Staying Updated

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In the issue Customs

Foreign trade policy (FTP) Anti-dumping duty

Contacts

Customs, FTP and WTO newsletter

In the issue Customs

Notifications and circulars

• Flat Panel (LCD/LED/Plasma) Television not allowed under duty free baggage allowance

• Purchase order can be accepted as a

“deed of contract” for the purpose of Project Import Regulations, 1986 Case law

Classification

• Classification of goods determined on the basis of principal function of the imported goods

Valuation

• Transaction value can be rejected on basis of significantly higher value of contemporaneous imports from the same foreign manufacturer, in absence of explanation by the importer

Others

• Refund of SAD cannot be denied where the imported goods do not undergo any fundamental change of identity before sale in the Indian market

• Interest on belated refunds of SAD is allowable

Foreign Trade Policy Notifications and circulars

• SEZ unit or a developer/ co-developer allowed to dispose off waste or scrap in domestic tariff area (DTA) without obtaining any import authorization

• Goods imported/ procured under SFIS Scheme can be transferred after 3 years

• Benefits under Advance Authorization (AA) and Duty Free Import

Authorization (DFIA) schemes are allowed only in respect of those inputs which are actually used in the

manufacture of exported goods Case law

• Conversion of Advance License shipping bill to DEPB shipping bill not allowed where request for conversion was made beyond time allowed by CBEC circular

• Custom authorities cannot challenge the validity of the import license issued by DGFT authorities

Anti-dumping duty

• Levy of anti-dumping duty on import of specified resin falling under chapter 44, originating in or exported from China PR, Indonesia, Malaysia and Sri Lanka extended till 8 February, 2015

August 2013: Volume 16 Issue 5

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In the issue Customs

Foreign trade policy (FTP) Anti-dumping duty Contacts

Customs

• The Central Government has increased the Basic Customs duty (BCD) from 8%

to 10% on specified gold bars, specified gold coins and platinum. Further, the Central Government has increased the Countervailing duty payable in lieu of excise duty (CVD) from 6% to 8% on specified gold ores and concentrates and specified gold doré bars.

(Notification No. 41/2013 dated 13 August, 2013)

• The Central Government has added Mahagaon, Thane in the State of

Maharashtra as Inland Container Depot (ICD) for the purpose of unloading of imported goods and loading of export goods.

(Notification No. 79/2012-NT dated 24 July, 2013)

• The Central Government has provided that passengers cannot bring Flat Panel (LCD/LED/Plasma) Television as duty free baggage allowance in terms of Baggage Rules, 1988 effective 26 August, 2013.

(Notification No. 84/2013 -NT dated 19 August, 2013)

• The Central Government has clarified that a purchase order can be accepted as a “deed of contract” for the purpose of registration with Customs authorities in

terms of Project Import Regulations, 1986.

(Circular No. 31/2013-Customs dated 6 August, 2013)

• The Central Government has clarified that “multifunctional speaker systems”

are classifiable under different headings of chapter 85 of the Customs Tariff Act, 1975 depending upon the principal function of the device.

(Circular No. 27/2013-Customs dated 1 August, 2013)

• The Central Government has instructed that full and comprehensive details of the exported goods should be indicated in the brand rate letters for duty

drawback purposes, which should match with the export documents as well.

(Instruction No. 7 dated 31 July, 2013) Case law

Classification

• The Madras High Court, in case of CC v Ponneri Steel Industries (2013- TIOL- 596-HC-MAD), held that skull scrap suitable for melting is classifiable under Customs Tariff Heading (CTH) 7204 as

„non-alloy steel melting scrap‟ and not under CTH 2619 as slag, as the

classification of the goods is to be determined on the basis of technical function of the imported goods.

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Valuation

• The Mumbai Tribunal, in case of Artecraft Impex International v CC (2013- TIOL-1223-CESTAT-MUM), held that transaction value declared for imported goods cannot be rejected by the authorities in absence of cogent reasons for rejection in terms of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR).

• The Delhi Tribunal, in case of CC v Solitaire India International (2013 (198) ECR 0217), held that the

transaction value can be re-determined and enhanced post-rejection on legally permissible grounds such as

significantly higher value of

contemporaneous imports in terms of CVR.

Others

• The Mumbai Tribunal, in Ganesh Saw Mill v CC (2013- TIOL-1124-CESTAT- MUM), held that refund claim of Special Additional Duty of Customs (SAD) cannot be denied where the imported goods do not undergo any fundamental change in their identity before sale in the Indian market.

• The Madras High Court, in Veetrag Enterprises v CC (2013 (293) ELT 529),

held that provisional release of seized goods pending Directorate of Revenue Intelligence (DRI) investigation can be allowed subject to fulfilment of bond, security and conditions as section 110A of the Customs Act, 1962 (the Act) which allows for provisional release of seized goods pending adjudication.

• In Libra Natural Resources (P) Ltd v CC (2013- TIOL-1183-CESTAT-MUM), the Mumbai Tribunal held that as the procedure prescribed for advance Bill of Entry permits reassessment upon arrival of vessel carrying the goods, adjudication at the stage of filing of advance Bill of Entry is allowed.

• In Caravel Logistics Pvt Ltd v Joint Secretary (2013 (293) ELT 342), the Madras High Court held that for short- landing of goods, penalty can be imposed on agent appointed by the person-in-charge of the vessel as the Act imposes liability for penalty on person-in-charge of the conveyance where short-landing is not accounted for.

• The Madras High Court, in KSJ Metal Impex (P) Ltd v Under Secretary (Cus) (2013 (294) ELT 211), held that interest on belated refunds of SAD is allowable as a CBEC Circular cannot override the provisions of the Act.

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• In Current Systems v CC (2013- TIOL- 1151-CESTAT-MUM), the Mumbai Tribunal held that GSM Dual SIM mobile phones are importable even if they have one International Mobile Equipment Identity (IMEI) Number as the Telecom Equipment Manufacturer‟s Association of India has clarified that mobile having single Central Processing Unit shall need only one IMEI number.

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In the issue Customs

Foreign trade policy (FTP)

Anti-dumping duty Contacts

Foreign trade policy

• The Central Government has permitted the Special Economic Zone (SEZ) unit or a developer or a co-developer to dispose off waste or scrap in DTA without obtaining any import authorization.

(Notification No. 28 (RE 2013) /2009- 14 dated 24 July, 2013)

• The Central Government has provided that goods imported or procured against the Served from India Scheme (SFIS) scrips can be transferred on completion of 3 years from the date of import or procurement of such goods.

(Notification No. 30 (RE 2013) /2009- 14 dated 1 August, 2013)

• The Central Government has provided that benefits available under Advance Authorization (AA) and Duty Free Import Authorization (DFIA) schemes are allowed to exporter only in respect of those inputs which are actually used in the manufacture of exported goods.

(Notification No. 31 (RE 2013) /2009- 14 dated 1 August, 2013 and Policy Circular No. 3 (RE-2013)/2009-2014 dated 2 August, 2013)

• The Central Government has provided exemption on import of steel and steel products by specified projects from the applicability of Steel and Steel Products (Quality Control) Order, 2012 („Order‟) subject to the fulfilment of the following conditions:

− The minimum investment in the project is not less than INR 10 Bn;

− The imports are subject to actual user condition;

− Quality certification is required to be obtained from the recognized

quality certifying body of the country of origin;

− Importers availing such exemption shall submit quarterly reports containing the details like type, quantity and value of steel and steel products to the Ministry of Steel and concerned regional authority of DGFT; and

− Such exemption is valid for 2 years from the date of issuance of this notification or until further order is passed.

(Notification No. 33 (RE 2013) /2009- 14 dated 7 August, 2013)

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• The Central Government has provided that the Importer Exporter Code (IEC) issued by Development Commissioner (DC) to SEZ/EOU/Electronic Hardware Technology Park (EHTP)/Software Technology Park (STP)/Bio Technology Park (BTP) units will remain valid even after de-bonding of such units. The DC will transfer the IEC file to the

concerned Regional Authority of DGFT after de-bonding. Further, it has been clarified that IEC issued to a DTA unit will also continue to be valid in case of conversion of such DTA unit to

EOU/SEZ/EHTP/STP/BTP unit.

(Policy Circular No. 2 (RE-2013)/2009- 2014 dated 26 July, 2013)

• The Central Government has included Kattupalli Sea Port, Tamil Nadu as a port of registration for the purpose of availing export promotion benefits under chapter 4 of the FTP.

(Public Notice No. 20 (RE-2013)/2009- 2014 dated 29 July, 2013)

• The Central Government has provided an option for redemption/regularisation of old cases of Export Obligation (EO) default in relation to Export Promotion Capital Goods (EPCG), Advance

Authorization (AA) and Duty Free Import Authorization (DFIA). This option is available subject to the fulfilment of the following conditions:

− All pending cases of default in meeting EO can be regularised by the authorisation holder on payment of applicable customs duty,

corresponding to the shortfall in export obligation, along with interest on such customs duty.

However, the interest component shall not exceed the amount of customs duty payable for the default.

− The customs duty could be paid either in cash or by way of debiting of any valid duty credit scrips issued under chapter 3 of the FTP. The interest component however, has to be paid in cash only.

− Any authorisation holder choosing to avail this benefit must complete the process of payment on or before 31 March, 2014.

(Public Notice No. 22 (RE-2013)/2009- 2014 dated 12 August, 2013)

Case law

• The Mumbai Tribunal, in the case of Reliance Industries Ltd v CC (2013 (293) ELT 679), held that the customs authorities do not have the power to curtail the imports unless the same is restricted under the import policy or by the concerned ministry regulating such imports.

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• The Madras High Court, in Hoewitzer Organic Chemical Ltd v DGFT (2013- TIOL-612-HC-MAD-CUS), held that the provisions of FTP applicable on the date of issuance of DFIA license would apply in respect of goods imported under such license.

• In CC v Indo Nissin Food Ltd (2013 (294) ELT 259), the Bangalore Tribunal held that penal provisions are not invokable where the relevant

notification allowing import of capital goods at a concessional rate under EPCG scheme itself provides for proportionate payment of duty along with interest in case of non-fulfilment of the export obligation by the exporter within the stipulated time period as there is no breach of condition of Notification.

• The Delhi Tribunal, in the case of Modipon Ltd v CC (2013 (294) ELT 287), held that the conversion of Advance License shipping bill to Duty Entitlement Pass Book (DEPB) shipping bill is not allowed in case where the request for such conversion is made beyond the time limit prescribed under the relevant circular issued by Central Board of Excise and Customs (CBEC).

Such conversion of shipping bills was also denied as the exporter had failed to declare the standard input-output norms at the time of export, which is

verified by the customs authorities before allowing custom duty benefits under the DEPB scheme.

• In ESPN Software India Pvt Ltd v CC (2013 (293) ELT 535), the Delhi Tribunal held that customs authorities cannot challenge the validity of the import license issued by the DGFT authorities when issuance of such import license is allowed in terms of the relevant provisions of the FTP

applicable at the time of import.

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Foreign trade policy (FTP) Anti-dumping duty Contacts

Anti-dumping duty Notifications

• The Central Government has extended the levy of anti-dumping duty on import of specified resin falling under chapter 44, originating in or exported from China PR, Indonesia, Malaysia and Sri Lanka till 8 February, 2015.

(Customs (ADD) Notification No.

18/2013 dated 8 August, 2013)

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Foreign trade policy (FTP) Anti-dumping duty Contacts

Contacts Delhi

Vivek Mishra/R Muralidharan Ph: +91 (124) 3306000 Mumbai

Dharmesh Panchal/S Satish Ph: +91 (22) 6689 1000 Kolkata

Rajarshi Dasgupta/Gopal Agarwal Ph: +91 (33) 2357 9100/4404 6000 Bangalore

Pramod Banthia

Ph: +91 (80) 4079 6000

Hyderabad Ananthanarayanan S Ph: +91 (40) 6624 6363 Chennai

Harisudhan M

Ph: +91 (44) 4228 5000 Pune

Nitin Vijaivergia Ph: +91 (20) 4100 4444 Ahmedabad

Dharmesh Panchal/Niren Shethia Ph: +91 (22) 6689 1000

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