Download Circular No. 10 / 2013-Customs Dated 6th March, 2013: Post Export EPCG duty credit scrip(s) Scheme and certain other changes related to Foreign Trade Policy 2009-14

Download Circular No.  10  / 2013-Customs Dated 6th March, 2013: Post Export EPCG duty credit scrip(s) Scheme and certain other changes related to Foreign Trade Policy 2009-14

Circular No.  10  / 2013-Customs

F.No.605/12/2012-DBK (Pt.)

Government of India

Ministry of Finance, Department of Revenue

Central Board of Excise and Customs

New Delhi, dated the 6th March, 2013

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:   Post Export EPCG duty credit scrip(s) Scheme and certain other changes related to Foreign Trade Policy 2009-14 – Reg.

Reference is made to Para 4 of Circular No.20/2012 – Customs dated 27.7.2012 wherein itwas indicated that there are certain areas of change in the FTP supplement 2012-13 for hich notifications shall be issued subsequently as modalities to make them operational were being worked out. In these areas, the Department of Revenue has since issued otifications described below.

2. The definition of capital goods (under para 9.12 of FTP amended on 26.7.2012) now ncludes catalysts for initial charge plus one subsequent charge. The notification No.3/2013-Customs dated 13.2.13 has amended notification Nos. 100 to 103/2009- Customs to pecify the conditions subject to which the catalyst for one subsequent charge shall be allowed nder EPCG Scheme. The notification No.4/2013-Customs dated 14.2.13 has been issued amending 31 customs notifications so as to specify Visakhapatnam Airport for making mports and exports under the export promotion schemes.

Post Export EPCG duty credit scrip(s) Scheme

3. It may be recalled that the Post Export EPCG duty credit scrip(s) Scheme was notified on 5.6.12 vide a new para 5.11 in FTP read with a new para 5.23 in the HBP v1. These paras have been further amended on 26.7.12 and 8.2.13 by Department of Commerce. These provisions may be downloaded from DGFT website and perused. The Post Export EPCG duty credit scrips to be issued by Regional Authority of the DGFT are intended to be used for, apart from imports of goods, domestic procurement. Their usage pattern is intended to be similar to that prescribed for freely transferable duty credit scrips issued by the Regional Authorities under chapter 3 of FTP.

4. The scheme envisages that the duty credit in these scrips shall be a duty remission computed based on the basic customs duty paid on capital goods which had been imported on payment of all applicable duties of customs in cash. Subject to installation and use of the imported capital goods, and other conditions including non-disposal of the capital goods till the date of last export, the duty remission may be granted by the Regional Authority in proportion to export obligation fulfilled within a fixed export obligation period. For this purpose, the export obligation would be fixed (over and above average export obligation) at 85% of applicable specific export obligation, computed as if the duty paid imports had taken benefit of duty exemption (i.e. like the EPCG duty exemption schemes, either zero duty or concessional 3% duty). As in the existing EPCG duty exemption scheme, if it is opted to not take the Cenvat credit of additional duty of customs paid, a lower export obligation would be fixed. There is no provision for extension of export obligation period in this scheme.

5. The notification Nos.5/2013-Customs and 6/2013-Customs both dated 18.2.13 have been issued under section 25(1) of Customs Act, 1962 to permit imports through debit of the customs duties in the said duty credit scrip. The notifications are for scrip variants where export obligation is fixed like the zero duty or concessional 3% duty EPCG scheme, respectively. The mechanisms of fixing the export obligation, and of granting the remission, are explained in the notifications. Further, notification Nos.2/2013-Central Excise and 3/2013-Central Excise both dated 18.2.13 have been issued under section 5A (1) of the Central Excise Act, 1944, read section 3 (3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and section 3 (3) of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, to permit domestic procurement. All these four notifications are conditional notifications. Notification No.7/2013-Customs dated 19.2.13 makes consequential amendments in the two customs notifications for the purpose of cross referencing the two central excise notifications.

6. As mentioned hereinabove, in this Scheme the duty remission is envisaged in proportion to export obligation fulfilled within a fixed export obligation period. Unlike the EPCG duty exemption schemes, the block obligation periods or their related proportions of export obligation fulfillment are not pre-defined in the new scheme. More than one duty credit scrip may issue (against the duty paid import of capital goods) based on the progressive fulfillment, during the specified export obligation period, of larger extents of the total export obligation. The meaning of ‘export obligation’ would apply individually to each duty credit scrip. Further, scrip issuance is akin to a discharge (or partial discharge) of the export obligation and is a remission by the DGFT of duty collected by the CBEC. Therefore, it is necessary that the Deputy/Assistant Commissioner of Customs satisfies himself of the compliance of the conditions of the notification (including fulfillment of export obligation, the quantum of duty remission in the duty credit scrip, the cumulative duty credits issued against imported duty paid capital goods) before allowing a duty credit scrip, issued under the Scheme, to be registered.

7. A sequential monitoring should be followed. This begins from registration of authorization (for importing capital goods) at the port of registration and is followed by import on payment of full applicable duties of customs in cash, endorsement of import particulars on authorization at time of clearance, making specified endorsements on bill(s) of entry at time of import, ensuring registration or installation/use of all imports under authorization before any scrip issues, registration of scrip at the same port, keeping cumulative record of duty credit scrips issued against an authorization, and making the indicated endorsements on documents at the time of registration. Moreover, the assessment Group which handles the authorization to import capital goods on payment of duty under this variant of the EPCG scheme would need to allow the registration of this duty credit scrip. The genuineness of the post export EPCG duty credit scrip should be verified.

8.Safeguards are provided in the notifications relating to making endorsements on the documents. The option for not availing Cenvat Credit on capital goods imported under authorization and thereby enjoying a lower export obligation is to be backed by a certification. Jurisdictional Central Excise authority should ensure that certificate on non-availment of Cenvat Credit is issued expeditiously and normally within two weeks but not later than four weeks under all circumstances. Where the goods imported against an authorization are found defective or unfit for use and are re-exported back to the foreign supplier, if claim of duty drawback is made, no duty remission for the duty paid at the time of import on the re-exported goods is to be allowed. Further, after any duty remission in the form of duty credit scrip has been claimed in respect of the duty paid on the goods imported against an authorization, no duty drawback shall be allowed when the goods are re-exported and the export obligation is also not to be re-fixed. Indigenous sourcing of capital goods (referred to as invalidation procedure of import authorization) on payment of duty is not permitted in this scheme.

9. It may also be noted that the post export EPCG duty credit scrip cannot be issued as a refund on the premise that duty was paid but a situation arose where there was no export obligation to be fulfilled. The Commissioners of Customs are also to exercise special checks so as to ensure that there is no misuse of the scheme and a proper record of all such checks is maintained. These shall include random verifications of the address shown on the authorizations (for import of capital goods) during their validity period in at least 10% of authorizations, random verifications of the certificates produced (not issued by central excise authorities) and of the declarations submitted with respect to Condition No. 14 (e)(i) of the Customs  notifications in at least 10% cases. These verifications should be made through the Commissioners of Central Excise. 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/ authorization holder premises. The Commissioners are expected to exercise due diligence to prevent misuse. If any other measure or safeguard is considered necessary it may be informed to the Board for appropriate action. Moreover, relevant aspects should also be incorporated in the monthly report of “Monitoring of Export/Imports under various Export Promotion Schemes” sent to the Board in terms of letter No. 605/64/2008-DBK dated 20.11.2008.

10. The Director General (Systems and Data Management) is to take steps to capture relevant details of authorizations, imports made (including duties paid) and the duty remitted against them, and in addition the subsequent utilization of the post export EPCG duty credit scrip. Moreover, the utilization of scrip under the Customs exemption notifications shall be shown separately in the FMR Customs (Annexure III) and that under the Central Excise exemption notifications shall be shown separately in the FMR Central Excise (Annexure IV) with a remark that it is a duty remission.

11. The Commissioners should ensure that the above mentioned Customs and Central Excise notifications and this Circular are carefully perused for details and implementation. Suitable public notice and standing order may be issued for guidance of the trade and officers.

Yours faithfully,

(Vinod Kumar Agrawal)

OSD (Drawback)

Download Circular No. 14/2013 – Customs Dated 5th, April, 2013: Issues relating to implementation of Ministry of Steel’s Order S.O. 415(E) dated 12.03.2012 and Application of BIS Specification No. IS: 227

Download Circular No. 14/2013 – Customs Dated 5th, April, 2013: Issues relating to implementation of Ministry of Steel’s Order S.O. 415(E) dated 12.03.2012 and Application of BIS Specification No. IS: 227

Circular No. 14/2013 – Customs

F.No.450/87/2012-Cus-IV

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Room No. 253A, North Block

New Delhi, Dated 5th, April, 2013

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: Issues relating to implementation of Ministry of Steel’s Order S.O. 415(E) dated 12.03.2012 and Application of BIS Specification No. IS: 227. –  reg

References have been received in the Board raising concerns on the applicability of the scope of BIS Specification No. IS: 227 issued by Ministry of Steel Order vide S.O. 415(E) dated 12.03.2012.

2. The same has been examined in consultation with Ministry of Steel.  Ministry of Steel has clarified as below:

1.It is not appropriate that Indian Standard IS: 277 covers Galvanized sheets only for roofing, panelling and lock forming.  It includes all Hot Dipped Galvanized sheets/strips unless and otherwise something is specifically excluded from Indian Standard and/or clarification is issued by BIS stating the exclusion of particular product.

2 Electro Galvanized sheets and Galvanised sheets/strips fall outside the purview of IS:277 and hence such product whether in prime or secondary/defective condition are not covered under the IS:277 or the Quality Control Order issued by the Ministry of Steel.

3. One of the prime objective of the Steel and Steel Products Quality Control Order is to restrict/prohibit production/sale/import of substandard material.  Therefore, import of any substandard product (Second/secondary/defective/offcut etc.) in respect of any of the product covered in the Indian Standard covered under the Quality Control Order is not permitted. Accordingly, import of seconds/secondary/defective/offcut Hot Dipped Galvanized Steel sheets/coils are not permitted as per the Quality Control Order.  It is mainly because though the material is similar to IS:277 in description, it fails to meet the technical requirement prescribed in the standard.  Further storage, sell, distribution of such substandard product whether produced domestically or imported is prohibited in domestic market.

3. Board desires the aforementioned clarification should be complied with by field formations. Suitable Public Notices or standing orders may be issued to guide the trade/ Industry and officers

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

Yours faithfully,

(M.V.Vasudevan)

Under Secretary to the Government of India (Customs IV)

Download Circular No. 08 / 2013-Customs Dated 4th March, 2013:Norms for Execution of Bank Guarantee in respect of Advance Authorization (AA) / Duty Free Import Authorization (DFIA) / Export Promotion Capital Goods (EPCG) Schemes

Download Circular No.  08 / 2013-Customs Dated 4th March, 2013:Norms for Execution of Bank Guarantee in respect of  Advance Authorization (AA) / Duty Free Import Authorization (DFIA) / Export Promotion Capital Goods (EPCG)  Schemes 

Circular No.  08 / 2013-Customs

 F.No.609/134/2012-DBK

Government of India

Ministry of Finance, Department of Revenue

Central Board of Excise and Customs

 New Delhi, the 4th March, 2013

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, 

Subject : Norms for Execution of  Bank Guarantee in respect of  Advance Authorization (AA) / Duty  Free Import Authorization (DFIA) / Export Promotion Capital Goods (EPCG)  Schemes – reg. 

The undersigned is directed to invite reference to Circular No. 58/2004-Cus dated 21.10.2004 on the above subject. This was amended by Cir. Nos.17/2009-Cus and 32/2009-Cus. Circular No.58/2004 was further amended by Circular No.6/2011-Cus dated 18.1.2011.  By this amendment, para3.2 (c) was amended and the conditions for availing of exemption from bank guarantee were modified.

2. Prior to amendment by Cir 6/2011-Cus, one of the explicit criteria for denying benefit was that the license holder should have been penalized. However, the issue of penalty imposed for technical offences had arisen. The Circular 6/2011-Cus asked for taking an affidavit from the license holder stating whether any case(s) for certain offences, regarded as other than technical offences, had been booked during the previous three financial years and it was prescribed that, in case such violation(s) were revealed, the benefit of exemption from bank guarantee should not be extended.

3. It has been brought to the notice of the Board by exporters, trade associations and the field formations that with this amendment the benefit of availing of exemption from bank guarantee will be denied even before the show cause notice proposing imposition of penalty has been adjudicated.

4.The Board has reviewed the matter and considers that the position of not having been penalized should be restored. Accordingly, the para 3.2 (c) of Circular 58/2004-Cus shall be read as follows

“(c) The License holder should not have been penalized during the previous three financial years in cases booked against him related to Customs, Central Excise or Service Tax under the provisions of the Customs Act, 1962, the Central Excise Act, 1944, the Finance Act, 1994 (for Service Tax), as detailed below:

(a)Cases of duty evasion involving mis-declaration / mis-statement/collusion / willful suppression / fraudulent intent whether or not extended period for issue of show cause notice has been invoked.

 (b) Cases of mis-declaration and/or clandestine/unauthorized removal of excisable / import / export goods warranting confiscation of said goods.

(c)Cases of mis-declaration / mis-statement / collusion / willful suppression / fraudulent intent aimed at availing CENVAT credit, rebate, refund, drawback, benefits under export promotion/reward schemes.

(d)Cases wherein Customs/Excise duties and Service Tax has been collected but not deposited with the exchequer.

(e) Cases of non-registration with the Department with intent to evade payment of duty / tax.

or in cases booked against him under the Foreign Exchange Management Act (FEMA), 1999 or the Foreign Trade (Development and Regulation) Act, 1992. In order to ascertain/verify whether the License/Authorization holder meets this criterion he may be asked to furnish an affidavit. The Commissioners shall ensure that some of the affidavits furnished are cross checked randomly with the field formations for their veracity.”.

5. It may be noted that the other conditions in Para 3.2 of the Circular No.58/2004-Cus dated 21.10.2004 remain unchanged.  These instructions may be brought to the notice of the trade/exporters by issuing trade/Public Notices.  Standing orders/instructions may be issued for guidance of the assessing officers.  Difficulties faced, if any, in implementation of the Circular may please be brought to the notice of the Board at an early date.

Receipt of this circular may kindly be acknowledged.

(Ashok Kumar Pandey )

Senior Technical Officer (Drawback)

Download Circular No. 06/2013-Customs Dated 6th February, 2013: Issue of Custom House Agent License

Download Circular No. 06/2013-Customs Dated 6th February, 2013: Issue of Custom House Agent License

Circular No. 06/2013-Customs

F. No. 494/4/2012-Cus.VI

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

*****

Room No.253-A, North Block,

New Delhi, dated the 6th February, 2013

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.

Subject:  Issue of Custom House Agent License.

Sir/ Madam

Attention is invited to Board’s Circular No. 9/2010- Customs dated 08.04.2010 on the above cited subject.

2.   The Hon’ble Supreme Court in Civil Appeal Nos. 4053-4061 of 2012 [arising out of SLP (C) Nos 19124-19132 of 2010] in the case of Sunil Kohli and others vs. Union of India and others vide order dated 27.04.2012 has held that those who had passed the examination under Customs House Agents Licensing Regulations, 1984 not have to again appear for examination under the Customs House Agents Licensing Regulations 2004 (CHALR 2004).

3.   In order to implement the aforementioned decision of Hon’ble Supreme Court, Board has decided to delete Para 8.1 and Para 8.2 of Circular No. 9/2010- Customs dated 08.04.2010. The implication of this modification of Board Circular No. 9/2010- Customs dated 08.04.2010 is that the Custom shall no longer insist that persons who have passed the examination under the 1984 Regulations have to additionally qualify in the new subjects given below.

(a) The Patents Act, 1970 and Indian Copyright Act 1957;

(b) Central Excise Act, 1944;

(c) Export promotion schemes;

(d) Procedure on appeal and revision petition;

(e) Prevention of Corruption Act, 1988;

(f)   Online filing of electronic Customs declarations;

(g) Narcotics Drug and Psychotropic Substances Act, 1985; and

(h) Foreign Exchange management Act, 1999.

Thus, subject to fulfilment of all others requirements such persons will now be directly eligible for grant of CHA license.

4.   These instructions may be brought to the notice of the trade by issuing suitable Trade / Public Notices.  Suitable Standing orders/instructions may be issued for the guidance of the field officers.  Pending court cases, if any, may also be suitably handled.

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

 Yours faithfully,

(S.C.Ganger)

Under Secretary (Customs)

Download Circular No. 04 /2013-Customs Dated 15th January, 2013 : Disposal of firearms imported as baggage under transfer of residence

Download Circular No.  04 /2013-Customs Dated 15th  January, 2013 : Disposal of firearms imported as baggage under transfer of residence

Circular No.  04 /2013-Customs

F.No.401/179/2012 –Cus III

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Excise & Customs

*****

New Delhi, dated 15th  January, 2013

To,

All Chief Commissioners of Customs.

All Chief Commissioners of Customs & Central Excise.

All Chief Commissioners of Central Excise.

Sir / Madam,

Subject: Disposal of firearms imported as baggage under transfer of residence – reg.

The undersigned is directed to refer to Ministry’s letter F.No. 497/57/87-Cus-VI,  dated 05.01.1998 whereby it was clarified firearms imported as baggage are not allowed to be transferred to any person for consideration or otherwise during the lifetime of the importer and to state that this issue has been re-examined in the context of a reference requesting permission to dispose an imported firearm on ground of old age.

2.In this regard it is observed that DGFT has revised the import policy on disposal of imported firearms vide Public Notice No. 82/2009-2014(RE-2010), dated 17.10.2011.  Accordingly, Para 2.43.2 of the Handbook of Procedures Vol.I, 2009-2014 stands modified and amongst other changes it now provides that transfer of imported firearms will not require permission from DGFT after ten years of import. Imports under baggage are exempt from the normal provisions of the Foreign Trade Policy in terms the Foreign Trade (Exemptions from Application of Rules in Certain Cases) Order, 1993.  Thus, the said DGFT’s Public Notice dated 17.10.2011 does not apply to imports as baggage.  The implication is that the relaxation provided by DGFT does not apply to firearms imported as baggage under transfer of residence and the restriction that these cannot be disposed in any manner during the lifetime of the importer continues to apply.   This places persons importing firearms as baggage at a disadvantage viz-a-viz other importers.

3.DGFT was consulted in order to address the inequitable situation aforementioned.  DGFT has clarified that the relaxation at their end in regard to allowing the disposal of imported firearms was made in consultation with the Ministry of Home Affairs, amongst others. DGFT has also recommended that it is desirable to liberalize the provision of disposal of firearms imported as baggage and harmonize it with their Public Notice.

4.In view of the above, I am directed to state that Government has decided to allow passengers importing a firearm as baggage on transfer of residence to dispose the same after ten years of import.  The disposal will be to persons legally entitled to possess the firearm.  The condition that no disposal can take place till ten years of import may be endorsed on the arms licence of the passenger at the time of granting the facility under transfer of residence.

5. Further, in view of the sensitive nature of the item viz. firearm, Government has decided that an eligible person would be allowed to import only one firearm under transfer of residence in his/her lifetime.  In other words, even though the facility of transfer of residence can be availed every three years at present, a firearm can be imported only once.

6.Board’s instruction vide F.No. 497/57/87-Cus-VI dated 05.01.1988 and subsequent Circulars including Circular No. 63/1995 Cus., dated 07.06.1995 stand modified to the aforementioned extent.

7.The change in Government policy may be brought to the notice of all concerned.  Difficulty, if any, in implementing this decision may be immediately informed to the Board.

(S.C. Ganger)

Under Secretary

Mailing List: As usual

 

Download Circular No.28 / 2013 Dated 1st August, 2013: Classification of products – “Cockroach traps”, and “Mosquito Repellent” in the harmonised Customs Tariff

Download Circular No.28 / 2013 Dated 1st August, 2013: Classification of products – “Cockroach traps”, and “Mosquito Repellent” in the harmonised Customs Tariff

Circular No.28 / 2013

F.No. .No.528/52/2013 – STO (TU)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tariff Unit

***

229A, North Block, New Delhi,

1st August, 2013

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:  Classification of products – “Cockroach traps”, and “Mosquito Repellent” in the harmonised Customs Tariff- regarding

The Board has noted import data in National Import Data Base which shows that products like “Cockroach Traps”, and “Mosquito Repellent”, are classified under various Customs tariff headings 3506, 3822, 3808, 3926, 4823, etc. Accordingly, this issue of classification was taken up for discussion and decision in the Vishakhapatnam Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013.

2. The product description illustrative in nature, for the purpose of classification of similar / identical goods, in the First Schedule of Customs Tariff Act, 1975, is as follows: (a) “Cockroach traps consist of a paperboard sheet covered with both an attractant and a sticky substance but not containing any poison”. (b) “Mosquito repellents consist of an adhesive backed patch having a basis of citronella oil and eucalyptus citriodora oil – Provides mosquito protection for adults and children applying a self adhesive patch to clothing, tents and /or furniture”.

3. The Customs Tariff headings considered are as follows:

3506 – “Prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg”;

3822 – “Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading3002 or3006; certified reference materials”;

3926 – “Other articles of plastics and articles of other materials of headings 3901 to 3914”;

3808 – “Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up in forms  or packings for retail sale or as preparations or  articles(for example, sulphur-treated bands,  wicks and candles, and fly-papers)”;  

4823 – “Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers”;

4. The classification of goods is to be determined by application of the General Rules for the Interpretation (GRIs) of the First Schedule to the Customs Tariff Act (CTA), 1975. GRI 1 requires that, “in classifying articles, for legal purpose it shall be determined according to the terms of the headings and any relative Section or Chapter Notes,..”. Hence, all relevant legal texts must be considered. The HS Explanatory Notes present an internationally accepted view of the scope of each Heading of the Customs Tariff. The scope of articles covered by the headings is explained in the World Customs Organization’s Harmonized Commodity Description and Coding System Explanatory Notes.

5. Cockroach trap under consideration is identified as an insecticide, operating to attract and trap insects. Insecticide as used in heading 3808 refers to a substance or preparation for the killing of insects either by direct or indirect means. It also covers substances which operate as repellents or attractants, or which operate to control insect populations in other ways such as by sterilisation, by chemicals which interfere with biochemical and physiological processes in insects or by trapping. The Harmonized System Explanatory Notes give as an example fly papers (including those coated with glue not containing poisonous matter).

6. The products at issue are other than “Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing”, and therefore classification under heading 3822 is ruled out. Also, based on the function of the product, which is to attract and trap insects, or to repel, classification under headings 3506, 3926 and 4823 is also ruled out. There was consensus in the Conference that the classification under heading 3506, 3822, 3926 and 4823 is not proper and appropriate classification is as under heading 3808, subheading 3808 91.

7. The issue has also been examined by the Board. In view of the consensus arrived at the aforementioned Conference, Board desires that such products should merit classification under heading 3808, subheading 3808.91, and tariff item 3808 91 99 (“Other”), by application of GRIs 1 and 6.

8. Suitable instructions in the matter may be issued to field formations for strict compliance and pending cases if any, may be decided accordingly.

Yours faithfully,

 (Subodh Singh)

OSD (Customs), Tariff Unit,

Fax-011-23092173

Internal Circulation:  As usual

Download Circular No. 30/2013 – Customs Dated 5th August, 2013 : Provisional release of export – goods detained for investigation

Download Circular No. 30/2013 – Customs Dated 5th August, 2013 : Provisional release of export – goods detained for investigation

Circular No. 30/2013 – Customs

 F.No. 401/179/2009-Cus.III

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Custom

North Block, New Delhi,

 Dated the 5th August, 2013.

To,

All Chief Commissioner of Customs/Customs (Prev),

All Chief Commissioner of Customs & Central Excise.

All Directors General of CBEC.

All Commissioners of Customs / Customs (Prev).

All Commissioners of Custms (Appeals).

All Commissioners of Customs & Central Excise.

All Commissioners of Customs & Central Excise. (Appeals).

Subject : Provisional release of export – goods detained for investigation -reg.

Sir/Madam,

                        Attention is invited to the Board Circular No. 01/2011-Customs dated 04.01.2011 regarding provisional release of export goods that are detained or seized. The said Circular was issued with the objective of expediting the clearance of export goods and to ensure that where permissible by law, exports should not get unduly delayed, thereby causing congestion in ports as well as delays in fulfilment of export orders. Thus, it was instructed that provisional release of export goods that are suspected of being mis-declared or where declaration is to be confirmed by further enquiry / test or detained/seized for mis-declaration of quantity / value / description should be given on execution of Bond and suitable security to cover the redemption fine and penalty (Para 4 of Board Circular No. 01/2011-Customs dated 04.01.2011). Further, continued detention of export goods in excess of three days must be brought to the notice of the Commissioner of Customs.

2.   It has been brought to the notice of the Board that the above instructions are not being implemented by certain field formations and exporting community is aggrieved by the long detention of exports goods. The matter has been raised in many forums and the issue of congestion in ports has also been highlighted by Inter-Ministerial Committee for boosting exports from Micro, Small & Medium Enterprises (MSMEs) sector, which pointed out that, besides the Boards aforementioned instructions, paragraph 2.42 of the Foreign Trade Policy also provides that export consignments shall not be withheld / delayed for any reason.

3.   The Board has re-examined the subject matter. The view is that there can be no justification to hold up export consignments for long periods unless the export goods are prohibited under Customs Act, 1962 or ITC (HS) Policy. Essentially genuine exports must be facilitated and there should be no delays or hold ups of export goods. Therefore, the Board strongly reiterates the instruction dated 04.01.2011 referred above. It shall be the responsibility of Commissioner of Customs concerned to ensure strict compliance of these instructions. Needless to state any deviation or lapse shall be proceeded against by the Board.

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

Yours faithfully,

(S.C.Ganger)

Under Secretary (Customs-III)

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Download Circular No.27 / 2103 – Customs Dated 1st August, 2013 : Harmonised Customs Tariff Classification of multifunction devices, referred to as “multifunction speaker system”

Download Circular No.27 / 2103 – Customs Dated 1st August, 2013 : Harmonised Customs Tariff Classification of multifunction devices, referred to as “multifunction speaker system”

Circular No.27 / 2103 – Customs

F.No. 528/36/2013-STO (TU)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tariff Unit

***

229A, North Block, New Delhi,

1st August, 2013

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: Harmonised Customs Tariff Classification of multifunction devices, referred to as “multifunction speaker system” – regarding

Representatives of trade have claimed classification of “multifunction speaker system” (combination of one or more of the following: Universal Serial Bus (USB) port, USB playback, Frequency Modulation (FM) radio as loudspeakers under heading 8518 based on premise that the principal function is that of a speaker system which involves conversion of digital signal to analogue, amplification, and relay to the listener.

2.This issue was discussed in the Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013, at Vishakhapatnam. Broadly following types of “multifunction speaker system”, were taken up for discussion, viz. (a) Speaker with USB port but without USB playback or FM radio, (b) Speaker with USB Port having USB playback but without FM radio (c) Speaker with USB port having FM radio but without USB playback (d) Speakers with USB port, FM radio, and USB playback.

3. The competing headings are:

8518 – Loudspeakers, whether or not mounted in their enclosures: headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers: audio-frequency electric amplifiers: electric sound amplifier sets;

8519 – Sound recording or reproducing apparatus;

8527 – Reception apparatus for radio-broadcasting whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock.

4.The view that in case of a “multifunction speaker system”, the “reception apparatus for radio-broadcasting (heading 8527)” or “reproduction function of sound as provided by USB play back (heading 8519)” is less important than the function of amplification and relay of sound, thereby leading to the inference that such products are classifiable in heading 8518, overlooks the fact that the HS nomenclature only mentions functions and does not refer to the complexity or sophistication of these functions. It appears that any sound reproducing playback device or reception apparatus for radio-broadcasting will need speakers for its effective functioning.

5.The classification of goods is to be determined by application of the General Rules for the Interpretation (GRIs) of the First Schedule to the Customs Tariff Act (CTA), 1975. GRI 1 requires that, “in classifying articles, for legal purpose it shall be determined according to the terms of the headings and any relative Section or Chapter Notes,..”. Hence, all relevant legal texts must be considered. In this regard, Note 3 to Section XVI stipulates that, “unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of per-forming two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function”.

6. During discussions held at the time of Conference, there was general agreement that in case of:

(a) “Speaker with USB port but without USB playback or FM radio”, the product would be classified in heading 8518, by application of General Rules 1.Speakers classified under heading 8518 include both passive speakers and active speakers. Active speakers, like many subwoofers, contain a built-in audio amplifier. The subheading under which speakers are classified depends on the number of ‘drive units’ – the actual loudspeaker cones or ribbons – in each cabinet or enclosure. Speakers with a single drive unit in each cabinet are classified under subheading 851821. Speakers with more than one drive unit in each cabinet – for example one woofer and one tweeter – are classified under subheading 851822. Speakers that are not mounted in a cabinet or enclosure are classified under subheading code 851829.

(b) “Speaker with USB Port having USB playback but without FM radio”, the principal function of the device is imparted by USB playback facility. Therefore the said multifunction speaker system is classifiable in subheading 851981 of the Harmonized Customs Tariff, which provides for Sound recording or reproducing apparatus: Other apparatus: Using magnetic, optical or semiconductor media: Other: Other.

(c) “Speaker with USB port having FM radio but without USB playback” the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under subheading 852799 by virtue of General Rules 1, Note 3 to Section XVI and 6.

(d) “Speaker with FM, USB port and USB playback”, if it is held that the principal function of the device is imparted equally by Radio (reception apparatus for radio-broadcasting) and USB playback facility then it would be classified by sequential application of GRI, according to Rule 3(c). According to this rule, of all the possible heading or subheading that could equally apply the heading / subheading that comes last in numerical order is used to classify the goods. Hence the said product is classifiable under subheading 852799 by virtue of General Rules 1, Note 3 to Section XVI, 3(c), and 6.

7. The issue has also been examined by the Board. In view of the general consensus arrived at the Conference, Board desires that as mentioned in para 6 above, based on the specifications “multifunction speaker systems” may be classified under heading 8519, heading 8527 or the appropriate heading as the case may be.

8. Suitable instructions in the matter may be issued to field formations for strict compliance and pending cases if any, may be decided accordingly.

Yours faithfully,

(Subodh Singh)

OSD (Customs), Tariff Unit,

Download Circular No. 26 /2013 -Customs Dated 19.07.2013 : Standard Unit Quantity Code (UQC)

Download Circular No. 26 /2013 -Customs Dated 19.07.2013 : Standard Unit Quantity Code (UQC)

Circular No. 26 /2013 -Customs

F. No. 450/180/2009- Cus. IV

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Excise and Customs)

****

227- B, North Block, New Delhi

Dated 19.07.2013

To,

All Chief Commissioners of Customs/Customs (Preventive)

All Chief Commissioners of Customs and Central Excise

All Commissioners of Customs / Customs (Preventive)

All Commissioners of Central Excise and Customs

All Directors General under CBEC.

Sir / Madam,

Subject: Standard Unit Quantity Code (UQC) – regarding.

            The issue of poor quality of trade data has been engaging the attention of the Government. Further, an analysis of National Import Data Base (NIDB) reveals that there  are at times variations between the lowest and highest unit values of the same item, which might escape detection on account of the use of different unit codes.

2. The matter has been carefully examined with the objective of improving data quality both from the view point of generating error free trade statistics as well as providing usable contemporary reference values to the assessing officers. The Board notes that Standard     Unit Quantity Codes (UQC) indicated in the Customs Tariff Act, 1975 are not being uniformly declared by importers and exporters for the same items across different Customs locations. This impacts data quality and makes comparisons and aggregations difficult. The use of non-uniform UQCs for the same item also vitiates the quality of the NIDB data and reduces its utility to the assessing officers, who are unable to ascertain the contemporaneous values or assessment practice of a given item in different Customs locations. Therefore, the solution lies in improving the quality of data by using standard UQCs.

3. In this regard, it is seen that the Customs Tariff Act, 1975 prescribes only a single Unit Quantity Code (UQC) against each Tariff Item, and it is the requirement of the law that the same is properly declared by importers/exporters/Customs Brokers in the Bills of Entry/Shipping Bills. It is the view that the correct declaration of the UQC, as indicated in the Customs Tariff Act, 1975 would resolve the aforementioned difficulties. Accordingly, it is directed by the Board that Customs field formations should ensure that only the correct and prescribed Standard UQC as per the Customs Tariff Act, 1975 is mentioned in Bills of Entry/ Shipping Bills.

4.Board desires the Chief Commissioners of Customs to ensure that instructions as aforementioned are complied with scrupulously. There should, however, be an endeavour that the exercise does not result in delays in clearance of cargo. The Directorate of Valuation shall monitor the correct use of UQCs and DG (System) shall modify the software applications suitably to give effect to mandatory compliance of correct UQC.

5.Difficulty faced, if any, in implementation of aforementioned instructions may be brought to the notice of the Board

Yours faithfully

(R.P.Singh)

Director (Customs)

Download Circular No.25 /2013 – Customs Dated 1st July, 2013 : Import of Pets under Baggage

Download Circular No.25 /2013 – Customs Dated 1st July, 2013 : Import of Pets under Baggage

Circular No.25 /2013 – Customs

F. No. 495/16/2012-Cus.VI

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

*****

                        Room No.253-A, North Block,

New Delhi the 1st July, 2013.

To,

All Chief Commissioners of Customs,

All Chief Commissioners of Customs (Preventive),

All Chief Commissioners of C.Ex. , Customs & S.Tax.

All Director Generals.

Sir/Madam,

Subject:  Import of Pets under Baggage – reg.

            Attention is invited to Board’s Circular No. 15/2013 – Customs dated 08.04.2013 on the above cited subject.

2. Board has received several representations regarding problems being faced in re-import of pets at airports. In this regard the undersigned is directed to inform that re-import of pets is not covered by Circular No. 15/2013 – Customs dated 08.04.2013. Therefore, it is clarified that re-import of pets as baggage is allowed subject to establishment of identity of pets by Customs authorities, production of the required health certificate from the country of export and examination of said pets by the concerned Quarantine Officer at this end.

3.These instructions may be brought to the notice of the trade / airlines / carriers by issuing suitable Trade / Public Notices.  Suitable Standing orders/instructions may be issued for the guidance of the field officers.

4.  Difficulties faced, if any, may be brought to the notice of the Board immediately.

Yours faithfully,

 (A.K. Goel)

STO (TU)