ICWA - INTERMEDIATE EXAMINATION

INDIRECT TAXATION

June 2004

Time Allowed : 3 Hours - Full Marks : 100.
Answer Q No 1 which is compulsory carrying 20 marks and
any 5 from the rest, each carrying 16 marks.

Q 1 (a) Capital goods on which Cenvat credit has been availed are required to be used within the factory. These cannot be sent outside to job worker’s place for his use. What are the exceptions ? (b) Cenvat credit is never refundable in cash. What is exception ? (c) Explain the meaning of ‘Exclusive Economic Zone’ and ‘Continental Shelf’ under the provisions of Customs Act, 1962. (d) What are the advantages of moving the Settlement Commission under the provisions of Customs Act, 1962 (e) Describe the provisions of section 11DD of Central Excise Act, 1944 [4 x 5 = 20 marks]

Q 2 (a) Define ‘inter connected undertakings’ under the provisions of Central Excise Act, 1944 (b) Explain whether the following elements are includible in the assessable value under section 4 of Central Excise Act, 1944 – (i) Advertising Charges (ii) Warranty Charges (iii) Interest on delayed payments (iv) Quantity Discount (c) Define ‘Retail Sale Price’ under section 4A of Central Excise Act, 1944 [4+8+4 = 16 marks]

Q 3 (a) Discuss whether the following goods are entitled for Cenvat credit – (i) Plastic trays used in a factory to move the raw materials within the factory (ii) Steel sheets used to erect a storage tank of 1 million capacity (iii) Light diesel oil used to generate electricity consumed within the factory (iv) Caustic soda used in the factory to treat the waste water let out to prevent water pollution (b) State the warehousing provisions available to a manufacturer of excisable goods (c) What is meant by ‘presumption of culpable mental state’ under the Central Excise Act ? [8+4+4 = 16 marks]

Q 4 Write short notes on any four of the following with reference to Customs Act, 1962 – (a) Salient features of Section 14(1) of Customs Act, 1962 for valuation of imported/exported goods (b) First Appraisement (c) Provisional Assessment (d) Demand of duty (e) SEZ (Special Economic Zone) (f) NCCD (National Calamity Contingent Duty) of Customs [4 x 4 = 16 marks]

Q 5 Discuss briefly any four of the following with reference to Customs Act, 1962 – (a) Remission of duty on abandoned goods (b) Deemed exports (c) Re-export of duty paid goods (d) The right of a person searched (e) High Court can directly formulate question of law and decide [4 x 4 = 16 marks]

Q 6 (a) M/s Sharma Traders imported certain goods from USA. The FOB value was US $ 5,000. Freight was US $ 200 and insurance charges were US $ 50. As per the agreement with USA suppliers, agency commission of Rs 10,000 was payable by Sharma Traders to their Indian Agents. M/s Sharma Traders filed Bill of Entry on 24-2-2004. Entry Inward was granted to the ship on 5-3-2004. Duty was actually paid by Sharma Traders on 25-3-2004. Basic customs duty payable on various dates was as follows – (i) 24-2-2004 – 25% (ii) 5-3-2004 – 20% (iii) 25-3-2004 – 30%. Exchange rates as announced by CBE&C on various dates was as follows – (i) 24-2-2004 – 1 US $ = Rs 44.70. (ii) 5-3-2004 – 1 US $ = Rs 45.10 ( iii) 25-3-2004 – 1 US $ = Rs 45.40. M/s Sharma Traders actually paid to Bank @ 1 US $ = Rs 44.90 against payment of the invoice. Excise duty on similar goods in India is 16%. However, as per an exemption notification, if Cenvat credit on input is not availed, excise duty will be @ 8%. No Special Additional Duty (SAD) is payable. Calculate the Assessable Value and customs duty payable (b) State the provisions in respect of ‘burden of proof’ in respect of goods covered under section 123 of Customs Act, 1962 (12+4 = 16 marks).

Q 7 (a) Ram & Co. are dealers in engineering goods. They obtained an order for an  engineering item ‘A’.  They quoted a price of Rs 5,000 per piece for ‘A’. Ram & Co. then approached Laxman & Co. who was manufacturer of engineering items. It was agreed that Ram & Co. will supply raw material required for manufacture of ‘A’ to Laxman & Co. free of cost. Laxman & Co. will manufacture product ‘A’ and supply it to Ram & Co.  It was agreed that Laxman & Co. will charge Rs 1,500 per piece as their job charges per piece. Other information is as follows – (i) Raw material supplied by Ram & Co. to Laxman & Co. was purchased by Ram & Co. from the manufacturer ‘Z’. The breakup of the invoice of ‘Z’ was as follows – Net Price per Kg of raw material – Rs 40. Excise duty – Rs 6.40 Sales Tax – Rs 1.86. Total – Rs 48.26. Ram & Co. generally sales goods after adding 10% to their purchase price  (ii)  Product A requires 50 Kg of raw material per piece, including normal wastage of 5%. (iii) Transport charges incurred by Ram & Co. for delivering raw material to factory of Laxman & Co – Rs 100 per piece (iv) Transport charges for returning the finished product to the Ram & Co – Rs 130 per piece. These are paid by Laxman & Co. and recovered from Ram & Co. by issuing a separate debit note. - - The rate of duty is 16%. Who is liable for payment of excise duty ? What will be the assessable value ? (b) State provisions in Central Excise Act in respect of special audit of Cenvat credit under section 14AA of Central Excise Act, 1944 [8+8 = 16 marks]

Q 8 (a) How would you treat the following transactions under the provisions of CST Act ? – (i) A, who is dealer in Jaipur, agrees to sell goods to B in Banlagore, but he books the goods from Jaipur to Bangalore in his own name and his agent in Bangalore receives the goods on behalf of A. Thereafter the goods are delivered to B in Bangalore and the same accepted by B (ii) A VPP dispatch from Ahmedabad to Hyderabad (b) Explain the provisions relating to ‘cognizable offences’ under the CST Act, 1956 (c) Define ‘sale price’ as defined in CST Act, 1956 [8+4+4 = 16 marks]

ICWA - INTERMEDIATE EXAMINATION

INDIRECT TAXATION

December 2003

Time Allowed : 3 Hours - Full Marks : 100.
Answer Q No 1 which is compulsory carrying 20 marks and
any 5 from the rest, each carrying 16 marks.

Q 1. (a) Define ‘Factory’ under Central Excise Act, 1944. (b) Define ‘wholesale dealer’ under Central Excise Act, 1944. (c) Discuss the ‘powers of officers of Customs’ under the provisions of Customs Act, 1962. (d) Are the goods imported or belonging to Government dutiable under Customs Law? Explain. (e) Define ‘Place of Business’ under CST Act, 1956 [4 x 5 = 20 marks]

Q 2. (a) When does the Central Government have powers to grant exemption from duty under Central Excise Act, 1944. (b) Explain the relevance of statement under certain circumstances as described in section 9D of Central Excise Act, 1944. (c) Is there any provisions to collect interest on amount collected in excess of duty and deposited with the Government? Explain the relevant provisions. (d) State the penal provisions for delayed payment of duty under Central Excise Rules [4 x 4 = 16 marks]

Q 3. (a) Under what conditions ‘Cenvat’ credit is available if the credit is deniable on Technical grounds? (b) How a manufacturer or buyer of inputs can satisfy himself about the payment of duty by the input supplier/manufacturer to avail Cenvat credit? (c) When is the notional interest on Advance includible in the value u/s 4 of Central Excise Act, 1944? (d) Mention those elements of cost that shall not form part of the assessable value of captively consumed gods under Rule 8 of Central Excise Valuation Rules, 2000 [4 x 4 = 16 marks]

Q 4. Write short notes on any four of the following under Customs Act, 1962: (a) ‘Electronic Declaration’ of Bill of Entry; (b) Advance Ruling; (c) Anti Dumping Duty; (d) Export Houses and criteria for their recognition; (e) Self assessment scheme for importers and exporters including claim; (f) Re-importation of goods produced or manufactured in India – section 20 of Customs Act, 1962. [4 x 4 = 16 marks]

Q 5. Attempt any eight of the following by filling the blanks/choosing appropriate word/stating the statement as True or False etc. as the case may be :  (a) Customs Act, 1962 consolidates ____________, _______ and provisions of Air Customs Acts. (b) In second appraisement system the assessment is done on the basis of _______ and goods are  ______ later. (c) Identical goods means that goods should be _____ in all respects, should be produced in the same ______ and should be ____ by same _________. (d) Rate of duty applicable in the following cases shall be the rate on the date; (i) for home consumption when ________ is presented. (ii) for warehouse goods when goods are _______ from warehouse. (iii) for baggage when ________ is made. (iv) for postal import when the authorities present the _________. (e) The maximum period for warehousing (i) capital goods for 100% EOU is _____ years. (ii) for other goods is ________ years. The period may be extended by _______. (f) Drawback Rules, 1995 are made under section _________ of Customs Act, 1962 and section _____of Central Excise Act, 1944. (g) Penalty for short levy etc. of duty by collusion or willful misstatement is equal to ____ and ______. However, if paid within 30 days it will be ____ per cent of the amount. (h) Interest on delayed payment of refund is ______%. (9, 10,15) (i) Offences under Customs Act are non-cognizable. Customs officer himself may grant bail. True or False. [2 x 8 = 16 marks]

Q 6. (a) A has imported from U.S.A. by Air under-mentioned goods at Mumbai: Tariff Heading - 85-01, (1)  Description - Micro motors – Value in FOB – US  $ 10,000 (2) Soldering irons and guns -  Value in FOB – $ 5000 - - Other relevant data are : Air freight $ 400, Insurance actual $ 200, Local agent’s commission Rs. 5,000, Rate of exchange 1$ = Rs. 50, Customs duty – 25% Ad-valorem, CVD – 16% Ad-valorem, SAD – 4% Ad-valorem. Effective Rate of duty on soldering irons and guns through a customs notification is 20%. Compute assessable value of each item and relative total customs duty and aggregate customs duty payable [8 marks] (b) (i) What is ‘Brand Rate”? (ii) An exporter has exported under-mentioned goods under draw-back claim: 

Note : 1: On examination it is found that brass content in brass artware is 80%. 2: Artware has copper content of weight 950 kg. Compute the amount of drawback admissible taking into account the above facts. [2+6 = 8 marks]

Q 7. Write short notes under the provisions of Central Excise Law regarding: (a) Procedures for end-use exemption (b) Removal of goods from FTZ, EOU and SEZ to DTA (c) Return of duty paid goods for repairs and other purposes (d) Storage of non-duty paid goods outside the factory [4 x 4 = 16 marks]

Q 8. (a) What is document of Title of goods under CST Act, 1956? (b) Mention the names of certain goods declared to be of special importance in inter-state trade or commerce for the purposes of CST Act, 1956. (c) When is indemnity granted under CST Act, 1956 to the officers of the Government? (d) Give a few illustrations of Consignment transactions, which are not considered as sale under the CST Act, 1956 [4 x 4 = 16 marks]

INDIRECT TAXATION

June 2003

Time Allowed : 3 Hours - Full Marks : 100.
Answer Q No 1 which is compulsory carrying 20 marks and
any 5 from the rest, each carrying 16 marks.

Q 1 (a) Mention the types of duties that could be imposed on excisable goods under Central Excise Tariff Act, 1944 and other allied Acts and on what value such duties are imposed if the rate is ad valorem rate of duty. (b) Define ‘inter connected undertakings’ as required under Section 4 of Central Excise Act, 1944. (c) Why Special Additional duty of Customs is levied? On what value is the said duty computed? Is there any exemption available from the said levy? (d) Under which provision of Customs Act, 1962, Customs Duty is levied? Explain the relevant provisions. (e) Define  ‘Sale price’ under CST Act, 1956. [ 4 x 5 = 20 marks]

Q 2 (a) Specify the exempted goods that require reversal of credit under Rule 6 of Cenvat Credit Rules. (b) How does a manufacturer availing Cenvat satisfy himself that duty was paid on such goods by the supplier of the Inputs/Capital goods? (c) State the powers of Central Excise Officers to grant ‘Remission’ of duty. (d) What is the penal provision when any person acquires or possesses or sells or keeps or purchases or transports or removes or deals with goods liable for confiscation under Central Excise Rules, 2002? [ 4 x 4 = 16 marks]

Q 3 (a) What are penal provisions in the case of vexatious search and seizure by Central Excise Officers? (b) Explain the circumstances when an Advance Ruling will be void under Central Excise Act, 1944 (c) State  the circumstances under which an application will not be entertained by the Settlement Commission under the provisions of the Central Excise Act, 1944? (d) Describe the provisions relating to offences by Companies under Section 9AA of Central Excise Act, 1944 [4 x 4 = 16 marks]

Q 4 Write short notes on any four of the following: (a) Customs Documents (b) Notice of Short Export (c) Status Certification for Export Houses under Exim Policy 2002-07 – Handbook of Procedure (d) Test Report by Customs Chief Chemist (e) Detention Certificate (f) Import of Commercial Samples  [4 x 4 = 16 marks].

Q 5 Answer the following under Customs Act, 1975 by filling in the blanks/choosing the appropriate word/stating whether statement is true or false: (a) Baggage includes ----- but does not include -------- as per section ------ of Customs Act, 1975 (b) There are four forms of shipping Bills (i) Green colour stands for -----. (ii) Yellow colour stands for ----. (iii) White colour stands for ------. (iv) Pink colour stands for ----. (c) An authorised representative may be ----- (any one/none) of the following : Employee, Custom House Agent, Advocate, Qualified professional such as Chartered Accountant, Company Secretary, Cost Accountant etc. (d) Refund claim should normally be filed within ------ months. It can be filed within one year by ---- and also by an individual for ----- use. (e) Time limit to file appeal to Commissioner (Appeals) is ----- days. He ------ (can/cannot) remand cases. (f) There is no time limit for launching ------ for ------ offences. (g) Penalty for improper import/export is equal to an amount not exceeding Rs. ----- or ----- times the value of goods, whichever is higher. (h) In case of post parcel, label/declaration is deemed “Bill of Entry”. State whether True or False. [2 x 8 = 16 marks]

Q 6 (a) Zing Yong of China exports Lithium Cell to India, the FOB price of which is one Dollar for 30 cells; however the details of Fright & Insurance were not made available. Investigation reveals that the goods are imported into India at an increased quantity. Similar cells are manufactured in India, the cost of sales per cell of which indicates the following break-up:
Direct Material Rs. 2.00,
Direct Labour Re. 0.25,
Direct Expenses Re. 0.25,
Indirect Expenses Re. 0.50,
Indirect Labour Re. 0.25,
Indirect Expenses Re. 0.25,
Administrative Overheads Re. 0.50,
Selling and distribution overheads Re. 0.50,
Profit Margin Re. 0.50.
The exchange rate 1 $ = Rs. 50. Is there any case to impose Safeguard Duty? If yes, what is the duty leviable ?
(b) Determine the total Customs Duty payable from the following data -
Quantity imported : 100 MTs, 
FOB value : Swiss Franc : 10000,
AIR Fright : Swiss Franc : 2500,
Insurance : Data not available,
Exchange rate : 1 Swiss Franc = Rs. 34,
Rate of BCD 30%,
Rate of Cenvat under First Schedule to CETA : 16%,
Rate of SED under Second Schedule to CETA : 16%,
Rate of AED(GSI) under Additional Duties of Excise (GSI) Act : Rs. 10/kg,
Rate of NCCD 1%,
Rate of SAD 4%      [8+8 = 16 marks]

Q 7 (a) X Ltd. is engaged in the manufacture of ‘paracetamol’ tablets that has an MRP of Rs. 9 per strip. The Company cleared 1,00,000 tablets and distributed as physician’s samples. The goods are not covered by MRP, but the MRP includes 16% Excise Duty and 4% CST. If the cost of production of the tablet is 40 paise per tablet, determine the total duty payable. (b) From the following data, determine the CENVAT allowable if the goods are produced or manufactured in a FTZ or by a 100% EOU and used in any other place in India.
Assessable value : Rs. 770 per unit,
Quantity cleared 77,770 units,
BCD – 30%,
CVD – 16%
(c) Mrs. E fails to pay Excise Duty of Rs. 60,000 on the goods cleared in February by 5^th March of 2003. The assessee, Mrs. E, is owner of a SSI unit. What is the interest payable under Rule 8 of Central Excise Rules, 2002 if the duty was actually paid on 10^th May of 2003? (d) Is there any provision to store non-duty paid goods outside the factory? State the provisions, if any, under Central Excise Rules, 2002. [4 x 4 = 16 marks].

Q 8 (a) What is the liability of a “Company in Liquidation” under Section 17 of CST Act, 1956? (b) Describe the provisions relating to rounding off of tax under Section 9B of CST Act, 1956? (c) State the transactions that are not taxable under CST Act, 1956. (d) Define the meaning of ‘Occasions such export/import sales’ under CST Act, 1956. [4 x 4 = 16 marks]

ICWA - INTERMEDIATE EXAMINATION

INDIRECT TAXATION

December 2002

Time Allowed : 3 Hours - Full Marks : 100.
Answer Question No. 1 which is compulsory and any five from the rest.

Q.1 (a) What is the relevant date for determination of rate of duty and tariff value under Central Excise Rules, 2001? (b) (i) A big ship carrying merchandize and stores enters the territorial waters of India but it cannot enter the port. In order to unload the merchandize lighter ships are employed. Stores are consumed on board the ship as well as by the small ships. Examine whether such consumption of stores attracts customs duty, quote relevant section and case law, if any. (ii) Stores are supplied to the above ships. Will such supplies be treated as exports and be entitled to drawback? (c) Describe the constitutional provisions under which Central Excise duty is imposed. (d) An officer of the Customs has reason to believe that a person has secreted gold/diamonds or documents about his person liable to confiscation. He wants to search him. The person requests the officer to take him to a Gazetted Officer or Magistrate. Should his request be acceded to? What precautions should be taken in such a search? (e) Describe constitutional provisions that restrict imposition of tax on sale of or purchase of goods. [ 4 x 5 = 20 marks]

Q 2. (a) H Ltd. purchased a Boring-Drilling machine at a cum-duty price of Rs. 32,14,476. The Excise duty rate charged on the said machine was @ 16%. The machine was purchased on 01.04.2000 and disposed of on 30.09.2002 for a price of Rs. 12 lakhs. The company was claiming depreciation @ 25% following Straight Line Method. Using the said information, answer the following questions: (i) What is the Excise duty paid on the machine? (ii) What is the Cenvat credit allowable under Cenvat Rules? (iii) What is the amount of Cenvat credit reversible or duty payable at the time of clearance of the said machinery? (b) Explain the provisions relating to confiscation and penalty under Rule 25 of Central Excise Rules. (c) Explain the penal provisions relating to vexatious search, seizures, etc. by Central Excise Officers. [8+4+4 = 16 marks]

Q 3. Distinguish between the following under Central Excise Law: (a) ‘Transfer of Cenvat credit’ and ‘Transitional provisions of Cenvat credit’. (b) ‘Exempted goods’ and ‘Nil rate goods’ (c) ‘Assessment of return’ and ‘Scrutiny of return’ (d) ‘Memorandum of appeal’ and ‘Memorandum of cross objections’. [4 x 4 = 16 marks]

Q 4. Write brief notes on any four of the following under Customs Act, 1962: (a) First appraisement (b) Procedure for filing appeal to Commissioner (Appeals) (c) Import under Duty Exemption Pass Book 1997-2002 (d) Legal position of instructions in manuals/trade circulars/public notices (e) Retrospective effect of rule/regulation notification even amended/repealed or superseded. [4 x 4 = 16 marks]

Q 5. Answer any four of the following under Customs Act, 1962 - (a) IEC code (b) Classification of an article which is incomplete or unfinished but has the essential characteristics of the complete/finished article (c) Nominated agencies (d) Negative List of Imports (e) Custom House Agent. [4 x 4 = 16 marks]

Q 6. (a) ‘A’ imports by air from USA a Gear cutting machine complete with accessories and spares. Its HS classification is 84.6140 and Value US $ f.o.b. 20,000.

Other relevant date/information: (1) At the request of importer, US $ 1,000 have been incurred for improving the design, etc. of machine, but is not reflected in the invoice, but will be paid by the party. (2) Freight - US $ 6,000. (3) Goods are insured but premium is not shown/available in invoice. (4) Commission to be paid to local agent in India Rs. 4,500. (5) Freight and insurance from airport to factory is Rs. 4,500. (6) Exchange rate is US $ 1 = Rs. 45. (7) Duties of Customs : Basic – 25% CVD – 16% SAD – 4%. - -  Compute (i) Assessable value (ii) Customs duty.

Q 6 (b) ‘A’ has exported under-mentioned goods under drawback claim –

On examination it is found that brass content in brass jewellery is 50% of weight and in plastic bangles the plastic content is 50% but the total weight comes to 190 kgs only. - -Compute drawback on each item and total drawback. [10+6 = 16 marks]

Q 7 (a) State whether the following elements are to be included or not as part of the ‘Transaction value’ under section 4 of the Central Excise Act, 1944. (i) Erection and commissioning charges (ii) System software etched in the computer system (iii) Cylinder holding charges (iv) After-sales warranty charges - - (b) X Ltd. manufactures three health drinks viz. Slim, Trim, Prim. Slim was sold only to Y Ltd., a subsidiary company of X Ltd. Trim was sold to Z Ltd., where the Managing Director of X Ltd. is a Manager. Prim is sold to P Ltd. who are sole distributor of X Ltd., and was coming under the same management of X Ltd. Determine the assessable value/transaction value of the three products in the hands of X Ltd. on the basis of the following information :

(c) Define ‘Transaction value’ under section 4 of the Central Excise Act, 1944.  [8+5+3 = 16 marks]

Q 8. (a) Distinguish between ‘concessions’ and ‘exemptions’ under CST Act, 1956. (b) State ‘omissions’ and ‘commissions’ that attract penal provisions under CST Act, 1956. (c) Are the following ‘Sale’ under section 2(g) of CST Act, 1956? (i) Sale of illegal goods. (ii) Gifts given by a company to their shareholders. (iii) Credit sale. (iv) Leasing of Fixed Assets (v) Works contract (vi) Development of Computer Software to the requirement of clients (vii) Xerox copying for customers (viii) Job work [4+4+8 = 16 marks].

June 2002

Time Allowed : 3 Hours - Full Marks : 100.
Answer Question No. 1 which is compulsory and any five from the rest.

Q.1 (a) Who is exempted from registration under Rule 9 of Central Excise Rules, 2001? (b) Distinguish between ‘reference application’ and ‘revision application’ under Central Excise Law. (c) Explain the provisions relating to short-shipment/shut out notice under the Customs Act and Rules. (d) Under Section 28A of the Customs Act, 1962, the Central Government has power not to recover Duties levied or short levied. – Discuss. (e) List the restrictions and conditions in regard to tax on sale or purchase of declared goods within a State under Section 15 of CST Act, 1956. [4 x 5 = 20 marks]

Q.2 (a) Is transfer of Cenvat Credit admissible on account of change of ownership? Explain the relevant provisions under Central Excise Law. - - (b) Fill in the blanks: i) Cenvat credit is available on ____ .( additional customs duty/special additional duty) ii) When excise duty paid goods are returned to a factory, _____ . (Cenvat is allowed/ Cenvat is not allowed) iii) Cenvat credit can be taken on the basis of ____. (Bill of Entry/bill of Lading) iv) Transitional provisions are covered by ______. (Rule 9/Rule 8) of Cenvat Credit Rules, 2002. v) Any wrong availment of Cenvat credit may attract a penalty equivalent to the duty or Rs._____. (10,000/100,000) vi) Under Cenvat Credit Rules, 2001, capital goods includes _____.(water tank/storage tank) - - - (c) Prepare a Cenvat account in the books of A Ltd., and determine the balance as on 30-09-2002 from the following data: - 

* Opening balance as on 01-04-2002 Rs. 47,000. 

* Inputs received on 04-04-2002 involving excise duty paid Rs. 14,747 

* Purchased a lathe for Rs. 1,16,000 -cum duty price @ excise duty rate of 16% on 05-04-2002 and received the lathe into the factory on 05-12-2002. 

* On 06-04-2002 paid excise duty on final products @ 16% through Cenvat A/c (cum duty price of the goods Rs. 2,32,000). 

* Inputs cleared as such to a job worker on 01-04-2002 not returned in 180 days, quantity 1,000 Kgs; Assessable value Rs. 2 lacs; ED @ 16% of the above, 50 % of the inputs were received on 01-10-2002. 

* Common inputs were used in a product, which was exempted from payment of duty cleared at a price of Rs. 100/unit, which included taxes of Rs. 20/unit; quantity cleared 1,000 units. 

* On 07-04-2002 duty paid on inputs amounting to Rs. 17,867 was taken credit for in the Cenvat A/c as Rs. 17,687. [4+6+6 = 16 marks].

Q.3 (a) Z Ltd. is a small-scale industrial unit manufacturing a product X. The Annual report for the year 2000-01 of the unit shows a gross sale turnover of Rs. 1,91,40,000. The product attracted an excise duty rate of 16% as BED and Sales Tax 10%. Determine the duty liability under Notification Nos. 8/2001 and 9/2001 meant for SSI units. (b) B Ltd. manufactures two products namely, Eye Ointment and Skin Ointment. Skin Ointment is a specified product u/sec. 4A of Central Excise Act, 1944. The sales prices of both the products are at Rs. 43/unit and Rs. 33/unit respectively. The sales price of both products included 16% excise duty as BED and 8% excise duty as SED. It also includes CST of 4%. Additional information is as follows -

Deduction permissible u/sec 4A: 40%.  
Calculate the total excise duty liability of B Ltd., on both the products. - - 

(c) Explain the term “Process ‘Amounting to’ Manufacture”. i.e. deemed manufacture. [6+6+4 = 16 marks]

Q.4 Examine any four of the following under Customs Act, in the light of and incorporating recent changes as per Finance Act, 2001, if any - (a) Interest payment on duty not levied, short levied, and the date from which it is to be reckoned.( b) Interest on warehoused goods. (c) Time limit for filing appeal to Commissioner (Appeals). (d) Penalty for improper importation/exportation of goods. (e) Budget day clearance under CE and Customs. [4 x 4 = 16 marks]

Q.5 Discuss any four of the following with reference to Customs Act: (a) Salient features of valuation of goods under Customs Act. (b) Provisional assessment of imports. (c) CEGAT. (d) LUT (Legal Undertaking) (e) Standard input-output and value addition norms. [4 x 4 = 16 marks]

Q.6 (a) Determine the assessable value and customs duty amount from the following data: 

Importer supplied design and drawings worth Euro 10,000 to the foreign raw material supplier. # Landing charges as per Customs provisions

Customs duty rates : BCD - 30%, ACD – 16%, SAD – 4% 

Exchange rate: 1 Euro = Rs. 42.

Q6 (b) (i) What is all industry rate of Drawback? (ii) ‘A’ exported a consignment under drawback claim consisting of the following items: - 

On examination in docks, weight of brass artware was found to be 190 Kgs and was recorded on shipping bill. Compute the drawback on each item and total drawback admissible to the party. [10+2+4 = 16 marks]

Q 7 Distinguish between the following under Central Excise Law: (a) Remission of duty and Rebate of duty. (b) Bond and LUT (c) General Bond (B1 Bond) and Bond for provisional release of seized goods (B4 Bond). (d) Excisable goods and Dutiable goods. [4 x 4 = 16 marks]

Q 8 (a) What are the limitations on use of ‘C’ form in terms of value ? Are the said limitations applicable to ‘D’ forms. (b) Distinguish between ‘Consignment sale’ and ‘subsequent sale’ under CST Act, 1956 (c) Calculate the CST payable from the following data - 
(1). Invoice No.1011 dated 01.04.2001 for Rs.1,78,967 inclusive of CST @4% 
(2) Invoice No.1012 dated 02.04.2001 for Rs.1,87,697 exclusive of CST @ 4% 
(3) Invoice No.1013 dated 03.04.2001 for Rs.1,75,000 inclusive of local Sales Tax. @ 10%
(4) Invoice No.1014 dated 04.04.2001 for Rs.2,50,000 exclusive of local Sales Tax @ 8%
(5) 50% of the goods sold on 01.04.2001 on inter-state trade was rejected and returned on 31.03.2002 
(6) 20% of the goods sold on 04.04.2001 on local sale was returned on 30.06.2001 
(7) 30% of the goods sold on 02.04.2001 on inter-state trade returned on 02.06.2001 
(8) 10% of goods sold on 03.04.2001 on local sale was rejected on 03.10.2001 
(9) Goods of Rs.1,50,000 was stock transferred from Bangalore to Indore on 05.04.2001 excludes CST elements of 4% 
(10) Export of goods worth 10 million Yens to Japan on 06.04.2001 of which 50% were rejected and returned on 01.11.2002 (1 Yen = Re. 0.35) 
(11) Export through Canalising Agency for value of 100 thousands Dollars (Export order with Canalising Agency) (1dollar = Rs. 48) 
(12) Purchased goods for Rs.3,00,000 from the market on 09.01.2001 and exported to Singapore on 14.01.01 to the Agent for further sale (The goods attracted local sales tax of 10%). - - Give reasons for inclusion/non-inclusion of the above. [4+4+8 = 16 marks].

ICWA Inter – December 2001 - Indirect Taxation - Time Allowed : 3 Hours - Full Marks : 100. Answer Question No. 1 which is compulsory and any five from the rest.

Q.1 (a) Under section 3 of the Central Excise Tariff Act, 1985, the Central Government has emergency powers to increase the duty of Excise. Under what circumstances and to what extent can these be exercised? (b) Can a manufacturer claim exemption from payment of Excise duty on any intermediate product manufactured and used within the same factory? Explain the provisions. (c) Explain the applicability of Courier Imports Regulations under the Customs Act, 1962. (d) Explain anti-dumping duty and its relevance in the present day scenario of globalisation and free trade. (e) Describe briefly the offences that attract penal provisions under section 10 of CST Act, 1956. – (4 x 5 = 20 marks)

Q.2 Determine the value on which Excise duty is payable in the following instances. Quote the relevant section / rules of Central Excise Law. (a) A. Ltd. sold goods to B Ltd., at a value of Rs. 100 per unit, In turn, B Ltd. sold the same to C Ltd. at a value of Rs. 110 per unit. A Ltd. and B Ltd. are related, whereas B Ltd. and C Ltd. are unrelated. (b) A Ltd. and B. Ltd. are inter-connected undertakings, under section 2(g) of MRTP Act. A Ltd. sells goods to B Ltd. at a value of Rs. 100 per unit and to C Ltd. at Rs. 110 per unit, who is an independent buyer. (c) A Ltd. sells goods to B Ltd. at a value of Rs. 100 per unit. The said goods are captively consumed by B Ltd. in its factory. A Ltd. and B Ltd. are unrelated. The cost of production of the goods to A Ltd. is Rs. 120 per unit. (d) A Ltd. sells motor spirit to B Ltd. at a value of Rs. 31 per litre. But motor spirit has administered price of Rs. 30 per litre, fixed by the Central Government. (e) A Ltd. sells to B Ltd. at a value of Rs. 100 per unit. B Ltd. sells the goods in retail market at a value of Rs. 120 per unit. The sale price of Rs. 100 per unit is wholesale price of A Ltd. Also, A Ltd. and B Ltd. are related. (f) Depot price of a company are –

Additional information: i) Quantity cleared to Amritsar Depot - 100 units ii) Quantity cleared to Bhopal Depot - 200 units iii) Quantity cleared to Cuttack Depot - 200 units iv) The goods were cleared to respective depots on 01/01/2001 and actually sold at the depots on 01/02/2001. [2 + 2 +2 + 2 +2 + 6 = 16 marks]

Q.3 Write short notes on the following with reference to Central Excise Law: (a) Fortnightly payment of Excise duty. (b) Procedures for claiming ‘Rebate’. (c) Restrictions on removal of Excisable goods on the Budget day. (d) Date for determination of ‘duty’ and ‘Tariff valuation’. [ 4 x 4 = 16 marks]

Q 4 (a) An actual user imports following goods from England per S. S. Vishal: (1) Second hand numerically controlled horizontal lathe machine - Tariff heading – 84.5811, Value FOB - 1,000/- Pound Sterling (2). A. C. motors - Tariff heading – 85.0110, Value FOB - 500/- Pound Sterling. - - Other relevant data are: - Exchange rate 1 UK Pound = Rs. 65, Freight – 150 UK Pounds, Insurance – 25 UK Pounds. - - Rate of duty : Basic customs duty - 25%, CVD - 16%, SAD - 4%, Ignore landing charges. - - It is found that the lathe machine is undervalued. It is proposed to load the FOB value of the lathe machine by 25%. Party does not want show cause notice and personal hearing. Compute – (i) Assessable value; (ii) Total duty payable. Q 4 (b) A person makes an unauthorised import of 1000 pieces of ophthalmic rough blanks CIF priced at $ 1 per piece by air from USA (Tariff heading 70.1510). The consignment is liable to be confiscated. Import is adjudicated. AC gives to the party an option to pay fine in lieu of confiscation. It is proposed to impose fine equal to 50 % of margin of profit. The market price is Rs 100 per piece of opthalmic rough blank. The rates of duty are - Basic customs - 35%, CVD - nil, SAD - 4%, Exchange rate is - $ 1= Rs. 45. Compute: i) Amount of fine; ii) Total payment to be made by party to clear the consignment. What is the maximum amount of fine that can be imposed in this case? Quote section. [8 + 8 = 16 marks]

Q.5 Distinguish between the following with reference to the Customs Act, 1962: a) SEZ (Special Economic Zone) and EPZ (Export Promotion Zone); b) CVD and SAD; c) Cess and Duty; d) Penalty and Fine. [4 x 4 = 16 marks]

Q.6 Briefly discuss the following: (a) Searches under Customs Act: (b) Adjudicating authority, adjudication and departmental adjudication under Customs Act; (c) Recovery of sums due to Government; (d) Warehousing without warehousing. [4 x 4 = 16 marks]

Q.7 (a) State whether the following duties are entitled for ‘Cenvat’ credit. Quote the relevant rules of Central Excise. i) Cess, ii) Basic Excise Duty (Cenvat), iii) AED (T & T), iv) AED (GSI), v) Special Excise Duty, vi) National Calamity Contingent Duty, vii) Additional Customs Duty. (b) Enumerate the groups of commodities excluded from the purview of rule 57AD of Cenvat Rules. (c) Under Tariff Notification No. 6/2001 meant for SSI units, mention the clearances not includible in the aggregate value of clearances. [7+4+5 = 16 marks]

Q.8 (a) Distinguish between ‘sale in the course of export’ and ‘export sale’. (b) With reference to section 5(3) of the CST Act, 1956, examine whether the following goods are ‘same’. i) ‘Rice’ and ‘Paddy’, ii) ‘Copper wire’ and ‘Insulated wire’, iii) ‘Cashew nuts’ and ‘Cashew nut kernels’, iv) ‘Fresh prawns’ and ‘Dressed prawns’ c) Determine the rate of tax applicable under CST Act 1956 and fill up the blanks from the following information:

[4+4+8 = 16 marks]

ICWA Inter – June 2001 - Indirect Taxation - Time Allowed : 3 Hours - Full Marks : 100. Answer Question No. 1 which is compulsory and any five from the rest.

Q 1. Distinguish between the following:

a) “Penultimate Sale” and “Consignment Sale” under CST Act, 1956. b) “Normal Price” and “Transaction Value” under Central Excise Act, 1944. c) “MODVAT” and “CENVAT” under Central Excise Rules. d) “Territorial Waters” and “Indian Customs Waters” under The Customs Act, 1962. e) “Interest on delayed payment of duty” and “Interest on delayed refunds” under Customs Act, 1962. [4 x 5 = 20 marks]

Q 2. a) State the different types of duties leviable on Excisable goods. Also state under which Act such duties are levied. b) Name at least eight commodities on which Excise duty is leviable under section 4A of the Central Excise Act, 1944. c) Determine the transaction value and the Excise duty payable from the following information: i) Total Invoice Price Rs. 18,000 ii) The Invoice Price includes the following: [4+4+8 = 16 marks]

Q 3. Write short notes on any four of the following with reference to the Customs Act, 1962 a) Duty Entitlement Passbook Scheme (DEPS). b) Foreign Privileged Person. c) Summons under Customs Act, 1962. d) All Industry Rate of Drawback. e) Noting of Bill of Entry. [4 x 4 = 16 marks]

Q 4. a) Compute the Customs duty from the following data:

Local agents’ commission to be paid in Indian Rupees is Rs. 4,500 (say equivalent to US Dollars 100), The exchange rate is 1 US Dollars = Indian Rupees 45., Customs duty on Machinery - 25% ad valorem, Customs duty on Accessory (normal rate 30 % ad valorem), Surcharge on Customs duty - 10%, CVD - 16% ( Effective Rate is 8% by a notification), SAD - 4%.

b) What is the relevant date for rate of duty, rate of exchange and tariff valuation of imported goods? Will it be different, i) if Bill of Entry (BE) is presented before the import of goods, ii) if goods are imported by post, iii) for baggage?

c) Anukool imported several consignments of goods under proper license valid up to 31st December 2000. A consignment was imported per “S. S. Vaishali” on 28th December 2000. Before the goods were unloaded, strike broke out and goods could not be unloaded. Ship was forced to leave the port. The strike ended on 7th January 2001. The ship Re-entered the port on 9th January 2001 and the goods were unloaded. Anukool claims that the leaving of the port by the ship was involuntary and to save the goods. Anukool also claims that since the vessel has entered the territorial waters earlier, import was complete. Could the goods be cleared in the same license? [8+5+3 = 16 marks]

Q 5. a) Under rule 173G(6) of the Central Excise Rules, what are the records which every assessee is bound to produce before the Central Excise Officers?

b) Fill in the blanks : i) CENVAT credit is not available for the final products _____.(cigarettes/matches) ii) Transitional provisions are covered by rule _____ of Central Excise Rules, 1944. (57AF/57AG). iii) CENVAT is permissible on the document namely _____. (Bill of Entry/Bill of Export) iv) When inputs or Processed Inputs are sent to a Job Worker under rule 57AC of Central Excise Rules, the amount to be debited is ______ (10% of value of goods/Nil) v) Under rule 173C of Central Excise Rules, 1944 an assessee makes a declaration of the _____on the Invoice. (Assessable value/Cost of the goods)

c) M/s Tips and Toes Ld., manufactures four types of “Nail Polishes”, namely Sweety, Pretty, Beauty, Tweety. The company has availed CENVAT credit of Rs. 4,00,000 on the common inputs used in the manufacture of ‘Nail Polishes’. During the financial year 1999-2000, the company manufactured 1000 litres of each type of ‘Nail Polishes”. The CENVAT availed input was used in equal proportion in all the four types of the products. Calculate the CENVAT credit amount not available or amount payable under CENVAT Rules 57AA read with 57AD of CENVAT Rules of Central Excise, using the following additional data:[5+5+6 = marks]

Q 6. Write short notes on the following with reference to the Central Excise Act, 1944: a) Settlement Commission; b) Remission of Duty; c) Re-assessment of warehoused goods; d) Power to summon persons to give evidence and documents. [4 x 4 = 16 marks]

Q 7. a) Distinguish between “Duty Drawback” under Customs Act, 1962 and “REBATE” under Central Excise Rules, 1944. b) Name at least six commodities which attract “CESS”. On what component of price is “CESS” payable? c) Describe the penal provisions under section 114A of Customs Act, 1962 for “short levy or non-levy of duty in certain cases.” d) Mention the orders against which an appeal can be filed before the ‘Tribunal’ under section 129-A of the Customs Act, 1962. [4 x 4 = 16 marks]

Q 8. a) State whether the following forms part of “Sale Price” under CST Act, 1956. i) Excise duty; ii) Cash Discount; iii) Quantity Discount; iv) Interest and Service charges in the case of Hire Purchase

b) What is Nexus Theory under CST Act, 1956?

c) State whether the following are “goods” under CST Act, 1956: i) Old newspapers; ii) Animals and birds in captivity; iii) Steam; iv) Lottery tickets; v) Computer software; vi) Advance licenses; vii) Stocks and shares; viii) Standing trees. [4+4+8 = 16 marks]