Eligibility of assessment of construction equipments under Project Imports Regulations (PIR), 1986 – Instructions - regarding.

Circular No.49/2011

F.No.528/14/2008-Cus (TU)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

229-A, North Block,

New Delhi-110001.     

4^th November,2011

To

All Chief Commissioners of Customs / Customs (Prev).

All Chief Commissioners of Customs & Central Excise.

All Commissioners of Customs / Customs (Prev).

All Commissioners of Customs (Appeals).

All Commissioners of Customs & Central Excise,

All Commissioners of Customs & Central Excise (Appeals)            

All Directors General under CBEC

Subject:  Eligibility of assessment of construction equipments under Project Imports Regulations (PIR), 1986 – Instructions - regarding.

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Sir / Madam,

            References have been received that divergent practice are being followed by field  formations regarding assessment of import of  construction equipments required for the initial setting up of a unit, for a specified project under Customs Tariff Heading No. 98 01 (Project Imports).

2.         The issue has been examined by Board in view of decision of Hon’ble Supreme Court in the case of Commissioner of Customs, Mumbai vs. M/s. Toyo Engineering India Ltd., 2006(201) ELT 513 SC where in the it has been observed;  “The goods imported by the respondent such as hydle truck cranes, excavator, shovel loader, truck, forklift truck, power generators, diesel welder, welding rectifier, containers tools and tackles instruments, level Nako with tripod and theodlite Nako with accessories & tripod would certainly be auxiliary equipments which would help in the initial setting up of the industrial plant.” It is also observed by Hon’ble Apex Court in Punjab Power State Electricity Board [1997(91) ELT 247(SC), “that the vehicles, which are used in the shifting of the transformers would not constitute integral activity of the project”.

3.         In view of above said decisions it is clarified that the scope of the items eligible for import under the Project Import Regulations 1986, shall cover construction equipments as auxiliary equipment; if essentially required for initial setting up or substantial expansion of registered projects.

4.         Further it is clarified that the construction equipments may be permitted to be  transferred to other registered project under CTH 9801, after completion of its intended use,  on recommendations of sponsoring authority.  

5.         It is also clarified that ‘Plant Site Verification Certificate’ (PSVC) required to be submitted for finalization of project as per Circular No. 14/2006-Cus F.No. 528/9/2006-Cus (TU) shall also incorporate the details of construction equipments imported and used for the project, to ensure proper utilization of goods imported.

6.         These instructions should be brought to the notice of all the concerned by way of issuance of instructions /trade notice.

7.         Difficulty faced if any, may be brought to the notice of the Board. 

Yours faithfully,

 (Alok Agarwal)

OSD (Tariff Unit)

Clearance of goods from Custom Bonded warehouses utilizing duty credit scrips of SFIS, VKGUY, FMS, FPS, SHIS -Reg.

Circular No. 50 / 2011-Customs

F.No.605/53/2011-DBK

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated 9th November, 2011

To,

All Chief Commissioners of Customs / Customs (Prev.).

All Chief Commissioners of Customs & Central Excise.

All Commissioners of Customs / Customs (Prev.).

All Commissioners of Customs & Central Excise.

All Director Generals under CBEC.

Subject: - Clearance of goods from Custom Bonded warehouses utilizing duty credit scrips of SFIS, VKGUY, FMS, FPS, SHIS -Reg.

Sir / Madam,

I am directed to invite your kind attention to an issue which has been raised before the Board as to whether duty credit scrips issued under the Chapter 3 schemes of the Foreign Trade Policy (FTP) viz Served from India Scheme (SFIS), Vishesh Krishi Gram Udyog Yojana (VKGUY), Focus Market Scheme (FMS), Focus Product Scheme (FPS) and Status Holder Incentive Scheme (SHIS) can be utilized for clearance of goods from Custom Bonded warehouses.

2.         The matter has been examined. Clearance of goods from Custom Bonded warehouses is allowable by utilizing DEPB credit scrips as per procedure mentioned in Circular No. 68/2000 dated 18.8.2000 and Circular No. 72/2003-Cus dated 11.8.2003. However, since the schemes such as SFIS, VKGUY, FMS, FPS, SHIS have come into being only after issuance of these circulars, these schemes do not find specific mention in the said circulars.

3.         All the schemes vizSFIS, VKGUY, FMS, FPS, SHIS provide for duty credit scrips which can utilized for import of goods subject to conditions and limitations detailed in the Foreign Trade Policy (2009-14). It is clarified that duty credit scrips of these schemes are allowed for clearance of goods from Custom Bonded warehouses under the same  procedure as prescribed for DEPB scrips under Circular 68/2000 dated 18.8.2000 and 72/2003-Cus dated 11.8.2003 and subject to the conditions and limitations mentioned in Foreign Trade Policy(2009-14).

 Yours faithfully,

 G.S. Bains

(Technical Officer –Drawback)

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Location of Foreign Exchange Counters at International airports -regarding

Circular No. 51/2011-Customs

F.No.520/25/2008-Cus.VI (pt.)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

227-B, North Block,

New Delhi -110001.

11^th November, 2011.

To,

All Chief Commissioners of Customs / Customs (Prev.).

All Chief Commissioners of Customs & Central Excise.

All Commissioners of Customs / Customs (Prev.).

All Commissioners of Customs (Appeals).

All Commissioners of Customs & Central Excise.

All Commissioners of Customs & Central Excise (Appeals).

All Directors General under CBEC.

Subject: Location of Foreign Exchange Counters at International airports -regarding

Sir / Madam, 

            References have been received in the Board from field formations seeking clarification on the issue of location of Foreign Exchange Counters in departure / arrival hall of international airports.

2.         It is reported that, Foreign Exchange Counters located after immigration and before Customs (green / red channel) in the arrival hall and after Customs in the departure hall, are posing problems in enforcement of FEMA regulations / RBI guidelines in regard to import and export of Indian Currency by Indian resident passengers as well as well as non resident passengers / foreign tourists.

 3.        The matter has been examined in consultation with RBI. RBI vide letter No. RBI/2011-12/234, [A.P. (DIR Series) Circular No. 38] dated Oct 25, 2011, in respect of Foreign Exchange Counters (full-fledged branches / extension counters) opened by Authorised Dealer Category-I banks, Authorised Category-II and Full Fledged Money Changers beyond the Domestic Tariff Area in international airports in India, has clarified that:

(a) Foreign Exchange Counters in the arrival halls in international airports in India shall ideally be established after the Customs Desk (Green Channel/Red Channel).  However, Foreign Exchange Counters may also be established between the Immigration Desk and the Customs Desk in international airports in India, subject to the condition that these counters shall only purchase Foreign currency and sell Indian Rupees (INR) and ‘Encashment Certificates’, shall invariably be issued by the money changers to the customers. 

(b) Similarly, Foreign Exchange Counters in the departure halls in international airports in India shall be established only before the Customs Desk or the Immigration Desk, whichever comes first. Putting up suitable display at these counters, reminding the passengers that the area is the last point for non-residents to possess Indian Rupees (INR) may be followed up with the Airport Authorities.

(c)  The Foreign Exchange Counters of Authorised Dealers Category-I banks, Authorised Dealers Category-II and Full Fledged Money Changers, not conforming to the above, should be relocated in accordance with the above instructions, latest by 31.12. 2011. 

4.         All Commissioners in charge of International airports are directed to ensure that the directions contained in the said Circular are complied with scrupulously.

5.         Wide publicity may be given to the above directions of the RBI for compliance by all concerned. 

Yours faithfully

(R. P. Singh)

Director (Customs)

Customs Tariff classification of TV Tuners used with ADP machines of Harmonised Customs Tariff 8471

Circular No. 52/2011-Customs

F. No. 528/122/2011-STO (TU)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

229A, North Block, New Delhi,

11^th November, 2011.

To

All Chief Commissioners / Commissioner of Customs / Customs (Prev.),

All Chief Commissioners / Commissioners of Customs & Central Excise,

All Director Generals under CBEC.

Subject:   Customs Tariff classification of TV Tuners used with ADP machines of Harmonised Customs Tariff 8471 - Regarding

****

Sir / Madam,

            References have been received on divergent practices being followed by field formations regarding classification of TV tuners. It was reported that external TV tuners are being classified in heading 8528 or 8529, and internal PCI TV tuners / cards are being classified in subheading 8528 or 8529 or subheading 8473. 

2.         These issues were discussed during Conference of Chief Commissioners of Customs held on 9^th-10^th May, 2011 in Bangalore. There was agreement on principal function ofTV tuners and it was held that said device provide the television function through the reception of broadcast signal from television station and conversion in to audio and video information of the broadcast signal enabling television broadcasts to be viewed on the screen. Broadly, there are two types of TV tuners, viz., (i) internal PCI TV Tuner / card, and (ii) external TV Tuner.

3.         Reportedly, an internal PCI TV tuner is a device that is connected to the expansion port of the motherboard of Automatic Data Processing (ADP) machine of heading 8471. An external TV Tuner is generally not connected to the PC expansion bus. Reportedly, in such cases the TV signals are controlled and processed by the tuner and the television is operated independently from the regular computer functions without the use of any software and the computer does not have to be turned on for one to receive television broadcast signals. Some external TV tuners are connected as USB device as well. TV Tuner is a device for reception of television broadcast signal as well as a conversion device. However, even if this device does function as a dual device with each function operating independently, the principal function of the device is critical in determining its classification in terms ofNote 3 to Section XVI of first Schedule to the Customs Tariff Act, 1975, which states that unless the context requires otherwise, machines adapted for the purpose of performing two or more complimentary or alternative functions are to be classified as if consisting only of that component or being that machine which performs the principal function.

4.         The principal function of TV tuner is reception of television broadcast signal and hence the applicable subheading under consideration is in 8528 which includes: “Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus:

85287100: Not designed to incorporate a video display or screen”

-2-

Harmonised System Commodity Explanatory Notes to heading 8528 states that, “Monitors and projectors may be capable of receiving a variety of signals from different sources.  However, if they incorporate a television tuner they are considered to be reception apparatus for television.” Further, for subheading Reception Apparatus for Television Harmonised System Commodity Explanatory Notes mentions that, “receivers are intended to be used with video recording or reproducing apparatus, monitors, projectors or televisions.  However, devices which simply isolate high-frequency television signals (sometimes called video tuners) are to be classified as parts in heading 85.29.”

5.         The issues raised have been examined by the Board. External TV Tuners merit classification under CTH 8528 on application of GIR 1, 6 and read with Note 3 to section XVI and Chapter Notes. As regard to Internal TV Tuners cards it is observed that generally these cards are connected to the ADP via a peripheral component interconnect PCI slot.  The internal TV tuner works with the software installed on the computer and can not function without the ADP machine. It even fulfils the conditions stipulated under paragraph 5(C) of Chapter Note 84. However, it can qualify as a part of ADP systems only if it is outside the ambit of items listed in paragraph 5 (D) and those which meet the criteria stipulated in paragraph 5 (E) to chapter Note 84. In this regard, it is seen that paragraphs D (ii) covers apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network). Whether external or internal, the principal function of TV tuner cards remains the same, that is, to provide the television function through the reception of broadcast signal from television station. The conversion into audio and video information of the broadcast signal enabling television broadcasts to be viewed on the screen remains the secondary reception. Taking into consideration the principal function of TV tuners, and provisions of paragraph 5(D) and 5(E) to chapter 84, internal TV tuner cards are found to be outside the ambit of heading 8473.

6.         Also TV tuners are other than those devices which simply isolate high-frequency television signals (sometimes called video tuners) and hence can not be classified as parts in the heading 85.29. Therefore, on application of General Interpretative Rules (GIR) 1 and 6, read with Note 3 to Section XVI and Chapter Notes 5(C) to Chapter 84, it is clarified that TV tuners, both internal and external are more appropriately classifiable in Harmonised Customs Tariff in tariff item 85287100.  

7.         Suitable instructions may be given to the field formation and all pending assessments, if any, may be finalized accordingly. Difficulty faced, if any, may be brought to notice of the Board.

Yours faithfully, 

(Subodh Singh),

OSD (Customs), Tariff Unit,

Fax-011-23092173

Regarding classification of Chloroparaffins / Chlorinated Paraffins

Circular No. 53/2011-Cus

F.No. 528/130/2011-STO (TU)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tariff Unit)

******************

229A, North Block, New Delhi

 2^nd December, 2011

To

All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,

All Directors General of CBEC,

All Commissioners of Customs / Customs (Prev.) / C&CE

All Commissioners of Customs & Central Excise (Appeals).  

           

Subject: Classification of Chloroparaffins/Chlorinated Paraffins- reg.

Sir/Madam,

            References have been received regarding divergent practices being followed by field formations regarding classification of Chlorinated Paraffins/Chloroparaffins.

2.         The matter has been examined by the Board. As regards classification of Chlorinated Paraffin Waxes (in solid form), the HSN Explanatory Note (B)(a) to Heading 27.12 of CTH clarifies that artificial waxes obtained by the chemical modification of lignite wax or other mineral waxes are classifiable under Heading 34.04. Also in the Budget, 2010, the specific sub heading 27122010 covering Chlorinated Paraffin Waxes has been deleted from the tariff. This item is therefore, classifiable under 340490 of Customs Tariff Act, 1975. Further, regarding classification of Chlorinated Paraffins / Chloroparaffins (in liquid form), the HSN Explanatory Notes  (B) (9) under Heading 38.21 clarifies that Chloroparaffins in Liquid from are covered under the heading 3824.

3.         Accordingly it is clarified that:

(a)           Chlorinated Paraffin Waxes (in solid form) are classifiable under sub-heading 340490 of Customs Tariff Act, 1975 after the budget, 2010.

(b)           Chlorinated Paraffins/Chloroparaffins (in liquid form) are classifiable under subheading 382490 of Customs Tariff Act 1975;

2.             Suitable instructions may accordingly be given to the field formations.

Yours faithfully,

(A.K.Goel)

Senior Technical Officer,

Tariff Unit

Clarification regarding handling of cargo in customs areas Regulations, 2009

Circular No. 54 / 2011-Customs

F.No.450/55/2008-Cus.IV (Pt.III)

Government of India

Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

*****

229-A, North Block,

New Delhi, dated 29^th December, 2011.

To,

All Chief Commissioners of Customs / Customs (Prev).

All Chief Commissioners of Customs & Central Excise.

All Commissioners of Customs / Customs (Prev). 

All Commissioners of Customs & Central Excise

All Director General under CBEC.

Subject:    Handling of Cargo in Customs Areas Regulations, 2009 – Clarification - regarding.

                        Attention is invited to the provisions of Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR) and various circulars and instructions issued by the Board on the above subject from time to time.

2.         At the time of introduction of the said regulations it was explained that it provides for a comprehensive mechanism for handling of goods in a customs area and set out the terms and condition for all facilities where customs cargo is handled. These Regulations also fulfilled the recommendation made by the Public Accounts Committee for formulating appropriate provisions to exercise adequate control over the cargo handling entities to ensure that the adequate infrastructure is set up at all customs areas for efficient handling of imported or export goods. 

3.         In this context, it is stated that Regulations 5 and 6, provide for conditions to be fulfilled by a Customs Cargo Service Provider (CCSP) and their responsibilities in relation to imported or export goods. Regulation 6(2) particularly provides that CCSP approved for custody of imported or export goods and for handling of such goods shall not lease, gift, sell or sublet or in any other manner transfer any of the premises in a customs area; or sub-contract or outsource functions permitted or required to be carried out by him in terms of these regulations to any other person, without the written permission of the Commissioner of Customs. The condition of such permission has been provided for the reason that the powers for approval of any place as ‘Customs Area’ and to approve / appoint a custodian under section 8 and 45 of the Customs Act, 1962, respectively, including the power for suspension or dismissal of such approval is vested with the jurisdictional Commissioner of Customs. 

4.         In this regard, a reference has been received from the Ministry of Shipping pointing out that the developmental activities in respect of major ports on Public Private Partnership mode are taking place wherein private operators are constructing and operating terminals in the land leased out to them. Such projects require obtaining the approval of Minister of Shipping/ Finance Minister/ Cabinet Committee of Infrastructure depending upon the cost of the project. Hence, they had represented that specific permission from another authority i.e., the Commissioner of Customs is unwarranted. Hence, they had requested to exclude Major port trusts from the purview of the said Regulations.

5.1.       The matter was examined in detail. At the time of introduction of the said Regulations itself it was clarified vide Board’s circular No.13/2009-Customs dated 23.3.2009 that Port Trusts of the notified major ports shall not be required to make an application for approval or renewal under these regulations, since section 45 of the Customs Act, 1962, which provides for approval of custodians, makes an exception to major ports. However, they are required to discharge the responsibilities cast upon them as specified in Regulation 6 which include obtaining written permission from the Commissioner of Customs prior to outsourcing or leasing part of the premises within a customs area. This has been provided in order to take into account the concerns of the revenue for safeguarding the duty on imported goods.

5.2.       It is also important to note that the provisions of Section 128 of the Major Port Trusts Act, 1963 provide for saving of the right of Central Government for collecting duties and of power of Customs officers by specifically providing as follows:

“128. Nothing in this Act shall affect—

(1) the right of the Central Government to collect customs duties …., or

(2) any power or authority vested in the customs authorities under any law for the time being in force.”

6.         In view of the above, it is clarified that all cases of lease, gift, sale or subletting or transfer of the premises in any other manner, in a customs area by major ports may be firstly examined to see whether required permission from the Central Government/ Ministry / Cabinet Committee has already been obtained or not. In cases where appropriate authority has already given permission for such lease or transfer of premises, then necessary written permission may be given by the Commissioner for such lease or transfer. On the contrary, if no approval of the Government has been obtained, then appropriate action may be initiated against the erring Custodian under the said Regulations and the Customs Act, 1962.

7.         These instructions should be brought to the notice of all the concerned by way of issuance of instructions/ trade notice.

8.         Difficulty faced, if any, may be brought to the immediate notice of the Board.

Yours faithfully,

(G.S. Sinha)

OSD (Customs IV)

Internal Circulation: As usual