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Regarding sale of cars to STC by foreign privileged persons - Delay in
realisation of duty
Circular No. 95 dated
23rd August 1995
In terms of rule
4(ii)(c) of the Foreign Privileged Persons/ Regulation of Customs Privileges
Rules, 1957, a foreign privileged person, on relinquishing his post or on his
transfer out India may offer the vehicle imported by him for sale to State
Trading Corporation, with the permission of Ministry of External Affairs. In
terms of rule 5(iv)(i) ibid, where such vehicles have been purchased by the
State Trading Corporation within three years from the date of its importation,
the State Trading Corporation is required to pay the customs duty leviable on
such motor vehicles.
2. Instructions
have been issued in the past requiring the Custom Houses through which the
vehicles are imported by the Foreign Privileged Persons, to maintain register
for recording the details of cars in respect of which permission is granted to
privileged person by the Ministry of External Affairs of sale to the State
Trading Corporation (Ministry's letter No. 442/ 7/ 78-Cus.lV dated 11.8.1978
reproduced in the Customs Appraising Manual Volume II pages 40-41 refers). It
was further prescribed that on receipt of the notice of the permission for sale
given by the Ministry of External Affairs, the number and date of the letter
granting permission, name and address of the privileged persons, particular of
car, the date of its importation, whether duty leviable etc. should be entered
in the relevant register together with the details regarding the date of payment
of duty, cash challan and the name of the Custom House where the amount
deposited. It was further desired that cases in which the duty is recoverable it
should be pursued by the concerned Customs House until duty is paid. And in
order to ensure that the recovery of duty is not delayed, the Custom House would
prepare a monthly list of the cases in which the recovery of duty is not known
the list to the concerned Regional Offices of State Trading Corporation asking
them to deposit the amount, of duty recoverable without any delay.
3. On
examining the replies furnished by the Customs Houses in respect of the sale of
car to the State Trading Corporation by the privileged persons in course of
enquiry by Public Accounts Committee it has been observed by the Board that
procedures as prescribed in Board's letter dated 11.8.1978, is not being
followed by the Custom Houses. It has been reported that the permission of the
Ministry of External Affairs, granting sale to State Trading Corporation is not
always received by the Customs Houses. Moreover, such permission by the Ministry
of External Affairs is being considered as advance intimation only, and Custom
Houses are mainly depending on the information furnished by the State Trading
Corporation in this regard. The duty is being asked from the State Trading
Corporation only after the receipt of the intimation from the State Trading
Corporation. This has caused a considerable delay in the realisation of duty
from the State Trading Corporation.
4.
In order to ensure that the recovery of duty on motor vehicles sold by
foreign privileged person is not delayed, it is reiterated that such cases
should be pursued by the Custom House in accordance with the procedure laid down
in Ministry's letter F.No. 442/ 7/ 78-Cus.IV dated 11.8.1978. The registers
referred to in para 3 of the Ministry's letter dated 11.8.1978 should be
maintained in the stipulated proforma. As regards non receipt of all the orders
granting permission of sale by the Ministry of External Affairs (MEA), Ministry
of External Affairs has been advised to allot running serial number (Custom
House of Import wise/ year wise) so that Custom Houses could check if they, have
received all the permissions for sale.
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