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Regarding amendment to section 20 of the Customs Act, 1962 vide Finance
Act, 1962
Circular No. 61 dated 6th June
1995
I am directed to
say that with the enactment of the Finance Bill, 1995 on 26.5.1995 section 20 of
the customs Act, 1962 stands amended so as to provide for the levy of customs
duty on all re- imported goods in the same manner as goods being imported for
the first time. As may be seen this is a substantial change from the hitherto
existing position wherein section 20 provided for the charging of duty on
specified categories of goods at the rate of duties indicated in the section
itself.
2. With
a view to exempt certain goods when re-imported into India from the levy of
Customs duty otherwise applicable in terms of section 20 of Act, two
notifications namely Notification No. 97/95-Cus and No. 98/95-Cus. both dated
26.5.95 have been issued.
3. In
terms of Notification No. 97/95-Customs dated 16.5.95, the goods in respect of
which any benefit of drawback of customs or excise duties or rebate of excise
duty was claimed at the time of their export or which had been exported under
bond, can be imported on payment of duty equal to the amount of drawback
claimed/ excise duty not paid at the time of their export.
4. Further,
the goods which had been sent for repairs abroad, would on their re-
importation, be subjected to a customs duty calculated on the fair cost of
repairs including the cost of materials used in repairs, insurance and freight
charges, both ways. (This provision is in line with the hitherto existing
Notification No. 204/ 76-Cus. dated 2.8.1976).
5. The goods other
than the aforesaid two categories are eligible to be imported without payment of
any duty. This category would include such of the goods which bad not claimed
any benefit at the time of their export. In this class would fall good which had
been sent for demonstration or exhibition aboard or as samples. The aforesaid
exemptions are, however, subject to certain conditions such as establishment of
the identity of the goods and re-import within three years, etc. The duty
exemption, however, does not apply in the case of re-imports effected by the
100% EOU/ EPZ units or those which had been exported in fulfillment of export
obligation under the Advance License Scheme or the EPCG Scheme or which had been
exported from a bonded warehouse. These type of goods would have to pay full
customs duties under section 12 as if imported as such unless there are special
exemption for these in other notifications.
6. Notification
No. 98/95-Cus. dated 26.5.1995 is a specific notification for exempting goods
manufactured in India and parts of such goods when re- imported into India for
repairs from the duty of customs. Here also, similar conditions such as identity
of goods being established; re- importation taking place within a period of
three year etc. is provided. Importantly another condition is that the
re-imported goods are re-exported after repairs within a period of six months or
such extended period not exceeding one year as the Commissioners of Customs may
allow. For this purpose, the importer has to execute a bond undertaking to
re-export the goods within the specified period after satisfying the customs
regarding the identity of the goods. In the event of failure of re-export the
duty will have to be paid. It is desired by the Board that such Bond should be
supported by a security of 25% of the duty amount so exempted as bank guarantee.
The security is considered necessary for monitoring the adherence to the
condition of the notification. This notification basically re-introduces the
exemption in terms of Notification No. 132/ 61.
7. The
aforesaid notifications with their implications may be immediately brought to
the attention of the Department officers and also the trade by issue of suitable
standing orders/ public notices. In case of any difficulty in implementation the
notification the Board may be suitably informed.
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