Customs

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CUSTOMS Amendments to Customs Act, 1962 Section 26A

Changes A new section 26A has been inserted to provide for refund of import duty paid at the time of clearance for home consumption on imported goods found to be defective or otherwise not in accordance with specification agreed upon between the importer and the supplier of goods. Refund under this provision would be available only if the importer either exports the goods or relinquishes title and abandons them to customs or if the goods are destroyed so that they become commercially valueless. There are other conditions prescribed in the provision. These may be examined carefully and in case any operational difficulties are envisaged, the matter may be taken up with Director (Customs), CBEC.

Comments Earlier their was provision of Drawback on reexport of imported goods but new provision of refund in case the tile of the goods are relinquished and handed over in the custody of the proper officer or are destroyed in present of proper officer

28F

This section has been amended to provide that the Central Government may by notification authorize the Authority for Advance Ruling constituted under Section 245-O of the Income Tax Act to act as an Authority for the purposes of customs, central excise and service tax subject to some modification regarding the constitution of the Authority. The change will come into effect from a date to be notified.

Due to this provision advance ruling on all taxation has been brought under single authority constituted under Income Tax Act

130

Subsection 2A has been inserted to empower the High Court to condone the delay in filing of appeals/applications where it is satisfied that there is sufficient cause for delay. Further the same shall be deemed to be inserted w.e.f. 1.7.2003.

130A

Big relief to assesses wherein on genuine grounds if appeal could not be filed, the same can be filed under condonation subject to satisfaction of the High Court about the genuineness for non filling of an appeal before the proper forum. Subsection 3A has been inserted to Big relief to genuine assesses empower the High Court to condone the delay in filing of memorandum of cross objections where it is satisfied that there Page 1 of 11

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is sufficient cause for delay. Further the same shall be deemed to be inserted w.e.f. 1.7.1999. 137

Section 137 of the Customs Act has been amended to exclude certain types of offences and circumstances from the purview of compounding provisions vide proviso (ii) to subsection 3 of section 137.

4

Notification No.27/2009-Customs (N.T.) dated 17.3.2009 notifies DGCEI officers as officers of Customs under Customs Act, 1962 with an all-India jurisdiction. Validation clause has been taken in the Finance (No.2) Bill, 2009 to validate appointment of officers of customs under sub-section (1) of section 4 read with sub-section (1) of section 5 of Customs Act, 1962 and specifying their jurisdiction vide notification No. 27/2009-Customs (N.T.) dated 17.3.2009 and to validate action taken by such officer of customs on and from 9th May, 2000 as if their area of jurisdiction as specified in the said notification was in force at all material times

Validation provision to notify DGCI officers as officer of Customs with all India Jurisdiction on & from 09.05.2000.

Notification No. 40/2006-Customs dated 01.05.2006 has been amended retrospectively from its date of issue so as to allow the facility of rebate in respect of locally procured materials used in the manufacture of goods exported under the Duty Free Import Authorization Scheme and carry out other related changes

So any duty paid on local procurements which are used in manufacture of goods exported under Duty Free Import Authorization Scheme will also be allowed for claiming the rebate as per Notification No. 40/2006Customs dated 01.05.2006.

Amendments to Customs Tariff Act, 1975 Section 3

Changes This Section 3 has been amended to make provision for cases where the central Government has fixed a tariff value under sub-section (2) of section 3

Comments So there is no need to reassess the value of the imported article if the tariff value of the like article produced or manufactured in India Page 2 of 11

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of the Central Excise Act, 1944, for the is fixed under sub-section (2) of like article produced or manufactured in section 3 of the Central Excise India for the collection of Central Excise Act. duty. In such cases, it has been prescribed that the value of the imported article shall be deemed to be such tariff value for the purpose of assessment of additional duty of customs 8C

Implementing provisions under this section have been extended to country specific safeguard duty in relation to determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalties also validation of actions the actions taken under any rule, regulation, notification or order made or issued under the Customs Act, 1962 or any notification or order issued under such rule or regulation Further these provisions have been amended with retrospective effect from 11.05.2002 till ending with the day, the Finance (No.2) Bill, 2009, receives the assent of the President.

8B, 9 & 9A

Similar amendments have been carried out in the provisions relating to levy of other duties under the Customs Tariff Act, 1975 for Safeguard duty (section 8B), Countervailing duty (section 9) & anti-dumping duty (section 9A)

Sub-section sub-section 6A has also been inserted 6A of Section so as to provide that the margin of 9A dumping in relation to articles exported by an exporter or producer shall be determined on the basis of records concerning normal value and export price maintained by such exporter or producer. In the case of an exporter who does not maintain records, the margin of dumping would be determined on the basis of facts.

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Section XI of It has been amended so as to provide first schedule that Goods classifiable in Chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or more textile materials shall be classified as if consisting wholly of that one textile material which predominates by weight or any other single textile material.

Classification w.r.t. the textiles material depending upon the composition of material has been clarified

However, when no one textile material predominates by weight the goods are to be classified as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration

New Tariff Rates: Amendment as per Customs Notification 77/2009 dated 07.07.2009 Chapter Tarriff Existing Description of Effective rate No. heading Customs goods Tarriff rate 1 to 4 No change 5 0508 00 5% as per Unworked Corals Nil 10 notification 21/2002. 6 to 24 No change

Our comment

25

2510

Chapter 2510 covers " Natural calcium phosphets, natural alluminium calcium phosphets & phosphetic chalk.

26 & 27

No cahnge

29 or 38

5% as per Rock Phosphets notification 21/2002.

2%

7.5% as Alkyl esters of 2.50% per long chain fatty notification acidsvobtained

1] Explanatory notes are giving wrong chapter heading as 28 Page 4 of 11

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21/2002.

vegetable oils, commonly known as Bio-diesel

3002

New entry

Influenza Vaccine

30

New entry

28,29

28,29

New entry

Other life saving Drugs as mentioned below: Bulk drugs used in the manufacture above added life saving drugs

40 to 50

No change

51

5103

15%

52

5202

15%

53 to 70

No change

30

5% with nil CVD by way of excise duty exemption 5% with nil CVD by way of excise duty exemption

Waste of wool or 10% fine or coarse animal hair, including yarn waste but excluding garnetted stock. Cotton waste 10% (including yarn waste & garnetted stock)

Added to list 3 notification 21/2002

of

Added to list 3 of notification 21/2002 with the condition no. 5 as per the notification

New entry in exemption list

New entry in exemption list

72 to 83 84 any

No change or 84 or 7.5% any per

to 38 though notification says 29 or 38. Further notification talks about chapter 38 which does resmble to the product desciption given in the notofication 2]As per our observation this can be drafting mistake & chapter 2938 is wrongly written as 29 or 38 5% with nil CVD Added to list 3 of by way of excise notification 21/2002 duty exemption

as Permanent magnets

5.00% for

The condition no. 35A is required to be fulfilled Page 5 of 11

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other chapter

other chapter

notification 21/2002.

manufacture of PM synchronous generators above 500 KW for use in wind operated electricity generators. 84 or 8474 Nil as per Concrete 7.50% any sr. no. 13 Batching Plants other of list 18 of 50 cum / Hr. or chapter notification more 21/2002 (Sr. 230 of the table) 84 & 85 8433 59 7.50% Mechanical 5% 00 harvester for coffee plantation sector.

which is inserted vide notification no. 77/2009 dated 7.7.2009

85

8528 7100

Exemption withdrawn

85

8529

86 to 88

No change

89

8907 10 10% 00

Nil as per Set top box 5% notification 21/2002 (Sr. 538 of the table) 10% LCD (Liquid 5% Crystal Display) Panels for manufacture of LCD TV

Inflatable Rafts

nil

Exemption withdrawn

Inserted List 32A item (i) sr. no. viii (sr. no. 252A of the table )items of notification 21/2002.

Inserted as Sr. no. 319A of the table of notification 21/2002 subject to condition no. 5 of the notification 21/2002. Condition 5 is " If importer follows the procedure set out in Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 19996

Inserted as sr. no. 588 of the table of notification 21/2002. Page 6 of 11

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90

9021 5000

90

90 or 7.50% any other chapter No change

91 to 94 95

95

9506 1100, 9506 1200, 9506 1900 9506 2100 9506 2900

96 & 97

No change

98

9801

7.50%

/

Artificial heart 5% (Left ventricular assist device) Patent ductus 5% arterioous / Artial septal defect occlusion device.

as sr. no. 589 of the table of notification 21/2002. Inserted as sr. no. 590 of the table of notification 21/2002.

10%

Snow skies & Nil other snow-ski equipments

Inserted as sr. no. 591 of the table of notification 21/2002.

10%

Water skies, surf Nil boats, sail boats & other water sport equipments

Inserted as sr. no. 591 of the table of notification 21/2002.

CVD is nil Aerial Passenger CVD exemption Exemption withdrawn as per Ropeway project is withdrawn notification 21/2002 sr.no. 433(2) of the table

Amendment as per Customs Notification 78/2009 dated 07.07.2009 Chapter No.

Tarriff Existing Customs Description of Effective rate heading Tarriff rate goods

Our comment

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71

71

Rs. 100 per 10 grams as per notification 31/2003(personal carriage) & 62/2004 (import other than post/courier/baggage)

Gold bars, other than tola bars, bearing Manufacturer's or refiner's engraved serial number & weight expressed in metric units & gold coins Gold in any form ( other than those specified above) including liquid gold & tola bars)

71

71

Rs. 250 per 10 grams as per notification 31/2003(personal carriage) & 62/2004 (import other than post/courier/baggage)

71

71

Rs. 500 per kg as per Silver notification form 172/1994(personal carriage) & 62/2004 (import other than post/courier/baggage)

in

Rs. 200 per 1] Applies to 10 grams personal carriage & import other than post/courier/baggage 2]The rates shall also apply to gold & silver ornaments (excluding ornaments studded with stones & pearls) imported as baggage Rs. 500 per by eligible 10 grams passengers coming to India.

any Rs. 1000 per kg.

Amendment as per Customs Notification 79/2009 dated 07.07.2009 Chapter Tarriff Existing Customs Description No. heading Tarriff rate goods 85

8517

Additional duties are applicable as per subsection (5) section 3 of customs tariff act, 1975.

of Effective rate

Parts, components & accessories of mobile handsets including cellular phones.

Our comment

Exemption Exemption granted from vide notification additional 79/2009. duties under subsection (5) section 3 of customs tariff act, 1975. i.e. Special Additional duty. This is reintroduced only for one Page 8 of 11

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year. Amendment as per Customs Notification 80/2009 dated 07.07.2009 Chapter Tarriff Existing Customs Description No. heading Tarriff rate goods 85

8523 8020

of Effective rate

BCD Nil with CVD Packaged or Exemption & SAD applicable canned software from additional duties under subsection (1) section 3 of customs tariff act to the extent of amount of duties on the value of consideration for the transfer of right to use the software for commercial exploitation.

Our comment The conditions to be fulfilled: 1] Importer shall make a declaration to the Asst./ Dy. Commissioner of customs for such transfer of right for commercial exploitation. 2]Importer must be registered under section 69 of Finance act 1994 read with rule 4 of Service tax rules 1994.

Miscellaneous changes: 1. The import duty exemption provided for specified goods for manufacture of leather garments or textile garments for export is being extended to one more item (S. No. 167 of notification No. 21/2002-Customs as amended by notification No. 77/2009-Customs dated 07.07.2009 refers). However, the exemption will be subject to the existing overall value limit of 3% and other specified conditions. 2. The import duty exemption provided for specified goods imported for manufacture of leather goods, footwear etc. for export is being extended to ten more groups of items (S. No. 167A of notification No. 21/2002-Customs as amended by notification No. 77/2009-Customs dated 07.07.2009 refers). However, the exemption will be subject to the existing overall value limit of 3% and other specified conditions. 3. Customs duty on five more specified items for use in manufacture of sports goods is being reduced to nil. [S. No. 583 of notification No. 21/2002-Customs amended vide notification No. 77/2009-Customs refers]. Page 9 of 11

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4. Other amendments not relating to tariff rate: Chapter Tariff Existing No. heading Customs Tariff rate

Description goods

84 & 85

List 32A (sr. no. 252A of the table )items as per notification 21/2002

84 & 85

84, 85 84, or 90 or 90

Concessional customs duty of 5% on specified plantation machinery is available upto 30.04.2009 85 5%

of Effective rate

Concessional customs duty of 5% on specified plantation machinery is reintroduced for one more year i.e.06.07.2010.

Goods specified in 5% list 34 of the notification 21/2002 machines designed for use in the leather industry or footwear industry.

As per notification 21/2002

Our comment

There is change in the nomenclatures to make it more specific as per the separate list enclosed as below

As per notification 77/2009

“(33) Clicking Board leveling Machine”;

“(33) Clicking Board levelling/ Planing Machine”; “(34) Clicking machine ”; “(34) Clicking machine/cutting press”; “(40) Conveyor System; “(40) Conveyor System; including conveyors for heat setting, cold setting, with or without vacuum”; “(77) Halogen and adhesive application “(77) Halogen and adhesive/film application machine”; machine”; “(110) Injection moulding of PVR/TPR/EVA “(110) Injection moulding of PVC/TPR/EVA Soles, inserts and Half soles” soles, inserts and half soles”; “(117) Ironing and conditioning machine

“(117) Ironing and conditioning machine including chill setter machine”; “(136) Moccasin Performing machine”; “(136) Moccasin performing machine”; “(151) Piping machine for trimming and “(151) Piping making machine with trimming embellishment fixing machine and embellishment fixing machines”; “(158) Polyurethane/PVC/TPR sole, insole, “(158) Polyurethane/PVC/TPR and EVA sole, heel, heel tip injection moulding machine insole, midsole, heel, heel tip injection ( single / multiple station) moulding machine (single or multiple station)”; Page 10 of 11

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“(159) Pore part lasting machine”; “(171) PVR/PU/EVA direct injection soling machine (DIP Construction)”; “(185) Scissors cutting machine for plate”;

“(159) Fore part lasting machine”; “(171) PVC/PU/EVA direct injection soling machine (DIP construction)”; “(185) Scissors type and nibbling type machines for plates”; “(223) Tapping and seam rubbing machine”; “(223) Taping and seam rubbing machine”; “(253) Stapling machine for lows to uppers “(253) Stapling machine for bows to uppers on leather shoes”; of leather shoes”; “(256) Bistep cutting machine”; “(256) Bias tape cutting machine”; “(262) Dust collector systems”. “(262) Dust collector and exhaust systems”.

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