Staying Updated, FTP and WTO newsletter November 2014: Volume 17 Issue 08 In the issue In the issue All India Rates (AIR) of Duty Drawback have been revised effective from 22 November, 2014 Valuation Royalty paid on account of technical know-how was held not includible in assessable value of imported goods, as the same was not a condition of sale of imported goods Consideration paid in terms of management consultancy services agreement was held not includible in assessable value of imported goods, as there was no nexus of the same with imported goods Others Amendment in bill of entry held allowable even though goods were out of customs charge, on the basis of documentary evidence warranting such an amendment Foreign trade policy The provisions of Memorandum of Understanding dated 23 October, 2014 between India and Bangladesh have been operationalised to facilitate border trade between the two countries through a new border Haat at Srinagar, Tripura Provisions of anti-dumping notification being specific and applicable on imports from specific sources, would prevail over the generalised notification covering large number of goods levied on imports of Diclofenac Sodium, originating in or exported from People s Republic of China for a period of five years. levied on imports of Digital Versatile Discs-Recordable (DVD-R and DVD-RW), originating in or exported from People s Republic of China, Hong Kong and Chinese Taipei for a period of five years
The Central Government has notified the revised All India Rates (AIR) of Duty Drawback effective from 22 November, 2014. Some relevant changes are as under: Several entries have been modified/ amended to address issues brought to Ministry s notice; It is clarified that vehicles of chapter 87 shall comprise completely built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit. (Notification No. 110/2014-Cus(NT) dated 17 November, 2014 and Circular No.13/2014-Cus dated 18 November, 2014) The Central Government has issued valuation and assessment practices to be followed by Custom Authorities in respect of export of iron ore, to overcome the differences in quality and price at the loading port and port of discharge. (Circular No. 12/2014-Cus dated 17 November, 2014) Valuation The Mumbai Tribunal held in Atlas Copco India Ltd v CC (2014-TIOL- 2269-CESTAT-MUM), held that royalty paid on account of technical know-how was not includible in assessable value of imported goods as the same was not a condition of sale of imported goods. In Alcan India Ltd v CC (2014-TIOL- 2292-CESTAT-MUM), the Mumbai Tribunal held that the consideration paid in terms of management consultancy services agreement was not includible in assessable value of imported goods as there was no nexus of the same with imported goods. Others The High Court of Madras held in Hine Hydraulics India Pvt Ltd v CC (2014- TIOL-1989-HC-MAD-CUS), that the bank guarantee could not be insisted on for differential duty when a favourable order had been received from the Commissioner (Appeals), and no stay had been granted by Tribunal. The Mumbai Tribunal, in Vijay Steel Industries v CC (2014-TIOL-2240- CESTAT-MUM), held that refund of Special Additional Duty (SAD) could not be denied in case of non-endorsement on the invoice that credit of the same was not available to the buyer, in case the buyer was not registered with the central excise department. 2 November 2014 - Volume 17 Issue 08
In Sunitidevi Singhania Hospital & Medical Research Centre v CC (2014- TIOL-2062-CESTAT-MUM), the Mumbai Tribunal held that it was a settled position in law that the onus to prove the entitlement to exemption notification was on the person who was claiming benefit of such exemption notification. As the importer did not fulfil the post-importation conditions of giving free treatment to specified percentage of OPD & IPD patients in consonance of Notification 64/88-Cus, the benefit of exemption was held not available. In Rashtriya Chemical & Fertlizers Ltd v CC (2014-TIOL-2218-CESTAT-MUM), the Mumbai Tribunal held that benefit of the exemption notification was available on fulfilment of conditions prescribed therein which should be construed strictly. In Surat Textiles Mills Ltd v CC (2014- TIOL-2241-CESTAT-MUM), the Mumbai Tribunal held that bar of unjust enrichment was not applicable on security deposit. In Pooja Hardware v CC (2014-TIOL- 2201-CESTAT-MUM), the Mumbai Tribunal held that pre-packaged goods intended for use by industrial consumer were not exempt from SAD as conditions of the exemption notification were not fulfilled. In Infrastructure Logistics Pvt Ltd v CC (2014 (309) ELT 288), the Mumbai Tribunal held that refund was not allowed directly without challenging the assessment order. In Reiter India Pvt Ltd v CC (2014 (309) ELT 277), the Mumbai Tribunal held that amendment in bill of entry had to be allowed even though goods were out of customs charge, on the basis of documentary evidence warranting such an amendment. 3 November 2014 - Volume 17 Issue 08
Foreign trade policy News Commerce Secretary has indicated that new Foreign Trade Policy will address exporters concerns of slowdown in several key markets like Japan, European Union, and would also target new markets like Africa, South East Asia and CIS countries. The Central Government has notified import policy of rough marble and traventine blocks for the year 2014-15. (Notification No. 99(RE-2013)/2009-14 dated 20 November, 2014) The Central Government has made it mandatory for importers of specified chemicals that at the time of import, for each import consignment, the importer has to notify the details of import to Directorate General of Foreign Trade (DGFT), National Authority, Chemical Weapons Convention and Department of Chemicals and Petrochemicals within 30 days from the date of their importation. (Notification No. 98(RE-2013)/2009-14 dated 19 November, 2014) The Central Government has operationalised the provisions of Memorandum of Understanding dated 23 October, 2014 between India and Bangladesh and facilitated border trade between the two countries through a new border Haat at Srinagar, Tripura. (Public Notice No. 72(RE-2013)/2009-14 dated 7 November, 2014) The Central Government has issued the guidelines which would govern India s import/ export regulations for items under Crime Control and Regional Security of USA as per Indo-US bilateral understanding. (Public Notice No. 74(RE-2013)/2009-14 dated 19 November, 2014) In Goan Hotels and Clubs Pvt Ltd v CC (TS-540-Tribunal-2014-CUST), the Mumbai Tribunal held that Export Promotion of Capital Goods (EPCG) scheme benefit could not be denied on the ground of classification of goods into a different heading since the goods were freely importable. In Oil and Natural Gas Corporation Ltd v CC (2014-TIOL-2098-CESTAT- MUM), the Mumbai Tribunal held that the provisions of anti-dumping notification being specific and applicable on imports from specific sources, would prevail over the generalised notification covering large number of goods. 4 November 2014 - Volume 17 Issue 08
In Peri (India) Pvt Ltd v CC (2014 (308) ELT 691), the Mumbai Tribunal held that second-hand propping pipes imported for rendering construction service were freely importable as the same were capital goods. In SS Agro Industries v CC (2014 (309) ELT 334), the New Delhi Tribunal held that encashment of bank guarantee by the Revenue for non-fulfilment of export obligations could not be treated as duty payment, and that the assessee could claim refund of such bank guarantee only after fulfilment of export obligations. In DSJ Communications v Union of India (2014 (309) ELT 230), the Delhi High Court held that under EPCG, the importer was exempt from payment of duty on condition of generation of foreign exchange and export to the extent of CIF value of its imports. If the condition precedent was not met, importer would be liable to pay requisite dues, despite the fact that the failure to meet export obligation was beyond the control of importer on account of failure of the business plan. 5 November 2014 - Volume 17 Issue 08
Notifications The Central Government has levied anti-dumping duty on imports of Diclofenac Sodium, falling under Tariff Heading (CTH) 2942, originating in or exported from the People s Republic of China for a period of five years from 21 November, 2014. ( (ADD) Notification No. 44/2014 dated 21 November, 2014) The Central Government has levied anti-dumping duty on imports of Digital Versatile Discs-Recordable (DVD-R and DVD-RW), falling under CTH 8523, originating in or exported from the People s Republic of China, Hong Kong and Chinese Taipei for a period of five years from 21 November, 2014. ( (ADD) Notification No. 45/2014 dated 21 November, 2014) 6 November 2014 - Volume 17 Issue 08
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