DEPB – Good news for importers – Bangalore Customs gives the much needed clarification

By Vijay Kumar

The DEPB scheme expired on 30th September 2005. DDT had reported on 6.10.2005, ''DEPB extended till December but there is a gap''

Notification No. 96/2004-Cus., dated 17-9-2004 exempts goods imported under the DEPB scheme or rather exempted., as the notification originally expired on 31st March 2005, but was by Notification No. 31/2005-Cus., dated 30-3-2005 extended till 30th September 2005. As we reported earlier, 30th September 2005 went by without any extension. But things cannot be left at that and everyone knew that the scheme had to be extended. We were flooded with calls and mails enquiring about the fate of the scheme. As an agony aunt, we comforted people that the scheme was bound to be extended – it was only a matter of time; they must have forgotten, the officer concerned must have been on leave or trying for a new posting. And further 30th September was a weekend and may be the babus were in a rush to go. The earliest opportunity they had, to realise the lapse was Monday 3rd October and by that time the notification had lapsed. Resurrection is not the option always. So a new notification had to be issued and that would take a couple of days and so was born Notification No. 89/2005-Cus., dated: October 4, 2005. The notification is dated 4th October but it was not made available till the evening of 5th October. These are minor infirmities of governance. The taxed should learn to live with the audacious actions of the taxmen. You may wonder why the government could not extend the scheme well before 30th September. But governance is a serious business and these things do happen. The new notification is an identical copy of the dead notification, but it raises an important issue. What happens to the imports between 1st October and 3rd October 2005, when there was no notification? More clarifications or litigation to follow!.

On 7.10.2005, DDT observed,

And our special story on the same day had suggested,

++ Give a clarification that for all the Scrips obtained on the basis of past exports should be permitted for benefit under DEPB till the expiry period of the Scrip.

The Board seems to be shy of giving clarifications for the bungling it has caused but we are happy to report that at least one Commissioner has clarified the issue obviously under instructions from the Board. The Bangalore Customs Commissioner has in his Public Notice No. 176/2005 dated 30.12.2005 has clarified that

Pending further examination of the mater, it is clarified that exports made during 1st October to 3rd October, 2005 shall be eligible for the benefit of the DEPB Scheme and that DEPB credit on imports against Bills of Entry filed during this period shall be allowed to be utilised on a provisional basis. It is also clarified that DEPB benefit shall be extended to imported goods under Notification No. 89/2005- Cus-dated 4.10.2005 even if the DEPB license contains an endorsement that the same is issued under notification no. 96/2004 – Cus dated 17.9.2004 This would be subject to the condition that the DEPB licence is valid to cover the imported goods and all conditions of notification No.89/2005 Cus dated 4.10.2005 are fulfilled. It is further clarified that licences issued under Notification No. 34/97 -Cus dated 1.4.1997 and 45/2002 Cus dated 22.4.2002 may also be allowed to be utilised for clearance of goods under DEPB Scheme provided the licences are valid to cover the imported goods and the conditions of notification Nos. 34/97-Cus dated 7.4.1997 and 45/2002-Cus dated 22.4.2002 are fulfilled.

Both the issues raised by us have been clarified in favour of the importers. But the fact remains that the Board forgot to extend the notification and caused all this confusion. Why then are they shy to give a public clarification and resort to secret letters to Commissioners? When the damage is done so publicly should the rectification be so private?

Click here to see Public Notice of Bangalore Customs