with nominal boiling point range 63 – 70 degrees Celsius; (iii) 2710
12 13 Other special boiling point spirits (other than benzene, benzol, toluene and toluol).
2710 12 20. This covers Natural Gasolene Liquid (NGL).
2710 12 90 This covers other light oils and preparations.
2710 20 00 This covers petroleum oils and oils obtained from bituminous minerals (other than crude) and
preparations not elsewhere specified or included (in the tariff), containing by weight 70% or more of
petroleum oils and oils obtained from bituminous minerals, these oils being the basic constituents of the
preparations, containing biodiesel, other than waste oils.
Dumping duty on tyres, tubes & flaps extended
The DG Anti-Dumping undertook a sunset review of
the dumping duty imposed under notification
88/2007-Cus dated 24 July 2007 on specified tyres,
tubes and flaps for buses and trucks, imported from
or manufactured in People’s Republic of China,
Thailand or Korea, and “requested for” extension of
the anti-dumping duty for one more year.
Accordingly the government has issued notification
17/2012-Customs (Anti-Dumping) dated 30 March
2012, extending the duty upto 7 October 2012. The
items covered are
“‘new/unused pneumatic non radial bias tyres,
tubes & flaps with or without tubes and/or flap of
rubber, having nominal rim dia code above 16”used in
buses and lorries/trucks’, falling under tariff items
4011 20 90, 4013 10 20 and 4012 90 49 of the First
Schedule to the Customs Tariff Act, 1975 (51 of
1975), originating in, or exported from, China PR and
Thailand”.
The notification can be seen at
http://cbec.gov.in/customs/cs-act/notifications/notfns-2012/cs-add2012/csadd-17-2012.htm.
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 2

3. It may be noted in passing that the notification records, as mentioned above, that the designated authority
“requested for extension of anti-dumping duty upto one more year from the date of initiation of the sunset
review.” (The underlining has been added here.) However, the duty of the designated authority is to
“recommend” and not to “request”, as can be seen from the wordings consistently used in the Customs
Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury) Rules 1995.
Dumping duty on flat base steel wheels from China extended
Dumping duty had been imposed under notification 124/2007-Customs dated 31 December 2007, on flat
base steel wheels manufactured in or imported from the People’s Republic of China. This has been extended
upto 27 March 2012 by notification 16/2012-Customs (ADD) dated 20 March 2012. Here again, the
notification records that the extention of anti-dumping duty for one year was “requested” by the designated
authority.
CBEC issues instructions regarding exemption for ore concentrate
Ores were exempted from central excise duty under notification 4/2006-CE, and the exemption has been
continued after the Budget 2012, in s.no. 56 of notification 12/2012-CE dated 17 March 2012. Customs
formations raised the issue of whether imported ore concentrates come within the scope of exemption from
CVD under these entries. The issue was examined in a tariff conference of Chief Commissioners of Customs,
and they concluded that ores and concentrates of ores are two different things, and that the concentrates
do not qualify for exemption. This has been circularised by the CBEC under circular no. 9/2012-Customs
dated 23 March 2012, which can be viewed at http://cbec.gov.in/customs/cs-circulars/cs-circ12/circ09-
2012-cs.htm.
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Update Written
By Radha Arun,
Consultant To
Udyog Software ( India) Ltd
Udyog Software (India) Ltd (www.udyogsoftware.com)
Phone: 022-67993535, Email: sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation. Page 3