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Government of India
Ministry of Finance
Department of Revenue
Central
Board of Indirect Taxes & Customs
(Directorate General of Export Promotion)
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Circular No. 17/2019-Customs
New Delhi, dated 19th June, 2019
To,
All Pr. Chief Commissioners/ Chief Commissioners of Customs/ Customs
(Prev.)
All Pr. Chief Commissioners/ Chief Commissioners of Central Tax/
Central Excise
All Pr. Commissioners/ Commissioners of Customs/ Customs
(Prev.)
All Pr. Commissioners/ Commissioners of Central Tax and Central
Excise
Madam/Sir,
SUB: Applicability of Additional Customs
duty on goods re-imported under Customs Notification No. 94/96-Customs dated
16.12.1996 exported earlier for exhibition purpose/ consignment basis - reg..
Representations have been received for clarifying the issue of availability
of exemption from the additional duty of customs leviable under Section 3 of
Customs Tariff Act, 1975 under notification no. 94/96-Customs dated 16.12.1996
on the reimport of jewellery which had been earlier exported either for
participation in exhibition or on consignment basis.
2. Matter has been
examined. It is to recall that during the 2016-17 Union Budget, Central Excise
duty of 1% (without input tax credit) or 12.5% (with input tax credit) was
imposed on articles of jewellery falling under heading 7113 of the First
Schedule to the Central Excise Tariff Act, 1985. As per section 3 of the Central
Excise Act, 1944, all goods produced or manufactured in India are leviable to
duty of Central Excise at rates prescribed in the First Schedule to the Central
Excise Tariff Act, 1985. As per Rule 4 of the Central Excise Rules, 2002, such
duties are however collected by the Government at the time of removal from the
place of manufacture/ warehouse of such manufactured goods. After the levy of
Central Excise Duty on articles of jewellery during Budget 2016-17, Articles of
Jewellery (Collection of Duty) Rules, 2016 were notified vide Notification
no.34/2016 (N.T.) dated 26.07.2016 by the Government. As per Rule 6 of the said
rules, liability to pay Central Excise duty arises at the time of first sale by
the manufacturer/ principal manufacturer from his registered premises. However,
such payment of Central Excise duty is done on a monthly basis by the 5th/6th
day of the following month. Prior to imposition of Central Excise duty on
jewellery, the same was exported without Bond/LUT as clarified by Circular no.
928/18/2010-CX dated 28.06.2010. On imposition of Central Excise duty, such
jewellery was exported under self declaration and submission of LUT to Customs
without the need to get the LUT ratified by jurisdictional central excise
authorities vide Circular Nos. 1021/9/2016-CX dated 21.03.2016 and
1042/30/2016-CX dated 26.07.2016.
3. Re-import of jewellery which was
exported under bond/LUT for exhibition abroad or on consignment basis, per se
indicates that there was no sale involved. Thus, there was no liability to pay
Central Excise duty as it arises only at the time of first sale by the
manufacturer as per provisions under the Articles of Jewelle (Collection of
Duty) Rules, 2016, inspite of leviability of Central Excise duty that had
already arisen at the time of manufacture. Condition 1(d) of the notification
no. 94/96- Cus requires payment at the time of re-import of Central Excise duty
not paid initially at the time of export. As in the present case, no duty was
required to be paid for goods which have not been sold and have been
re-imported, hence the said condition requiring payment of Central Excise duty
in such cases appears to be not applicable even if the re-import is taken to be
falling under condition 1(d) of the notification. However, such cases appear to
fall more appropriately under residuary entry at Sl. No. 3 of the said
notification as the goods were allowed to be exported under simple LUT which was
even not required to be registered with Central Excise authority. Hence, in
effect, claim of re-import under condition 1(d) or 3 does not materially alter
the situation. Therefore, no duty is payable in such cases of re-import provided
all other conditions of the notification are met.
4. In the case
where the export has taken place under claim of rebate, then it is clear that
Central Excise duty has been paid. This means that as per Rule 6 of Articles of
Jewellery (Collection of Duty) Rules, 2016, sale has taken place and then at the
time of re-import, rightly it has to be done under condition 1(c) of the
notification which requires repayment of the rebate claimed by the exporter.
5. Difficulties, if any, may be brought to the notice of the Board.
6. Hindi version would follow.
F.No. DGEP/G&J/06/2019
Yours faithfully,
Sd/-
(Saroj Kumar Behera)
Additional Director
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