Staying Updated

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Customs, FTP & WTO Newsletter

In the issue

Customs

Foreign Trade Policy (FTP)

In the Issue

Customs

Notifications/Circulars

• 1% ADC levied on specified Fertilizers of Chapter 31 of the Customs Tariff Act, 1975

• 24X7 customs clearance facility to start from 1 September, 2012 at identified ports for specified

• Amendments made to post export EPCG Scheme

• Amendments made to the checklist of document/information required to be submitted for obtaining the Advance Authorization, DFIA and IEC

Case Law

• Transferability of the DFIA cannot be

August 2012 - Volume 15 Issue 05

Foreign Trade Policy (FTP) Antidumping duty

Contacts

identified ports for specified categories of import and export

Case Law Valuation

• Value of imported goods cannot be enhanced on the basis of imports of non-comparable or dissimilar goods Others

• No payment of interest on delayed return of seized goods under the Customs Act, 1962

Foreign Trade Policy News

• Commerce Ministry proposes to liberalise the SEZ policy

• Transferability of the DFIA cannot be challenged if Cenvat Credit availed on consumables used in manufacture of export product is reversed before its utilisation

• Principle of natural justice not violated in case the DGFT authorities refuse to provide report of DRI to importer

Anti-dumping Duty Notification

• Levy of antidumping duty extended on import of Hexamine, originating in or exported from Saudi Arabia and Russia till 24 July, 2013

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In the issue Customs

Contacts

Customs

• The Central Government has levied 1% Additional Duty of Customs in lieu of excise duty (ADC) on import of specified fertilizers under Chapter 31 of the Customs Tariff Act, 1975, which amongst others include:

– ammonium phosphate or

ammonium nitro phosphate, for

use as manure or for production of complex fertilizers;

– urea; and

– diammonium phosphate, for use as manure or for production of complex fertilizers.

(Notification No. 46/2012 dated 17 August, 2012)

• The Central Government has introduced 24X7 customs clearance facility from 1 September, 2012 for the following categories of imports and exports:

– bills of entry where no examination and assessment is required; and – factory stuffed export containers and export consignment covered by free – factory stuffed export containers and export consignment covered by free

shipping bills

The above facility has been introduced in the following air cargo complexes and seaports:

(Circular No. 22/2012 dated 7 August, 2012) S. No. Air Cargo Complexes Seaports

1 Bangalore Chennai

2 Chennai Jawaharlal Nehru Port Trust

3 Delhi Kandla

4 Mumbai Kolkata

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Contacts

• The Central Government has clarified the following in relation to the

changes announced in the Annual Supplement 2012-13 to the Foreign Trade Policy (FTP):

– the duty credit scrips issued under Status Holder Incentive Scheme (SHIS) can be utilized to the extent of 10% of the duty credit amount in scrip originally issued, for import of components, spares and parts for already imported capital goods, subject to

fulfillment of specified conditions;

– under zero duty Export Promotion Capital Goods (EPCG) Scheme

TIOL- 971-CESTAT-MUM), the Tribunal has held that value of imported goods cannot be enhanced on the basis of imports of non- comparable or dissimilar goods.

• The Tribunal, in CC v.Windia Power Ltd. (2012 -TIOL- 888-CESTAT- MUM), has held that royalty and know-how fees are not includible in the value of imported goods in case the same are related to the goods manufactured in India and have no nexus with the imported goods.

• The Madras High Court, in Unit Traders v.CC (2012 (281) ELT 659), has held that the customs authorities Capital Goods (EPCG) Scheme

and 3% duty EPCG Scheme, the export obligation (EO) shall be 75% of the normal EO when fulfilled by export of specified green technology products; and – import of re-manufactured goods

shall be allowed only against a license.

(Circular No. 20/2012 dated 27 July, 2012)

Case Law Valuation

• In Hazari Trading Co. v.CC (2012 -

has held that the customs authorities can reject the transaction value declared by the importer based on documentary evidence of

contemporaneous import unless rebutted by the importer.

Others

• The Tribunal, in Reliance

Communications Ltd. v.CC (2012 - TIOL-926-CESTAT-MUM), has held that fine and penalty are not leviable in the absence of mala fideintention of importer to wrongly classify the goods, as the correct classification is the duty of the customs authority.

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Contacts

• The Calcutta High Court, in Prince International v.Additional Director General of DRI (2012 (282) ELT 193), has held that the customs authorities cannot detain the goods indefinitely without passing seizure order and are duty bound to conclude the

investigation expeditiously.

• The Tribunal, in Madras Cements Ltd v.CC (2012 -TIOL- 1019-CESTAT- MAD), has held that refund of cess paid on imported raw material will be hit by bar of unjust enrichment in case the same is expensed off in profit and loss account and forms part of the cost of goods manufactured.

• The Tribunal, in Visa Steel Limited v.

CC (2012 (192) ECR 0304), has held that refund of excess duty is not

maintainable in case appeal is not filed against a bill of entry, even in the absence of a speaking order.

• The Madras High Court, in Pacificorp (HK) Ltd. v.CC (2012 (281) ELT 522), has held that where the importer does not clear the imported goods, the foreign supplier can request the customs authority to permit re-export of such goods as the foreign supplier is deemed to be unpaid seller who has lien on the goods in terms of the Sale of Goods Act, 1930.

of goods manufactured.

• The Tribunal, in Metal Scrap Trading Corporation Ltd. v.CC (2012-TIOL- 984-CESTAT-MAD), has held that the Chief Commissioner is empowered to exercise powers of Commissioner and appeal against such order is

maintainable in the Tribunal.

• In CC v.Shashi Goyal (2012-TIOL- 882-CESTAT-DEL), the Tribunal has held that there cannot be payment of interest on delayed return of seized currency as the Customs Act, 1962, defines goods to include currency and there is no provision of interest payment on return of seized goods.

of Goods Act, 1930.

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In the issue Customs

Foreign Trade Policy (FTP)

Antidumping duty Contacts

Foreign Trade Policy (FTP) News

• The Ministry of Commerce (MOC) proposes to liberalise the Special Economic Zone (SEZ) policy,

however, the same has been opposed by the Finance Ministry. Some of the key proposals of MOC are as under:

– social infrastructure in Non- Processing Area (NPA) to be opened to Domestic Tariff Area (DTA) clients if the developer opts not to avail duty benefits.

However, NPA in backward area to be given duty concessions and allowed to open up;

payment of applicable duties in cash.

Earlier payment of applicable duties in cash was not mandatory.

(Notification No. 8/(RE-2012)/2009- 14 dated 26 July, 2012)

• The Central Government has amended the following provisions in Handbook of Procedures (HBP) which are

applicable from 5 June, 2012:

– in case an applicant has availed zero duty EPCG Authorisation during the years 2010-11 or 2011- 12 or 2012-13, they shall not be entitled to SHIS for the export made during the respective years.

Further, in case a person after allowed to open up;

– shifting and relocation of SEZ made easier coupled with tax concessions; and

– SEZ developer to be allowed to transfer the SEZ after it is developed.

(Source: The Indian Express, New Delhi, dated 21 July, 2012)

• The Central Government has amended the EPCG Scheme to provide that post export EPCG Scheme shall be

available to exporter only on full

Further, in case a person after availing benefit of zero duty EPCG Scheme files an application for SHIS benefit, the Director General of Foreign Trade (DGFT)

authorities will upfront reject that application;

– the duty credit scrips such as Focus Market Scheme (FMS), Focus Product Scheme (FPS) and Market Linked Focus Product Scheme (MLFPS) shall be valid for 18 months as against the earlier period of 24 months;

– export shipments filed under the free shipping bill category, would

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need the declaration i.e. ‘We intend to claim benefit under Chapter 3’ on the shipping bill in order to be eligible for claiming benefits under Chapter 3 of the FTP. Further, such declaration shall not be required for export shipments under any of the schemes of Chapter 4, 5 and 6 of FTP;

– for importing capital goods under post export EPCG Scheme, all applicable duties at the time of importation of capital goods shall be paid in cash by the exporter.

Further, a certificate from the

of Hyderabad and Bengaluru.

(Public Notice No. 11(RE-2012) /2009-14 dated 26 July, 2012)

• The Central Government has

amended the checklist of document/

information to be submitted with the DGFT for obtaining the Advance Authorization, Duty Free Import Authorization (DFIA) and Importer Exporter Code (IEC).

(Additional DGFT, Mumbai, Trade Notice No. 07/2012, 08/2012 and 10/2012 dated 26 July, 2012) Case Law

• The Bombay High Court, in Steelco Further, a certificate from the

jurisdictional Central Excise Authority is required in specified cases to avail benefit under post export EPCG Scheme stating that cenvat credit on bills of entry has not been availed and will not be availed in future.

(Public Notice No. 12(RE/2012)/

2009-14 dated 26 July, 2012)

• The Central Government has authorised two new branches of Federation of Indian Micro and Small

& Medium Enterprises for the purpose of issuing Certificate of Origin (Non Preferential) in the State

• The Bombay High Court, in Steelco Gujarat Ltd. v.Union of India (2012- TIOL-572-HC-MUM-CUS), has held that transferability of the DFIA cannot be challenged if the Cenvat Credit availed on consumables used in the manufacture of export product is reversed before its utilization either by reversing the Cenvat Credit or by payment through cash along with interest.

• The Gujarat High Court, in Gujarat Ambuja Exports Ltd. v.GOI (2012- TIOL-546-HC-AHM-CUS), has held that education cess is to be levied only on such component of the

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customs duties which has not been exempted by virtue of customs notification granting importation of goods under Duty Entitlement Passbook Scheme (DEPB) scheme.

• The Tribunal, in Shanthi Alloys Pvt.

Ltd. v.CC (2012-TIOL-1016-CESTAT- BANG), has held that the benefits under Duty Exemption Entitlement Certificate (DEEC) scheme is available to a person other than the licensee, only if the transferability of the license has been endorsed in his name by the licensing authority.

• The Karnataka High Court, in Karle International v.CC (2012 (281) ELT

• The Tribunal, in L.N.M. Auto

Industries Pvt. Ltd. v.CCE (2012 (281) ELT 578), has held that extended period of limitation cannot be invoked in case the provisions of law are not clear.

• The Madras High Court, in Victoria Marine & Agro Exports Ltd. v.Jt.

DGFT (2012 (281) ELT 685), has held that there is no violation of the

principle of natural justice in case the DGFT authorities refuse to provide the report of Director Revenue Intelligence (DRI) to the importer as the same being the internal correspondence between two Government departments.

International v.CC (2012 (281) ELT 486), has held that a DTA unit is entitled to avail All Industry Drawback rate as per section 75 of the Customs Act, 1962, instead of applying to the authorities for fixation of Brand Rate in case the goods have been manufactured on job work basis by a Export Oriented Unit (EOU) and exported directly.

• In CCE v.Matrix Laboratories Ltd.

(2012 (281) ELT 569), the Tribunal has held that the duty levied on clearances of goods by EOU unit to DTA can be paid through Cenvat Credit account as it is an excise duty and not a customs duty.

between two Government departments.

• The Government of India, in FCI OEN Connectors Ltd. (2012 (281) ELT 750), has held that the duty drawback cannot be denied in case the goods imported under EPCG Scheme are re-exported on payment of differential customs duty along with interest.

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Foreign Trade Policy (FTP) Antidumping duty Contacts

AntidumpingDuty Notifications/Circulars

• The Central Government has extended the levy of antidumping duty on the import of Hexamine, originating in or exported from Saudi Arabia and Russia till 24 July, 2013.

(Customs Notification (ADD) No.

38/2012 dated 6 August, 2012)

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Contacts

Delhi

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

Mumbai

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

Kolkata Somnath Ballav

Ph: +91(33) 2357 9100/ 4404 6000

Bangalore Pramod Banthia Ph: +91(80) 4079 6000

Hyderabad

Pramod Banthia /Ananthanarayanan S Ph: +91(40) 6624 6394

Chennai B Sriram

Ph: +91(44) 4228 5000

Pune

Nitin Vijaivergia Ph: +91(20) 4100 4444

Ahmedabad

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

Contacts

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