Financial Daily from THE HINDU group of publications
Thursday, Feb 20, 2003
Industry & Economy
Duty-free hot-rolled stainless steel coils Salem Steel wants mint usage norms fixed
COIMBATORE, Feb. 19
THE public sector SALEM Steel Plant (SSP) has asked the Finance Ministry to fix the standard usage norms for the duty-free imported hot-rolled stainless steel (HRSS) coils used for producing coin blanks for the Government of India's mint as the present ambiguity in the usage factor to get the duty exemption for the HRSS coils imports comes in the way of claiming the duty exemption benefit.
SSP has also sought the Ministry to allow duty-free import of HRSS coils against the cold-rolled stainless steel (CRSS) strips supplied to the mint for the latter's own production of coin blanks.
The plant, in its pre-Budget memo to the Ministry, has stated that the input-output norm for the HRSS coils allowable duty-free against the coin blanks or the CRSS strips supplied to the mint that could be workable has already been accepted by the Government of India mint.
SSP produces coin blanks at its Salem plant on behalf of the Government of India mint using HRSS/CRSS route, and also supplies CRSS strips to the mint to facilitate the latter to manufacture coin blanks on their own.
SSP is permitted duty-free import of HRSS coils for the manufacture of coin blanks to be supplied to the mint under a specific customs notification which offers exemption to payment of customs duty, CVD and special additional duty on the HRSS coils imported.
But the lack of usage factor enunciated in the exemption notification has created litigation and fixation of the input-output norms would avoid disputes, the SSP has stated in its memorandum to the Centre.
The plant, which imports stainless steel slabs for conversion into HRSS coils/CRSS coils/strips, has asked the Government to reduce the customs duty on SS slabs to 15 per cent from the present 25 per cent duty incidence. The SSP has stated that currently, the import tariff structure for both SS slabs and HRSS coils is the same at 25 per cent. Lowering the duty on the slab to 15 per cent would help the plant to produce HR coils at a lower cost.
The public sector special steel making unit which has taken up job-working for other steel producers has also asked the Government to extend the `cenvat' credit for the various inputs used by it in the `job-work' manufacture of finished excisable goods returnable to the principal manufacturers without the payment of excise duty.
SSP would, as per the relevant notification meant for the job working be receiving raw material under challan without payment of excise duty and the finished goods converted to be returned to the principal manufacturers without payment of excise duty. This has been allowed under the Central excise notification no.214/86.
The plant has stated that the job working unit has to procure various inputs other than the raw material, which go into the finished excisable products, though the excise duty is ultimately discharged by the principal manufacturers.
The job working units not opting to the notification 214/86 are allowed to avail themselves of the Cenvat credit and the same facility be extended to SSP, the memo submitted by the plant has said.
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