In this Issue Customs News CBEC issues Customs Manual on Self Assessment for guidance of importers/exporters. All Industry Duty Drawback rates amended for several products. Import of construction equipment such as hydel truck cranes, excavators, fork-lifts, etc. eligible for import under Project Import. In this Issue Customs Foreign Trade Policy (FTP) Antidumping Duty Contacts Valuation Transaction Value of goods supplied under a contract acceptable even contemporaneous imports are made at a higher price. In the absence of payment of extra consideration, enhancement of value by the Customs Authority solely on internet prices not sustainable. Others Import by a partner company of Joint Venture not in compliance with the condition of notification providing exemption to specified goods to be imported by Joint Venture to whom contract has been awarded. Chartered Engineer not the competent authority to determine if secondhand computers imported are hazardous goods or not. Foreign Trade Policy Benefits under duty credit scrips can be utilized where the goods are cleared from Custom Bonded warehouses. Status Holders shall be eligible for a Status Holders Incentive Scrip on exports made during 2012-2013. Corrigendum issued has a retrospective effect unless specifically mentioned. Customs authorities cannot challenge the authenticity of a duty scrip issued by the DGFT. Antidumping Duty Notifications Definitive antidumping duty imposed on Opal Glassware imported from People s Republic of China and UAE. Foreign Trade Agreements Exemption from customs duty provided on import of specified goods from Least Developed Countries that are members of SAARC under the South Asian Free Trade Agreement (SAFTA).
Customs News The Central Board of Excise and Customs has issued the Customs Manual on Self Assessment. This Manual covers: - standard operating procedures; - compulsory compliance requirements; and - key aspects of customs requirements such as classification, valuation, exemption notifications etc. for correct Self-Assessment of duty on goods imported or exported. (Source: www.cbec.gov.in) The Central Government has invited suggestions supported by statistics and justification from the industry and trade associations for changes in duty structure, rates, etc. in indirect taxes for Budget 2012-13. (F. No. 334/9/2011- TRU dated 02/11/2011) The Central Government has amended "All Industry Duty Drawback" rates for goods manufactured in India and exported. Many products of Chapter 73, 84 and 87 have undergone a change in the duty drawback rate. Furthermore, some new tariff headings have also been added to the drawback schedule. Some important changes in Chapter 87 are as follows: Tariff Item Description of Goods Drawback when CENVAT is not availed Drawback when CENVAT is availed 8702 Motor Vehicles for transport of ten or more persons, including the driver 870201 Commercial 4% 4% Vehicle of GVW up to 7.5 MT in CBU/SKD/CK D condition 870202 Commercial 5.5% 5.5% Vehicle of GVW above 7.5 MT in CBU/SKD/CK D condition 870203 Others 1% 1% (Customs Notification No. 75/2011 dated 28/10/2011 and Circular No. 48/2011 dated 31/10/2011) The Central Government has clarified that import of construction equipment such as hydel truck cranes, excavators, fork-lifts, etc is eligible for import under Project Import. This construction equipment can be imported as auxillary equipment if essentially required for initial setting up of/expansion of an eligible registered project. (Customs Circular No. 49/2011 dated 04/11/2011) The Central Government has clarified that both external and internal TV tuner cards are classifiable under tariff heading 85287100 as reception apparatus for televisions since the principal function of TV tuner cards is to provide reception of broadcast signal from a television station. (Customs Circular No. 52/2011 dated 11/11/2011) Page No. 1
The Central Government has issued the Customs (Provisional Duty Assessment) Regulations, 2011. These Regulations provide that provisional assessment can be made in the following cases: - where the importer/exporter is unable to make a self-assessment of goods; or - where the proper officer is not able to verify the self-assessment due to nonavailability of any test report, production of any document/information, etc. (Notification No. 81/2011 dated 25/11/2011) Valuation The Supreme Court of India in CC Vs Aggarwal Industries Ltd. (2011 (272) ELT 641), has held that the transaction value of imported goods cannot be rejected on the basis of higher price of contemporaneous imports in the case goods for which value has been disputed are supplied for a lower price in terms of a contract entered prior to the comtemporaneous import date. The Tribunal, in ACC Vs Alstom Projects (India) Ltd. (2011 (272) ELT 742), has held that the transaction value of imported goods cannot be rejected where the Revenue is neither able to prove that the importer has remitted an amount in excess of transaction value nor contemporaneous import at higher prices are available. The Tribunal, in CC Vs M/s Anmol Marketing (2011- TIOL- 1417), has held that Customs Authorities solely on the basis of internet price cannot enhance the value of imported goods unless proof of payment of extra consideration over and above the transaction value is available. In CC Vs Finolex Industries Ltd. (2011- TIOL- 1417), the Tribunal has held that ship demurrage charges are not to be included in the assessable value of the goods prior to 26/09/2006 as provision treating the same as part of transportation cost was introduced by amendment in Rule 10A of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 after 26/09/2006. The Tribunal, in Varun Overseas Vs CC (2011 (273) ELT 271), has held that the value of imported goods can be re-determined on the basis of minimum price fixed in guidelines issued by the Commissioner of Customs after extensive study of production cost of such imported goods in the event the importer fails to produce evidence of any other contemporaneous imports to show the correctness of value declared by the importer. In Global Industries Vs CC (2011 (272) ELT 724), the Tribunal has held that the transaction value of imported goods cannot be rejected on the basis of value of imports from other ports relied upon by Customs Authorities when the quantity and quality of goods imported from other ports is different, as such imports from other ports cannot be considered similar goods. Others The Tribunal, in Hindustan Unilever Ltd. Vs CC (2011 (273) ELT 137), has held that countervailing duty in lieu of excise (CVD) will be leviable on a Maximum Retail Sale Price (MRP) basis in the case the goods imported are sold in numbers and not by weight which in some specified cases are exempt from levy of CVD on a MRP basis. The Supreme Court of India, in M/s Gammon India Ltd. Vs CC (2011- TIOL-60), has held that import by a partner company of a Joint Venture Page No. 2
(JV) to whom contract has been awarded, will not be treated as import by the JV itself. This will not comply with the condition of the notification providing exemption for import of specified goods for construction of road by the person to whom contract has been awarded as exemption notification needs to be strictly interpreted. In ABB Ltd. Vs CC (2011 (272) ELT 706), the Tribunal has held that differential CVD on imported goods cannot be demanded on the basis of MRP when MRP is not declared by the importer for imports made prior to 01/03/2008 as no machinery was in existence to determine MRP before 01/03/2008. In CC Vs Thermo King India Pvt. Ltd. (2011 (272) ELT 705), the Tribunal has held that amendment in the Bills of Entry under Section 149 of the Customs Act is allowable when documents are available to show that duty on imported goods has been paid twice by mistake. The High Court of Bombay, in Royal Carbon Black Pvt. Ltd. Vs CC (2011-TIOL-716), has held that one cut tyres/multiple cut and shredded tyres mandatorily require permission from the Ministry of Environment and Forests (MoEF) as the goods are covered under Hazardous Wastes (Management, Handling and Transboundary Movement) Rules 2008. The Tribunal, in Shivam International Vs CC (2011 (272) ELT 693), has held that a Chartered Engineer is not a competent authority to examine whether imported computers are restricted in terms of Environmental (Protection) Act, 1986 or not, as this can be examined only by a agency appointed by the State Government or Central Government. The Tribunal in ITC Ltd. Vs CC (2011 (272) ELT 673), has held that even in the absence of statutory provision to deny benefit of refund of an erroneous levy when burden is passed on to the customer, refund of the same cannot be allowed. Foreign Trade Policy (FTP) The Central Government has clarified that Status Holders shall also be eligible for a Status Holders Incentive Scrip (SHIS) on exports made during 2012-2013. (Notification No. 84 (RE-2010)/2009-14 dated 31/10/2011) The Central Government has clarified that the benefits under the duty credit scrips can be utilized where the goods are cleared from Custom Bonded warehouses, subject to fulfillment of the prescribed conditions. (Circular No. 50/2011-Cus dated 09/11/2011) The Central Government has made it mandatory to comply with the bar coding requirements with respect to pharmaceuticals and drugs manufactured with effect from 01/10/2011. (Policy Circular No. 43 (RE-2010)/2009-14 dated 25/10/2011) The Director General of Foreign Trade (DGFT) has issued a list of specified products which are eligible for benefits under the Focus Product Scheme (FPS). (Public Notice No. 83 (RE-2010)/2009-14 dated 31/10/2011) Page No. 3
The Central Government has modified the application form for an Importer Exporter Code (IEC) number. (Public Notice No. 84 (RE-2010)/2009-14 dated 11/11/2011) The Mumbai Commissionerate has streamlined the procedure of registration of specified duty credit scrips by the Customs authorities at the port of export. (Public Notice No. 139/2011 dated 23/11/2011) In M/s Leather Crafts (India) Pvt. ltd. Vs CC (2011-TIOL-1503), the Tribunal has held that an importer can avail the customs duty benefit under the prescribed exemption notification in the case he is not eligible to avail the benefit under the Duty Entitlement Passbook (DEPB) Scheme. In M/s American Power Conversion (India) Pvt. Ltd. Vs CC (2011-TIOL-1442), the Tribunal has held that the exemption from payment of Special Additional Duty (SAD) of Customs is not available on clearance of goods from a 100% Export Oriented Unit (EOU) to a Domestic Tariff Area (DTA) where an exemption from payment of sales tax is allowed by the State Government. The Central Government in the case of Jubilant Organosys Ltd. (2011 (273) ELT 447), has held that the benefit under the advance license is available when all the conditions prescribed under the notification are satisfied. Furthermore, any amendment/corrigendum issued with respect to the notification has a retrospective effect unless specifically mentioned. The Tribunal, in Shailesh D Redeej Vs CC (2011- TIOL-1511), has held that new vehicles are allowed to be imported into India only if they are imported from a country of manufacture along with the fulfillment of other conditions prescribed under the FTP. The Tribunal, in CC Vs M/s Reliance Industries Ltd. (2011-TIOL-1533), has held that a 100% EOU is not required to discharge any duty liability in respect of the imported goods which have been warehoused. Furthermore, the jurisdiction for raising demands over 100% EOU lies with the jurisdictional Commissioner of Central Excise and not with the Customs authorities. The Tribunal, in Khanna Paper Mills Ltd. Vs CC (2011 (273) ELT 149), has held that it is not vested in the hands of the Customs authorities to challenge the authenticity of a duty scrip issued by the licensing authority of the DGFT. Antidumping Duty The Central Government has extended the levy of antidumping duty on imports of Compact Discs- Recordable, originating in or exported from China PR, Hong Kong, Singapore and Chinese Taipei. This duty will be imposed until 03/10/2012. (Notification No. 100/2011-Cus dated 14/11/2011) The Central Government has imposed definitive antidumping duty on Opal Glassware falling under Customs Tariff Heading (CTH) 7013 and originating in or exported from the People s Republic of China and UAE. This duty has been imposed for a period of five years from 09/08/2011. (Notification No. 103/2011-Cus dated 23/11/2011) Page No. 4
The Central Government has extended the levy of antidumping duty on imports of Hot Rolled Flat products of Stainless Steel of Grade 304 falling under Chapter 72 of the Customs Tariff Act, originating in or exported from the European Union, Korea RP, South Africa, Taiwan and USA. This duty has been imposed for a period of five years from 25/11/2011. (Notification No. 104/2011-Cus dated 25/11/2011) Foreign Trade Agreements (FTA) The Central Government has specified that all goods except a list of specified goods will be eligible for exemption from payment of basic customs duty when imported into India from Least Developed Countries that are members of SAARC under the South Asian Free Trade Agreement (SAFTA), subject to fulfillment of specified conditions. (Notification No. 99/2011-Cus dated 09/11/2011) Contacts Delhi Vivek Mishra/R. Muralidharan Ph: +91(124) 3306000 Mumbai Dharmesh Panchal/S Satish Ph: +91 (22) 6689 1000 Kolkata Somnath Ballav/Siladitya Sarkar Ph: +91(33) 2357 9100/ 4404 6000 Bangalore Pramod Banthia Ph: +91(80) 4079 6000 Hyderabad Pramod Banthia /N V Raman Ph: +91(40) 6624 6394 Chennai B Sriram/Niranjan JV Ph: +91(44) 4228 5000 Pune Suresh Rohira/G.P Kawathekar Ph: +91(20) 4100 4444 Ahmedabad Dharmesh Panchal/Niren Shethia Ph: +91 (22) 6689 1000 Disclaimer: The materials contained in this Newsletter have been compiled by the Indirect Tax Practice team from various sources. The subjects are discussed in brief/general terms and are intended to provide a simple overview of the relevant developments in Customs, Foreign Trade Policy and WTO. This information is for guidance only and should not be regarded as a substitute for appropriate professional advice. PricewaterhouseCoopers accepts no liability with regard to the information herein or any action that may be taken by readers of this Newsletter. Page No. 5