Customs Complications - Board solutions?
RECENTLY Member (Cus & EP) of CBEC, SK Goel chaired a meeting of the Customs Consultative Group in Mumbai. We bring you some of the queries raised and the Member's crisp replies.
Q. Execution of bond/bank guarantee under Advance License Scheme. As is reported, some Customs Authorities are denying exemption from Bank Guarantee even in cases where a penalty has been imposed by the Adjudicating Authority and Appeal has been filed by the exporter before the appropriate authority. There are some cases where the Appellate Authority has even stayed the orders of the adjudicating authority regarding the penalty but exemption from BG has been denied. This interpretation of the Circular is faulty and causing a lot of hardship to the genuine exporters.
It is suggested that a clarification may be issued to all field formations that the imposition of penalty in Para-3.2 (c) of the Customs Circular No. 58/2004 dated 21.10.2004 is meant only for such cases where the imposition of penalty has reached its finality in the legal process. That is, the exporter has exhausted all his legal options in the matter, no appeal is pending and the penal status of the exporter has attained finality.
A. Circular No. 58/2004, which prescribes the norms for execution of bond and bank guarantees under the Advance Licence and EPCG Schemes, stipulates that relaxation from the circular will not be available to any licence holder who has been penalized under the provisions of the Customs Act / Central Excise Act / FEMA or the FT (D&R) Act during the previous three years. However, if the case of the appellant is strong then there ought not to be any difficulty in obtaining a stay from the appellate authority till the final disposal of the appeal.In the absence of any stay, consequences of the penalty imposed will follow.
The matter will be looked into by Drawback Section.
Q. Discharge of export obligation under Advance Authorisation Scheme. Many Customs Houses, especially in case of deemed exports, are referring all the supply documents to various jurisdictional Central Excise Authorities for verification. This verification takes a long time and Bond/BG is not redeemed till the time such confirmation is received by Customs Authorities from the concerned jurisdictional Central Excise Authorities. There have been cases where such confirmations have come after a delay of more than one year and the Bank Guarantee executed by the exporter was not redeemed during the whole period.
It is requested that a suitable circular may be issued to Custom Authorities that only in case they have a doubt then only such verification may be insisted upon. In other case, the EODC issued by DGFT authorities may be accepted as proof for discharge of bond/BG.
A. Circular No.5/2010 dated 10.3.2010 has been issued which, inter alia, stipulates that in cases of Advance Authorisation Scheme the EODC should normally be accepted unless there is specific intelligence to suggest misuse. The grievance that Custom Houses are not redeeming the bond / bank guarantee till independent verification is caused, perhaps, refers to cases where intelligence suggesting such misuse, has necessitated verification.
Q. Includibility of Ship Demurrage Charges in the assessable value: As per Circular No. dated 26.9.2006, the importers are required to pay duty against the ship demurrage charges from back date i.e. from 2.3.2001.
It is suggested that for the period between 2.3.2001 – 26.9.2006, the ship demurrage amount may not be considered for assessable value while finalizing the B/E.
A. Circular No.26/2006-Cus. provides that ship demurrage charges are required to be included in the assessable value of the goods under Section 14 of the Customs Act with effect from 2.3.2001.
Q. Special Valuation Branch is required to facilitate the trade at Bangalore: The importers are approaching Chennai Custom House for SVB valuation. Previously the SVB valuation cell was opened at Bangalore and the same was closed later on. More than 500 collaborated/ related industries are functioning at Bangalore and they are depending on Chennai SVB cell for valuation.
A. In principle there is no objection to opening up SVB section at Bengaluru. However, the matter is under examination.
We will bring you more clarifications in the next editions of DDT.