CVD of 4% on Flash Memory Cards

Classification of the Item Broadened to Entire HS Code 8523

[Central Excise Notification No. 32 dated 28th September 2010]

The Department of Revenue has issued Excise Notification No. 32 dated 28 September 2010. The measure has broadened the classification of flash memory cards to the entire heading 8523 from 8523 51 for eligibility to the 4% CVD. Thus the contention of the Delhi Preventive Section of Customs that flash memory SD cards, are a sub set of smart cards and are thus leviable to 10 percent CVD under 8523 52 is immaterial. With the broadening of the classification for exemption, the CVD under smart card classification is also 4% after the amending notification of 28 September 2010.

It may be recalled that SD flash memory cards were subjected a Bank Guarantee of 10% following Delhi CC (Prev) Circular based on IIT professor opinion which said that SD flash memory did not have PCB. The conclusion of Delhi CC (Prev) was that the classification of flash memory SD cards was under Smart Card and exemption of 4% was not applicable.

(The excise duty on flash memory was earlier reduced to 4% from 10% by 28-CE dated 07.05.2010. The issue of classification surfaced subsequently and the exemption became “dirty” is now sorted out with the issue of 32-CE dated 28 Sept 2010).

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.6/2006-Central Excise, dated the 1st March, 2006, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R.96(E), dated the 1st March, 2006, namely:-

In the said notification, in the Table, against S.No.17, for the existing entry in column (2), the following entry shall be substituted namely:-

“8471 70 or 8473 30 or 8523”

[F.No.354/150/ 2010-TRU]