Line of credit for Indian capital goods exports to Cambodia, financing the bulk via letters of credit with importer contribution.
A Government of India line of credit to the Royal Government of Cambodia finances imports of Indian capital goods, spare parts and related project and consultancy services on an f.o.b. basis covering the financed portion of approved contracts. Disbursements are made under letters of credit opened by Cambodian banks and advised to the State Bank of India; each letter of credit must contain a reimbursement clause and be supported by a negotiating bank's certificate confirming receipt of the importer's direct payment. Contracts and letters of credit must be established and drawn within prescribed timelines; shipments must be declared on specified export forms. Agency commission is restricted and prior approval is required for exceptions.

Assessable value: freight and transit insurance included only up to the contractual place of removal.
Inclusion of freight and insurance in the excise assessable value is determined by the contractual place of removal and terms of sale: charges up to the point where title passes (factory gate or depot as the agreed place of sale) are includible; charges for delivery beyond that point are not; transit insurance does not alone determine ownership.

Protective demands must be raised pending Board direction, with escalation to PAC for resolution and timely audit examination.
Protective demands must be raised or continued whenever an audit objection concerns an issue covered by Board instructions, pending written Board directions to the contrary; such matters are to be referred to the PAC section for resolution with the C&AG. For objections at initial stages the Commissioner should first approach the Principal Accountant General and, if unresolved, escalate to the PAC section while continuing to raise protective demands. Audit objections should, where practicable, be examined and completed within two months of receipt at the range or divisional office to protect revenue.

Import of goods: authorised dealers may open stand-by letters of credit for EXIM-permissible imports under industry guidelines.
Authorised dealers may open stand-by Letters of Credit on behalf of importer constituents for import into India of any goods permissible under the EXIM Policy, subject to adherence to detailed operational guidelines issued by the industry association; authorised dealers must notify concerned constituents and act under the Exchange Control directions issued under statutory powers.

Examination norms for EOU and SEZ exports clarified: EPCG/DEEC norms apply; sealed consignments follow stricter norms.
Exports by EOUs and SEZ units are to follow the examination norms applicable to EPCG/DEEC schemes (para 2.1(D)); if an export consignment is sealed by Customs or Central Excise, para 2.1(A) norms apply; para 2.1(B) norms for free shipping bills apply only to exports not under any export promotion scheme. Administrative notification by Public Notices/Standing Orders is required and implementation difficulties are to be reported to the Board.

Overseas direct investment automatic route liberalisation permits market purchases up to full net worth within overall investment limit.
The automatic route for overseas direct investment is liberalised to permit market purchases of foreign exchange for investment up to the investing company's full net worth; companies with a proven track record may invest by market purchases up to full net worth within the overall external investment ceiling in any bonafide business. Financial activities remain subject to Regulation 7, two tier investment prohibition continues, and entities on the Reserve Bank's caution/defaulter list remain ineligible for the automatic route.

Prepayment of External Commercial Borrowings: automatic-route prepayments from local resources now allowed without a monetary ceiling.
Authorised Dealers must permit remittances for prepayment of outstanding External Commercial Borrowings under the automatic route without any limit when prepayment is made from local resources or market purchases; prepayments from EEFC balances or fresh foreign equity inflows remain permissible without restriction. All other conditions of the earlier circular continue to apply, the facility is available until further notice subject to review, and the directions are issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999.

Service tax expansion broadens taxable services and tightens credit and filing rules, including retrospective validation.
Service tax proposals raise the rate and expand taxable services to specified education, technical, maintenance, commissioning, business promotion, internet cafe, franchise, port, automobile and FOREX brokerage services while excluding certain computer-enabled services; exemptions and credit rules are amended by withdrawing convertible-foreign-exchange exemption, extending hotel relief, limiting credit to paid services, and introducing retrospective validations and fresh-return requirements alongside statutory backing for prior administrative exemptions for select small-scale and trading entities.

Excise Rate Restructure expands Cenvat-creditable taxation and redefines manufacture, broadening the excise net and compliance duties.
A consolidated excise duty restructure establishes uniform ad valorem bands and extends Cenvat credit to many items formerly on a non-credit low rate, imposes new 8% duties on specified goods while exempting a defined list, and treats packing, labeling and repacking as manufacture; textiles face comprehensive rate and exemption changes to complete Cenvat chain and revise SSI coverage; valuation rules clarify price-cum-duty and place-of-removal concepts; retrospective amendments restrict diversion of input credit under certain exemption notifications and require revision and recovery of past assessments.

Excise and service tax reform restructures excise bands, expands service tax scope, and tightens cenvat and valuation rules.
The Finance Bill, 2003 restructures excise into consolidated ad valorem bands while retaining special treatments for tobacco and petroleum, imposes new and revised excise and specific duties (including temporary NCCD levies), and reforms textiles taxation by removing exemptions, withdrawing deemed credit and extending Cenvat through to garments. Service tax is proposed to rise and its scope broadened to multiple services with tightened credit and payment rules. Valuation rules and depot/place of removal definitions are clarified, monthly duty payment and default interest regimes are reformed, and retrospective amendments limit diversion of input credit and require revision and recovery of past benefits.

SEB certification for captive power plant: documentary requirement introduced for Advance Licence under Duty Exemption Scheme.
Amendments revise the worksheet for computation of DEPB rates to clarify FOB/CIF and duty calculation steps, require a copy of permission under Section 44 of the Electricity (Supply) Act from the State Electricity Board for installation of captive power plants as a documentary condition for grant of an Advance Licence under the Duty Exemption Scheme (unless waived), and add specified products and districts to Appendix 15 listing of Agri Export Zones.

Valuation under Section 4A: returnable deposits not additional consideration when container cost is amortised and included in product.
Where the cost of reusable containers is amortised and included in the product price, returnable cash deposits or deposit of empty containers shall not be treated as additional consideration for valuation under Section 4A; if audit shows container cost was not amortised and included, the cash value of such deposits must be added to the MRP to re determine the assessable value.

Line of credit for export finance ensures majority reimbursement from India while importer pays a minority share in convertible currency.
The Government of India extended a line of credit to the Government of the Lao PDR to finance eligible imports of Indian capital goods, consultancy services and consumer durables. The credit covers 90 per cent of the f.o.b. value with the importer required to pay the remaining 10 per cent in freely convertible currency at L/C opening. Contracts require bilateral approval and submission to the Ministry of Finance; letters of credit must be opened by Lao banks, advised to the State Bank of India, and claims for reimbursement must be supported by a negotiating bank certificate confirming receipt of the importer's share.

Definition of Integrated Steel Plant includes ore concentrate, allowing exemption where manufacture starts from concentrated ore delivered to plant.
The circular clarifies that for the definition of "Integrated Steel Plant" under the exemption notification, the term "ore" includes "ore concentrate", thereby allowing plants that commence manufacture from washed or concentrated ore delivered to the premises to qualify for the excise exemption.

Supplementary DEPB filing: revised-rate claims allowed with consolidated fee, portwise consolidation options, eligibility limited to original licence holders.
Supplementary DEPB claims allow exporters with shipping bills dated on or after 1 April 2002 to claim additional credit reflecting revised rates; fresh applications under Appendix 10C are permitted where no prior DEPB was sought, revised applications with differential fee where applied but not issued, and single supplementary DEPBs where licences were already issued. Only the original DEPB licence holder may apply; applicants may irrevocably opt to consolidate claims by DEPB type or port, pay a consolidated licence fee as per Appendix-29 with the application, file within the prescribed window, and receive supplementary DEPBs valid for twelve months.

Duty drawback fraud exposes multiple fictitious exporters; investigations prompt warning to field officers to prevent recurrence.
Attempt to obtain duty drawback through fictitious/non-existent companies was detected by Delhi Preventive Customs; preliminary investigation found 27 of 38 examined entities to be fictitious, implicating Rs. 12.52 crores in drawback on Rs. 104 crores of exports. A list of the 27 companies was enclosed, further investigations are ongoing, and customs field officers are directed to circulate the modus operandi and strengthen verification and scrutiny of drawback claims.

Settlement Commission jurisdiction limited; interest under foreign trade bond remains enforceable despite customs waivers.
Settlement Commission waivers under the Customs Act do not extinguish interest liabilities created by the Indemnity cum Guarantee Bond and licence conditions under the Foreign Trade (Development and Regulation) Act for EPCG/Advance Licences issued up to 31 3 1995. DGFT treats interest on duty saved for unfulfilled export obligation as independently recoverable, issues demand notices and BG forfeiture orders, and views non compliance as actionable under FT(D&R) Act; customs formations should notify the Settlement Commission of these facts to protect revenue.

Implementation of High Court or Tribunal orders: Commissioners may grant refunds or release goods pending SLP absent a stay.
Jurisdictional Commissioners are authorized to grant refunds or release goods on merits where a Special Leave Petition or Civil Application is pending, unless a higher forum has granted a stay; the prior requirement for Board consultation is withdrawn, but Commissioners should pursue the Board for early disposal of stay applications in matters concerning the Supreme Court.

Depreciation method: companies must use straight line or written down value; unit-of-production method disallowed to prevent manipulation.
Companies must charge depreciation using either the Straight Line Method or the Written Down Value method; the Unit of Production method is disallowed. The Department reasons that depreciation represents loss of value over time, a concept not reliably captured by a production-based approach which can imply no depreciation in non-production years, extend asset life beyond the period underlying prescribed rates, and enable profit manipulation through estimated production and technical assumptions.

Removal of Budget Day trade restrictions permits normal import-export on Budget Day, subject to customs vigilance against misuse.
Removal of Budget Day restrictions allows importers and exporters to carry out import/export activities on the Budget Day as per law with immediate effect; the decision notes that upward duty revisions are exceptional and that previous restrictions imposed economic costs. Field formations are required to remain vigilant against misuse and notify trade and acknowledge receipt of the instruction.