Customs

(Rebate of duty on “export goods” used in manufacture of such goods:- Where any excisable goods are exported, Rule 18 of Central Excise Rules, 2002, provides for grant of rebate of duty paid on such goods or duty paid on the material used in the manufacture of such export goods.

Export of goods under Bond i.e. without payment of excise duty on end product or their inputs:-

(i) As per Rule 19, any excisable goods (except exempted or nil rated goods, but including goods cleared by a 100% EOU can be exported without payment of duty (central excise duty as well as other duties of excise levied under separate enactments of Parliament line AED, NCCD, Education cess etc.

Cenvat credit of input excise duty provided drawback for the same is not taken:-

Where end product is exported under bond, the input credit taken on account of export can be utilized for paying duty on similar final products cleared for home consumption or if that be not possible for any reason, by cash refund to the assessee.

Setting up of units in Electronics Technology Parks, Jewellery Complexes and 100% Export-Oriented Units:-

For Setting up an EOU, an application is required to be made to the development Commissioner, who grants approval after clearance from Board of Approval. All required inputs and capital goods (new or second hand)

Special Economic Zones (SEZ)-Taking inspiration from the success of such Zones in China, these specifically delineated duty free enclaves, deemed to be foreign territory for the purpose of trade operations and duties and tariffs, have been created.

Free Trade & Warehousing Zones.- These are special category of SEZ with a focus on warehousing and trading in free currencies with the object of making India into a global trading hub like Dubai and Singapore. Supplies from DTA to these Zones will be treated as physical exports and sales to DTA will be on payment of applicable customs duties.

Vishesh Krishi and Gram Udyog Yojna (VKGUY)- Under the scheme export of village industry products and poultry and dairy products and their value-added products has been facilitated by granting them duty credit @ 5 per cent of FOB value of the eligible export flowers, vegetables and fruits to get additional duty credit scrip of 2.5% and against such credit certificate freely importable inputs and capital goods can be imported duty free subject to the conditions of exemption Notification No.41/2005-Cus.EO/EHTPs/BTPs who do not avail direct tax benefit are also eligible for this scheme.

Focus Market Scheme (FMS)- To incentivize exports of all products to notified countries by duty credit scrip equivalent to 3% of FOB value of eligible exports (including those from non-EDI ports) for each licensing year commencing from 01.04.2006. Export of products to notified countries (Appendix 37C of HBP Vol.1) will be entitled for additional duty credit scrip @ 1% of FOB value of exports (in free foreign exchange) made w.e.f. 01.04.2011.

Focus Product Scheme (FPS): To incentivize exports of notified products to all countries by duty credit scrip equivalent to 2% of FOB value of eligible exports (including those from non-EDI parts) for each licensing year commencing from 01.04.2006.

High Tech. Products Export Promotion Scheme (HTPEPS): In ETP 2009-14, this scheme is deleted and products covered by it shifted to FPF.

Status Holders Incentive Scheme Incentive Scheme (SHIS) for specified capital goods imported thereunder: This is a new entrant under the FTP 2009-14. Duty credit scrip @ 1% of FOB value of export goods) under this Scheme is available only to Status Holders and that too for certain specified sectors only during 2009-10 to 31.12.2013.

Agr-infrastructure Inventive scrip (AIIS)- Earlier a part of VKGUY: This allows import of specified agri-equipments with actual user condition but transferability of the scrips amongst status holders units in and to parks recognized by the Ministry of Food Processing Industries.

Served from India Scheme Certificate: It will cover Duty Free Credit Entitlement benefit @ 10% of total foreign exchange earned, even for individual service providers who are able to earn total foreign.

Advance licence/DEEC (now Advance Authorization Scheme-Valid upto 30.06.2011).- (i) Units primarily engaged in production of domestic market can also get required inputs free of duty to service an export order under Duty Exemption Scheme/Advance Licence. Advance licence can also be issued for supply of stores on board the foreign going vessel/aircraft subject to the condition that there is specific SION in respect of the items.

Duty Free Import Authorization Scheme (DFLA).- (i) This scheme has been evolved w.e.f. Ist May, 2006 (para 4.2.1. of the Policy) by combining the salient features of the Advance Licensing Scheme ( which allows imports before exports) and Duty Free Replenishment Certificate or DFRC. (which allows transferability of import entitlement.

Drawback of Customs/Excise duties/Service Tax.- (i) A alternative option of Drawback is also available under which products made out of duty paid inputs are first exported and thereafter refund of duty is claimed. After abolition of DEPB, Drawback scheme has been expanded. It now covers about 4000 items.

EPCG Scheme: (i) Benefits- The object of this scheme is enhancement, modernization and technical upgradation of industrial capacity. Imports of capital goods (including second-hand) at 3% concessional rate plus education cesses under EPCG- Scheme, subject to export obligation, is now applicable to all sectors and to all capital goods without any threshold limit.

Searches & Seizures.-One of the aspects through which one frequently hears of customs is anti-smuggling or preventive operation. Under the Customs Act, definition of ‘smuggling’ is very wide. Any act or omission which will render the goods liable to confiscation amounts to smuggling. Customs officers are empowered to inspect any premises or conveyances of X-ray any person and effect search and seizure in cases where they have reason to believe that the goods are of a contraband nature.

Compounding of Offences: (i) Compounding of offences by the Chief Commissioner, either before or after initiation of prosecution, proceedings, is possible. On compounding, the person would get immunity from prosecution but would have to pre-pay duty, penalty, interest and compounding fee. However, compounding fees have been reduced to make the scheme attractive.

Prosecution: In addition to departmental action, prosecution in a cout of law, with the sanction of the Commissioner, is often resorted to in serious cases of customs contraventions including misdeclaration of valu and fraudulent exports.