Prof Dippak /IDT Amendments/Cus- Act, Rules, Exem, Circulars


 FA, 2010 not applicable. So, no discussion under this category.

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 Goods Exported – Now imported into India for Repairs in India
(1) : Goods manufactured in India and parts of such goods are re-imported into
India for repairs or for reconditioning shall be exempt from customs duty subject to
following condition:
1) Such re-importation shall take place within 3 years from date of exportation.
Provided that
 in case of NEPAL, such re-importation takes place within 10 years from
the date of exportation. [As amended in 2010 (16th March, 2010)]
2) The goods must be re-exported after repairs. The re-export must takes place within 6
months (extendable to 1 year).
3) The AC is satisfied as regards identity of the goods;
4) The importers at the time of importation executes a bond undertaking to –
(a) Export the goods after repairs or reconditioning within the period as stipulated;
(b) pay, on demand, in the event of his failure to comply with any of the aforesaid conditions,
an amount equal to the difference between the duty levied at the time of re-import and the
duty leviable on such goods at the time of importation but for the exemption contained
herein.
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 (Imp)
 Recovery of Drawback for Export Values not realized by Exporter
Circular No. 122/03/2010 –dated 30th April, 2010

Relevant Rules / Provisions (Reproduced)

 Sec 75 of Customs Act, 1962 (IInd Proviso): “Where any drawback has been allowed on any
goods and the sale proceeds in respect of such goods are not realized within the time
allowed under the Foreign Exchange Management Act, 1999
 such drawback shall be deemed never to have been allowed and
 CG may, by Rules, specify the procedure for recovery of the amount of such drawback.

 New provision in Foreign Trade Policy (Para 2.25.4 of the Hand Book of Procedures) :
“realization of export proceeds shall not be insisted under any of the Export Promotion
Schemes under the Foreign Trade Policy, if the RBI writes off the requirement of realization
of export proceeds on merits AND the exporter produces a certificate from the concerned
Foreign Mission of India about the fact of non-recovery of export proceeds from the buyer.
However, this would not be applicable in self-write off cases.
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Issue 1:. In cases where export proceed realization has been waived off by RBI in terms of FTP (new
provision), drawback recovery provisions shall also not be insisted upon or shall drawback
recovery provisions (as mentioned in Sec 75 of Customs Act) would remain unaffected?
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Clarification
Prof Dippak /IDT Amendments/Cus- Act, Rules, Exem, Circulars

Since the Drawback scheme is governed by the provisions of the Customs Act, 1962 and the
Rules made there under which clearly provide that drawback should be recovered if sale
proceeds have not been realized, it is hereby clarified that provisions contained in Para 2.25.4
of the HBP v.1 (2009-14) would not be applicable to the Drawback scheme.
 Hence, ‘Drawback’ would not be payable in cases where export proceeds have not been
realised in accordance with the provisions of the Foreign Exchange Management Act, 1999
even if realisation waived by RBI. Action should be taken for recovery of drawback
amount in such cases.
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’ : NOBODY CAN PLAY WITH THE WORDS BETTER THAN CBEC, when it is a matter of putting
assessee at loss. Though literally this Circular is right, in spirit it is going to result gross injustice to assessee.