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Advance Licensing Scheme - Import of iron & steel items below floor
prices
Circular No. 6 dated 4th February
2000
Kind attention is
invited to notification number 34(RE) and 35(RE) dated 10.12.98 and 11.12.98
respectively issued by DGFT fixing floor prices for certain iron and steel items
falling under Chapter 72. In terms of Public Notice No. 24/ 98 dated 30.11.98
issued by DGFT, it is clarified that import of such iron and steel items below
prices is allowed under Advance Licensing Scheme.
2. The
Commissioner of Customs (EP), Mumbai has reported a modus operandi to the Board
where an Advance Licence holder imported tinplate waste and prices below
specified floor prices and later on, instead of utilising it for exports,
diverted bulk of it into the domestic market after payment of customs duty at
the said lower prices on the plea that the full quantity of imported goods could
not be utilised for export. In this manner the Advance Licence holder
circumvented the provisions of DGFT Public Notice No. 24/ 98 to divert goods
imported for export at lower prices into local market to earn profit.
3. The
Board desires that in all cases where steel items imported at prices below floor
prices are diverted into domestic market, the customs duty should be recovered
at the floor prices declared in DGFT notification numbers 34(RE) dated 10.12.98
and 35(RE) dated 11.12.98. In addition diversion of such imported goods in local
market before fulfillment of the specified export obligation results in
contravention of Section 111(O) of the Customs Act. Hence in all such cases
penal proceedings under Sections 111(O) of the Customs Act should be initiated
besides recovery of duty at the specified floor prices.
4. However,
in other cases of normal imports of iron and steel items against advance
licenses not involving diversions, the advance licence should be debited on the
basis of actual import price if it is otherwise in order.
5. This may brought
to notice of the staff concerned and the trade.
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