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Published on : 01 Dec 2018

Panorama of Customs Duty in India Part II

Import for Re-Export

Re-exports out from U.A.E. Free Trade Zones to a third market goal beyond the GCC Customs Zones are additionally exempted from any obligation.

However, such goods when imported with the intention of re-exporting them as a whole or part to another country, a Deposit or Guarantee equivalent to the applicable tariff amount on the goods shall be secured instead of Customs Duty.

For this methodology, the Declaration Type "Import for Re-Export to Local from ROW (Rest of the World)" should be cleared. As of now, this is a restricted revelation to those with esteem higher than AED 20,000 aside from if there should arise an occurrence of vehicles. The value of the foreign goods that are to be re-exported, for which customs taxes/duties will receive refunds, shall not be less than five thousand US dollars.

 The period of import for re-exportation may not exceed six months (180 days). The customs office will make null all or part of the cash deposits and securities, as customs taxes duties, in the case, that the goods placed are partly or wholly, for local consumption, or similarly disposed of, or upon expiry of the designated period (180 days). The claim for the refund of the customs taxes or duties shall be filed within 180 days from the date re-exported.

Goods may be re-exported in the following situations:

  1. Imported products that have not left from the customs warehouses.
  2. Goods brought into the country under a Temporary Admission procedure
  3. Products deposited with the customs warehouses as one of the cases of suspension of customs taxes/duties.
  4. Foreign goods for which customs taxes and duties have received payment.
  5. Foreign goods from local markets
  6. Products that have been rejected by the competent authority. g. Goods imported for re-exportation.

For goods destined directly for Mainland Customs Zones or to a Free Trade Zone for sale in the U.A.E. and re-exports to GCC Countries are subject to customs import tariff as per GCC Common Customs Law that sets the framework for the UAE's Import Regulations. The exception concerns those under the Act of GCC Common Customs Law or the effective GCC Economic Agreement or similar such international agreements within the GCC Regulation. Accordingly, products can be moved intra-GCC Customs Offices permitting entry of the remote resources starting with the one-party state then onto the next. Be that as it may, a Statistical Export Declaration more likely than not been cleared from the trading GCC nation for internal developments of such merchandise and a duplicate of the same must require submission to the Customs Office. It must require submission for bringing into the country conveying the "Makasa Stamp" (set-off component) on the Declaration with a specific end goal to maintain a strategic distance from the rehashed instalment of Customs Duty at the goal Country. The Declaration write "Import to Local from GCC" should be cleared for such exchange.

Documents required for Customs Declaration are:

  1. Delivery order (for air or sea importation)
  2. Bill of Lading used for air or sea import
  3. Manifest (for introduction by land or by wooden vessels or the like)
  4. Packing List for multiple/several good
  5. (The HS code, as well as the International law for chemicals or hazardous goods,  are be indicated).

The customs office may request translation of the foreign documentation into Arabic.

Powers of investigation and enforcement by the Authority under Common customs law for GCC states;

According to Article 122 of the common customs law for GCC states the Customs officers are authorised to inspect the goods to combat smuggling and the means of transport and to search individuals under the provisions herein and the other applicable regulations (laws). The searching of the body of a woman, the search shall be done only by a female officer.

If there are adequate pieces of evidence found, and after obtaining permission from the competent authority, customs officers are entitled to inspect any house, store or shop according to the applicable regulations.

Customs officers are also entitled to as stated in article 128, detain any individuals suspected to have performed or attempted to commit an offence or involved in playing a part in any of the following crimes:

  1. Smuggling
  2. Transporting or acquisition of contraband

An Arrest for customs officers to make is authorised only in the following cases (As stated in article 137:

  1. Smuggling offences in the act.
  2. Resistance to officers or security officers that impedes an investigation of smuggling cases or customs offences or the persons involved therein.
  3. When the persons are acting to escape to avoid the fines, penalties or compensations that might arise.
  4. The customs officers authorised to shall issue the arrest order and produce the arrested person to the competent authority within 24 from the time of arrest.


Case law in India referring to the Customs duty Jurisdiction

In "Amba Expo Fab V. Authority of Customs (Import)", Nhava Sheva' – 2012 (12) TMI 395 - CESTAT MUMBAI the show caused notice was issued by one Commissioner of Customs (Adj), notwithstanding he didn't pass any decree. The impugned law passed by Commissioner of Customs (Import), Nhava Sheva who recorded that he can pick the challenged show cause notice to vide Notification No. 112/2005-Cus. In the Notification no place it is exhibited that the impugned show cause notice has received allotment to Commissioner of Customs (Import), Nhava Sheva for intercession. The Tribunal held that the challenged decree passed without jurisdiction requires putting aside.

In “Bengal Ruby Mica Supplies Co. vs. Union of India (UOI) And Ors. On 2 March 1994, In the present case, customs authority had no jurisdiction to levy any export duty on "cess" treating the same to be a part of the assessable value within the interpreted meaning of Section 14 of the Act. When cess was and is not a part of the assessable value, any duty realised by said value shall receive clearance without authority of law and more than the jurisdiction conferred on the authority. It would not be an instance of a simple mistake of law or actuality under the arrangements of the Customs Act, 1962 to levy the export obligation on "cess" not approved under the Act. A similar upcoming act will consider the scope and purview of the Customs Act, 1962 and the jurisdiction, authorities, and capability of the officers under the Act. The Customs Act is comprehensive code just if the Customs specialists act inside the extent of the arrangements of the Act, however, if traditions expert acts past the scope of the Act, at that point the request of the Customs specialists can't be dealt with as last.

In the case of “Industrial Cables v. Union of India", supra, a Single Judge of the Punjab and Haryana High Court held that the removal of the products by the actual officer under Section 47 of the Customs Act must be attempted after due adjudication, right off the detail element as to the reality regardless of whether the Act precludes the import of the merchandise. Further, the best possible officer was "Adjudicating Authority" inside the importance of Sub-section (1) thereof, and this way, the request goes under Section 47 of the Customs Act is official on the specialists under the Import (Control) Order.


 “Adjudication Procedure”

Segment 122A furnish the methodology for adjudication. The Section gives that the Adjudicating Authority might, in any procedures

-    Under Chapter 14 of the Act; or

-    Some other arrangements of the Act

provide an opportunity of being heard at a party in any proceeding, if the party so desires.

The Adjudicating Authority is enabled to supremacy time to the gatherings to the proceedings occasionally if the adequate reason has appeared for this reason. The hearing might be suspended for motivations to be recorded in composing. Such delay is limited to just over three times.

 “Beneficial owner" implies an individual for whose sake the goods are being foreign made or sent out or who practices successful control over the products being transported in or traded.

The Supreme Court passed judgment on account of "Saint Gobain Glass India Ltd. Vs Union of India" 2017 (349) E.L.T. A214 (SC) - Interpretation of statute - the importance of the term 'domestic industry.'

Rule 2(b) of the Anti-Dumping Rules. The verdict on account of NIRMA LIMITED Vs SAINT GOBAIN GLASS INDIA LTD. [2012 (10) TMI 832 - MADRAS HIGH COURT] challenged - Held the following. "We don't think of it as important to go into the issue(s) emerging in the present Special Leave Petitions, to be specific, the exact significance of the term 'domestic industry' in Rule 2(b) of the Anti-Dumping Rules which issue is left open for arbitration in a proper case - SLP discarded being not viable".

Extra-territorial jurisdiction.

The reply to this inquiry is clarified with the assistance of a judgment go by the Customs, Excise and Gold Tribunal on account of "Hi Lingos Co. Ltd. Versus Collector of Customs" For this situation, the appeal was documented against the first order passed by authority of Customs, Bombay. In this law, the Collector has requested reallocation of six holders comprising of aggregate 5100 packs proclaimed to be Sodium Tripoly Phosphate (from now on alluded to as S.T.P.P.). All things considered observed to be Poly Vinyl Alcohol, under Section 111(d), (f) and (g) of the Customs Act, however permitting reclamation for re-export to the appellants (who have transported the shipment from Keelung, Taiwan) on the instalment of a fine of crore. The Collector has likewise forced a punishment of Rs.50 lakhs on the appellants.

The appellants are reported to a trading concern in Taiwan. They have dispatched six containers of S.T.P.P from Keelung. The notified party in India according to the B/L is proclaimed to be M/s U.K. Paint Industries, Delhi. The products are professed to be of Taiwanese source. The destination port according to B/L is Bombay. The individual packs containing the material likewise bore the names of S.T.P.P. The operators of the vessel arranged the Import General Manifest and conveyed to Customs. In the said manifest, the load of questions was figuring at thing no. 79 yet discovered erased, however, the total of the elements continued as before for release at Bombay, and this thing was likewise not figuring in the list of items as same bottom cargo.

It, subsequently, appeared to the Department that however the freight according to the B/L and the manifest prepared was implied for release at Bombay and stayed on board the vessel touched base at Bombay, the erasure of this thing was made to influence it to create the impression that the payload was not implied for release at Bombay.

The appellants sent a letter to the Collector of Customs, Bombay looking for consent to permit reshipment of this consignment of 6 containers. Be that as it may, no reasons looking for reshipment were given in the letter. The appellants in the second letter kept in touch with the Collector of Customs expressing that they have authorised one Shri N.H. Shah, Advocate speaking to their case regarding reshipment of the six containers. M.s U.K. Paint Industries, New Delhi were also asked to furnish details about this import consigned in the same. One more transfer of 15 containers which had touched base by another vessel relegated to M/s. U.K. Paint Industries, New Delhi was likewise detained, and consequently, the Customs asked M/s. U.K. Paint Industries to document the B/E for leeway of the products as per appropriate system, falling flat which, the Customs would analyse the said goods and continue with issue according to law. M/s. U.K. Paint Ind., New Delhi returned expressing in their letter that cargo for this situation did not have a place with them and they didn't have any right, title or responsibility for load and consequently asked for the Customs to manage freight as esteemed fit. The advocate authorised by the appellants penned in a letter asserting that the appellants are general dealers and merchants in Taiwan and by right blue mix-up and pass on their part, they have dispatched Poly Vinyl Alcohol rather than proclaimed depiction, S.T.P.P. As both the things are as white powder, this oversight has happened. S.T.P.P. was planned for M/s. U.K. Paint Industries, New Delhi and after shipment of the merchandise, the appellants understood that omission and in like manner taught their shippers not to empty the said products at Bombay. Anybody in India and them does not guarantee the merchandise, being an exporter of the products, and furthermore, the proprietor, ought to be reestablished the goods by permitting reshipment. From there on, the promoter, for the appellants showed up and demonstrated that the appellants would outfit answers to the questions raised before by the Department as to the products.

The appellants sent a fax in answer to the inquiry posed, in which they conceded that there are no written purchase orders (since it is bought in the open market), no correspondences separately put or traded by/with M/s. U.K. Paint Industries concerning the dispatch and they have no particulars about import permit or the points of interest of the Bank through which instalment for the products was to be made on receipt of records by the shippers. Since the representative declined to acknowledge P.V.A., in the wake of being educated and they made some endeavour to look alternate purchasers for P.V.A. in India and, consequently, investigated the likelihood of redirecting the products from Bombay to Kandla or reshipping the merchandise back. Since the products have sent wrongly, they would look for reshipment. They additionally submitted duplicates of different wire messages and letters to steamer specialists.

In the wake of hearing the advocate and considering the evidence, the Collector dismissed the conflict of the appellants that it is an instance of a valid blue mistaken shipment. However, a piece of their plan to encourage the import of highly esteemed and great obligation chemicals in the appearance of S.T.P.P. for dodging obligation and the appellants were conscious of this plan and passed the impugned order.


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