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Rules and Regulations
05-01-2012, 01:27 PM
Customs - Circulars - year - 2012

Circular No 01/ 2012-Customs



F.No.401/46/2008-Cus.III

Government of India

Ministry of Finance


Department of Revenue

Central Board of Excise and Customs


North Block, Room No. 253-A,


New Delhi, the 5thJanuary 2012.
To,
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.

Subject: Refund of 4% Additional Duty of Customs (4% CVD) in terms of Notification No. 102/2007-Customs dated 14.09.2001-regarding.

Sir/Madam,

Your kind attention is invited to the Circular No. 18/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8165) dated 8th July, 2010), vide which Board has simplified procedure for sanction of refund of 4% SAD in case of ACP importers. Vide Para 4.1 (d) of the Circular No.18/2010-Customs, dated 08.07.2010 it was provided that the amount of 4% CVD refund shall be sanctioned in full, on preliminary scrutiny of the documents and certificate of statutory auditor/Chartered Accountant, for correlating the payment of ST/VAT on the imported goods with the invoices of sale and also to the effect that the burden of 4% CVD has not been passed on by the importer to the buyer. However, as Para 6 of the said Circular only Charted Accountant can issue a certificate that incidence of burden of 4% CVD has not been passed on by the importer to the buyer.

2. Representations have been received in the Board for amending Para 6 of the said Circular to make it in consonance to Para 4.1 (d) ibid to enable Cost Accountants to issue the Certificates as statutory auditors for the purpose of refund of 4% CVD.

3. The matter has been examined in the Board. Board noted that the Circular No.18/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8165) dated 08.07.2010 disentitles Cost Accountants in regard to issue of requisite certificate though they may be statutory auditors of the importer. Board also observed that several States currently recognize Cost Accountants for purpose of VAT audit and it would be a hardship to trade already using statutory auditors/Cost Accountants to get required certificate for amount of 4% refund from Chartered Accountants. Therefore, as a measure to facilitate the trade Board has approved the amendment of the Circular No.18/2010 Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8165) dated 08.07.2010 so as to authorize Statutory Auditors/ Cost Accountants/ Chartered Accountants to issue a certificate, certifying that burden of 4% CVD has not been passed on by the importers to any other person.

4. Accordingly, para 4.1(d) and Para 6 of Board Circular No.18/2011-Customs, dated 08.07.2010 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8165), stands modified to above extent.

5. Suitable Public Notices or standing orders may be issued to guide the trade / industry and officers.



(Vikas)
Under Secretary (Customs-III/VI)

Rules and Regulations
16-01-2012, 06:23 PM
Circular No.02/2012-Customs



F.No.401/46/2008-Cus.III(Pt.)



Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs




North Block, Room No. 253-A,


New Delhi, the 16th January 2012.

To,

All Chief Commissioners of Customs/Customs (Prev.),
All Chief Commissioners of Customs & Central Excise,
All Commissioners of Customs/Customs (Prev.),
All Commissioners of Customs & Central Excise.

Subject:- Refund of 4% CVD (SAD)-Extension of time upto 31st March 2012, for using re-credited 4% CVD (SAD) amount in DEPB-Regarding.

Sir / Madam,

Your kind attention is invited to the Circular No.30/2011-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11187), dated 19.07.2011, regarding procedure on refund of 4% CVD (SAD). The above Circular provides the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD refunds (SAD) for payment of duty in case of re-credited DEPB/ Reward Scheme scrips upto 15.09.2011. However several representations have been received from trade and industry to extend the time limit for using re-credited 4% CVD (SAD) amount in DEPB as they have not been able to utilize the re-credited DEPB/Reward Scheme scrips within the stipulated time.

2. The matter has been examined and it has been decided to extend time limit for using re-credited DEPB scrips/ Reward Scheme scrips in case of 4% CVD (SAD) upto 31.03.2012. No further extension shall be given under any circumstances.

3. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff.

Yours faithfully,
(Vikas)
Under Secretary (Customs-III/VI)

Rules and Regulations
02-02-2012, 11:40 AM
F. No. 528/109/2011-STO (TU)



Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Tariff Unit



****




229-A, North Block, New Delhi,

30th January, 2012.
To

All Chief Commissioners of Customs/Customs (Prev.),
All Commissioners of Customs/Customs (Prev.),
All Chief Commissioners Customs & Central Excise,
All Commissioners of Customs & Central Excise,
All Directors General under CBEC.
Sir / Madam,


Subject: Implementation of The Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order 2009 – reg.


***


Attention is invited to CBEC instructions F.No.528/109/2011 – STO (TU) dated 29.11.2011, and 15.12.2011 on the issue of the implementation of the Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009. Further reference has been received in the Board from Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, clarifying that certain Commercial vehicles, Off the Road, Run flat and Collapsible types of tyres are not covered under the said Quality (Control) Order, 2009 (copy enclosed).

2. As such, in continuation to the above mentioned Instructions, it is clarified that in addition to pneumatic tyres covered by Clauses 3(a) to (f) of the Quality Control Order, 2009, the following types of tyres are also not covered under the said Order:

(i) Commercial Vehicle tyres – Certain types of tyres identified by Speed Symbols corresponding to speed below 80 km/h marked with speed Symbols as A (A1 to A8), B, C, D or E.

(ii) Off The Road Tyres – Certain types of tyres used for Off The Road (OTR) vehicles carrying Tyres Tread Code marking such as C (C1, C2), E (E1 to E4, E7), G(G1 to G4), L(L2 to L5, L3S to L5S), IND or NHS.

(iii) Run Flat Tyres – Tyres marked RF or similar marking and carrying the Symbol

(iv) Collapsible Mini Tyres

3. Thus, other than exempted pneumatic tyres, no person shall by himself or through any person on his behalf, import, store for sale, sell or distribute imported pneumatic tyres (which include pneumatic tubes) that do not conform to the specified standards and that do not bear the BIS Standard Mark.



Yours faithfully,

Enclosure: As above.


(Subodh Singh)
OSD (Customs), Tariff Unit,
Fax-011-23092173

Internal Circulation: As usual.

Rules and Regulations
02-02-2012, 11:47 AM
Circular No.03 / 2012 - Customs





F. No. 524/129/2011-STO (TU)



Government of India

Ministry of Finance

Department of Revenue


Central Board of Excise & Customs

229A, North Block, New Delhi,

1st February, 2012.
To

All Chief Commissioners / Commissioner of Customs / Customs (Prev.)
All Chief Commissioners / Commissioner of Customs & Central Excise
All Commissioners of Customs (Appeals)
All Commissioners of Customs & Central Excise (Appeals)
All Directors General under CBEC.


Subject: Classification of Fused Silica under Customs Tariff Act, 1975 - regarding.



****
Sir / Madam,

References have been received in the Board from field formations regarding divergent practices being followed in respect of classification of ‘Fused Silica’ under Customs Tariff sub-heading 250610, 281122, 320740 or 700231.

2. The matter of correct classification of fused silica under the First Schedule to the Customs Tariff Act, 1975 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CTA.asp) was taken up for discussion during the Conference of Chief Commissioners of Customs on Tariff and allied matters held in May 2011. After examining the various entries in the said schedule and the technical aspects of the product in question, it was decided that the Chief Commissioners under whose jurisdiction the import of fused silica are taking place, shall furnish the technical details of the product to the Board; it was also decided to seek an expert opinion before arriving at a final decision regarding classification of the product.

3. Accordingly, reports received from various field formations where import of fused silica had taken place was examined and an expert opinion was sought from the Central Glass & Ceramic Research Institute (CGCRI), Kolkata. The report given by CGCRI and technical literature on the product reveals that ‘Fused Silica’ is type of glass containing primarily silica in amorphous (non-crystalline) form. Fused Silica is produced using high-purity silica sand as the feedstock, and is normally melted using an electric furnace or through continuous flame hydrolysis process, resulting in a material that is translucent or opaque. It has also been confirmed by CGCRI that naturally occurring fused silica is available in small quantity and for commercial use synthetically produced silica as above is generally in use.

4.1. In terms of the headings, relative Section or Chapter Notes to the First Schedule of the Customs Tariff Act, 1975 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CTA.asp) and the General Rules for the Interpretation of the said Schedule to the tariff, it is seen that the sub-heading 2506 covers the following:

2506 Quartz (other than natural sands); Quartzite, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a rectangular (including square) shape
In terms of chapter note 1 to chapter 25, the headings of this chapter cover only products which are in crude state or which have been subjected to basic process such as washing, crushing, grounding etc. by physical or mechanical process. Products which are processed beyond this basic process would not be covered under this Chapter. As explained in para 3 above, since fused silica is produced by chemical processes beyond the basic processes mentioned above and considering that naturally occurring fused silica is not available for commercial use, classification of synthetically produced fused silica is ruled out under sub-heading 2506.

4.2. Chapter 28 covers the following products:

Inorganic chemicals; organic or inorganic compounds of precious metals, of rare earth metals, of radioactive elements or of isotopes
It is also stated in the technical literature that chemical composition of ‘Fused Silica’ and ‘Silica’ is same, as both are predominantly consist of Silicon dioxide (SiO2). It may be noted that there is a specific entry under tariff item 28112200 as ‘silicon dioxide’. However, in view of Chapter Note 3 to Chapter 28, which excludes glass frit and other glassin the form of powder, granules or flakes, the classification of Fused Silica even though it consists of silicon dioxide (SiO2) cannot be brought under tariff item 28112200 of chapter 28.

4.3. Sub-heading 3207 specifically covers ‘glass frit and other glass, in the form of powder, granules or flakes’. In the HSN explanatory notes to 3207 it has also been provided that Glass frit and all other varieties of glass (including vitrite and glass obtained from fused quartz or other fused silica) in the form of powder, granules or flakes, whether or not coloured or silvered is classifiable under sub-heading 3207. Therefore, on application of General Rules for the Interpretation (GIR) of the First Schedule to Customs Tariff GIR-1 and GIR-6, read with Chapter Note 3 to Chapter 28, ‘Fused Silica’ is correctly classifiable under tariff item 32074000.

4.4. Similarly, sub-heading 7002 covers Glass in balls (other than microspheres of heading7018), rods or tubes, unworked. Hence,Fused Silica in tube form, rods or tubes, unworked, is appropriately classifiable under tariff item 70023100.

5. Suitable instructions may be given to the field formation and all pending assessments, if any, may be finalized accordingly. Difficulty faced, if any, may be brought to notice of the Board.

Yours faithfully,
(Subodh Singh)
,OSD (Customs), Tariff Unit,
Fax-011-23092173

Rules and Regulations
03-03-2012, 04:34 PM
F. No.450/160/2011-Cus.IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
*****



229 A, North Block
New Delhi, dated 13th February, 2012


To,
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.
Director General of Revenue Intelligence.


Subject: Time bound Customs clearance of Cargo from Ports/Land Customs Stations/Air CargoComplexes, CFSs/ICDs - regarding.

Sir / Madam,

Kind attention is invited to Board’s instructions issued from F.No. 450/82/95-Cus.IV,dated 7th July, 1997, Member (Customs)’s D.O. letter F.No. 450/82/99-Cus.IV, dated 2nd June, 2001 and Circular No.42/2001 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=1334) dated 31st July, 2001 for time bound Customs clearance and to avoid detention of Cargo from Ports/Land Customs Stations/Air Cargo Complexes, CFSs /ICDs. These instructions, inter-alia, have laid emphasis on measures to avoid unnecessary demurrages and difficulties to importers. These instructions have been issued after taking due note of directions of Hon’ble Supreme Court.

2. Despite clear guidelines issued by the Board and reiterated from time to time, it has come to notice of the Board that these guidelines are not being complied with by the field formation. As a consequence of that goods are being detained on grounds other than that are mentioned in these instructions. These avoidable detention results into mounting demurrages in most of the cases. Recently in a case, department has been asked to pay substantial demurrage charges pursuant to Hon’ble High Court order, which is being contested.

3. Board has taken a serious note of it and desires that special care will have to be taken by field formation to avoid any unwarranted delays which may lead to possible demurrage liability on Customs field formation. It is reiterated that where for justifiable reasons in certain types of exceptional situations, release of consignments is not considered advisable even on provisional basis, options must be given by sending intimation in writing to the importers / exporters or their agents to keep the goods in ware houses in terms of Section 49 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=1026) of the Customs Act (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp). It should be made clear that if the facility is not availed and the goods incur any demurrage, the importers/exporters will be wholly responsible for its payments.

4. Non compliance of the Board’s instructions and in cases of consignments being detained by Customs in routine disputes / cases without valid grounds causing demurrages would be viewed seriously and accountability be fixed on erring officer.

Yours faithfully,



(G. S. Sinha),
OSD (Customs IV)

Rules and Regulations
03-03-2012, 04:39 PM
CIRCULAR NO. 04/2012-Cus



F. No. 450/93/2011-Cus.IV


Government of India


Ministry of Finance


Department of Revenue


Central Board of Excise & Customs


Customs-IV Section


**********


New Delhi, 17th February, 2012




To

All Chief Commissioners of Customs,
All Chief Commissioners of Central Excise,
All Director Generals/Chief Departmental Representatives (CESTAT),
All Commissioners of Customs,
All Commissioners of Central Excise and
All Commissioners of Central Excise & Customs

Sir/Madam,

Subject: Adoption of uniform Customs Procedure for calculating the contents of Iron Ore – clarification regarding.


**********


Several references have been received in the Board highlighting divergent practices for calculation of iron contents from Iron Ore being followed at different Ports for charging Export duty. In this regard two types of calculation methods are being followed i.e. on the basis of Wet Metric Ton (WMT) and other on the basis of Dry Metric Ton (DMT).

2. Hon’ble Supreme Court in the matter of Civil Appeal No. 7539 of 1995 in case of Union of India Vs Gangadhar Narsingdas Aggarwal [1997(89) ELT 19(SC)] in order to arrive at the Iron (Fe) contents out of Iron Ore, had held that-

‘that is because the duty is relatable to weight and therefore, once the iron content is determined keeping in mind the total weight, the percentage can be determined separating the iron contents from the rest of the impurities inclusive of moisture and thereafter ascertain in which category the lumpy iron would fall for the purpose of charging duty….’

3. In light of the observation by the Apex Court that export duty is chargeable according to Fe contents, and to maintain uniformity all over the custom houses, it is clarified that for the purpose of charging of export duty the assessment of Iron ore for determination of Fe contents shall be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents.

4. In case of any difficulty in arriving at the net Fe content, assessment may be based on test result which directly determines the Fe contents.

5. Pending assessments on the issue, if any, should be finalized accordingly.

6. Difficulties, if any, faced in the implementation of this circular, may be immediately brought to the notice of the Board.


Yours faithfully,
(A.K.Goel)
Senior Technical Officer
Tariff Unit

Rules and Regulations
03-03-2012, 04:42 PM
F.No. 528/133/2011-STO (TU)



Government of India

Ministry of Finance
(Department of Revenue)
Central Board of Excise & Customs
Tariff Unit

*******

229A, North Block, New Delhi,

22nd February, 2012.
To

All Chief Commissioners of Customs / Customs (Prev.),
All Chief Commissioners of Customs & Central Excise,
All Commissioners of Customs / Customs (Prev.),
All Commissioners of Customs & Central Excise,
All Directors General under CBEC.

Sir / Madam,

Subject: Applicability of provisions of the Notifications No. 417 (E) dated 27.05.2011 on Molasses used in Hookah containing tobacco – regarding.

******
Reference has been received on import of molassesfor use in hookah without compliance of the Cigarettes and other Tobacco Products (Packaging and Labelling) Rules, 2008 Rules, which prescribes the manner in which the specified health warning shall be displayed on the tobacco product packs covering all types of tobacco products produced, supplied and distributed in India. The Rules came into effect from 31st May, 2009 and aset of new pictorial health warning has been issued by the Ministry of Health & Family Welfare vide Notification G.S.R. No. 417 (E) dated 27th May, 2011 which came into force from 1st December, 2011. The Ministry of Health & Family Welfare has now confirmed that anything containing tobacco is covered under the Cigarette and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) (COPTPA) Act, 2003.

2. Accordingly, in continuation to the CBEC instruction of even number dated 30.11.2011, it is further clarified that imported Molasses used in Hookah containing tobaccohave to bear the new specified health warnings as prescribed in the said Notification. A copy of the Rules is available on the Ministry’s website: www.mohfw.nic.in (http://www.mohfw.nic.in) under National Tobacco Control Programme.




Yours faithfully,

(Subodh Singh)
OSD (Customs), Tariff Unit
Fax: 011 - 23092173


--X--

Rules and Regulations
03-03-2012, 04:46 PM
Circular No. 05 / 2012 - Customs



F.No.450/122/2010-Cus-IV
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs


Room No. 229-A, North Block,
New Delhi, dated 23rd February, 2012. To,
All Chief Commissioners of Customs / Customs (Prev).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev).
All Commissioners of Customs (Appeals).
All Commissioners of Customs & Central Excise.
All Commissioners of Customs & Central Excise (Appeals).
All Directors General under CBEC.


Subject: Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 – regarding.



Sir / Madam,


Kind attention is invited to Board’s Circular No. 21/2011-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8608) dated 18th April, 2011 regarding Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 framed vide Notification No.36/2010–Customs (N.T.) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22828) dated 5.5.2010 as amended vide Notification No.26/2011-Customs (N.T.) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=23529) dated 1.4.2011, on electronic declaration for assessment and clearance of goods imported or exported under the Courier mode. Further Regulation 12 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 stipulates that an employee of authorized couriers or his employee can file electronic declaration in respect of imported or export goods provided he has passed the examination referred to in regulation 8 or regulation 19 of the Custom House Agents Licensing Regulations (CHALR), 2004.


2. Representations were received from the trade as well as from field formations to extend the transition period, which was already extended upto 31.12.2011 vide above said Circular, for a further period of six months i.e. upto 30th June, 2012, to the employees of authorized couriers to appear in the examination referred to in regulation 8 or regulation 19 of the CHALR, 2004.


3. The matter has been examined in the Board. Board has also taken note of genuine difficulties reported by Commissionerates in holding examination referred to in regulation 19 of CHALR, 2004 in time. Accordingly, it has been decided to extend the transition period from the date of publication of regulation for examination referred to in regulation 19 of CHALR, 2004 upto 30.06.2012. The Board desires that necessary examinations under regulation 19 of CHALR, 2004 should be got conducted and completed in all respects by respective Commissionerates without fail by 30.06.2012.


4. Para 4 and 5 of Board’s Circular No. 21/2011-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8608) dated 18th April, 2011 stand modified to the above extent.


5. Difficulties, if any, faced in implementation of above provisions may be brought to the notice of the Board, immediately.



Yours faithfully,
(G.S. Sinha)OSD (Customs-IV)

Rules and Regulations
26-03-2012, 10:55 AM
Circular No.6/2012-Customs

F. No. 524/19/2012-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
*****




229-A, North Block,
New Delhi, the 6th March, 2012.


To
All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Subject: Ban on export of Cotton (Tariff Code 5201 and 5203) - reg.

****

Sir / Madam,

Attention is invited to DGFT RE Notification No.102 (RE-2010)/2009-14 dated 5th March, 2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24665) amending Notification no. 74(RE-2010)/2009-14 dated 12-09-2011 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24320) imposing ban on export of cotton (Tariff code 5201 and 5203) (http://www.taxmanagementindia.com/Site-Map/Exim/detail_ITC_HS_Code.asp?Tariff_Index_ID=452). Accordingly –

(i) Export of cotton [ITC(HS) (http://www.taxmanagementindia.com/Site-Map/Exim/ITC_HS_Code.asp) Codes 5201 & 5203] (http://www.taxmanagementindia.com/Site-Map/Exim/detail_ITC_HS_Code.asp?Tariff_Index_ID=452) has been prohibited till further orders.

(ii) Transitional arrangements will not be applicable for the export of cotton.

(iii) Export against registration certificates already issued will also not be allowed.

2. Considering the sensitivity of the issue the Board desires that the field formations should strictly monitor the conditions imposed by DGFT in the above notification with immediate effect.

3. It is also requested to provide the details of all the consignments of export of Cotton handed over to Customs for export as of 2400 hrs. on 04-03-2012. This report is required positively by 07-03-2012.

4. Suitable instructions may accordingly be given to the field formations.

Yours faithfully,
(A.K.Goel),
Senior Technical Officer
Tariff Unit

Rules and Regulations
26-03-2012, 10:59 AM
Circular No. 07/2012-Customs

F. No. 524/19/2012-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
*****



229-A, North Block,
New Delhi, the 9th March, 2012.

To
All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Subject: Ban on export of Cotton (Tariff Code 5201 and 5203)- reg.

****

Sir / Madam,

Attention is invited to Board’s Circular No. 6/2012-Cus dated 06-03-2012 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11520) regarding imposition of ban on export of Cotton (TH 5201 and 5203) vide DGFT Notification No.102 (RE-2010)/2009-14 dated 05.03.2012. (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24665)

2. In this regard DGFT has issued another Circular No. 58(RE-2010)/2009-14 dated 09-03-2012 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11524) to clarify that the consignments of Cotton for which ‘Let Export Orders’ have been issued by Customs authorities till 2400 hrs. on Sunday, 04-03-2012 will be outside the purview of the Notification No.102 (RE-2010)/2009-14 dated 05.03.2012. (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24665)

3. Accordingly, Board desires that the field formations shall allow the export of consignments of Cotton (TH 5201 and 5203) for which ‘Let Export Orders’ have already been issued till 2400 hrs. on 04-03-2012.

Yours faithfully,
(A.K.Goel),
Senior Technical Officer
Tariff Unit

Rules and Regulations
26-03-2012, 11:02 AM
Circular No. 08/2012-Customs

F. No. 524/19/2012-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

*****



229-A, North Block,
New Delhi, the 13th March, 2012.


To

All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Subject: Ban on export of Cotton (Tariff Code 5201 and 5203)- reg.
.
****

Sir / Madam,

Attention is invited to Board’s Circular No. 06/2012-Cus (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11520) dated 06-03-2012 and DGFT RE Notification No.102 (RE-2010)/2009-14 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24665) dated 5th March, 2012 amending Notification no. 74(RE-2010)/2009-14 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24320) dated 12-09-2011 imposing ban on export of cotton (Tariff code 5201 and 5203).

2. DGFT vide Notification no. 106(RE-2010)/2009-14 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24673) dated 12th March, 2012 has withdrawn the earlier Notification No. 102 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24665) imposing ban and now the export of Cotton is free subject to the condition “prior registration of Contract with DGFT”.

3. Considering the sensitivity of the issue the Board desires that the field formations should strictly monitor the conditions imposed by DGFT in the above notification with immediate effect.

4. Suitable instructions may accordingly be given to the field formations.

Yours faithfully,

(A.K.Goel),
Senior Technical Officer
Tariff Unit

Rules and Regulations
26-03-2012, 11:12 AM
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
*****


Vivek Johri
Joint Secretary (TRU-I)
Tel: 23092687; Fax: 23092031
Email: johri.vivek@nic.in
D.O.F.No.334/ 3/2012-TRU

New Delhi, dated the 16th March, 2012.


Dear Chief Commissioner/Commissioner,
The Finance Minister has introduced the Finance Bill, 2012 in Lok Sabha today, i.e., 16th March, 2012. Changes in Customs and Central excise law and rates of duty have been proposed through the Finance Bill, 2012 [clauses 114 to 126 for customs; clauses 127 to 142 for Central Excise and clauses 151, 152, 154 to 156 for miscellaneous changes)]. In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:


<tbody>
CUSTOMS:

Notification Nos.

Date



Tariff

No. 10/2012-Customs to No. 22/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_rss_feed.asp?ID=2939)

17th March, 2012



Non-Tariff

No. 20/2012-Customs(NT) to No. 22/2012-Customs (NT) (http://www.taxmanagementindia.com/visitor/detail_rss_feed.asp?ID=2939)

17th March, 2012



CENTRAL EXCISE







Tariff

No. 5/2012-CE to No. 19/2012-CE (http://www.taxmanagementindia.com/visitor/detail_rss_feed.asp?ID=2938)

17th March, 2012



Non-Tariff

No. 7/2012-CE (NT) to No. 18 /2012-CE (NT) (http://www.taxmanagementindia.com/visitor/detail_rss_feed.asp?ID=2938)

17th March, 2012



M&TP







Tariff

No. 1/2012 –M&TP (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24740)

17th March, 2012


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Unless otherwise stated, all changes in rates of duty take effect from the midnight of 16th March/17th March, 2012. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 127, 128, 140, 141 and 151 of the Finance Bill, 2012 so that changes proposed therein also take effect from the midnight of 16th March/17th March, 2012. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2012. Retrospective amendments in the provisions of law or notifications issued under the respective Acts shall have the force of law only upon the enactment of the Finance Bill, 2012 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.

2. Important changes in respect of Customs and Central excise duty are discussed below. Some important changes discussed under Central Excise – such as the ones proposed for ships, vessels and dredgers have a direct relevance for Customs duties owing to CVD.

I. CENTRAL EXCISE

3. Rate structure for goods, other than petroleum:

3.1 The standard rate of Central Excise duty for non-petroleum products has been enhanced from 10% to 12% ad valorem. The merit rate of excise duty for non-petroleum goods that hitherto attracted 5% has been increased to 6%. Similarly, the rate of duty of 1% imposed on 130 items in the last Budget has been increased to 2%. The exceptions to this increase are:



Goods of heading no. 2701, i.e. coal;
All goods of Chapter 31, other than those clearly not to be used as fertilizers;
Articles of jewellery of heading 7113; and
Mobile handsets and cellular phones of heading 8517.


3.2 As in the past, this concessional duty would be available only for goods in respect of which credit of duty on inputs and tax on input services has not been taken. Wherever credit is taken, the applicable duty would be 6%. In the case of jewellery, the scheme of levy has been rationalized. The details are discussed at para 8 below.

3.3 Changes consequential to changes in rate structure discussed above have also been carried out for clearances made by Export Oriented Units into the Domestic Tariff Area. The rate of excise duty on Medicinal and Toilet Preparations under the M&TP (Excise Duties) Act has also been increased from 10% to 12% ad valorem.

3.4 As far as possible, the standard rate and the merit rate (of 6%) have been incorporated in the First Schedule to the Central Excise Tariff itself through suitable entries in the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512) (clause 141). Owing to the fact that the current tariff rates for most of the lines are higher, these rates have been given effect to through notification no. 18/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24711) dated 17th March, 2012 till the time of enactment of the Finance Bill.

3.5 In most cases, concessional rates of duty were prescribed in notification nos. 3 to 6/2006-CE, all dated 1st March, 2006 and Notification no. 3/2005-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=35) dated 24.2.2005. Concessional rates were also available in notification nos.10/2006-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1055) dated 1.3.2006; 2/2008-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=6505) dated 1.3.2008; and 59/2008-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=14308) dated 7.12.2008. For ease of reference, many of these exemption notifications have been merged and the entries arranged in chronological order in notification no. 12/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24705) dated 17.3.2012.

Cement:

3.6 The rate structure applicable to Portland cement falling under heading no.252329 has been revised. Both for packaged cement manufactured by mini-cement plants as well as non-mini cement plants, there were differential rates of duty depending on the Retail Sale Price (RSP) per bag of 50kgs, so far. Moreover, the rates of duty applicable to mini-cement plants were lower compared to non-mini plants. Now, a uniform rate of duty is being prescribed regardless of the RSP per bag although a difference in the rates applicable to mini and non-mini cement plants is being retained.

The details of these changes are as under:


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S.No.

Description of goods

Earlier rate

Revised rate



1.

Packaged cement manufactured in a mini-cement plant –









(i) Of retail sale price not exceeding Rs. 190 per 50 kg bag or of per tonne RSP not exceeding Rs. 3800

10% ad valorem







6% ad valorem
+ Rs. 120 PMT





(ii) Of retail sale price not exceeding Rs. 190 per 50 kg bag or of per tonne RSP not exceeding Rs. 3800

10% ad valorem + Rs. 30 PMT



2.

Packaged cement manufactured in a plant other than a mini-cement plant –









(i) Of retail sale price not exceeding Rs. 190 per 50 kg bag or of per tonne RSP not exceeding Rs. 3800

10% ad valorem + Rs. 80 PMT






12% ad valorem + Rs. 120 PMT






(ii) Of retail sale price not exceeding Rs. 190 per 50 kg bag or of per tonne RSP not exceeding Rs. 3800

10% ad valorem + Rs. 160 PMT



3.

Cement, not cleared in packaged form

10% ad valorem

12% ad valorem



4.

Cement clinker

10% ad valorem + Rs. 200 PMT

12% ad valorem


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3.7 Another important change in respect of Portland cement is that the item is being notified under section 4A (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=6) of the Central Excise Act (http://www.taxmanagementindia.com/Site-Map/Excise/List_Act_CEA.asp). Accordingly, the value for the purpose of charging duty on packaged cement would be determined on the basis of the Retail Sale Price. An abatement of 30% from the RSP is also being notified.

Automobiles:
3.8 Rates of excise duty applicable to motor vehicles falling under heading nos.8702 and 8703 have been enhanced in the following manner:


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S. No.

Description of goods

Earlier rate

Revised rate



I. Length not exceeding 4 metres







1.

Engine capacity not exceeding 1200cc (petrol, LPG or CNG)

10% ad val

12% ad val



2.

Engine capacity not exceeding 1500 cc (diesel)

10% ad val

12% ad val



II. Others







1.

Engine capacity not exceeding 1500 cc

22% ad val

24% ad val



2.

Engine capacity exceeding 1500 cc

22% + Rs. 15000 per unit

27% ad val














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4. Cigarettes and biris:

4.1 There are two important changes in the rate structure applicable to cigarettes. The first is a modification in the size of the length-wise slabs for filter and non-filter cigarettes. Both in the case of filter and non-filter cigarettes, the lowest slab [tariff items 24022010 and 24022030] is of length not exceeding 60mm. This has been revised to length not exceeding 65mm. The size of the next slab [tariff items 24022020 and 24022040] has been curtailed for both categories and will now cover cigarettes of length exceeding 65mm but not exceeding 70mm. Corresponding changes have been made in the Seventh Schedule to the Finance Act, 2001 [pertaining to the levy of National Calamity Contingent Duty –NCCD] and the Seventh Schedule to Finance Act, 2005 (http://www.taxmanagementindia.com/Site-Map/F_Acts/List_F_Acts.asp?ID=401) [relating to the levy of Additional Duty on Tobacco Products]. These changes have been carried out in the First Schedule to the Customs Tariff too.

4.2 As regards the rates of duty applicable to cigarettes, the specific rate of basic excise duty of Rs. 509 per thousand sticks currently applicable to cigarettes of length not exceeding 60mm will now apply to cigarettes of length not exceeding 65mm. Suitable exemption notifications have been issued for all three duties viz. basic excise duty, NCCD and Additional Duty of Excise to prescribe the rate currently applicable to cigarettes of length not exceeding 60mm to cigarettes of length not exceeding 65mm [Notification nos.9/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24675), 10/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24685) and 11/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24686) all dated 17th March, 2012 may be seen]. For all slabs above this length i.e. 65mm, an ad valorem component of 10% has been added to the existing specific rates. As the relevant clause by virtue of which this changes is proposed in the Finance Bill [Clause 141] has been declared under the Provisional Collection of Taxes Act, 1931, this increase in duty would take effect immediately- from the midnight of 16th/17th March, 2012.

4.3 Cigarettes have been notified under section 4A (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=6) of the Central Excise Act (http://www.taxmanagementindia.com/Site-Map/Excise/List_Act_CEA.asp). Accordingly, the value for the purpose of charging the ad valorem component of duty would be the Retail Sale Price (RSP) printed on the pack less abatement of 50% [Notification Nos. 7/2012-CE(NT) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24721) dated 17th March, 2012 refer]. The Third Schedule of the Central Excise Act has also been amended to include cigarettes through clause 140 of the Finance Bill, 2012. The implication is that the processes of packing or repacking of cigarettes and their labeling or relabeling including declaration or alteration of Retail Sale Price shall be deemed to be processes amounting to “manufacture”. By virtue of declarations under the Provisional Collection of Taxes Act, the changes in rates and other related changes for cigarettes shall come into effect tonight i.e. the midnight of 16th/17th March,2012.

4.4 Basic Excise duty on cigars, cheroots and cigarillos has been increased from “10% or Rs. 1227 per thousand,
whichever is higher” to “12% or Rs. 1370 per thousand, whichever is higher”. By virtue of declarations under the Provisional Collection of Taxes Act, the changes in rates and other related changes for cigarettes shall come into effect tonight i.e. the midnight of 16th/17th March,2012.

4.5 In the case of bidis, the rates of basic excise duty for both hand-rolled and machine-rolled bidis have been increased by Rs. 2 per thousand. Thus, BED on hand-rolled bidis (tariff item 2403 1921) has gone up from Rs. 8 to Rs. 10 per thousand sticks and that on machine-rolled bidis (tariff item 2403 1929) from Rs. 19 to Rs. 21 per thousand. [Notification No. 12/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24705) dated 17th March, 2012 may be seen for details].

5. Pan Masala, Gutkha, Chewing tobacco, Zarda Scented Tobacco and Unmanufactured tobacco in pouches:

5.1 The above items packed in pouches with the aid of packaging machines are leviable to excise duty in terms of section 3A of the Central Excise Act. The rates of duty applicable to all these items under the compounded levy scheme have been increased. The details are available in notification nos. 13 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24706) and 14/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24707) both dated 17th March, 2012.

5.2 For Zarda Scented tobacco covered by the aforesaid provisions, Cenvat Credit of duty paid on goods cleared in bulk has been allowed to manufacturers packing it in pouches and operating under the compounded levy scheme.

6. Ready-Made Garments, made-up articles and textiles:

6.1 The rate of excise duty applicable to ready-made garments and made-up articles of textiles falling under Chapters 61, 62 and 63 (heading nos.63.01 to 63.08) of the Central Excise Tariff except those falling under heading nos.63.09 and 63.10 when they bear or are sold under a brand name has been increased from 10% to 12%. However, the tariff value for these items has been revised and shall now be equal Retail Sale Price (RSP) less abatement of 70% instead of 55%. In other words, duty would be payable on 30% of the RSP.

6.2 In terms of notification no.31/2011-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=23490) dated 24.3.2011, full exemption from Central Excise duty is available to duty-paid, branded ready-made garments and made-ups returned or brought back to the same factory or premises and cleared after being re-made, re-conditioned, re-packed or subjected to any other process, subject to the fulfillment of certain conditions. Certain procedural relaxations have been made in the operation of this exemption. The exemption will now be available to goods returned or brought back to any registered premises of the same brand owner/ manufacturer and not only to those returned to the same factory. It would be available only if the goods are returned or brought back within a maximum period of one year from the date of their clearance. It has been clarified by way of an explanation that the threshold limit of 10% of the aggregate value of clearances for home consumption in the preceding year is to be computed for each factory/ registered premises separately. It has also been clarified that in computing this limit the value of goods cleared under the provisions of rule 16 of the Central Excise Rules are to be excluded. Finally, duty-free clearance after the prescribed processes have been carried out on the returned goods is to be allowed on the basis of a declaration from the manufacturer that the goods are duty-paid. This aspect should be verified on the basis of documents/ records maintained by the manufacturer at the time of audit of the unit.

6.3 The effective excise duty rate applicable to the textile sector (other than readymade garments and made ups bearing a brand name or sold under a brand name) is currently covered by Notification No. 29/2004-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=91) dated 9.7.2004. This notification is being superseded by notification no. 7/2012 –CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24700) dated 17th March, 2012.

7. Footwear:

7.1 Hitherto, footwear was subject to a three-tier excise duty rate structure. Footwear with RSP not exceeding Rs. 250 per pair was fully exempt; that with RSP exceeding Rs. 250 but not exceeding Rs. 750 per pair attracted the merit rate of 5% ad valorem and that with RSP exceeding Rs. 750 was chargeable to the standard rate. This rate structure is being rationalized into two slabs. Thus, footwear with RSP not exceeding Rs. 500 per pair has been fully exempted, while full duty would be chargeable on footwear with RSP exceeding Rs. 500 per pair.

7.2 The full exemption available to this item is subject to the fulfillment of the condition that the RSP should be indelibly marked or embossed on the footwear itself. It may kindly be ensured that this condition is complied with both for imported footwear and footwear manufactured domestically.

8. Precious metals and jewellery:

8.1 The scheme of levy of excise duty on precious metal jewellery has been revamped. Hitherto excise duty of 1% ad valorem was applicable to precious metal jewellery manufactured or sold under a brand name. The levy would now apply to both branded and unbranded goods (except silver jewellery) although at the same rate of duty of 1%. The important features of the scheme are as under:

i. Duty would be chargeable on tariff value which is being prescribed under section 3 of the Central Excise Act.

ii. Tariff value would be equal to 30% of the “transaction value” declared on the invoice and transaction value shall have the same meaning as assigned to it under section 4 of the Central Excise Act.

iii. The benefit of SSI exemption would be available to manufacturers of precious metal jewellery and the aggregate value of clearances (both for the purpose of eligibility and exemption) would be computed on the basis of tariff value. Suitable provisions are being incorporated in notification no.8/2003-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=40) dated 1st March, 2003 so that for the purpose of determining eligibility of a manufacturer/ factory for SSI exemption for the year 2012-13, the computation of aggregate value of clearances of Rs. 4 crore for the year 2011-12 is made on the basis of the tariff value i.e. taking 30% of the transaction value and not full transaction value. It may be noted that the exemption limit for the remaining part of 2011-12 i.e. between 17th March, 2012 and 31st March, 2012 is not being curtailed for manufacturers of unbranded jewellery who would come into the tax net afresh. In other words, eligible manufacturers/ factories would be entitled to exemption for the full threshold limit of Rs. 1.50 crore for this period. For manufacturers who are already availing of the SSI exemption during 2011-12 also the computation of the exemption limit would have to be made on the basis of tariff value of clearances effected during the period from 17th March, 2012 to 31st March, 2012 by virtue of Explanation (C)(ii) of notification no.8/2003-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=40) dated 1.3.2003.

Illustration- If a manufacturer X clears goods of value 1.4 crore till 16th March 2012, and from 17th March to 31st March 2012 manufacturer X clears goods of transaction value 30 lacs, the total value of clearances for SSI exemption in financial year 2011-12 shall be calculated as follows:-

Value of clearances from 1st April 2011 to 16th March 2012= Rs. 1.4 crore
Value of clearances from 17th March to 31st March 2012= Rs. 9 lacs(30% of transaction value 30 lacs)
Total value of clearances financial year 2011-12= Rs. 1.49 crore
iv. Rule 12AA of the Central Excise Rules has been amended to provide that every person who gets articles of jewellery of heading no.7113 produced or manufactured on job-work shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with the procedural requirements, as if he is the manufacturer. In other words, those artisans or goldsmiths who only manufacture jewellery for others on job-work need not obtain registration. The option to the job-worker to register, if he so desires, has been deleted.

It may kindly be ensured that the implementation of this scheme happens in a smooth, trade-friendly manner and no harassment is caused to assessees.

8.2 Unbranded jewellery is currently exempt. Full exemption from excise duty is being provided to branded silver jewellery. It may also be noted that in respect of articles of precious metals, the levy would continue to apply only to those articles that are manufactured or sold under a brand name. Full exemption from excise duty has been provided to gold coins of purity 99.5% and above and silver coins of purity 99.9% and above when manufactured from gold or silver on which the appropriate duty of customs or excise has been paid.

8.3 Excise duty on refined gold manufactured starting from the stage of ore, concentrate or dore bars has been increased from 1.5% to 3%. The same rate has been prescribed for refined gold produced from the smelting of copper. Refined silver obtained from the smelting of copper shall henceforth attract excise duty of 4%.

8.4 Excise duty on gold jewellery sold from EOUs into DTA has been increased from 5% to 10%.

9. Chassis for automobiles and parts of electric/ hybrid vehicles

9.1 Excise duty structure applicable to chassis falling under heading 8706 has been rationalized. Hitherto, such chassis attracted composite rates of duty consisting of an ad valorem component of 10% or 22% and a specific component of Rs. 10,000 per chassis. These have now been combined into an ad valorem rate and increased to 15% or 25% ad valorem respectively.

9.2 Concessional excise duty rate of 6% is being prescribed for batteries supplied to manufacturers of electrically operated vehicles, including two and three-wheeled electric motor vehicles. The benefit of the exemption would be available only to those manufacturers registered with the Indian Renewable Energy Development Agency or any State Nodal Agency notified for the purpose by the Ministry of New and Renewable Energy for Central financial assistance.

9.3 In the case of Lithium Ion batteries, the processes of matching, batching and charging or making of battery packs have been deemed to be processes amounting to manufacture. For this purpose, a Note has been inserted in Chapter 85 of the First Schedule to the Central Excise Tariff. The merit rate of 6% shall apply to battery packs of lithium ion batteries when supplied to manufacturers of hybrid or electric vehicles.

10. Ships, vessels and dredgers:

10.1 Full exemption from Central Excise duty (and hence CVD) available to ships, vessels and dredgers (goods of Chapter 89) was withdrawn in the last Budget and a concessional duty of 1% was imposed on the condition that no Cenvat Credit is taken by the manufacturer. Correspondingly, CVD of 5% became leviable on the import of these goods. By virtue of notification no.38/2011-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24249) dated 29th July, 2011 full exemption was granted to all goods of heading 8901 in respect of which a general licence under section 406 of the Merchant Shipping Act, 1958 has been granted by the Director General Shipping. The following changes have been made in the duty structure applicable to ships, vessels and dredgers:

(a) full exemption from excise duty available to ships and vessels shall now be available subject to fulfillment of the following conditions:

i. If the ship or vessel is procured by a company or person holding a general licence- Indian/ foreign issued by the Director General, Shipping under section 406 of the Merchant Shipping Act, 1958 for the ship or vessel;
ii. the ship or vessel is used only for this purpose;
iii. such company or person undertakes to pay,-
a. full duty on the vessel if it converts to coastal status against a general licence;

b. 1/120th part of the aggregate duty payable on the vessel for each month (or part thereof) of operation as a coastal vessel if such conversion is for a specified period.
Notification No. 12/2012-Central Excise (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24705) dated 17th March, 2012 has been issued for this purpose.

(b) For the removal of doubts, a retrospective exemption from additional duty of customs (CVD) has been provided to “foreign-going vessels” imported into India for the period from 1st March, 2011 to 16th March, 2012 [Clause 125 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=16043) of the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512) refers]. This shall come into effect on the date of enactment of the Bill.

(c) For the period starting 17th March, 2012, also full exemption from additional duty has been provided to “foreign-going vessels” imported into India but on the fulfillment of certain conditions viz that a Bill of entry shall be filed for the vessel when it converts into a “coastal” vessel and additional duty would be payable on the following basis:

i. if the licence obtained for coastal trade at the time of conversion is a general one i.e. without specified period of validity, duty would be payable as if there were no exemption;
ii. if the licence for coastal trade is for a specified period , and

a. import is by the owner of the vessel or his agent, then 1/120th part of the aggregate duty would be payable on the vessel for each month (or part thereof) of stay in India as a coastal vessel; or

b. if the import is against a lease agreement/ contract, then duty shall be payable on the lease value of the contract.
Illustration I: If a vessel imported by a Shipping Line ABC Company as a foreign-going vessel converts into a coastal vessel for 6 months and the value of the vessel declared by the importer is Rs. 2 crore, the duty payable would be calculated in the following manner:

(2*0.0618) * 6/120 = Rs. 61,800, where the rate of duty is 6.18%
Illustration II: If a vessel is imported by an Indian corporate on lease basis for use after import on payment of a total rental of Rs. 50 lakh for a period of 3 months, the duty payable would be calculated in the following manner:
50* 0.618 = Rs. 3.09 lakh, where the rate of duty is 6.18%
Notification No. 12/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) dated 17th March, 2012 has been issued for this purpose.

(d) Unlike other vessels, dredgers do not qualify for treatment as “foreign-going vessels” as they are not engaged in the carriage of goods or passengers In the case of import of dredgers too, additional duty would be payable on the basis of length of stay in India or lease value (as discussed for foreign-going vessels at sub-para (b) above). However, this duty would be payable at the time of import of the dredger.
Notification No. 19 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24694) and 20/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24695) both dated 17th March, 2012 have been issued for this purpose.

11. Crude Petroleum:

11.1 The rate of cess leviable as a duty of excise on crude petroleum under the Oil Industries Development Act has been increased from Rs. 2500 per metric tonne to Rs. 4500 per metric tonne. [Clause 151 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=16069) of the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512) refers]. A suitable declaration under the Provisional Collection of Taxes Act has been made in respect of this clause. Accordingly, the increase comes into force with effect from the midnight of 16th/17th March, 2012.

12. Relief Measures:

12.1 Full exemption from excise duty has been provided in the following cases:


Specified raw materials viz. stainless steel tube and wire, cobalt chromium tube, Hayness Alloy-25 and polypropylene mesh required for manufacture of Coronary stents/ coronary stent system and artificial heart valve on actual user basis.
Refills and inks in bulk packs (not meant for retail sale) used for manufacture of pens of value not exceeding Rs. 200 per piece.
The entry „intraocular lens‟ has been removed from Sl. Nos. 115 & 67 of Central Excise Notfn. Nos. 1/2011-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=23438) & 2/2011-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=23441), both dated 1.3.2011 and will be exempted from Central Excise Duty under CETH 9021.


12.2 Parts, components and specified accessories viz. battery chargers, PC Connectivity Cables, Memory cards and hands-free headphones required for the manufacture of mobile phones are fully exempt. However, standard rate is chargeable when such goods are cleared as spares. Concessional rate of excise duty of 2% is now being provided for such spares on the condition that no CENVAT Credit of any inputs or input services is availed of.

12.3 Excise duty has been reduced from 10% to 6% on:



Matches manufactured by “semi-mechanised” units – the latter being units that carry out the processes of frame-filling or dipping of splints with the aid of machines
LED lamps
Iodine
Processed food products of soya
Parts of Blood Pressure Monitors and Blood glucose monitoring systems (Gluco-meters) on actual user basis
Specified raw materials viz. Polypropylene, Stainless Steel Strip and Stainless Steel capillary tube for manufacture of syringe, needle, catheters, and cannulae on actual user basis.


13. Classification of Natural marble Slabs subjected to processes of resin filling, fibre netting and Polishing:

13.1 Marble slabs and tiles are classified under Chapter 25 or Chapter 68 of the Central Excise Tariff depending on the extent to which they have been finished. Polished marble slabs are classifiable under heading 6802 21 90 which attracts the general effective rate of 10% ad val. Concessional excise duty of Rs. 30 per square meter is applicable to marble slabs and tiles falling under heading nos. 25151220, 25151290 or 6802 21 10 in terms of notification no.4/2006-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1121) dated 1.3.2006. Representation were received by the Board that the benefit of this exemption is not being extended to polished marble slabs of heading 68022190 as the latter does not find specific mention in the exemption entry even though covered by the description. It is pertinent to mention that the Board has examined similar issues in the past on more than one occasion and clarified that the benefit of exemption will be available to goods as long as they are covered by the description. It is clarified that the benefit of concessional rate of Rs. 30 per square metre is available to polished marble slabs of heading 68022190 under the said notification. For the removal of doubts, however, the relevant exemption entry is being amended to specifically include CETH 6802 21 90. [Notification No.12/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24705) dated 17th March, 2012 refers].

14. Excise Duty exemption on Pipes used for Collector wells:

14.1 Currently excise duty exemption is available vide Serial No.7 of Notification No. 6/2006-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1051) dated 1.3.2006 which includes; (1) All items of machinery, including instruments, apparatus and appliances, auxiliary equipment and their components/parts required for setting up water treatment plants, (2) Pipes needed for delivery of water from its source to the plant (including the clear treated water reservoir, if any, thereof) and from there to the first storage plant and (3) Pipes of outer diameter exceeding [10cm] when such pipes are integral part of water supply project. Water supply project for the purposes of this exemption include the desalination plant, demineralization or purification of water or for carrying out similar process and process intended to make water fit for human or animal consumption, but does not include a plant supplying water for industrial purpose.

14.2 A doubt has arisen whether the pipes used for water supply projects executed in river bed with zero energy consumption by using open well, infiltration well, collector well etc are covered by this exemption. It has been explained by Tamil Nadu Water Supply and Drainage (TWAD) Board that generally Mild steel pipes of 30cm diameter with perforations are driven into the river bed in these projects. As pointed out above, pipes of diameter exceeding 10cm, if these are an integral part of the project, are eligible for exemption. Since pipes used for these projects match the description in the exemption, it is clarified that MS pipes of diameter 30cm used in collector well, infiltration well for water purification are eligible for exemption from excise duty under Serial no.233 of Notification No. 12/2012-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24705) dated 17.3.2012.

15. Important Legislative Amendments:

15.1 Barring legislative amendments involving an increase in the rate of duty for which a suitable declaration has been made under the Provisional Collection of Taxes Act, all amendments would come into effect on the date of enactment of the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512) i.e. the date on which the Bill receives the assent of the President. The legislative amendments relating to Central Excise Act and Central Excise Tariff Act have been explained in the Explanatory Memorandum to the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512). The important ones are discussed/ highlighted below:

15.2 The provisions of the Central Excise Act relating to offences and penalties are being aligned with those under the Customs Act. In terms of section 9(1)(i) of the Act, offences involving excisable goods where the duty leviable exceeds Rs. 1 lakh are punishable with imprisonment for a term which may extend to seven years and with fine. It is proposed to enhance this duty amount to Rs. 30 lakh. [Clause 130 of the Bill refers]

15.3 Section 9A of the Act presently provides that all offences under the Act shall be deemed to be non-cognizable
within the meaning of the Code of Criminal Procedure. Sub-section (1) of this section is proposed to be substituted to prescribe that offences, other than offences punishable with imprisonment of three years or more under section 9, shall be non-cognizable. [Clause 131 of the Bill refers]. Through clause 135 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=16053) of Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512), section 13 dealing with the power to arrest is being substituted with a new section 13 and section 13A. The revised section 13 provides that offences punishable with imprisonment of three years or more under section 9 shall be cognizable. Section 13A is being inserted to provide that bail in the case of offences punishable with a term of imprisonment of three years or more under section 9 shall not be granted by a Court or Magistrate without an opportunity being given to the Public Prosecutor to present his case. However, in the case of minors, infirm and women the Magistrate may grant bail. Further, it excludes the jurisdiction of police officers to initiate investigation of offences under the Central Excise Act, unless authorized in this behalf by the Central Government, by a special or general order

15.4 Section 12F relating to search and seizure is being amended to align the provisions with Customs Act (Clause 134). Section 18 is being substituted to provide that save as provided under the Central Excise Act, searches shall be carried out as per the procedure laid down in the Code of Criminal Procedure [Clause 136]. As a corollary to these changes, section 19 is being omitted and some consequential amendments are being carried out in section 20.

15.5 Section 11AC provides for reduced penalty if the duty along with interest is paid within 30 days of the communication of the order. It is being amended to make available the benefit of reduced penalty only if the reduced penalty is also paid within the specified period of thirty days. [Clause 133]

15.6 Notification No.1/2010-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22568) dated 6th February, 2010 provides exemption from Central Excise duty to goods cleared from new units or units that have undertaken substantial expansion in the State of Jammu and Kashmir for a period of ten years from the date of commencement of commercial production. Doubts were raised about the interpretation of provisions of this exemption relating to the date from which the ten years period is to be computed in the case of units undertaking substantial expansion. The notification is being amended retrospectively from the date of issue of the said notification i.e. 6th February, 2010 to provide that for units undertaking substantial expansion, the exemption period of ten years would be computed from the date of commercial production from the expanded capacity [Clause 139].

Amendments to First Schedule of Central Excise Tariff Act:

15.7 The First Schedule to the Central Excise Tariff is being amended so as to carry out the following changes:

i. omit the words “or polishing” in Note 6 of Chapter 25 so as to remove doubts about the correct classification of polished marble;
ii. revise the description of tariff items 2601 11 10 to 2601 11 90 covering iron ore and concentrates based on Fe content;
iii. insert a note in chapter 48 to provide that notwithstanding anything contained in Note 12, if the paper and paper products of heading 4811, 4816 or 4820 are printed with any character, name, logo, motif or format they shall remain classified under Chapter 48 as long as such products are intended to be used for further printing, to avoid classification disputes;
iv. insert a note in Chapter 71 to provide that for the purposes of headings 7113 and 7114, the process of affixing or embossing trade name or brand name on articles of jewellery or on articles of goldsmiths‟ or silversmiths‟ wares of precious metal or of metal clad with precious metal, shall amount to “manufacture”;
v. insert a note in Chapter 72 to provide that the process of oiling and pickling in respect of goods of heading 7208 shall amount to “manufacture”;
vi. insert a note in Chapter 76 to provide that the process of cutting, slitting and printing of aluminium foils shall amount to “manufacture”;
vii. insert a note in Chapter 85 to provide that the processes of matching, batching and charging of Lithium ion batteries or the making of battery packs shall amount to “manufacture”;
viii. align the entries relating to copper scrap, brass scrap, nickel scrap, aluminium scrap, lead scrap and zinc scrap with the revised ISRI classification.

15.8 Through clause 142 of the Finance Bill, a Note is being inserted in Chapter 54 to provide that notwithstanding anything contained in Note 1, man-made fibre such as polyester staple fibre and polyester filament yarn manufactured from plastic and plastic waste including waste polyethylene terephthalate bottles shall be classified as textile material under Chapter 54 or Chapter 55, as the case may be. This amendment is being carried out with retrospective effect from 29.06.2010. Duty in respect of clearances already made is to be recovered from the manufacturers of these goods within one month of the date of enactment of the Finance Bill, 2012 failing which interest at the rate of 24% is payable. Simultaneously, the manufacturers are being permitted to take into account credit of duty paid on inputs, input services and capital goods.

16. Amendments in Central Excise Rules, 2002

16.1 Rule 22 (3) is being amended to empower the officers of audit, cost accountants and chartered accountants appointed under section 14A or 14AA to prescribe the time limit within which the units being audited will produce the documents.

17. Amendments in Cenvat Credit Rules, 2004

17.1 Rule 3(5) and 3(5A) are being amended to prescribe that in case the capital goods on which Cenvat credit has been taken are cleared after being used then the amount payable shall be either the amount calculated on the basis of Cenvat credit taken at the time of receipt reduced by a prescribed percentage or the duty on transaction value whichever is higher.

17.2 Rule 10A is being inserted to permit transfer of unutilized credit of SAD lying in balance at the end of each quarter to another factory of the manufacturer

17.3 Rule 14 is being amended to substitute the word “or” with “and” so that interest is not payable on credit wrongly taken unless the same is utilized. Similar changes are being carried out in Rule 16 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. However, penalty provisions for such cases have not been amended.

II. CUSTOMS

18. Rate structure:
18.1 There is no change in the peak rate of basic customs duty of 10% applicable to non-agricultural goods with few exceptions which are separately discussed. The rates below the peak are also being retained. Notification no. 21/2002-Customs dated 1.3.2002 prescribing the general effective rates is being superceded by Notification No. 12/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) dated 17.3.2012.

19. Computation of Customs Duties:

19.1 The method of computation of Education Cess and Secondary & Higher Education cess on imported goods is being simplified. Currently, these cesses are first charged on the CVD portion of customs duty and thereafter on the aggregate of customs duties (excluding special CVD). The portion of cesses leviable on the CVD portion of customs duty is being exempted so as to avoid computation of such cesses twice.

Illustration:


<tbody>




Present

Proposed



A

Assessable value (CIF + Landing Charges)

100

100



B

Basic customs duty (BCD) 10%

10.00

10.00



C

Value for CVD (A+B)

110.00

110.00



D

CVD equivalent to central excise duty 10%

11.00

11.00



E

Educational Cess on CVD 2%

0.22

0



F

Sec. and Higher Educational Cess 1%

0.11

0



G

Customs duty for calculation of Cess

21.33

21



H

Customs Educational cess 2%

0.43

0.42



I

Customs Secondary and higher educational cess 1%

0.21

0.21



J

Value for SAD

121.97

121.64



K

SAD @ 4%

4.88

4.865





Total Duty

26.85

26.495


</tbody>

20. Special Additional Duty:
20.1 Notification Nos. 20/2006-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=3034) dated 1.3.2006 and 29/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22649) dated 27.2.2010 are being superceded by notification no.21/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24696) dated 17.3.2012 which prescribes the effective rates of SAD.

20.2 Brass scrap, wood in the rough, dredgers and equipments for setting up of solar thermal projects are being fully exempted from SAD.

20.3 The existing exemption from special additional duty of customs (SAD) currently available to CRGO steel is being restricted to prime quality of such steel.

20.4 A condition is being inserted in Notification No.21/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24696) dated 17th March, 2012 requiring the importer of specified goods to declare the State of destination where the goods are intended to be sold for the first time after import and the VAT registration number. This condition would apply to such goods imported on or after 1st May, 2012.

20.5 As mentioned above, CENVAT Credit Rules are being amended to permit transfer of unutilized credit of SAD lying in balance at the end of each quarter to other registered premises of the same manufacturer. This change would come into effect from 1.4.2012. [Notification No.18/2012 –CE (NT) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24738) dated 17th March, 2012 refers]

21. Baggage Allowance:

21.1. The duty-free allowance under the Baggage Rules is being increased from Rs. 25000 to Rs. 35000 for passengers of Indian origin and from Rs. 12000 to Rs. 15000 for children upto 10 years of age.

22. Rate changes on Specific Items:

22.1 Increases:

22.2. The basic customs duty/CVD is being increased on the following items:


From 60% to 75% on Completely Built Units (CBUs) of large cars/ MUVs/ SUVs permitted for import without type approval (value exceeding US$40,000 and engine capacity exceeding 3000cc for petrol and 2500cc for diesel)
from 5% to 7.5% on boric acid
From Nil to 10% on Digital Still Cameras of certain specifications.
From 5% to 7.5% on flat rolled products (HR and CR) of non-alloy steel is being increased
From 2% to 4% on standard gold bars and platinum bars
From 5% to 10% on non-standard gold
From 1% to 2% on gold ore/concentrate and dore bars for refining(CVD)
Basic customs duty of 2% is being imposed on cut and polished coloured gemstones.
[Notification No. 12/2012-Customs dated 17th March, 2012 has been issued for this purpose].
From 10% to 30% on bicycles and from 10% to 20%. on parts of bicycles [Clause 127]

As the said clause has been declared under the Provisional Collection of Taxes Act, 1931, this increase in duty would take effect immediately- from the midnight of 16th/17th March, 2012.

23. Textile Machinery:

23.1 Full Basic Customs Duty exemption has been provided to shuttle less looms, parts/components of shuttle less looms by actual users for manufacture, specified silk machinery viz. Automatic reeling/ dupion reeling machines and their accessories including cocoon assorting machines, cocoon peeling machines, vacuum permeation machine, cocoon cooking machine, reeled silk humidifier, bale press and raw silk testing equipments. The exemption is available only to new machinery.

23.2 The concessional 5% duty available to specified textile machinery under erstwhile Notification. No. 21/2002-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=3417) dated 1.3.2002, superseded by Notification no.12/12-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) dated 17th March,2012 is being restricted only to the new textile machinery. Consequently second hand machinery would attract 7.5%. basic customs duty.

24. Relief Measures:

24.1. Full exemption from basic customs duty is being provided to certain items as under:



Initial setting up and substantial expansion of fertilizer projects. The exemption would be valid till 31.03.2015.
Steam coal. CVD is also being reduced from 5% to 1% on such coal. This dispensation would be valid upto 31.3.2014.
Natural gas/Liquified Natural Gas imported for power generation by a power generation company.
Uranium concentrate, sintered natural uranium dioxide, sintered uranium dioxide pellets for generation of nuclear power.
Steel tube & wire, cobalt chromium tube, Hayness Alloy-25 and polypropylene mesh for the manufacture of coronary stents/coronary stent systems and artificial heart valves subject to actual user condition.
Equipment imported for road construction projects awarded by Metropolitan Development Authorities along with Nil CVD and Nil SAD
Tunnel excavation and specified lining equipment along with Nil CVD and Nil SAD
Coal mining projects
New and retreaded aircraft tyres along with Nil CVD.
Parts of aircraft and testing equipment for maintenance and repair of aircraft imported by third-party Maintenance, Repair and Overhaul (MRO) units.
Tunnel boring machines for hydel and road projects for all infrastructure projects. The exemption is also being provided to parts required for assembly of such machines.
Tri-band phosphor
Waster paper
Lithium ion batteries for the manufacture of battery packs for supply to electric or hybrid vehicle manufacturers along with 6% CVD and Nil SAD


24.2 The basic customs duty is being reduced on the following items:

(i) From 30%/15% to 10% on,-


Isolated soya protein and soya protein concentrate
Probiotics.


(ii) From 10% to 7.5% on,-


Railway safety (Train Protection and Warning System) equipment and railway track laying machines
Machinery and instruments for surveying and prospecting of mines
Titanium Dioxide


(iii)From 10%/ 7.5% to 5%, on-


Specified coffee plantation and processing machinery. The concessional duty would be available upto 31.3.2014.
Coffee brewing and vending machines (commercial type). The concessional duty would be available upto 31.3.2014.
Specified soluble fertilizers and liquid fertilizers, other than urea.
Raw materials for the manufacture of intermediates, parts and sub-parts of blades for rotors for wind energy generators.
Six specified life saving drugs/vaccines and their bulk drugs is being reduced from 10% to 5% with Nil CVD by way of excise duty exemption
Iodine.


(iv) From 7.5% /5% to 2.5%, on-


Sugarcane planter, root or tuber crop harvesting machine and rotary tiller & weeder, parts & components for their manufacture.
Parts required for manufacture of such coffee vending and brewing machines (commercial type).
Specified raw materials for the manufacture of syringes, needles, catheters, cannulae along with Nil SAD and 6% CVD subject to actual user condition
Parts and components for the manufacture of blood pressure monitors and blood glucose monitoring systems (Gluco-meters) along with Nil SAD and 6% CVD.
Capital goods, plant and equipment imported for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants
Specified soluble fertilizers and liquid fertilizers, other than urea.


25. Other Project Imports:

25.1 At present, project import status is available to installation of Mechanized Handling Systems & Pallet Racking Systems in mandis or warehouses for food grains and sugar, with concessional rate of basic customs duty of 5% with full exemption from additional duty of customs (CVD) and special additional duty of customs (SAD). This exemption is being extended to such systems installed for handling horticultural produce.

25.2 Project imports status with 5% BCD is being granted to the green houses set up for protected cultivation of horticulture and floriculture produce.
[Notification No. 17 /2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24692) and Notification No. 12/2012 –Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) both dated 17th March, 2012 has been issued for this purpose].

26. Important Legislative Amendments:

26.1 Barring legislative amendments involving an increase in the rate of duty for which a suitable declaration has been made under the Provisional Collection of Taxes Act, all amendments would come into effect on the date of enactment of the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512) i.e. the date on which the Bill receives the assent of the President. The legislative amendments relating to Customs Act and Customs Tariff Act have been explained in the Explanatory Memorandum to the Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512). The important ones are discussed/ highlighted below:
26.2 Sections 2 and 7 are being amended to include „airfreight stations‟ [Clause 114 and 115]

26.3 A new section 28AAA is being inserted to provide for recovery of duties, from the person to whom the instrument such as duty credit scrips was issued, where the instrument was obtained by means of collusion or wilful mis-statement or suppression of facts by the such person without prejudice to any action that may be taken against the importer. [Clause 116]. Section 28BA is being amended to make the provisions relating to provisional attachment of property applicable to the proposed Section 28AAA [Clause 116].

26.4 Section 47 is being amended to insert a new proviso therein to provide that the Central Government may, by notification in the official gazette, specify the class or classes of importers who shall pay customs duty electronically.[Clause118]

26.5 Section 104 is being amended to provide that notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under the Act (except an offence punishable with term of imprisonment of three years or more under section 135) shall be non-cognizable and bailable. It also provides that all offences punishable with a term of imprisonment of three years or more under section 135 shall be cognizable.[Clause 120].

26.6 Section 104A is being inserted to provide that bail in the case of offences punishable with a term of imprisonment of three years or more under section 135 shall not be granted by a Court or Magistrate without an opportunity being given to the Public Prosecutor to present his case. However in the case of minors, infirm and women the Magistrate may grant bail. It also excludes the jurisdiction of police officers to initiate investigation in cases under the Customs Act, unless authorized in this behalf by the Central Government by a special or general order [Clause 121]

26.7 Section 122 is being amended to enhance the monetary limits for adjudication of cases involving confiscation of goods and imposition of penalty from Rupees two lakh to Rupees five lakh for Deputy/ Assistant Commissioners and from Rs. 10,000 to Rs. 50,000 for Gazetted officer lower in rank to Assistant/ Deputy Commissioner. [Clause 122]

26.8 Section 138 deals with summary trial of offences. This section is being amended to exclude offences punishable with term of imprisonment of three years or more under section 135 since it is being proposed that such offences shall be cognizable. [Clause 123]

26.9 Section 153 is being amended to bring „courier services‟ within its ambit for the purpose of serving any order/decision/summons/notice by the Commissioner. [Clause 124]

27. Amendments in the First Schedule and Second Schedule to the Customs Tariff Act.

27.1 The First schedule to the Customs Tariff Act is being amended to,-



revise the length of the lowest slab of both filter and non-filter cigarettes of length not exceeding 60 millimetres or exceeding 60 millimetres to length exceeding or not exceeding 65 millimetres
revise the description of tariff items 2601 11 10 to 2601 11 90 dealing with iron ore and concentrates based on Fe content
insert Note 13 in Chapter 48 to provide that notwithstanding anything contained in Note 12, if the paper and paper products of heading 4811, 4816 or 4820 are printed with any character, name, logo, motif or format they shall remain classified under Chapter 48 as long as such products are intended to be used for further printing. This would prevent classification disputes.
align the entries relating to copper scrap, brass scrap, nickel scrap, aluminium scrap, lead scrap and zinc scrap with the revised ISRI classification. [Clause 127]


27.2 The Second Schedule to the Customs Tariff Act is being amended to enhance the rate of export duty on chromium ore from Rs. 3000 per tonne to 30% ad valorem. [Clause 128] This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

28. Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996

28.1 The Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 is being amended to further liberalize and simplify the procedure. The important changes are as under:



Eligibility Certificate can be obtained for a period not exceeding a year instead of consignment wise or quarterly certificate at present;
Permitting re-export of unused/ rejected goods imported at concessional duty under the said Rules with the prior permission of the jurisdictional Assistant Commissioner of Deputy Commissioner of Central Excise, as the case may be, subject to the condition that-



Such re-export takes place within six months from the date of importation
The re-export value should not be less than the value of the imports.
Maintenance of separate accounts for these rules should not be insisted upon as long as the records maintained by the importer contain the requisite information.


29. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill are studied carefully and feedback on issues that may need clarification is provided urgently.

30. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to bring it immediately either to my notice or to the notice of Shri Yogendra Garg, Director (TRU) (Tel No.011-23092236; e-mail: y.garg@nic.in) or Ms. Limatula Yaden, Director (TRU) (Tel No. 011-23092753; e-mail: l.yaden@nic.in ). We can also be reached at budget-cbec@nic.in.

31. Copies of Finance Bill, 2012 (http://www.taxmanagementindia.com/site-map/bills/list_m_bills.asp?ID=512), Finance Minister‟s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications and Explanatory Notes etc. can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.

32. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.

With regards and best wishes,

Yours sincerely,
(Vivek Johri)


To
All Chief Commissioners/ Directors General
All Commissioners of Customs
All Commissioners of Central Excise
All Commissioners of Customs and Central Excise
All Commissioners of Service Tax
Commissioner DPPR/ Logistics/Legal Affairs/ Data Management

Rules and Regulations
26-03-2012, 11:29 AM
EXPLANATORY NOTES (CUSTOMS)


Chapter 1 to 4

No change

Chapter 5

5.1 Basic customs duty on artemia classified under tariff item 0511 99 11 is being reduced from 30% to 5%. [S.No.15 of notification No.12/2012-Customs dated 17.03.2012 refers]

Chapter 6 to 18

No change

Chapter 19 to 20

No change

Chapter 21

21.1 Basic customs duty on Soya protein Concentrate classified under 2106 10 00 is being reduced from 30% to 10%. [S. No 91 of notification No.12/2012-Customs dated 17.03.2012 refers]

Chapter 22 to 25

No change

Chapter 26

26.1. Basic customs duty is being increased on gold ores and concentrates for use in the manufacture of gold from 1% to 2%. [S. No 116 of notification No.12/2012-Customs dated 17.03.2012 refers]

26.2 The description of goods classified in tariff item 2601 11 10 to 2601 11 90 is being revised [Clause 127 read with Third Schedule to the Finance Bill 2012 refers].

26.3 Export duty on “chromium ores and concentrates, all sorts” is being enhanced from Rs. 3000 per tonne to 30% ad valorem [Clause 128 read with Fourth Schedule to the Finance Bill 2012 refers].

26.4 Basic Customs duty on nickel ore & concentrate classified under tariff item 2604 00 00 is being fully exempted. [S. No 118 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 27

27.1 Steam Coal classified under CTH 2701 19 20 is being fully exempted from basic customs duty alongwith 1% CVD. This dispensation would be valid upto 31st March, 2014. [S. No123 of notification No.12x/2012-Customs dated 17.03.2012 refers]

27.2 Basic customs duty Liquefied Natural Gas (LNG) and Natural Gas (NG) (2711), is being fully exempted when imported for generation of electrical energy by a power generating company [S. No139 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 28

28.1 Basic customs duty on nickel oxide & hydroxide classified under 2825 40 00 is being reduced from 7.5% to „Nil‟. [S. No 161 of notification No.12/2012-Customs dated 17.03.2012 refers]

28.2 Basic customs duty on Ammonium Metavanadate, classified under heading 2841, is being reduced from 7.5% to 2.5%. [S. No 162 of notification No. 12/2012-Customs dated 17.03.2012 refers]

28.3 Basic customs duty on Iodine classified under 2801 20 00 is being reduced to 2.5 %. [S. No 156 of notification No. 12/2012-Customs dated 17.03.2012 refers]

28.4 Basic customs duty on Titanium dioxide classified under CTH 2823 00 10 is being reduced from 10% to 7.5%. [S. No 150 of notification No. 12/2012-Customs dated 17.03.2012 refers]

28.5 Basic customs duty on Boric Acid classified under CTH 2810 00 20 is being enhanced from 5% to 7.5%. [S. No 150 of notification No. 12/2012-Customs dated 17.03.2012 refers]

28.6 Basic customs duty on Sintered natural uranium dioxide/ Sintered uranium dioxide pellets (U-235) classified under CTH 2844 20 00 for use in the production of nuclear power is being reduced from 7.5% to Nil. [S. No163 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 29

No change

Chapter 30

30.1 The Concessional rate of 5% of basic customs duty is being extended to six life saving drugs/vaccines and their bulk drugs used in the manufacture of said drugs. [S. No176 to 181 of list appended to notification No. 12/2012-Customs dated 17.03.2012 refers]

30.2 Basic Customs duty on probiotics classified under 3002 90 30 is being reduced from 10% to 5% [S. No195 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 31

31.1 Basic customs duty on specified water soluble and liquid fertilizers is being reduced from 7.5% to 5% and from 5% to 2.5%. [S. No 202 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 32

32.1 Triband Phosphor classified under CTH 3206 50 00 is being fully exempted from basic customs duty [S. No209 of notification No. 12/2012-Customs dated 17.03.2012 refers]

32.2 Basic customs duty on Organic / Inorganic Coating material for manufacture of electrical steel (CTH 3209) is being reduced from 10% to 5% on actual user basis [S. No212 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 33 to 34

No Change

Chapter 35

35.1 Basic customs duty on Isolated soya protein classified under 3504 00 91 is being reduced from 15% to 10%. [S. No216 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 36 to 38

No Change

Chapter 39

39.1 Basic customs duty on Super Absorbent Polymer (SAP) classified under 3906 90 90 imported for use in the manufacture of Adult Diapers is being reduced from 7.5% to 5% alongwith Nil SAD on actual user basis [S.No242 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 40

40.1 Basic customs duty and additional customs on pneumatic tyres (new or retreaded) for aircraft is being fully exempted subject to conditions [S.Nos.249 &250 of notification No. 12/2012 customs dated 17.03.2012 refers]

Chapter 41 to 43

No Change

Chapter 44

44.1 Wood in rough falling under heading 4403 has been exempted from Special CVD. [S. No 56 of notification No. 21/2012-Customs dated 17.03.2012 refers]

Chapter 45 to 46

No Change

Chapter 47

47.1. Basic Customs duty on waste paper, falling in heading 4707, is being fully exempted from basic customs duty. [S. No.262 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 48

48.1. A chapter note in chapter 48 is being inserted to provide that if paper and paper products of headings 4811, 4816 or 4820 are printed with any character, name, logo, motif or format, they shall remain classified under chapter 48 as long as such products intended to be used for further printing.” [Clause 127 read with Third Schedule to the Finance Bill 2012 refers].

Chapter 49 to 50

No Change

Chapter 51

51.1 Basic customs duty on Wool Waste (CTH 5103) is being reduced from 10% to 5%. [S. No279 of notification No. 12/2012-Customs dated 17.03.2012 refers]

51.2 Basic customs duty on Wool Tops (CTH 5105) is being reduced from 15% to 5%. [S. No 281 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 52 to 53

No Change

Chapter 54

54.1 Basic Customs duty on Aramid thread/ Yarn/ fabric for manufacture of Bullet proof helmets for Defence and Police personnel is being reduced from 10% to Nil with Nil CVD and Nil SAD (S. No. 16 of Notification No.39/96-Customs dated 23rd July, 1996 as inserted vide Notification No.11 /2012-Customs dated 17th March, 2012 refers).

Chapter 55

No Change

Chapter 56

56.1 Basic customs duty on Hydrophilic Non –Woven, Hydrophobic Non –Woven ( CTH 56031100) imported for use in the manufacture of Adult Diapers is being reduced from 10% to 5%, With 5% CVD and Nil SAD on actual user basis [S. No295 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 57 to 70

No Change

Chapter 71

71.1 Basic customs duty is being increased on gold dore bars having gold content not exceeding 95%, imported for refining and manufacturing serially numbered gold bars in India from 1% to 2% [S. No 318 of notification No. 12/2012-Customs dated 17.03.2012 refers]

71.2 Basic customs duty is being increased on Gold bars, other than tola bars, bearing manufacturer‟s or refiner‟s engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5% from 2% to 4%. [S. No321 & 323 of notification No. 12/2012-Customs dated 17.03.2012 refers]

71.3 Basic customs duty is being increased on Gold in any form other than above, including tola bars and ornaments, but excluding ornaments studded with stones or pearls from 5% to 10%.

71.4 Basic customs duty is being increased on Platinum from 2% to 4%. [S. No328 of notification No. 12/2012-Customs dated 17.03.2012 refers]

71.5 Basic customs duty of 2% is being prescribed for Cut and polished coloured gemstones. [S. No 313 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 72

72.1 Basic Customs duty on flat-rolled products of non-alloy steel whether or not clad, plated or coated falling in headings 7208, 7209, 7210, 7211, and 7212 is being increased from 5% to 7.5%. [S. No 334 of notification No. 12/2012-Customs dated 17.03.2012 refers]

72.2 Prime quality cold rolled sheets of grain oriented (CRGO) Silicon electrical steel falling under tariff item 7225 11 00 or 7226 11 00 has been exempted from Special CVD. [S. No 79 of notification No. 21/2012-Customs dated 17.03.2012 refers]

Chapter 73

73.1 Basic Customs duty on pipes and tubes for use in manufacture of boilers falling in chapter 73 of the customs tariff,
has been reduced from 10% to 7.5%. [S. No335 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 74

74.1 The description of goods falling in tariff item nos. 7404 00 12 and 7404 00 22 of the customs tariff has been aligned with revised ISRI code [Clause 128 read with Third Schedule to the Finance Bill 2012 refers].

74.2 Brass Scrap falling under tariff item 7404 00 29 has been exempted from Special CVD. [S. No 80 of notification No. 21/2012-Customs dated 17.03.2012 refers]

Chapter 75

75.1 The description of goods falling in tariff item no. 7503 00 10 of the customs tariff has been aligned with revised ISRI code [Clause 128 read with Third Schedule to the Finance Bill 2012 refers].

Chapter 76

76.1 The description of goods falling in tariff item no. 7602 00 10 of the customs tariff has been aligned with revised ISRI code [Clause 128 read with Third Schedule to the Finance Bill 2012 refers].

Chapter 78

78.1 The description of goods falling in tariff item no. 7802 00 10 of the customs tariff has been aligned with revised ISRI code [Clause 128 read with Third Schedule to the Finance Bill 2012 refers].

Chapter 79

79.1 The description of goods falling in tariff item no. 7902 00 10 of the customs tariff has been aligned with revised ISRI code [Clause 128 read with Third Schedule to the Finance Bill 2012 refers].

Chapter 84

84.1 Basic customs duty on Marine seawater pumps with fibre impellers and Automatic fish/prawn feeder is being reduced from 10% to 5%. [S. No348 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.2 Basic customs duty is being reduced from 7.5% to 2.5% on specified Agriculture Machinery viz. Sugarcane planter, Root or tuber crop harvesting machines and Rotary tiller/ weeder. Parts and components required for manufacture of these items would also attract BCD@ 2.5%. [S. No399 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.3 The Concessional import duty regime of 5% basic Customs Duty + Nil CVD +SAD presently applicable to food grains and sugar under project imports scheme is being extended to goods required for installation of mechanized handling systems and pallet racking systems in mandis and warehouses for horticulture produce [S. No515 of notification No. 12/2012-Customs dated 17.03.2012 and notification No. 17/2012-Customs dated 17.03.2012 refers]

84.4 Full exemption from basic customs duty exemption is being provided to shuttle less looms, parts/components of shuttle less looms by actual users for manufacture, specified silk machinery viz. Automatic reeling silk reeling and processing machinery and their accessories including cocoon assorting machines, cocoon peeling machines, vacuum permeation machine, cocoon cooking machine, reeled silk humidifier, bale press and raw silk testing equipments.[S. No.406 of notification No. 12/2012-Customs dated 17.03.2012 refers]. The existing concessional duty rate extended to specified textile machinery is being restricted only to new textile machinery.

84.5 A concessional rate of 5% BCD is being extended to raw materials, intermediates required for the manufacture of parts of blades for rotors of wind operated generators. [S. No 362 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.6 An unconditional full exemption from Basic Customs Duty and additional duty of customs (CVD) is being provided to tunnel boring machines and parts and components thereof for use in the assembly of Tunnel boring machines. [S. No 397 of notification No. 12/2012-Customs dated 17.03.2012 refers] In addition the full exemption from basic customs duty and CVD is being extended to Tunnel Excavation & Lining Equipments consisting of Drilling Jumbos, Loaders, Tunnel excavators, Shotcrete Machines and 3 Stage Crushers for use in highway development projects [S. No 368 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.7 The benefit of existing exemption from Customs duty on Road Construction equipment is being extended to projects awarded by Metropolitan Development Authority also. [S. No 368 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.8 Basic customs duty on Power weeding machine for coffee plantations, Coffee grinder, Coffee processing machine, sprayers, Coffee packaging machine, Coffee bagging machine and mechanical harvester for coffee plantation is being reduced from 7.5% to 5% [S. No 384 of notification No. 12/2012-Customs dated 17.03.2012 refers]

84.9 Basic customs duty on Coffee vending machine and brewing machines other than of a kind used for domestic purpose is being reduced from 10% to 5%. A concessional rate of BCD of 2.5% is also being provided to parts required for the manufacture of such machines. [S. No 385 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 85:

85.1 Full exemption from basic customs duty, additional duty of customs presently available on parts, components and accessories of mobile handsets including cellular phones is being extended to parts, components and sub-parts of parts and components required for manufacture of Memory Cards for mobile phones [S. No 431 of notification No. 12/2012-Customs dated 17.03.2012 refers]

85.2 Full exemption from Special Additional Duty of customs on parts, components and accessories of mobile handsets including cell phones valid up to 31.3.13 is being been extended to parts, sub-parts and components of Memory Cards for mobile handsets including cellular phones. The validity of this exemption is being extended upto 31.3.2013. [S. No 5 of notification No. 21/2012-Customs dated 17.03.2012 refers]

85.3 The exemption from basic customs duty on poly laminated aluminium tape and poly laminated steel tape is being withdrawn. [Notification No. 25/2005-Customs dated 1.03.2005 as amended by notification No. 15/2012-Customs dated 17.03.2012 refers]

85.4 The customs duty exemption provided for specified raw materials for use in electronics/IT industry is being withdrawn [Notification No. 25/1999-Customs dated 28.02.1999 as amended by notification No. 16/2012-Customs dated 17.03.2012 refers]

85.5 Excise duty is being reduced to 6% on LED lamps & LEDs required for manufacture of such lamps and SAD is being fully exempted on LEDs used for manufacture of LED Lamps [S. No 90 of notification No. 21/2012-Customs dated 17.03.2012 refers]

85.6 Full exemption from Basic Customs Duty is being extended to LCD and LED TV panels for 20 inches and above. [S. No 432 of notification No. 12/2012-Customs dated 17.03.2012 refers]

85.7 Basic customs duty of 10% is being imposed on Digital Cameras which are capable of recording video with minimum resolution of 800 x 600 pixels, at minimum 23 frames per second, for at least 30 minutes in a single sequence using the maximum storage (including expanded) capacity. [Notification No. 25/2005-Customs dated 1.03.2005 as amended by notification No. 15/2012-Customs dated 17.03.2012 refers]. Basic Customs Duty on parts and components of such cameras is being reduced to 5% subject to actual user condition [S. No 429 of notification No. 12/2012-Customs dated 17.03.2012 refers]

85.8 Basic customs, additional customs duty and special additional duty of customs (SAD) on Lithium ion automotive battery for manufacture of Li ion battery packs for supply to hybrid/electric vehicle manufacture is being reduced from 10% to Nil, 10% to 6% and 4% to Nil respectively [S. No 438 of notification No. 12/2012-Customs dated 17.03.2012 and S. No 6 of notification No. 21/2012-Customs dated 17.03.2012 refers]

Chapter 86

86.1 Basic customs duty on Track Machines and parts classified under CTH 86 is being reduced from 10% to 7.5% [S. No 436 of notification No. 12/2012-Customs dated 17.03.2012 refers]
86.2 Basic customs duty on Train Protection and Warning System is being reduced from 10% to 7.5%. [S. No 435 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 87

87.1 Basic customs duty on CBUs of motor vehicles (cars) falling under CTH 8703 with FOB value more than US $ 40000 and with engine capacity more than 3000cc for petrol-run vehicles and more than 2500 cc for diesel-run vehicles is being increased from 60% to 75%. [S. No 437 of notification No. 12/2012-Customs dated 17.03.2012 refers]

87.2 Basic customs, additional customs duty and special additional duty of customs (SAD) on specific parts of hybrid vehicles is being reduced from 10% to Nil, 10% to 6% and 4% to Nil respectively [S. No 440 of notification No. 12/2012-Customs dated 17.03.2012 and S. No 8 of notification No. 21/2012-Customs dated 17.03.2012 refers]

87.3 Basic customs duty on Bicycles in fully built condition as well as in form of CKD/SKD kits is being increased from 10% to 30%.

87.4 Basic customs duty on Bicycles parts and components is being increased from 10% to 20%. [S. No 444 of notification No.12x/2012-Customs dated 17.03.2012 refers]

Chapter 88

88.1 Basic customs and additional customs duty on imports of Parts and testing equipment, by a third party Maintenance Repair, and Overhauling facility for aircraft falling under heading 8802 is being fully exempted [S. No 448 of notification No.12/2012-Customs dated 17.03.2012 refers]

88.2 The period of stay for duty free import of aircraft not registered or intended to be registered in India for a flight to or across India, is being reduced from six months to 15 days or as extended by the competent Authority not exceeding 60 days[S. No 450 of notification No. 12/2012-Customs dated 17.03.2012 refers]

Chapter 89

89.1 Unconditional exemption form CVD is being extended on import of foreign going vessels for a period from 01.03.2011 to 17.03.2012.

89.2 Additional Customs duty (CVD) on Foreign going vessels imported into India are being fully exempted subject to payment of duty at the time of its conversion for coastal run. [S. No 462 of notification No. 12/2012-Customs dated 17.03.2012 refers]

89.3 Dredgers are being fully exempted from Special Additional customs duty [S. No 97 of notification No.21/2012-Customs dated 17.03.2012 refers]

89.4 Additional Customs duty (CVD) on dredgers imported into India is being rationalised for import of dredgers on lease and contractual basis and on short term basis. [Notification Nos. 19/2012-Customs and 20/2012-Customs both dated 17.03.2012 refer]
[B]
Chapter 90

90.1 Basic Customs Duty is being reduced to 2.5% along with 6%CVD and Nil SAD on specified raw materials viz. Polypropylene, Stainless Steel Strip and Stainless Steel capillary tube for manufacture of syringe, needle, catheters, and cannulae on actual user basis. [S. No 475 of notification No. 12/2012-Customs dated 17.03.2012 refers]

90.2 Full exemption from basic customs duty, CVD and SAD is being provided to specified raw materials viz. stainless steel tube and wire, cobalt chromium tube, Hayness Alloy-25 and polypropylene mesh required for manufacture of Coronary stents/ coronary stent system and artificial heart valve on actual user basis. [S. No 476 of notification No. 12/2012-Customs dated 17.03.2012 refers]

90.3 Basic Customs Duty is being reduced to 2.5% with 6% CVD and Nil SAD on parts of Blood Pressure Monitors and Blood glucose monitoring systems (Gluco-meters) on actual user basis [S. No 477 of notification No. 12/2012-Customs dated 17.03.2012 refers]

90.4 BCD is being reduced to 2.5% ad valorem on survey(DGPS) instruments, 3D modeling software for ore body simulation cum mine planning and exploration (geophysics and geochemistry) equipment. [S. No 489 of notification No. 12/2012-Customs dated 17.03.2012 refers]

CHAPTER 91-97

91-97 No change

CHAPTER 98 (Project Imports)

98.1 Project import status is being granted for Green Houses set up for protected cultivation of Horticulture and Floriculture produce [S. No 515 of notification No. 12/2012-Customs dated 17.03.2012and notification No. 42/96-Customs dated 23.07.1996 as amended by notification No. 17/2012-Customs dated 17.03.2012 refers]

98.2 Basic Customs Duty (BCD) is being reduced to Nil for initial setting up as well as substantial expansion of all fertilizer projects for a period of 3 years i.e. up to of 31.3.2015. [S. No506 of notification No. 12/2012-Customs dated 17.03.2012 refers]

98.3 Basic Customs Duty (BCD) is being reduced to 2.5% for the capital goods/ equipments required for setting up or substantial expansion of iron ore pellet plants & iron ore beneficiation plants. [S. No506 of notification No. 12/2012-Customs dated 17.03.2012 refers]

98.4 Full Basic Customs Duty (BCD) exemption is being extended to Coal Mining Projects. [S. No506 of notification No. 12/2012-Customs dated 17.03.2012 refers]
98.5 Project Import status is being granted to mechanized handling systems and pallet racking systems for horticulture produce. [Notification No. 17/2012-Customs dated 17.03.2012 refers]

[B]
*****

Rules and Regulations
22-08-2012, 06:49 PM
Circular No. 09 / 2012 – Customs

F. No. 528/11/2012-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs


229A, North Block, New Delhi,
23rd March, 2012.


To

All Chief Commissioners / Commissioner of Customs / Customs (Prev.)
All Chief Commissioners / Commissioner of Customs & Central Excise
All Commissioners of Customs (Appeals)
All Commissioners of Customs & Central Excise (Appeals)
All Directors General under CBEC.

Subject: Applicability of exemption under Sr. No. 4 of the Notification 4 / 2006 - CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1121) dated 1/3/2006 on import of Ore Concentrates - regarding.

****


Sir / Madam,


Doubts have been raised whether on imports of Ore Concentrate classifiable under Chapter 26 of the First Schedule to the Customs Tariff Act, 1975, (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CTA.asp) the benefit that is admissible to “Ore” under Serial Number 4 of the Notification No. 4/2006 – CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1121) dated 1.3.2006 can be granted to the “Concentrate” of that Ore. The issue was taken up for discussion during the Conference of Chief Commissioners of Customs on Tariff and allied matters held in May 2011.

2. The matter related to: (a) whether the term ‘Ore’ includes Concentrate, and (b) Whether insertion of Chapter Note 4 in the Chapter 26 will have any impact on the admissibility of notification benefit to Concentrates, was examined. The Conference noted the HS definitions of Ore and Concentrate are as follows:

“The term ‘ore’ applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine; it also applies to native metals in their gangue (e.g. metalliferous sands”).

“The term ‘concentrates’ applies to ores which have had part or all of the foreign matter removed by special treatments, either because such foreign matter might hamper subsequent metallurgical operations or with a view to economical transport”.

It was also seen that the recent changes in the Central Excise Tariff treating the concentration of ore as amounting to manufacture would not in any way change the definition of Ore or Concentrate for the purpose of classification. This has been reiterated in a number of judgments and also vide Board Circular No.696/12/2003 – CX (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=505) dated 26.2.2003.

3. In view of Chapter Note 4 to Chapter 26 of CETA, 1985 (http://www.taxmanagementindia.com/Site-Map/Excise/List_Act_CETA.asp) inserted vide Finance Act 2011 (http://www.taxmanagementindia.com/Site-Map/F_Acts/List_F_Acts.asp?ID=435), Ores and Concentrates are two distinct products. Thus, Concentrates suffer Central Excise duty being a manufactured product. The implication for imported Concentrates is that the benefit of exemption of additional duty of Customs leviable under Section 3 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=1211) of Customs Tariff Act, 1975 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CTA.asp) in terms of a notification that applies only to Ores is no longer available to Concentrates, even if Concentrates and Ores fall under the same tariff heading.

4. Thus, it is concluded in the Conference that the benefit of exemption notification under Sr. No. 4 of the Notification 4/2006-CE (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=1121) dated 1.3.2006 will be available only to imported Ores and not to imported Concentrates.

5. Suitable instructions may be given to the field formation and all pending assessments, if any, may be finalized accordingly. Difficulty faced, if any, may be brought to notice of the Board.

Yours faithfully,

(Subodh Singh),
OSD (Customs), Tariff Unit,
Fax-011-23092173


----X----

Rules and Regulations
22-08-2012, 06:52 PM
F. No. 26000/1/2012-OSD(ICD)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
(International Customs Division)
North Block, New Delhi

****



Dated the 27th March, 2012


To

All Chief Commissioners of Customs/ Customs (Prev.),
All Chief Commissioners of Central Excise,
All Chief Commissioners of Central Excise & Customs,
Director General, Directorate of Revenue Intelligence.

Sir,

Subject: CS (OS) No. 2982/2011 in the matter of L.G. Electronics India Pvt. Ltd. (petitioner) vs. Bharat Bhogilal Patel, Commissioner of Customs, Mumbai / Delhi before the Hon’ble High Court of Delhi – Regarding.

Shri Bharat Bhogilal Patel has Unique Permanent Registration Number (UPRN) A0241 INBOM4PR and A0242INBOM4PR with Commissioner of Customs (Import), Air Cargo Complex for the following two patents in terms of Rule 4 of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007:

(a) No. 188787 dated 21.09.1998 for 'an improved laser marking and engraving machine' and

(b) No. 189027 dated 21.09.1998 for 'process for manufacturing engraved design articles on metals and non-metals';

2. L.G. Electronics India Pvt. Ltd. vide petition CS (OS) No. 2982/2011 in the matter of L.G. Electronics India Pvt. Ltd. (petitioner) vs. Bharat Bhogilal Patel, Commissioner of Customs, Mumbai / Delhi before the Hon’ble High Court of Delhi has submitted that Bharat Bhogilal Patel filed a complaint with the Commissioner of Customs, Mumbai against L.G. Electronics India Pvt. Ltd. and various other importers alleging that such importers were importing products inter alia GSM handsets (Phones), using laser marking and engraving process which infringe his patent rights under patent No.189027 and the Commissioner of Customs, Mumbai has restricted clearance of consignments of L.G. Electronics India Pvt. Ltd.

3. The Hon’ble Delhi High Court vide order dated 30th November, 2011 opined in Para 21 that “in case clause 4 of the notification dated 29.10.2007 is read in a meaningful manner, it becomes clear that as far as the case of other three violations, i.e., Patents, Design and Geographical Indications, are concerned, unless the offences have already been established by a judicial pronouncement in India, the custom department cannot take action contrary to clause 4 of the notification.”

3.1. The Court further stated that mere reading of clause 4 makes it clear that as far as three violations, i.e., Patents, Design and Geographical Indications, are concerned, the defendants 2 and 3 are merely implementing agencies to enforce the orders, if passed by the Court in favour of the party pertaining to above mentioned three subjects and the custom department would be entitled to enforce the same.

3.2 The Court ruled that as far as the present case is concerned, prima facie it appears that the defendants 2 and 3 (Customs Mumbai & Delhi) cannot restrict clearance of the plaintiff's consignments on the basis of alleged patent obtained or on the complaint made by defendant No.1 (Bhogilal Patel).

4. In this connection, it may be noted that the Central Government has been empowered under Section 11 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=956) of the Customs Act, 1962 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp) to issue notifications for prohibiting either absolutely or subject to such conditions as may be specified in the notification, the import or export of goods of any specified description. Section 11(2) (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=956) of the Customs Act, 1962 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp) details the purpose for which such a notification may be issued by the Central Government which, inter-alia, covers the following purpose:

(i) The protection of patents, trademarks and copyrights. [Section 11 (2) (n)]; and
(ii) The prevention of the contravention of any law for the time being in force.[ Section 11 (2) (u)]

4.1 Notification No. 51/2010-Cus(NT), (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) dated 30.06.2010 prohibits import of goods infringing specified provisions of Trademarks Act, Copyrights Act, Designs Act, Geographical Indications Act and Patent Act subject to following the procedure prescribed under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (IPR Rules) issued under Notification No. 47/ 2007- Cus.(NT) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=4268), dated 08.05.2007. The explanation to the notification states that for the purpose of this notification, the terms and expressions used in various clauses of the notification shall have the meanings assigned to them in the respective Acts, including the Patents Act, 1970.

4.2 Thus, the provisions of the Customs Act, 1962 clearly empower the Central Government to prohibit import of goods to protect infringement of patents. Accordingly, the Central Government had issued notification 51/2010 Customs (NT) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) to prohibit import of goods, inter-alia, infringing specified provisions of Patent Act, 1970. The conditions and procedure based on which the prohibition would operate is listed in the IPR Rules.

4.3 The above legal position, which is unambiguous and explicit, should alone suffice to conclude that the Customs authority is empowered to enforce prohibition of imported goods that contravene the specified provisions of the Patent Act, 1970. In fact, IPR Rules empower Customs authority to take action on own initiative (ex officio action), even without prior recordation of Rights by the Right holder.

4.4 Hence, the interpretation that Customs authority is not empowered to take action to prohibit import of goods infringing the patent Act does not appear to be proper and correct in law. The Hon’ble High Court has relied on the following provision of Circular No. 41/2007-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=3016) dated 29th October, 2007, in support of the judgement pronounced:

“It is pertinent to mention that while the mandatory obligations under Articles 51 to 60 of the TRIPS dealing with border measures are restricted to Copyright and Trade Marks infringement only, the said Rules deal with Patents, Designs and Geographical Indications violations as well, in conformity with the practice prevailing in some other countries, notably EU countries. While it is not difficult for Customs officers to determine Copyright and Trade Marks infringements at the border based on available data/inputs, it may not be so in the case of the other three violations, unless the offences have already been established by a judicial pronouncement in India and the Customs is called upon or required to merely implement such order. In other words, extreme caution needs to be exercised at the time of determination of infringement of these three intellectual property rights”.[underlined/in bold for emphasis]

4.5 As is evident from the above wording of the Circular No. 41/2007-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=3016) dated 29th October, 2007, that the Circular merely seeks to drive a note of caution with regard to the determination of infringement in case of patents, designs and Geographical Indications and does not in any manner, take away the powers of Customs authorities to act on imported goods infringing Patents Act, conferred by Section 11 of Customs Act, 1962 and Notification 51/201 Customs (N.T). Further, a Circular cannot nullify provisions of an Act and Notification issued under the Act. Circulars are issued to clarify the legal provisions and to bring in uniformity in implementation. They are not intended to alter the scope or meaning of the existing statutory provisions.

5. In view of the foregoing, the order dated 30th November, 2011 of High Court of Delhi, in the matter of CS (OS) No. 2982/2011 – L.G. Electronics India Pvt. Ltd. does not appear to be proper in law. Since, the aforesaid order of the Hon’ble Delhi High Court would have wider ramifications on the interpretation of Para 4 of Circular 41/2007 dated 29th October, 2007, the jurisdictional Chief Commissioner has been directed to defend the case by filing appropriate reply / review application against the order.

6. The undersigned is directed to reiterate to the field formations the policy intent as reflected in Section 11 (2) (n) of the Customs act, 1962 and notification 51/2010 Customs (N.T) which empower the Customs authorities to take action on patent infringement also.

7. To help in determination of IPR infringements including that of patents, designs and GIs of imported goods, the field formations are advised to take assistance of the concerned registration authorities, expert views and test results (based on the nature of the product) as done in case of implementation of many other allied laws where the final determination is made by Customs in consultation with the concerned authorities/ agencies and experts.

[B]Yours faithfully,

(M. Satish Kumar Reddy)
Director (ICD)

Rules and Regulations
22-08-2012, 06:55 PM
Circular No.10/2012-Customs

F.No.401/16/2012-Cus.III
Government of India
Ministry of Finance
Department of Revenue

Central Board of Excise and Customs



North Block, Room No. 253-A,
New Delhi, the 29th March 2012.

To,

All Chief Commissioners of Customs/Customs (Prev.),
All Chief Commissioners of Customs & Central Excise,
All Commissioners of Customs/Customs (Prev.),
All Commissioners of Customs & Central Excise.

Subject:- Refund of 4% CVD (SAD)-Extension of time upto 30th June 2012, for using re-credited 4% CVD (SAD) amount in DEPB-Regarding.

Sir / Madam,

Your kind attention is invited to the Circular No.02/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11454), dated 16-02-2012, regarding procedure on refund of 4% CVD (SAD). The above Circular provides the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD refunds (SAD) for payment of duty in case of re-credited DEPB/ Reward Scheme scrips upto 31-03-2012.

2. The matter has been examined in consultation with Director General of Foreign Trade (DGFT) and it has been decided to extend time limit for using re-credited DEPB scrips/ Reward Scheme scrips in case of 4% CVD (SAD) upto 30-06-2012.

3. Board also directs all Chief Commissioner of Customs to ensure that all pending application for refund of 4% SAD paid through DEPB/reward scrips are disposed of by 30-04-2012. The Chief Commissioner may constitute a special team to liquidate these refund claims. The report in this regard should be sent to Board by 04-05-2012.

4. Board also reiterates Para 8 of Board’s Circular No. 27/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8223), dated 13-08-2010 wherein it was mentioned that in the interest of ensuring expeditious grant of refund of 4% SAD, the importers may be advised to make the initial payment of 4% CVD in cash. DGFT has also informed that no re-crediting shall be done if such payment is made by means of scrips. In other words, in future exporters should pay SAD component in cash if they want a refund.

5. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff.

Yours faithfully,

(Vikas)
Under Secretary (Customs-III/VI)

Rules and Regulations
22-08-2012, 06:57 PM
Circular No. 11/2012 -Customs

F. No. 711/01/2006-Cus.(AS)/Pt.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

***



New Delhi dated the 12th April, 2012.

To

All Chief Commissioners of Customs/ Customs (P)
All Chief Commissioners of Customs & Central Excise,
All Director Generals/Chief Departmental Representatives (CESTAT),
All Commissioners of Customs / Customs (P) and
All Commissioners of Customs & Central Excise

Sir/Madam,

Subject: Disposal of confiscated goods – clarification on existing instructions – regarding.

***


I am directed to invite your attention to the Board’s Circular No. 12/2006-Customs dated 20.2.2006 and the earlier instructions issued to the field formations vide Board’s letters F. No. 711(7)/53-Cus. (AS) dated 27.5.1993, F. No.30/33/67-LC.I dated 19.1.68 and F.No.30/3/64-LC.I dated 10.2.1964 in the matter of disposal of confiscated/seized goods. In this regard, certain representations have been received in the Board from the trade as well as the field formations seeking clarification on the manner of disposal of confiscated/seized goods.

2. Recently, the Department of Consumer Affairs had forwarded the request of National Cooperative Consumers’ Federation (NCCF), wherein they have claimed that the confiscated goods should be offered only to NCCF, based on the then existing guidelines that confiscated goods in bulk may first be offered to NCCF and if they do not respond within a reasonable period, the goods may be offered to other agencies . On the other hand, Kendriya Bhandar (KB) had been requesting to offer same treatment as at par with NCCF in the matter of disposal of confiscated consumer goods. The grounds for their claim is that it is a Multistate Consumer Cooperative Society of Central Government employees under the Ministry of Personnel, Public Grievances & Pension, wherein Govt. of India has majority shareholding and purchase preference policy for local purchase of stationery and other articles by the DOPT treat KB/NCCF and other Multi-State Cooperative Societies (MSCS) on same footing (DOPT’s O.M. No.14/1/2009-Welfare dated 5.3.2012). Further, Board had also received a number of requests from the trade for equitable and wider participation of cooperative societies which are duly registered with the State/Central Government authorities and not to make a particular body monopolistic, in sourcing the confiscated goods being disposed of by the department.

3.1. In this regard, practices followed by the field formations and the instructions issued from time to time by the Board were also examined in detail. The judgement of the Hon’ble High Court of Patna in Civil Writ case No.12672 of 2010 dated 9.9.2011 was also taken into account. Considering the various factors involved in the process of disposal of seized/confiscated goods, the following clarification are offered in disposal of confiscated/ seized goods by the department.

3.2. Sale through Army canteen/ CSD: It is reiterated that the requirements of Army authorities/Military Canteens/ Canteen Stores Department (CSD) for purchase of confiscated/seized goods may be allowed since they provide consumer goods of high quality to the troops wherever they are situated. The earlier instructions dated 10.2.64 issued in this regard, provide that confiscated goods, as much as can conveniently be made available, after meeting the earlier demands of Army authorities/Military Canteens/ CSD and/or the consumer’s cooperative stores, are to be offered to the Central Government Employees Consumer cooperative society Ltd.

3.3. Sale through NCCF/KB/consumer cooperatives: Any lot of confiscated/seized consumer goods of value not exceeding Rs. Five lakhs which are ripe for disposal shall be offered to NCCF/KB/Other Central Government Employees Consumer Cooperative Society/ Multi-State Consumer Cooperative Societies/ State Consumer Cooperatives, subject to the following conditions. Most of these conditions had been prescribed in various instructions of the Board issued earlier and have been reiterated here:

(a) They should be functional for at least 10 preceding years and should submit Income-Tax returns and VAT/ST returns showing their activities in sale of goods to the consumers and that appropriate taxes have been duly paid and relevant laws/rules and regulations are complied with.

(b) Only those Co-operative Societies or National/State level Cooperative Federations that are duly verified and certified as genuine, every year by an officer not below the rank of AC/DC, and those that have been duly registered under Multi-State Cooperative Societies Act, 2002 or concerned State Cooperatives Act, should be permitted to purchase the confiscated/seized goods. The genuineness of co-operative societies/federation may also be verified through concerned Commissionerates or other field formations of this department, wherever required.

(c) They should be obliged to sell such seized/confiscated goods directly to bonafide consumers.

(d) No pick and choose of items would be allowed.

(e) Seized/confiscated consumer goods shall be offered on [I]first come first served basis.

(f) Any lot of confiscated/seized consumer goods of value exceeding Rs. Five lakhs shall not be sold directly to the aforesaid cooperative societies/federation and shall be sold by E-auction or auction-cum-tender basis.

(g) Complete accounts may be called for scrutiny by the department as and when necessary, to ensure that the seized/confiscated goods, which are sensitive to smuggling are not misused; or to verify that their disposal has not been made to a single party/ individual; or to ensure that sale has not been made to any persons where in purchase vouchers etc. had been misused by unscrupulous elements in legitimizing smuggling.

4. Sale through e-auction/auction cum tender: In respect of confiscated/seized goods of all types and confiscated/seized consumer goods exceeding value of Rs. Five lakhs in single lot, may be disposed through e-auction or auction-cum-tender, since it offers enhanced transparency and accountability for quick disposal of goods. In such e-auction or auction-cum-tender process, all persons including NCCF, KB, other CG employee’s consumer cooperatives, Multi-State/State cooperatives or National/State level Cooperative Federations can also participate. If the NCCF/KB/other Consumer Cooperative societies are found to be successful bidder, then the goods may be sold to them with the eligible rebate/discount as prescribed, subject to fulfillment of other conditions of e-auction/auction-cum-tender. Instructions for use of E-auction or auction-cum-tender have already been prescribed vide Board’s Circular No.50/2005-Customs dated 1.12.2005 and No.12/2006-Customs dated 20.2.2006.

5.1. CVC has been emphasizing on e-commerce/e-procurement/e-sales for enhancing transparency, giving equal opportunities to all. Accordingly, CVC vide Office Order No.46/9/03 dated 11th September 2003 (No.98/ORD/1) has stated that the departments/ organizations may themselves decide on e-procurement/reverse auction for purchases or sales and work out the detailed procedure in this regard. It has, however, to be ensured that the entire process is conducted in a transparent and fair manner.

5.2. Board had earlier appointed a Task Force to examine the various issues arising out of the audit review, and to suggest effective measures to put in place a permanent mechanism for expeditious disposal of cargo including confiscated/seized goods. Based on the recommendations of a Task Force, Board had streamlined the procedure for disposal of goods which interalia include its approval for setting up of a centralized e-auction portal by engaging the services of M/s. MSTC Ltd. Mumbai, a PSU under the Ministry of Steel. This e-auction procedure had been in force for quite some time and it had facilitated expeditious disposal of goods by the field formations. Detailed instructions and guidelines on this procedure are already available in MSTC website, which specifically hosts e-auctions for Customs and Central Excise department regularly. It is hereby reiterated that E-auction or auction-cum-tender prescribed vide Board’s Circular No.50/2005-Customs dated 1.12.2005 and No.12/2006-Customs dated 20.2.2006 may continue to be utilised in respect of confiscated/seized goods.

6. The above instructions may be brought to the notice of all concerned immediately through appropriate Public Notice.

7. Receipt of this Circular may kindly be acknowledged.

Sd
(Rishi Mohan Yadav)
Under Secretary (AS)


Copy to:

-Internal circulation (as usual)

-Web Master.

-The Chief Commissioner of Customs (Preventive), Patna – for information and necessary further action w.r.t. his letter C.No.VIII (48)6/Illegal import/CCO/Cus/T/09 dated 31.1.2012 seeking directions of the Board on the matter of disposal of confiscated goods/betel nuts.

Rules and Regulations
24-08-2012, 05:23 PM
F.No. 437/12/2012-Cus. IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

*****


New Delhi, dated the 12th April, 2012.


ORDER


In terms of Notification No. 15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued under sub-section (1) of section 4 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=948) of the Customs Act, 1962 (52 of 1962), (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp) the Board hereby assigns the Show Cause Notice F.No. DRI/AZU/INV-43/Part-I/2009/6875 dated 02.03.2012 issued by Additional Director General, Directorate of Revenue Intelligence, Zonal Unit, Ahmedabad in the case of M/s Hari Krishna International, 105, D.K. Nagar-2, Nr. Santoshi Krupa, Katargam, Singapore Road, Surat, to the Commissioner of Customs (Import), Air Cargo Complex, Sahar, Mumbai, for the purpose of adjudication.


(Vikas)
Under Secretary to the Government of India


Copy to:

1. The Additional Director General, Directorate of Revenue Intelligence, Zonal Unit, Ahmedabad, “Rupen Bungalow”, Jain Merchant Society, Paldi, Ahmedabad;
2. The Commissioner of Customs (Import), Air Cargo Complex, Sahar, Mumbai;
3. The Commissioner of Customs, Custom House, Opp. Old High Court, Navrangpura, Ahmedabad;
4. Webmaster.cbec@icegate.gov.in.

Rules and Regulations
24-08-2012, 05:29 PM
Circular No.12 / 2012 - Customs

F. No. 528/27/2010-CUS (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tariff Unit

***



New Delhi, the 1st May, 2012.

To

All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).


Subject: Classification of Micro / Mini SD Cards - regarding.

Doubts have been raised as regards the classification of Micro / Mini SD Cards in the Sub-heading 852351, which covers Semiconductor media, Solid – state non-volatile storage devices or the Sub-heading 852352, which applies to Semiconductor media, Smart cards. The matter was also deliberated upon in the Bangalore 2011 Conference of Chief Commissioners of Customs.

2. The correct classification of Micro / Mini SD Cards was examined in the Board and also deliberated in the 49th meeting of WCO’s Harmonized Systems Committee (HSC). The technical inputs received revealed that the product structure of Micro /Mini SD Cards can be divided into two broad categories: Category 1: where there is PCB in the same housing, and Category 2: where there is no PCB instead there is substrates like alumina substrate with IC mounted in the substrate and interconnects printed on substrate.

3. Reportedly, at the time when Note 4(a) to Chapter 85 was adopted the solid-state non-volatile storage cards included a traditional printed circuit board. SD card technology has since evolved and now uses “Chip on Board” substrate packaging (also known as System-in-Package or SIP) instead of traditional printed circuit board assembly packaging to provide the exact same SD functionality. The Current SD cards contain a substrate or support on which the components (flash memory, controller, passive elements) are mounted. Moreover, Note 5 to Chapter 85 defines printed circuits for the purposes of heading 8534 and the Explanatory Note thereto provides further insight that confirms that circuits are made by forming on an insulating base, by any printing process (conventional printing or embossing, plating-up, etching, etc.), conductor elements (wiring), contacts or other printed components such as inductances, resistors and capacitors (“passive” Elements), other than elements which can produce, rectify, detect, modulate or amplify electric signals, such as diodes, triodes or other “active” elements. In this regard the WCO’s HSC is of the opinion that a very broad definition of printed circuits was intended.

4. Micro / Mini SD Cards are manufactured using an etching process. The etching process is one of the processes specifically identified in the definition of “printed circuit” in Note 5 to Chapter 85. Thus, the substrates used fully comply with the definitions of printed circuits found in the Harmonized System and therefore, the substrate of Micro / Mini SD Cards qualifies as a printed circuit board for purposes of Note 4(a) to Chapter 85.

5. The issue of classification of Micro / Mini SD cards was also referred to the Department of Information Technology (DIT), Ministry of Communications & Information Technology. Technical inputs from this Ministry revealed that connecting pins can be treated as connecting sockets and the product covered in the aforesaid two broad categories remain solid-state non-volatile storage devices even when substrate is of alumina. This Ministry has also suggested classification of Micro / Mini SD Cards in Sub-heading 8523.51

6. In view of the aforesaid, Board is of the considered view that in case of Micro / Mini SD Cards wherein the PCB is substituted by substrates, then such substrates fully comply with the definitions of printed circuits found in the Harmonized System and the qualifies as a printed circuit board and connecting pins qualifies as connecting sockets for purposes of Note 4(a) to Chapter 85. As such, Micro / Mini SD Cards are correctly classified in Sub-heading 8523.51 as Semiconductor media, solid-state, non-volatile data storage devices by application of General Rules for Interpretation of Import Tariff (GRIs) 1 (Note 4(a) to Chapter 85) and 6.

7. The Board desires that the pending provisional assessment cases of Micro/ Mini SD Card imports may be finalised on the basis of above instructions. Difficulties, if any, in implementation, may be brought to the notice of the Board.


Yours faithfully,

(Subodh Singh),
OSD (Customs), Tariff Unit,
Fax-011-23092173

Rules and Regulations
24-08-2012, 05:31 PM
Circular No. 13/2012-Customs

F. No. 528/21039/08-Cus/ICD

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

***



New Delhi, dated the 8th May, 2012

To

All Chief Commissioners of Customs/ Customs (P),
All Chief Commissioners of Customs & Central Excise,
All Director Generals/Chief Departmental Representatives (CESTAT),
All Commissioners of Customs / Customs (P), and
All Commissioners of Customs & Central Excise.

Sir/Madam,

Subject: Enforcement of Intellectual Property Rights on imported goods - Clarification on the issue of parallel imports – regarding.


***


I am directed to invite your attention to the Notification No.51/2010-Customs (N.T.) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) dated 30.6.2010 and Board’s Circular No. 41/2007-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=3016) dated 29.10.2007 prescribing certain conditions and procedures in implementation of Intellectual Property Rights (IPR) such as trade mark, design, patent, geographical indication and copyright under the IPR (Imported Goods) Enforcement Rules, 2007. In this regard, certain representations have been received in the Board from the trade as well as the field formations seeking clarification on the matter of import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/authorisation of the IPR holder, which in trade parlance is known as ‘parallel imports’.

2.1. It may be recalled that the notification No.51/2010-Customs (N.T.) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) dated 30.6.2010 prohibits import of goods for sale or use in India, which are covered under specified legal provisions of the following statutes that regulate products with false trade mark, fraudulent or obvious imitation of design, patent obtained without consent, false Geographical indication or product which infringe registered copyright etc.

(i) Trade Marks Act, 1999
(ii) Designs Act, 2000
(iii) Patents Act, 1970
(iv) Geographical Indications of Goods (Registration and Protection) Act, 1999 and
(v) Copyright Act, 1957.

2.2. In terms of the legal provisions under the IPR (Imported Goods) Enforcement Rules, 2007 read with notifications and circulars issued in this regard, the determination of the fact that whether particular consignment of imported goods infringes the rights of the IPR holder would be done by the Customs authorities taking into account the provisions of the aforesaid parent Acts.

2.3. It may also be noted that all infringements and consequential offences stated in the aforesaid parent Acts is not limited to import of goods, as the scope of these Acts are wide, interalia, covering enforcement of the legal provisions of these Acts in the country. Hence, it may be noted that the prohibition of imported goods for the purpose of protecting intellectual property rights as specified under Notification No.51/2010-Customs (N.T.), (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) does not relate to all infringements under the parent Acts but only to those imports that infringe the specific provisions of various parent Acts governing IPR, mentioned in the notification No.51/2010-Customs (N.T.). (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939)

2.4. To illustrate, in case of the Trade Marks Act, 1999, prohibitions against infringement of trade marks on import of goods intended for sale or use in India, that attract the provisions IPR (Imported Goods) Enforcement Rules, 2007, have been given in para (i) and (ii) of aforesaid notification, viz,:

(i) imported goods having applied thereto a false trade mark, as specified in section 102 of the Trade Marks Act, 1999 [for para (i)]

(ii) imported goods having applied thereto any ‘false trade description’ within the meaning of definition provided in clause (i), in relation to any of the matters connected to description, statement or other indication direct or indirect of the product but not including those specified sub- clauses (ii) and (iii) of clause (za), of sub-section (1) of section 2 of the Trade Marks Act, 1999[for para (ii)].

Thus, the prohibition under the para (i) and (ii) of aforesaid Notification No.51/2010-Customs (NT) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) would be applicable only when the imported goods fall within the purview of the above referred provisions of Trade Marks Act, 1999.

3. In this context, the issue of permitting import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/ authorisation of the IPR holder, known in the trade as ‘parallel imports’ was referred to the administrative Ministry i.e., Department of Industrial Policy and Promotion (DIP&P), Ministry of Commerce & Industries, seeking their clarification.

4. In this regard, the Department of Industrial Policy and Promotion which is nodal authority for all matters relating to (i) Trade Marks Act, 1999 (ii) Patents Act, 1970 and (iii) Designs Act, 2000 has, interalia, stated that:

(i) Section 107A (b) of the Patents Act, 1970 provides that importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product shall not be considered as an infringement of patent rights. Hence, in so far as Patents are concerned, Section 107A (b) provides for parallel imports.

(ii) Section 30(3)(b) of the Trade Marks Act, 1999 provides that where the goods bearing a registered Trade Mark are lawfully acquired, further sale or other dealing in such goods by purchaser or by a person claiming to represent him is not considered an infringement by reason only of the goods having been put on the market under the registered Trade Mark by the proprietor or with his consent. However, such goods should not have been materially altered or impaired after they were put in the market.

(iii) In so far as designs are concerned, it is clarified that parallel imports are not allowed as indicated by Section 22 (1)(b) of the Designs Act, 2000.
(iv) As regards geographical indications, it is stated that there are no identical or similar provisions as in Section 107A(b) of Patents Act, 1970 on parallel imports under the Geographical Indications of Goods (Registration and Protection) Act, 1999. The said Act does not address the issue of parallel import at all. Hence, parallel imports are not covered under this Act.

(v) As regards ‘copyright’ since the clarification is awaited from the nodal authority i.e., Department of Higher Education, the field formations may follow the extant provisions of the Copyright Act, 1957 until further instructions are issued in this regard.

5.1. In view of the above, the field formations are directed to decide cases of import of ‘parallel imports’ on the basis of aforesaid legal provisions of parent Acts, the provisions of Notification No. 51/2010-Customs(N.T.) (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=22939) dated 30.6.2010 and the clarification given by the administrative Ministry as detailed in para 4 above.

6. The above instructions may be brought to the notice of all concerned immediately and wide publicity of this circular may given through appropriate Public Notice.

7. Receipt of this Circular may kindly be acknowledged.

(M. Satish Kumar Reddy)
Director (ICD)

Rules and Regulations
24-08-2012, 05:38 PM
Circular No. 14/2012 - Customs

F. No. 528/23/2012-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tariff Unit

***



New Delhi, the 11th June, 2012.

To
All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Sir / Madam,

Subject: Classification of Rail Cum Road Vehicle - regarding.

Board has received representations regarding divergent practice followed in the classification of rail cum road vehicles. Reportedly, field formations are classifying such vehicles both in chapter 86 which covers, “Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds”, and in chapter 87 (http://www.taxmanagementindia.com/Site-Map/Customs/Detail_Basic_Rate.asp?Tariff_Index_ID=287) which covers, “Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof.”

2. The correct classification of Road-Rail–Vehicle or Rail Cum Road Vehicle was examined in the Board. The General Rules of Interpretation (GRI), Rule 1 inter alia states that, “…for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes…”.
Note 4 (a) to Section XVII states that, “For the purposes of this Section, vehicles specially constructed to travel on both road and rail are classified under the appropriate heading of Chapter 87 (http://www.taxmanagementindia.com/Site-Map/Customs/Detail_Basic_Rate.asp?Tariff_Index_ID=287)…”. On the basis of the said legal section Notes to Section XVII, the “dual mode vehicle capable of being used as “rail cum road vehicle” - specially constructed to travel on both road and rail should fall under an appropriate heading in Chapter 87. (http://www.taxmanagementindia.com/Site-Map/Customs/Detail_Basic_Rate.asp?Tariff_Index_ID=287) As such, Board is of the considered view that the correct classification in the harmonised Customs Tariff in case of Rail cum Road Vehicles should be in the appropriate heading in Chapter 87 (http://www.taxmanagementindia.com/Site-Map/Customs/Detail_Basic_Rate.asp?Tariff_Index_ID=287) by application of GRIs 1 (Note 4 (a) to Section XVII).

3. All pending provisional assessment cases of Rail Cum Road Vehicle imports may be finalised on the basis of above instructions. Difficulties, if any, in implementation, may be brought to the notice of the Board.


Yours faithfully,
(Subodh Singh),
OSD (Customs), Tariff Unit,
Fax-011-23092173

Rules and Regulations
24-08-2012, 05:41 PM
Circular No.15/2012-Customs


F.No.450/20/2007-Cus.IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs



227-B, North Block,
New Delhi-110001
Date, 13th June, 2012

To

All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.
All Director Generals under CBEC.

Sir/ Madam,

Subject: Review of Risk Management System (RMS) – regarding.


…..


As you are aware Self Assessment has been introduced vide Finance Act 2011 (http://www.taxmanagementindia.com/Site-Map/F_Acts/List_F_Acts.asp?ID=435). This marks a major change in the system of assessment of customs duty of imported and export goods. Self Assessment is trust based control with more reliance on declarations of the importer and exporters.

2. In order to implement self assessment effectively and to ensure its benefits to the trade, Board decided that current facilitation level under RMS should be enhanced significantly. Accordingly vide Board Circular 39/2011-Cus (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11272) dated 2.09.2011 it was decided to enhance facilitation level up to 80%,70% and 60% in case of air cargo complexes, ports and ICDs respectively by rationalizing risk rules and risk parameters.

3. Risk Management Division has since carried out rationalization of risk parameters and it is reported that facilitation level of Bills of entry has been enhanced appreciably. This means that that more and more numbers of Bills of Entry are not subjected to examination and assessment.

4. Higher facilitation at the same time has led to a need for more scrutiny of Bills of Entry at Post Clearance Audit (PCA)/Post-Clearance Compliance Verification (PCCV) stage. It is therefore felt that percentage of Bills of entry selected for PCA need to be enhanced by concerned field formations. RMD has also reported that all Chief Commissioner should ensure that higher percentage of facilitated Bills of Entry should be subject to Post Clearance Audit/PCCV.

5. Board has also introduced ‘On Site Post Clearance Audit’ (OSPCA) vide Circular No 47/2011- Cus (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11352) dated 21.10.2011. The Scheme currently covers ACP importers only. It was decided that in respect of ACP importers covered under OSPCA, transaction based PCA in vogue since 2005 after introduction of RMS should be phased out. However in respect of other importers, the same should continue to be operational.

6. Board is therefore of the view that till the time OSPCA is made applicable to other categories of importers, the percentage of Bills of Entry selected for PCA at a Customs house should be suitably enhanced to safeguard the interest of revenue. Board also desires that concerned Chief Commissioners of Customs should review the staff position in their jurisdiction and relocate more manpower for audit work as increased facilitation in terms of reduced examination have led to lesser requirement of staff for examination of goods. It is therefore imperative that excess staff should be diverted for activities such as PCA and SIIB in Customs Houses.

7. It is also reported that pendency in respect of transaction based PCA remain acute. Board has taken a serious note of it and desires that the work should be accorded due consideration and pendencies reduced.

8. These instructions should be complied with strictly and any difficulty in this regard may be brought to the notice of the Board immediately.

Yours faithfully,

(R.P. Singh)
Director (Customs)

Rules and Regulations
24-08-2012, 05:46 PM
Circular No. 16 /2012-Customs

F. No.450/79/2010-Cus.IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

*****



Room No.229 A, North Block
New Delhi, dated 13th June, 2012

To,
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Director Generals / Chief Departmental Representatives (CESTAT),
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs (Appeals).
All Commissioners of Customs & Central Excise.
All Commissioners of Customs & Central Excise (Appeals).

Sir / Madam,

Subject: Procedure followed for import of Indian vessels and filing of Import General Manifest, Bill of Entry – regarding.

I am directed to invite your attention to the Board’s instruction issued vide F.No.450/79/2010-Cus.IV dated 23.09.2010 which state that the requirement for filing Import General Manifest (IGM) and Bill of Entry should be complied with even in cases, where goods are exempt from payment of any duty. The jurisdictional Commissioners were also instructed to review the situation, and take appropriate action for past cases, including adjudication, if warranted, in case of non-fulfillment of aforesaid filing of documents.

2. In this regard, certain difficulties have been brought to the notice of the Board by the trade and Indian Ship Owners’ Association stating that the Customs field formations are insisting on filing of IGM and Bill of Entry even in respect of those vessels that were imported in the past and which were exempt from payment of import duty.

3.1 In this regard, it is stated that as the provisions of Section 29 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=1005) of the Customs Act, 1962 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp) read with Section 2 (22) (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=946) and 2(25), (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=946) the term ‘imported goods’, interalia, includes vessels entering India from any place outside the country (India). These vessels may fall into any of the following category (i) Foreign flag vessels i.e., vessels that have been registered outside India and which carry imported/ exported goods or passengers, during its foreign run (voyage from a port outside India to an Indian port, whether touching any intermediate port in India or not); (ii) Vessel entering India for the first time on arrival in the country, for registration as Indian Flag vessel; (iii) Vessels which are intended for conversion from foreign run to coastal run/ trade (voyage between two or more Indian ports); and (iv) Vessels which are brought into India for breaking up.

3.2 Foreign flag vessels: These are the vessels that are registered abroad and its entry into the country is for carrying cargo or passengers, as a conveyance. Hence, there is no requirement for filing an IGM, Bill of Entry for foreign flag vessel which is being used as conveyance. However, the requirement for filing an import manifest in the prescribed manner for the goods or passengers which are being carried in the vessel, on its entry into an Indian port in terms of the provisions under Section 30 of the Customs Act needs to be complied with.

3.3 Indian Flag Vessel: In terms of the provisions of Part-V of the Merchant Shipping Act, 1958, vessels entering into India for the first time, are required to be registered with specified authority of the Mercantile Marine Department as Indian ship, which can then display the national character of the ship as Indian Flag Vessel for the purpose of Customs and other purposes specified in the said Act. Such Indian ship or vessel may be used for foreign run or exclusively for coastal run/ trade. Further, any ship or vessel may be taken outside India or chartered for coastal trade in India, only after obtaining the requisite licence from the Director General of Shipping, under the provisions of Section 406 or 407, respectively, of the said Merchant Shipping Act. Hence, in all such cases the Customs declarations such as IGM, Bill of Entry is required to be filed with jurisdictional Customs authority.

3.4 Vessels for conversion into coastal run: Any vessel could be used for coastal run/ trade after obtaining requisite clearance from Director General of Shipping and on fulfilment of certain specified conditions under Section 407 of the Merchant Shipping Act, 1958. In case of foreign going vessel, exemption from import duties, including CVD, have been extended vide serial No.462 of notification No.12/2012-Cus (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687). dated 17.03.2012, subject to prescribed conditions, which binds the importer to file fresh Bill of Entry at the time of its conversion for coastal run/ trade and payment of applicable duty on such conversion of vessel for costal run/ trade. Similarly, excise duty is also payable on vessels which are being used for coastal trade vide serial No.306 of notification No.12/2012-Cus (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687). dated 17.03.2012. Hence, if any Indian Flag vessel which is used for time being as foreign going vessel is converted for use in coastal trade or any vessel which is to be used for coastal trade, there is a need to file a Bill of Entry for payment of applicable duty as CVD.

3.5 Vessels for breaking up: Vessel and other floating structures intended for breaking up are liable to payment of applicable duty. All vessels for the transport of persons or goods, falling under heading 8901 (excluding those which are imported for breaking up) are fully exempt from payment of import duty under vide serial No.461 of notification No.12/2012-Cus. dated 17.03.2012, subject to the condition that the importer should file fresh Bill of Entry at the time of its breaking up of the vessel after its importation. Hence, in these cases the importer has to file an IGM and Bill of Entry, claiming the exemption as may be applicable, at the time of initial import and later file fresh Bill of Entry at the time of breaking up of the vessel as per the condition attached to the aforesaid exemption.

4. In view of the above, it is clarified that in respect of foreign flag vessels, for Indian flag vessels, there is no requirement of filing of IGM and Bill of Entry, since its usage is as conveyance. In respect of Indian flag vessels and vessels for breaking up as explained in para 3.3 and 3.5 above, the importer has to file IGM and Bill of Entry, under the provisions of the Customs Act, 1962. As regards the vessel for conversion into costal run/ trade as detailed in para 3.4, since the changes in the duty structure for levy of CVD on vessels which are being converted for coastal trade was initially imposed from 1.3.2011, and subsequently retrospective exemption has been provided for the period 1.3.2011 to 16.3.2011 vide clause 129 of the Finance Act, 2012, the requirement for filing IGM and Bill of Entry may be insisted in all such cases w.e.f. 17.03.2012, that is the date from which levy of CVD has come into force.

5. It is also clarified that all vessels including foreign going vessels for its entry into / exit from the country during its journey as foreign going vessel and the Indian flag vessel / Indian Ship for subsequent use as foreign going vessel would not require filing of IGM and Bill of Entry as conveyance, since the same are not imported goods to be cleared for home consumption.

6. Accordingly, the field formations may adjudicate the cases involving any violation where the IGM or Bill of Entry in respect of import of vessel were not filed at the time of import, on its first arrival in India or on its conversion into coastal trade and appropriate penal action be taken against the offenders.

7. The above instructions may be brought to the notice of all the concerned immediately through appropriate Public Notice.

8. Receipt of this Circular may be kindly acknowledged.

Yours faithfully,

(G. S. Sinha),
OSD (Customs IV)

Copy to:
Internal circulation (as usual).
-x-0-x-

Rules and Regulations
24-08-2012, 05:49 PM
Circular No. 17/2012-Customs

F.No.605/12/2012-DBK
Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise and Customs



New Delhi dated the 5th July,2012


To

All Chief Commissioners of Customs
All Chief Commissioners of Customs & Central Excise/ Central Excise
All Director Generals under CBEC,
All Commissioners of Customs, Customs (Preventive)
All Commissioners of Customs & Central Excise/ Central Excise

Madam/Sir,

Sub: Verification of genuineness, of duty credit scrips issued under Chapter 3 of FTP, before registration

Attention is drawn to para 2 (e) of Circular No. 5/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8008) dated 16.03.2010, which reads - “ As regards the duty credit scrips issued under Chapter 3 of FTP, the verification of genuineness of scrips in terms of Para 3.11.3 of the HBP v.1 shall be done before allowing registration of such scrips. Further, the Commissioner may cause random verification of the shipping bills based on which the said duty credit scrip has been issued to ascertain the genuineness of such shipping bills. A quarterly report on the outcome of the said verification may be forwarded to the Board, which should include inter alia the details of the discrepancies noticed during the verification and the measures taken to redress such discrepancies. This procedure will be reviewed once online transmission of the duty credit scrips issued under Chapter 3 of FTP is operationalized”.

2. The Annual Supplement 2012-13 (FTP for 2009-14) issued on 5th June 2012 has not retained the provision (“before registration, authorities shall verify genuineness of duty credit scrips, from RA concerned, until EDI system of message exchange is put in place”) under para 3.11.3 of the HBP, Vol. 1.

3. The matter was reviewed by the Board. Field formations have reported that they do signature verification of issuing authority, they cross-check the particulars of the scrip with its issuance particulars available on the official website of the concerned Regional Authority (RA) of the DGFT and place in the file a copy of the print-out of details of scrip taken from the said official website, some also use fax or letter confirmation from the RA when required, and they check alerts, etc before registering the scrip. Where scrip details are not available on the official website of RA, say for example in the case of manually issued scrips or for any other reason, field formations write a letter to RA and take steps to register such scrip when written confirmation is received.

4. Since, EDI system of message exchange has not been put in place and online transmission of duly validated duty credit scrips is not operational, it has been decided that even while the words and figures “in terms of Para 3.11.3 of the HBP v.1” shall stand deleted from first sentence of para 2(e) of Circular No.5/2010-Customs, the verification of genuineness of scrips shall continue to be done as before prior to registration of such scrips. No other aspect with respect to para (e) of Circular No.5/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8008) has undergone change.

5. These instructions should be brought to the notice of all concerned by way of issuance of instructions/trade notice. Difficulty faced, if any, may be brought to the notice of the Board.

Yours faithfully,

(Suresh Kumar)
Director-Drawback
Telefax: 011-23360581

Rules and Regulations
24-08-2012, 05:51 PM
Circular No. 18/2012-Cus.

F. No. 605/12/2012-DBK

Government of India
Ministry of Finance
Department of Revenue



New Delhi dated the 5th July, 2012.

To
All Chief Commissioners of Customs
All Chief Commissioners of Customs & Central Excise/ Central Excise
All Director Generals under CBEC,
All Commissioners of Customs, Customs (Preventive)
All Commissioners of Customs & Central Excise/ Central Excise

Sir/Madam,

Sub: Amendment in para (4) of Circular No. 38/2010-Customs, dated 27.09.2010-Served From India Schemes(SFIS) – reg:-

Attention is invited to para (4) of Circular No. 38/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8280), dated 27th September, 2010, which reads: “Served From India Scheme (SFIS) As per existing Notification No. 91/2009-Cus. Import of vehicles is not allowed under the Served From India Scheme(SFIS), even if such vehicles are freely importable under the Foreign Trade Policy. However, after the announcement of Annual supplement to the Foreign Trade Policy, vehicles which are in the nature of professional equipment such as Airfield Fire Fighting and Rescue Vehicles (AFFRVs), Heavy Duty Modular Trailer Combination, Reach Stackers etc. for use by the service provider in his regular service business have been allowed to be imported against SFIS scrips. However, personal vehicles such as motor cars/ Sports Utility Vehicles(SUVs) / Multi Utility Vehicles (MUVs) etc. are not permitted to be imported against SFIS scrips. Notification no. 90/2010-Cus (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=23095) dated 01.09.2010 refers in this regard.”

2. It has been decided by the Board that the vehicles which are in the nature of professional equipment, illustratively mentioned in para (4) of the said Circular, may also include Ambulance, Sewage Disposal Truck, Refuse Disposal Vehicle, that are pre-designed structurally and pre-fitted with relevant devices and mechanisms that make for their use for the intended purposes and enable a reasonable conclusion that they cannot be put to generalized or personal use; and Dumpers designed for off-highway use (as described in the Explanatory Notes to Chapter 87 of the Harmonized System of Nomenclature-HSN), for use by the service provider in his regular service business. It is reiterated that personal vehicles such as motor cars/ Sports Utility Vehicles (SUVs)/ Multy Utility Vehicles (MUVs), etc. are not permitted to be imported against SFIS scrips.

3. There is no change in any aspect of the Notification No. 91/2009-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21918), as amended or any other aspect of Para (4) of the Circular No. 38/2010-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8280), dated 27th September, 2010.

4. These instructions should be brought to the notice of all concerned by way of issuance of instructions /trade notice. Difficulty faced if any, may be brought to the notice of the Board.

Yours faithfully,

(Suresh Kumar)
Director-Drawback
Telefax-011-23360581

Rules and Regulations
24-08-2012, 05:54 PM
Circular No. 19/2012 - Customs

F.No. 528/115/2011-STO (TU)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs



227A, North Block, New Delhi
11th July, 2012


To

All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Sir / Madam,

Subject: Classification of Mouse Pads – regarding.

It has come to the notice of the Board that divergent practices are being followed by field formations regarding classification of Mouse Pads in heading 3926 (Other Articles of Plastics and Articles of Other Materials of Headings 3901 To 3914), 4016 (Other Articles of Vulcanised Rubber Other than Hard Rubber), and 8473 [Parts and Accessories (Other than Covers, Carrying Cases and the Like) suitable for use Solely or Principally with Machines of Headings 8469 to 8472] of the Customs Tariff Act (CTA), 1975 (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CTA.asp).

2. This issue was examined in the Board. It was also one of the agenda items in the WCO 48th and 49th Harmonized System Committee which examined this issue for decisions on classification. The HS Code considered was 8473.30 which covers, “parts and accessories”, of goods of heading 8471. Mouse is classified as tariff item 84716060 under HS Code 847160 which covers input or output units, whether or not containing storage units in the same housing.

3. For the classification of goods in the Harmonized Commodity Description and Coding System, it is understood that parts are goods intended to be assembled into articles, together with other goods, or intended to be incorporated into other articles. In other words, a part constitutes a component of an article. Mouse Pads do not meet this criterion. Further, Mouse Pads fail to qualify as an accessory of a computer or Automatic Data Processing (ADP) mouse of heading 84.71, as they do not serve to adapt the computer mouse for a particular operation, perform a service relative to a computer mouse, and increase the range of operations of a computer mouse.

4. Mouse Pads are generally flat products of different shapes and consist of different materials or combinations of materials such as plastics, rubber, hard rubber, etc. The characteristics and properties of these materials of which Mouse Pads are made of do not make the product indispensible for the functioning of an ADP mouse. It is also apparent that an ADP mouse does not depend on the presence of a Mouse Pad in order to function or to carry out its specific activity. The ADP mouse could also be used and would also function without being placed on a Mouse Pad.

5. As such, Board is of the considered view that Mouse Pads are neither parts nor accessories of a computer mouse of heading 84.71 and would therefore be classifiable according to their constituent material.

6. Accordingly, suitable instructions may be given to the field formation and all pending assessments, if any, may be finalized. Difficulty faced, if any, may be brought to notice of the Board.

Yours faithfully,

(Subodh Singh),
OSD (Customs), Tariff Unit
Fax: 011 – 23092173

Internal circulation – As usual.

Rules and Regulations
24-08-2012, 05:56 PM
Circular No. 20 /2012-Cus.

F.NO.605/12/2012-DBK
Government of India
Ministry of Finance
Department of Revenue



New Delhi dated the 27th July, 2012


To

All Chief Commissioners of Customs
All Chief Commissioners of Central Excise / Customs & Central Excise
All Director Generals under CBEC,
All Commissioners of Customs / Customs (Preventive)
All Commissioners of Central Excise /Customs & Central Excise

Madam / Sir,

Sub: Changes in the Foreign Trade Policy 2009-14 issued on 5.6.12 – reg

The DGFT’s notification No. 1(RE-2012)/ 2009-2014 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24906) and Public Notice 1(RE-2012)/2009-14 both dated 5.6.12 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11658) have issued a revised edition of the FTP 2009-14 effective 5.6.12. The revised edition of the FTP and the Handbook of Procedures (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=526) may necessarily be perused for all the details.

2. In the areas that presently required changes to be made by Department of Revenue, certain notifications and circulars have been issued:

(I) Notification No.39/2012-Customs dated 12.06.2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24927) has been issued by TRU. With this, the import of duty free embellishments allowed against export of polyester made-ups, cotton made-ups and handloom made-ups has been extended to export of man-made made-ups.

(II) Notification No.42/2012-Customs dated 22.6.2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24970) amended notification Nos. 100 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21927), 101 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21928), 102 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21929), 103 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21930) and 104/2009-Cus (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21932). With these amendments,-

a) The duty credit scrip under Status Holder Incentive Scheme (SHIS) can now also be utilized, to the extent of 10% of duty credit amount in scrip originally issued, for import of components, spares and parts for already imported capital goods, subject to conditions. A limited transferability of these scrips has also been permitted amongst status holders provided that the transferee status holder is a manufacturer, subject to conditions.

b) The notifications, for import of the specified capital goods, which had effect till 31.12.2012, under zero duty Export Promotion Capital Goods (EPCG) Scheme, including that for common service providers, will have effect till 31.12.2013. This is to implement the FTP provision that zero duty EPCG scheme shall be in operation till 31.3.2013. Further, the condition that importer is not currently availing any benefits under Technology Upgradation Fund Scheme (TUFS) has been made subject to a proviso whereby the said condition will not be applicable where the benefit under TUFS has been obtained but exact line of business in TUFS is different from the line of business under EPCG or where benefits availed under TUFS are refunded, with applicable interest, before availing the zero duty EPCG authorization. The aspect of benefits, with interest, having been refunded will be ensured by DGFT. Additionally, it has been provided that the condition that the importer is not issued, in the year of issuance of zero duty EPCG authorization, the duty credit scrips under SHIS scheme, will not be applicable where already availed SHIS benefit that is unutilized is surrendered or where benefits availed under SHIS that is utilized is refunded, with interest, before availing zero duty EPCG authorization.

c) Under both zero Duty EPCG and 3% duty EPCG schemes it has been provided that the export obligation shall be 75% of the normal export obligation when fulfilled by export of specified green technology products. Further, it has been provided that for units located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, the export obligation shall be 25% of the normal export obligation. This does not imply any change in the average export obligation. These reflect provisions introduced in paras 5.10 and 5.12 of the FTP. Also, it has been provided that in the case of export of goods relating to carpet, coir and jute the EPCG authorization holders shall not be required to maintain average export obligation/level of exports. This is in addition to the exports already specified. This provisioning reflects changes made in para 5.7.6 of the HBP, Vol. I.

d) In respect of Common Service Providers (CSP), under both zero duty EPCG and 3% duty EPCG schemes, earlier, the details of the users and the quantum of export obligation which each user will fulfill were required to be endorsed on the EPCG authorization at the time of issue, and each one of the users of the CSP, apart from the CSP, was required to furnish 100% bank guarantee (BG) equivalent to their portion of duty foregone apportioned in terms of quantum of export obligation to be discharged by them. These provisions have been modified. As regards details of users, the CSP is now required to inform the same to the concerned Regional Authority prior to exports, and the quantum of BG shall be equivalent to duty foregone amount and BG can be given by CSP or any one of the users or a combination thereof, at the option of CSP. These amendments reflect changes introduced in para 5.3(b) of FTP.

(III) Circular No.17/2012-Customs dated 5.7.12 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11718) relating to continuation of verification of genuineness, of duty credit scrips issued under chapter 3 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=16626) of FTP (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=525FTP%202009-14%20), before registration, is self explanatory.

(IV) Circular No.18/2012-Customs dated 5.7.12, (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11719) relating to para (4) of Circular No.38/2010-Customs, which illustrates certain vehicles which are in the nature of professional equipment in connection with the Served from India Scheme (SFIS), is self explanatory.

(V) Notification Nos. 29/2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24998)- 30 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24994), 31 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24995), 32 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24996), & 33/2012-Central Excise all dated 9.7.2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24997) allow duty credit scrips issued under FPS, FMS, AIIS (under VKGUY), VKGUY and SHIS schemes to be used for domestic procurement, subject to the conditions laid down therein which have been provided keeping in view, inter alia, the transferability/limited transferability of these scrips. It has also been provided that the holder of the scrip, to whom the goods are cleared under these Central Excise notifications, shall be entitled to avail the drawback or Cenvat credit of duties of excise leviable against the amount debited in the scrip and validated at the time of clearance. These notifications reflect para 3.17.5 (c) of FTP. The Notification No. 44/2012-Customs dated 9.7.2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24993) makes consequential changes in the notifications issued with respect to these scrips for imports.

3. There are certain areas of change in the FTP which do not require amendments in Customs notifications. Salient amongst these are –

a) Earlier, the para 2.17 of FTP pertaining to second hand goods specifically mentioned “Import of re-manufactured goods shall be allowed only against a license”. This does not find mention in the FTP issued on 5.6.12. The DGFT has informed that such goods will be governed by the import policy applicable for second hand items/goods under para 2.17 of FTP.

b) In respect of the Agri Infrastructure Incentive Scrip (AIIS), the para 3.13.4(c) of FTP specifies the capital goods/equipment for cold storages, pack houses etc, which are permitted for import. In terms of the existing notification No.94/2009-Customs dated 11.9.2009 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=21921), this scrip will now also be eligible to be used for import of fourteen specified equipment (for setting up of Pack Houses) that are notified in Appendix 37F of the HBP, Vol. I.

c) In para 4.1.2 of FTP (applicable to Advance Authorization and DFIA schemes) the formula/norm for Value Addition (except for gems and jewelery) has been tightened by including reference to intent of claiming drawback, and in para 4.1.14 of FTP it has been made clear that drawback would be allowed only for such duty paid items which have been endorsed on the authorization by the Regional Authority. Field formations may specifically note this aspect in the context of brand rate of drawback. Moreover, in terms of changes made in para 2.12 of HBP, Vol. I the normal periods of validity for the purpose of making imports under Advance Authorization, Annual Advance Authorization and DFIA schemes have been reduced to 12 months. Further, as per para 4.22 of HBP, Vol. I, the period for fulfillment of export obligation has been reduced to 18 months, with certain exception. One extension of 6 months can be given by the Regional Authority.

d) The para 4.29 of HBP Vol. I has made an additional provision for Regional Authority to intimate details of recovery/deposits to Commissioner of Central Excise having jurisdiction over the factory of the authorization holder. This was necessitated as authorizations are not registered at any Port when the advance authorization is entirely invalidated for domestic sourcing of inputs. The Commissioner of Central Excise will now be enabled to take a 360 degree view and exercise due diligence in the matter.

e) Para 5.3.3 of the HBP, Vol. I has clarified that separate authorization shall be issued in case application is filed under para 5.2A of FTP [for restricted import of spares with reduced export obligation, subject to conditions] pertaining to EPCG scheme.

f) In chapter 8 of the FTP, certain categories of supply of goods by main/sub-contractors have been deleted from being regarded as deemed exports. These are those under erstwhile para 8.2 (e) and (g) of FTP as it stood prior to 5.6.12.

4. There are certain areas of change in the FTP for which notifications shall be issued subsequently to make them operational. These include the specification of Vishakapatnam Airport in the Customs exemption notifications for the purposes of import and export under the export promotion schemes (para 4.19 of HBP, Vol. I) for which modalities are being worked out by DG (Systems) and Chief Commissioner, Vishakapatnam; making operational the scheme of Post Export EPCG duty credit scrip (para 5.11 of FTP) for which modalities are being worked out in consultation with DGFT; changes made in para 5.2A of FTP notified on 5.6.12 w.r.t. catalyst for subsequent charge which are being reviewed by the DGFT.

5. A change made in the FTP (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=525FTP%202009-14%20) issued on 5.6.12 related to declaration of intent on free shipping bills under para 3.11.8 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=16637) of HBP, Vol. I. (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=526) The position with respect to this para was earlier governed by DGFT Public Notice No. 53(RE-2010)/ 2009-14 dated 3.6.2011 (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=9333). In the FTP issued on 5.6.12, the requirement of declaration of intent was deleted. During post FTP discussions, the necessity of retention of this provision was informed to the Department of Commerce and it was agreed that the pre 5.6.12 position would be restored.

6. This Circular covers salient features of the FTP (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=525FTP%202009-14%20) effective 5.6.12 dealt by the Drawback Division. It should be ensured that the FTP (http://www.taxmanagementindia.com/site-map/exim/list_rule.asp?ID=525FTP%202009-14%20) and Handbook of Procedures issued effective 5.6.12, as well as above mentioned Customs and Central Excise notifications and circulars are carefully perused for details. The Circular may also be brought to the notice of all concerned by way of issuance of standing order/instruction/trade notice. Difficulties faced, if any, may please be brought to the notice of the Board.


Yours faithfully,
(Suresh Kumar)
Director (Drawback)
Telefax: 23360581

Rules and Regulations
24-08-2012, 05:59 PM
Circular No. 21/2012-Customs

F.No.528/16/2010-CUS(TU)

Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Excise & Customs

Tariff Unit


**************


229-A, North Block,
New Delhi-110 001.
1st August,,2012.


To
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.

The Principal Chief Controller of Accounts (C&CE).

Subject: Clarification on the scope of exemption Notification No.146/94-Customs dated 13-07-1994.


*******


Sir / Madam,

I am directed to invite your attention to Notification No.146/94-Customs dated 13.7.1994 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=3319) wherein duty concessions have been extended to certain specified sports goods, equipments and requisites.

2. The matter has been examined by the Board. From the wordings of the notification no. 146/64-Customs dated 13.07.1994 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=3319), it is seen that the exemption covers two broad categories of goods. First category covering sports goods required for training purposes by a sports person of outstanding eminence, which are listed in specified terms under each item or sport such as Archery, Athletics, Badminton etc. The second category being the goods that are described in general as ‘sports goods, sports equipments and sports requisites’ and their ‘spares, accessories and consumables’ for import by specified sports bodies for national or international completion/ championship.

3. In the second category of goods earlier Board has examined the scope of exemption for ‘sports requisite’ in the above said notification and clarified vide Circular No. 70/2002-Cus as follows:

“the exemption provided under Notification No. 146/94-Cus. (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=3319) is wide enough to include all kind of sports requisites falling within any chapter of the Customs Tariff and therefore, exemption may not be denied to such goods merely on a technical ground or taking a narrow meaning of the term sports requisite.”

In view of this and since the notification covers all goods of the description specified therein and falling under any of the chapter of the first schedule, the issue of classification of imported item would not be relevant for the purpose of extending the exemption.

4. In view of the above, it is to clarify that the description of the goods exempted under S.No. 1(a) is “Sports goods, sports equipments and sports requisites” and under 1(b) is “spares, accessories and consumables of (a)”, Hence, all types of goods, whether it is an equipment or simple item required for sport are covered under the category 1(a). It is also clear that the sport equipment covered here includes its spares, accessories and consumables. Hence it could be concluded that the scope of coverage of goods under the category ‘sports goods, sports equipment, sports requisites’ is comprehensive. The said exemption entry is subject to specific conditions such as production of certificate from specified sports bodies/federations for its usage in National or International championship or competition and an undertaking from the importer that the said goods are required for the intended purpose of use. There is no distinction between mandatory or optional accessory for inclusion or exclusion in the exemption notification. Further there is no distinction between general purpose equipment or specialized equipment to the extent it is a sport equipment for extending the notification benefit. Apparently it excludes only those types of equipments which are general purpose machines.

5. Difficulties, if any, faced in the implementation of these instructions, may be immediately brought to the notice of the Board.

Yours faithfully,
(A.K.Goel)
Senior Technical Officer

Rules and Regulations
24-08-2012, 06:02 PM
Circular No. 22/2012 - Customs

F.No.450/25/2009-Cus.IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

*****



Room No. 229 A, North Block,
New Delhi, dated 7th August, 2012.

To,
All Chief Commissioners of Customs / Customs (Prev).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev).
All Commissioners of Customs (Appeals).
All Commissioners of Customs & Central Excise.
All Commissioners of Customs & Central Excise (Appeals).
All Directors General under CBEC.

Sir/ Madam,

Subject: 24x7 Customs clearance operations – regarding

In order to further facilitate importers and exports the Board has decided to begin on a pilot basis 24X7 Customs clearance with effect from September 1st. 2012 (1.9.2012) at identified Air Cargo Complexes and Seaports in respect of following categories of imports and exports:

(a) Facilitated Bills of Entry where no examination and assessment is required; and

(b) Factory stuffed export containers and export consignment covered by Free Shipping Bills.

2. The Air Cargo Complexes and Seaports identified for 24x7 Customs clearance are:


<tbody>
S.No.

Air Cargo Complexes

Seaports



1.

Bangalore

Chennai



2.

Chennai

JNPT



3.

Delhi

Kandla



4.

Mumbai

Kolkata


</tbody>

3. It is clarified that in the case of exports, the 24X7 Customs clearance facility shall even extend to processing of Free Shipping Bills. At present, the Shipping Bills can be filed 14 days in advance in case of export by sea and 7 days in advance in case of export by air. Therefore, for smooth clearance of export goods the trade may be advised to file the Shipping Bills well in advance.

4. It is also clarified that 24X7 Customs clearance facility in respect of factory stuffed export containers that is presently available at specified Customs stations viz. Vishakhapatnam, Kolkata, Mundra, Okha, Sikka, Mangalore, JNPT, Mumbai, Paradeep, Gopalpur, Ennore and Chennai would continue to be operational. Besides, the normal round the clock boarding of vessels would also continue.

5. In this regard the Board appreciates that additional Customs staff will be required for the 24X7 Customs clearance facility to be provided w.e.f. 1.9.2012. It is, however, also seen that after introduction of self assessment the responsibility has shifted to the importers and exporters to make a correct assessment of Customs duty. Thus, the Customs can now focus more on consignments that are interdicted on basis of risk assessment for purpose of Customs assessment and examination. Further, as a result of self assessment, Board has decided to increase the level of facilitation (refer Circular No.39/2011-Cus dated 2nd September, 2011) to 80% in case of Air Cargo Complexes and 70% in case of Seaports (and 60% in case of ICD/ CFS). Risk Management Division has also carried out necessary changes and facilitation level has been substantially enhanced with an average of approx. 70% Bills of Entry being currently facilitated. Thus, there has been a reduction in the requirement of Customs staff for purpose of routine assessment and examination. This allows the relocation of staff for various other items of work such as PCA, SIIB etc. to ensure compliance of legal provisions and correct payment of Customs duty. In the light of these developments the officers required for 24x7 Customs clearance operations of facilitated Bills of Entry on import side and factory stuffed containers and Free Shipping Bills on exports side should be deployed from within the available staff strength. This shall be ensured by all Chief Commissioners of Customs.

6. Customs clearance on 24x7 basis would require concurrence of Custodians and other stakeholders such as CHAs. Further, Customs duty payment is necessary to ensure 24X7 Customs clearance. Therefore, Board desires that Chief Commissioners should begin immediate consultations with other stakeholders including custodians to make necessary arrangements that allow 24X7 Customs clearance and physical delivery of goods.

7. In addition to above, Board is exploring the possibility of full fledged roll out of 24X7 Customs clearance for ALL import and export goods. This would certainly require additional manpower that cannot be met from the presently sanctioned strength. Therefore, all Chief Commissioners are also directed to work out the additional manpower requirement and intimate the same to the Board so that a consolidated proposal may be processed to enable 24X7 Customs clearance operations at all Customs stations.

8. Board desires that wide publicity by way of Public Notice / Trade Notice may be given to the scheme of pilot 24X7 Customs clearance facility as detailed in paragraph 2 above to be extended w.e.f. 1.9.2012. Also, a detailed fortnightly report on the extent to which the facility is being availed should be sent so as to reach Board positively by the 2nd and 17th of each month. The first such report is expected on 17th of September, 2012. The report should inter-alia contain details of documents filed (imports and exports separately) and number of containers/ packages imported or exported in aforementioned categories in normal working hours and in extended hours separately. The reports should be faxed to Board on Fax No.23093859 and e-mailed at uscusiii@nic.in.

9. The receipt of this letter may please be acknowledged.
Yours faithfully,

(G.S. Sinha),
OSD (Customs IV)


Copy to:
Internal circulation (as usual).

Rules and Regulations
31-08-2012, 05:52 PM
F.No. 442/12/2004-Cus.IV (Pt.)

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
*****



Room No. 229 A, North Block
New Delhi, dated: 28th August, 2012.

To
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.

Sir / Madam,

Subject : Procedure for disposal of unclaimed/ uncleared cargo under section 48 of the Customs Act, 1962, lying with the custodians – regarding

Attention is invited to Board Circular No. 50/2005-Cus. dated 1st December, 2005, issued on the above mentioned subject. References have been received regarding difficulties faced in respect of disposal of motor cars and negative list items.

2. The matter has been examined. It is seen in this regard that instructions contained in para 3(iii) of the Circular No. 50/2005-Cus. dated 1st December, 2005 in respect of disposal of car and items of negative list has not been implemented in right perspective which has resulted in accumulation of unclaimed, uncleared and confiscated cargo and blockage of substantial Government revenue.

3. Accordingly, it has been decided by the Board that the concerned Commissioner of Customs should ensure that early investigation, issue of Show Cause Notice and adjudication, if required, in respect of such goods (motor cars and goods of negative list) are taken up on priority so that the goods are not allowed to remain uncleared for longer period blocking substantial Government revenue. These goods may be disposed of by auction after adjudication subject to condition that they are not prohibited in nature. Board also desires noticeable improvement in disposal of such goods unclaimed / uncleared.

4. These instructions may be brought to the notice of all the concerned officers by issuing suitable Standing orders/instructions/Public Notices.

Yours faithfully,
(G. S. Sinha),
OSD (Customs IV)

Rules and Regulations
31-08-2012, 05:54 PM
Circular No. 23 /2012-Customs

F.No.354/35/2011-TRU

Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
***



R.No.146 I, North Block
New Delhi, dated the 30th August, 2012

To
Chief Commissioner of Customs (All)
Chief Commissioner of Customs & Central Excise (All)
Director Generals (All)
Sir/Madam,

Subject: Applicable rate of CVD on imported Fertilizers-regarding.

Representations have been received from trade as well as the field formations regarding the applicable rate of additional duty of customs (CVD) on Fertilizers when imported into India. Doubts have arisen in view of the fact that in Notification No. 12/2012-Customs, dated 17-03-2012, (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) except for Serial Number 200(ii) [where the CVD rate of 1% is mentioned in column (5)] the entry in this column for all other Serial Nos. is “-“(dash). In terms of the Explanation II (b) of the said Notification, “–” appearing in column (5) means additional duty equal to duty of excise leviable on the goods as per the First Schedule (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=696) to the Central Excise Tariff Act, 1985 (5 of 1986) (http://www.taxmanagementindia.com/Site-Map/Excise/List_Act_CETA.asp) read with any other notifications issued under sub-section (1) of section 5A (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=8) of the Central Excise Act, 1944 (1 of 1944), (http://www.taxmanagementindia.com/Site-Map/Excise/List_Act_CEA.asp) for the time being in force. Since, the effective rate of CVD has been prescribed in the case of fertilizers, through a notification issued under section 25 (http://www.taxmanagementindia.com/visitor/detail_act.asp?ID=983) of the Customs Act, 1962, (http://www.taxmanagementindia.com/Site-Map/Customs/List_Act_CA.asp) some field formations have sought to apply the effective rate of excise duty of 6% ( with cenvat credit) for the purpose of charging CVD on this item.

2. The matter has been examined. Even though it is true that for many S. Nos. of notification no. 12/2012-Customs (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=24687) pertaining to goods falling under Chapter 31(S. Nos 196 to 199 and 200 to 205) the entry indicated in column (5) is ‘-‘, S. No. 200(ii) covering “All goods, other than those which are clearly not to be used as fertilizers” prescribes a CVD rate of 1% in column (5). It is relevant that the entry pertaining to basic customs duty indicated in column (4) against this S. No. is ‘-‘ implying thereby that the otherwise applicable rate of basic customs duty is to be charged. From a combined reading of other S. Nos. covering goods of chapter 31 and S. No. 200 (ii), it is evident that the benefit of concessional CVD of 1% is available to “All goods, other than those which are clearly not to be used as fertilizers” even if the benefit of concessional basic customs duty under any other S. No of the same notification is claimed. For instance, an importer claiming the benefit of concessional basic customs duty of 5% under S. No. 204 covering “Potassium sulphate containing not more than 52% by weight of potassium oxide”, would be eligible for the benefit of concessional CVD of 1% under S. No. 200 (ii) if the goods are to be used as fertilizers. However, to avoid disputes & place the matter beyond doubt, notification no. 46/2012-Customs dated 17th August, 2012 (http://www.taxmanagementindia.com/visitor/detail_notification.asp?ID=25069) has been issued to expressly prescribe the effective rate of CVD against the relevant serial nos.

3. The above position may be brought to the notice of formations under your charge, for strict compliance, especially in respect of assessments for the period prior to 17th August, 2012.


Yours faithfully,
(Vivek Johri)
Joint Secretary (TRU)
Tel: 2309 2687
Fax: 2309 2031

Rules and Regulations
12-09-2012, 12:17 PM
Circular No.24/2012-Customs


F.No.450/180/2009-Cus.IV(Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
*****


Room No. 229-A, North Block,
New Delhi, dated 5th September, 2012.


To,

All Chief Commissioners of Customs
All Chief Commissioners of Central Excise and Service Tax


Subject: Making E-payment of Customs duty mandatory-regarding.

Sir / Madam,

Kind attention is invited to Board Circular No. 33/2011-Customs (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=11213) dated 29th July, 2011 wherein it was decided that by the Board that the date for mandatory E- payment of Customs duty shall be notified separately.

2. It has been decided to make e-payment of duty mandatory for importers registered under Accredited Clients Programme and importers paying customs duty of one lakh rupees or more per Bill of Entry with effect from 17.09.2012.

3. All Chief Commissioners of Customs are therefore advised to give wide publicity to enable trade to be ready in case any change in their software or any internal procedure for effecting E-payment is required. As a large number of taxpayers would be required to pay the taxes electronically, it is requested that importers, trade and industry may be provided all assistance so as to help them in adopting the new procedure.

4. Suitable Public Notices or Standing Orders may be issued to guide the trade / Industry and officers.

Yours faithfully,
(G.S. Sinha)
OSD (Customs-IV)

Rules and Regulations
12-09-2012, 12:19 PM
Circular No. 25 /2012-Cus

F. No. 603/03/2011-DBK
Government of India
Ministry of Finance
Department of Revenue
Drawback Division
*****



New Delhi Dated: 6th September, 2012


To
All Chief Commissioners of Customs/ Central Excise/ Central Excise & Customs,
All Commissioners of Customs/ Central Excise/ Central Excise & Customs,
All Director General of CBEC,
Chief Departmental Representatives of CESTAT

Sir/Madam,

Sub: Verification mechanism and monitoring of export obligation under duty exemption/ reward Schemes- reg.

Reference is invited to Board’s Circular No. 5/2010-Cus (http://www.taxmanagementindia.com/visitor/detail_circular.asp?ID=8008) dated 16.03.2010. Para 2(c) of the Circular provides that Customs authorities cause random address verification [for some of the authorizations issued under EPCG/ DFIA/ Advance Authorization schemes registered at their port to check correctness of address shown in the authorization] preferably through jurisdictional Central Excise authorities, during validity of the authorization. As far as the EPCG Scheme is concerned, the provision in Para 2(c) of the Circular is in addition to ensuring submission of Installation Certificates (ICs) for capital goods imported and randomly checking correctness of ICs through Central Excise authorities, when the ICs have been issued by other than Central Excise authorities. The Commissioners would be ensuring that above requirements are followed.

2. The C&AG of India in Audit Report No. 22 of 2011-12 observed that authentication of licencee premises is an important check which makes it possible to verify at any time that imported goods are installed and operated at the declared location. In this connection the Audit has noted that utility bills containing the address can also be used for checks relating to installation and operation of the imported Capital goods.

3. Keeping the foregoing in view, Board has decided to prescribe that when address verifications or Installation Certificate verifications are requested by the Customs authorities in respect of EPCG authorizations, the Central Excise authorities should include, in their verification, a check of the periodical utility bills (containing the address) as one of the means enabling verification of installation/ operation/ licencee premises.

4. This Circular may be bought to the notice of all concerned by way of issuing standing order/ instructions/trade notice.


Yours faithfully,

Sd/-
(Ashok Kumar Pandey)
STO (Drawback)