Fire

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2013 OPINION ON PULP IMPORTED UNDER CONCESSIONAL RATE OF DUTY LOST AND DAMAGED IN FIRE
We import pulp ( Custom Chapter 4703 ) i.e. raw material ( input) under Rule (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996 and S..No. 260 of notification No. 12/2012 (Customs) dated 17.03.2012 as amended vide notification No. 31/2012-Customs, dated 08.05.2012 by preparing Annexure III duly certified by the Excise Department. for the manufacture of Paper Board i.e final product which is dutiable.
As per notification custom duty (Basic) 5% is exempted and CVD 6% and additional duty 4% is applicable. We take cenvat credit of CVD and additional duty.
Some Qty of this material (Pulp) has been destroyed and damaged due to fire in Pulp godown on 2.1.13.
Please give your opinion on the following points :

1. (a) Whether we have to pay customs duty @ 5% on imported value of the pulp ?

2. ( a) Whether we have to reverse duty equivalent to Cenvat Credit taken by us i.e. CVD & Addl. Duty ?

3. On disposal of salvage value what will be rate of duty to be charged from buyer?

Arun Kumar Singh

Arun Kumar Singh (Expert)
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17 February 2013 Duty has to be remitted if there is loss due to file, efen if the manufacturer gets compensation from insurer, as a demand can be raised only terms of proviso to rule 9(1). You should consult to tax advisor so, that they can give you proper guidance.