Circular No. 05/2008-Cus.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
New Delhi, the 12th March, 2008.
Chief Commissioner of Customs,
Chief Commissioner of Customs & Central Excise,
Chief Commissioner of Central Excise.
Sub: Collection of Double Cess on exports of agro products – regarding –
I am directed to state that Central Board of Excise & Customs vide Circular No.3/2000, dated 07.01.2000 issued from F.No.572/4/99-LC, had clarified that Cess on export products is to be charged only once i.e., if the item is a primary product, the Cess should be collected under the Agricultural Produce Cess Act, 1940 and if item is processed product, the Cess should be collected under the Agricultural & Processed Food Products Export Cess Act, 1985.
2. Both the Agricultural and Processed Food Products Export Cess Act, 1985 and Agricultural Produce Cess Act, 1940 have since been repealed on 01.06.2006 and 25.09.2006 respectively. Board has received representation from field formations and various Exporters Associations regarding regulation of past cases of export on which Cess is leviable.
3. The matter was taken up with the Ministry of Agriculture, Department of Agriculture & Cooperation for clarification in the matter. Ministry of Agriculture have clarified that a similar case was referred by them to Ministry of Law & Justice, Department of Legal Affairs, who opined as follows: –
‘We have examined the issue, it appears that the purpose of collection of cess in the nature of a Custom Duty on Export of the Scheduled articles under the Agricultural Produce Cess Act, 1940, is to make better financial provision for ICAR for carrying out of its objectives.
But the purpose of collection of cess in the nature of Customs Duty on Export of the Scheduled Products under the Agricultural and Processed Food Products Export Cess Act, 1985, is to make financial provision to enable Agricultural and Processed Food Products Export Development Authority to discharge its functions effectively. Therefore, both the enactments seem to operate independently. This view is fortified by sub clause (2) of section 3 of the Agricultural and Processsed Food Products Export Cess Act, 1985, which is extracted below:
“(2) the duties of customs levied under sub section (1) on the Scheduled products shall be in addition to any cess or duty leviable on such Scheduled products under any other law for the time being in force.”
In the light of the above, the view of the deptt that for the same item, if it is included in the Schedule of both the Acts, it is in order to impose the cess under both the Acts, appears to be correct.”
4. The Law Ministry in its aforesaid opinion has, therefore, confirmed that for the same item, if it is included in the schedule of both the said Acts, it is in order to impose Cess under both the said Acts.
5. In view of the above, necessary instruction may be issued to the field formations to finalize the pending cases/assessments following the above legal position.
6. The Board’s Circular No.3/2000, dated 07.01.2000 stands withdrawn.
Tel: 2309 338