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OFFICE OF THE
COMMISSIONER OF CUSTOMS, |
PUBLIC
NOTICE NO. 125 /2001
Sub: Import of rough diamonds and other precious or
semi-precious stones under various licensing schemes of the Exim Policy in
terms of notification No.35/2001-Cus. dated 30.03.2001 Procedures - reg.
******
Govt. of
India, Min. of Finance, Dept. of Revenue, New Delhi, Circular No.20/2001-Cus.
Vide F.No.305/46/2001-FTT dated 30.03.2001, is reproduced below for the guidance
of the Importers, Clearing Agents, and Trading Public.
Sd/-
C11/27/2001-AP (PORT)
(JOSEPH DOMINIC)
CUSTOM HOUSE, CHENNAI-1.
COMMISSIONER
OF CUSTOMS (PORT)
DATE : 18.06.2001
_____________________________________________________________________________
CIRCULAR NO.20/2001-CUS.
F.NO.305/46/2001-FTT
DATED 30.03.2001
Attention is invited to notification No.27/2001-Cus. dated
05.03.2001, which was issued to exempt rough diamonds and other precious or
semi-precious stones from customs duty when imported under various licensing
schemes provided in Chapter 8 of the EXIM Policy. Since then, several
references have been received from the Department of Commerce (DOC) and Gem
& Jewelry Export Council bringing to our notice the difficulties being
faced by trade in complying with various provisions of the notification. The
difficulties cited are basically with reference to execution of bank guarantee,
maintenance of accounts and monitoring of export obligation. It has also been
stated that raw pearls, natural/cultured, which are importable against the REP
license in terms of para 8.2/8.38 of Policy read with Appendix 30A and 30B of
the Handbook, should be included in the notification for the purpose of enjoying
duty free import facility. Similarly, the REP licenses issued under para
8.13(a) of the Policy and para 8.74 of the Handbook have been left out from the
purview of notification inadvertently. The DOC has requested for inclusion of
these licenses in the notification. As various diamond, gem & jewelry
export promotion schemes of the EXIM Policy are likely to continue after
1.4.2001, the DOC has requested that the validity period of the notification
should be extended so as to impart predictability and continuity to the Policy.
2. The matter has been examined by the Ministry. After
consideration of the issue in all its aspects, a new notification
(No.35/2001-Cus. dated 30th March, 2001) has been issued in
supersession of notification No.27/2001-Cus. dated 5.3.2001. This notification
exempts raw pearls, natural/cultured, rough diamonds and other precious or
semi-precious stones from customs duty when imported under various licensing
schemes provided in Chapter 8 of the EXIM Policy. It may be noted that this notification
includes replenishment licenses issued under para 8.13 (a) of the Policy and
para 8.74 of the Handbook, which were earlier not covered by notification
No.27/2001-Cus. Further, there is no validity period prescribed under the new
notification. The other salient features of the notification are as discussed
below :-
IMPORTS
UNDER REPLENISHMENT LICENCES:
3. The REP Licenses are issued after export proceeds have been
realised. It is a facility given to exporters to replenish their inputs. The
license does not carry any export obligation. In view of this, it has been
decided that there will not be any requirement for the parties importing raw
pearls, diamonds and other precious or semi-precious stones against
replenishment licenses to give any bond/bank guarantee/legal undertaking to the
Customs or for that matter to maintain any accounts.
Imports
under Diamond imprest Licenses:
4. Diamond Imprest Licenses are issued in advance for import of
rough diamonds. The licenses carry an export obligation. The export obligation
against each consignment is required too be fulfilled within a period of 5
months from the date of clearance of such consignment through Customs. The
export obligation is fixed according to the formula laid down in para 8.12 of
the Handbook. Para 8.9 of the Handbook provides for extension of export
obligation period in certain situations on payment of penalty. Para 8.20 of the
Handbook provides a procedure for regularisation of bonafide defaults.
5. It
may be noted that under the present Policy there is no mechanism for recovering
the duty from the defaulting importers in case of their failure too fulfil the
export obligation. It is for this reason that a provision was made for
execution of bond and furnishing a bank guarantee in notification
No.27/2001-Cus. Considering the point made by the DOC and exporting trade that
execution of bank guarantee would increase the transaction cost of exports, and
taking into account the waiver from bank guarantee requirement for larger
exporters already permitted under advance licenses, it has been decided that in
case of importers having average turnover of Rs.2 crores and above during the
last financial year a Bond may be accepted without insisting for any Bank
Guarantee. The Bond may be taken in the same format as given in Appendix 24B of
the Handbook. Suitable modifications may be made to provide therein the
conditions of the notification. As for the other categories of importers i.e.
those who do not fulfil the above criteria, apart from Bond, a Bank Guarantee
may also be taken at 50% of the duty saved. For the purpose of verification
export figures of an exporter, a certificate from the regional licensing
authority or a statement of export of cut & polished diamonds made during
the last financial year duly certified by a Chartered Accountant may be
accepted.
6. Further, the exporters importing rough
diamonds under Diamond Imprest Licenses shall not be required to maintain any
accounts specifically for the Customs. The procedure as being followed by DGFT
for monitoring discharge of export obligations by the Diamond Imprest License
holders shall continue to be followed. However, the license holders will
furnish a copy each of the statement/return being furnished to DGFT giving
particulars of imports and discharge of export obligation, license-wise etc.
For discharge of Bond/Bank Guarantee executed with Customs, the license holder
may be asked to produce a certificate from DGFT to the effect that export
obligation against the particular Diamond Imprest License has been fulfilled.
In case of defaults in export obligation, the duty may be demanded in
proportion to the shortfall and not on the total imports as provided in the
exemption notification.
Imports
under Bulk Licenses:
7. The
bulk licenses are issued for import of rough diamonds for supply of such
diamonds to the holders of valid REP/Diamond Imprest License, EOU/EPZ/SEZ units
or to re-export the same. The supply/export of such diamonds is required be
completed within a period of 12 months from the date of issuance of license or
within a period of 3 months from the date of import, whichever is later. As per
para 8.25 of the Handbook the Bulk Licensee is required to furnish to the
licensing authority the proof of supplying rough diamonds to the REP/Diamond
Imprest licensee and to the EOU/EPZ/SEZ units within the prescribed period. The
Bulk Licensee is required to submit the details of such supplies alongwith the
original proforma signed by the licensing authority. The licensing authority
then compares such original with the proforma retained by it and thereafter
redeems the case provided the Bulk Licensee has supplied the rough diamonds
upto the value of rough diamonds imported under the Bulk License. If the Bulk
licensee fails to supply rough diamonds within the prescribed period, he is
required to surrender REP Licenses of S.No.2.1 to 2.6 of Appendix 30A for a
value twice the value of such rough diamonds imported under the Bulk License.
8. As rough diamonds are imported duty-free
which otherwise carry a duty of 5%, it is the responsibility of the Customs to
ensure that the goods are properly accounted for. To safeguard the interests of
revenue, a condition has been put in the notification that the Bulk License
holder will be liable to pay duty on such quantity of diamonds as are not
accounted for by him. Therefore, before allowing imports under Bulk Licenses, a
Bond may be taken from the license holder on the lines given in Appendix 24B of
the Handbook. Bank Guarantee may be waived as all Bulk License holders have
very large turnover. No separate account will be required to be maintained
specifically for the Customs. The Bulk License holders will however furnish a
copy each of statements and other documents presently being given to DGFT, to
the Customs. For release of Bond, the licensee shall be required to produce a
certificate from DGFT to the effect that the obligation against a particular
Bulk License has been fulfilled.
Maintenance
of Accounts:
9. As
for maintenance of accounts, it is clarified that the trade may not be asked to
maintain any accounts for Customs purposes and that the present system under
which their responsibilities/obligations have been fixed under the Exim Policy
should be al-lowed to continue. For monitoring the export obligation for
Imprest Licensees and fulfillment of obligation of accountal in stipulated
period by Bulk Licensees, some simple computerised account of all these imports
will have to be maintained in the Custom Houses, license-wise. The
Commissioners may, as mentioned, rely on the data being submitted to DGFT under
the existing arrangement for taking a view on discharge of export obligation
and if no proof of discharge of export obligation or accountal of imported
rough diamonds duly accepted by DGFT is forthcoming in the period stipulated in
the Policy/Handbook appropriate demand notices may be issued.
ATTESTED
(S.
SANKARAVADIVELU)
DY. COMMR.
OF CUSTOMS (APPG)
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