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Procedures regarding import of gold by MMTC for sale
Circular No. 38 dated 9th July
1996
Under para 88 of
the EXIM Policy read with the various relevant customs exemption notification
(Nos. 177/ 94, 3/ 88, 277/ 90 and 144 / 93) MMTC/ SSI/ STC/ HHEC are authorised
to import gold and sell/ lend the same to actual users in the various EPZs or to
exporters in the EOU/ DTA sector, with an export obligation imposed thereon.
Currently, it is reported that the procedure is that MMTC who is the major
importer, imports gold, clears for home consumption after executing a bond for
observing the conditions of exemption, without any security and passes on the
gold to the actual users.
2. Recently,
it came to notice of the Ministry that substantial quantity of gold so imported
had not been duly accounted for, by the concerned exporters. In some cases the
gold as well as the loaners have been found missing, indicating gross abuse of
duty exemption. Keeping in view the sensitive nature of this commodity and the
risks to revenue, the matter was reviewed in consultation with the Ministry of
Commerce and it has been decided that the following procedure be adopted in
respect of gold imported by MMTC under any of the above said duty exemption
schemes:
(a) MMTC
may be allowed to open private bonded warehouses, subject to the observance of
the Board's existing instructions on setting up such warehouses, wherein the
imported gold would be kept by MMTC in bond;
(b) Clearance
from the said bonded warehouse may be taken by all categories of manufacturer -
exporters covered by these exemption schemes by filling ex-bond Bills of Entry
in their own name;
(c) A
manufacturer - exporter shall make a request in writing for duty exemption as
above mentioned and he will also execute the necessary bonds as mentioned in the
said exemption schemes;
(d) The
bond should be secured by a Bank Guarantee for 10% of the duty amount leviable
on the gold but for the duty exemption. If any exporter so desires he may be
allowed to maintain a Running Bond Account with the Customs House so that he
does not have to obtain and file separate Bank Guarantees for each Bill of
Entry.
(e) MMTC
shall be responsible for safe keeping of the gold, for making physical delivery
thereof to the manufacture exporters against duly assessed Bill of Entry on
which ex-bond clearance has been allowed by a proper Officer, and for rendering
to customs a complete account of gold received and kept by them in bond. In
their capacity as a bounder, they will also maintain the prescribed records,
including the name, address and other specified details of exporters and the
quantity of gold released to and exported by each exporter. They would also keep
the Customs authorities informed of any export which are due but have not taken
place within the permissible period.
Presently, as per
the Exim Policy, exports are required to be completed within 60 days from the
date of release of the gold issued on loan or 90 days in case of out right
purchase and extendable by the DGFT by another 30 days. In the event of an
exporter failing to discharge the export obligation within the prescribed
period, the responsibility for retrieving the gold, delivered or loaned by the
MMTC to the exporter, shall continue to remain with the MMTC.
(f) The
record regarding execution of bond and submission of the bank guarantees by the
intending exporters, as prescribed, shall be maintained by the Assistant
commissioner of Customs in the same way as is required to be maintained for
export of excisable goods under bond. However, on submission of proof of
exports, the corresponding guarantee may be recreated to the exporter's account
and may be allowed to be used for the subsequent ex-bond clearances provided the
validity period of the bond and the bank guarantee so permits. However, in the
event of the exporter failing to produce proof of export on the expiry of the
prescribed period, the Asstt. Commissioner may proceed to recover the amount of
Customs duty liable on the quantity of gold released to the exporter free of
duty and to encash the bank guarantee. In addition, he may proceed to recover
the balance of Customs duty if any, not covered by the bank guarantee, from the
exporter as provided for in the law.
(g) The
performance of exporters who have received duty free clearance of gold should be
carefully watched, and in case of default immediate steps should be taken to
encash the guarantee and safeguard the revenue, recover the gold, in addition to
any other revenue and penal action allowed under the law. The Commissionerate
should devise an effective monitoring system to ensure to draw any further gold.
The above said
procedures may be brought into effect immediately, and the trade informed
suitably. Proper steps may be taken for smooth transition from existing scheme
to new scheme without dislocating the trade.
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