Special Currency Basket valuation revised, affecting deferred payment contracts under Indo-USSR protocols for machinery imports.
The Reserve Bank of India has revised the Indian Rupee value of the Special Currency Basket, effective from 8.6.99 with a rupee value of 50.3297, for application to deferred payment contracts concluded under the Deferred Payments Protocol dated 30.4.1981 and the Deferred Payments Protocol dated 23.12.1985 between the Government of India and the erstwhile USSR covering deliveries of machinery and equipment on deferred payment terms.

Drawback entitlement extended to DEPB exports where modvat credit is unavailable, enabling reimbursement of CVD and excise on inputs.
Exports under the DEPB Scheme whose inputs cannot obtain modvat credit may receive a brand-rate drawback against additional customs duty (CVD) or excise duty paid on inputs, upon submission of proof of payment; this applies to re-rolled steel products and processed fabrics and amends the prior circular while preserving its other provisions.

DEPB scheme TRA facility allows imports at designated alternative ports, requiring TRA with DEPB details for customs processing.
The circular permits imports against DEPB scrips at specified sea-ports, airports and ICDs other than the port of registration, subject to listed groupings and exclusions, and limits the facility to imports only. The arrangement is to be operated by issuance of a Telegraphic Release Advice (TRA) from the port of registration to the importing Customs House, which must record TRA details including description, value, quantity, DEPB serial number, date and duty entitlement to enable imports against the relevant DEPB book/scrip.

Present Market Value verification required: DEPB credit entitlement capped at half for exports with higher DEPB rates.
DEPB credit entitlement for export products with DEPB rates of ten percent or more shall not exceed fifty percent of the Present Market Value, and Customs is required to determine and verify the PMV of all such products exported under the DEPB scheme; earlier circulars are amended to this extent.

Cargo clearance hours extended: exports accepted later in evening, imports delivered until earlier evening at all air cargo complexes.
The Board confirms that Circular No. 89/98-Cus applies to all Air Cargo Complexes and substitutes paragraph 2(c) to set terminal hours: export cargo will be received at all cargo terminals until 9.00 PM and import cargo delivery will be allowed until 8.00 PM. Officers must issue standing orders to implement these hours and report any difficulties to the Board.

Centralisation of service tax administration shifts filings and registrations to Commissionerate headquarters to streamline administration and taxpayer convenience.
Service tax administration for metropolitan Commissionerates is centralised at the Commissionerate Headquarters to improve administrative efficiency and convenience; all assessees must file registrations and returns at the designated Headquarters office, and may contact the Assistant Commissioner or the Superintendent, Service Tax at the specified office for difficulties, effective from the notice's stated commencement.

Prosecution thresholds for customs offences: value, intent and senior approvals govern arrests and launches of criminal cases.
The circular establishes a restrained, evidence-focused regime for initiating prosecution and arrests under the Customs Act, requiring proof of mens rea and role-specific culpability, value-based thresholds for different offence categories with exceptions for repeat or professional offenders and specified high-risk items, and mandatory procedural safeguards including prior Commissioner/Chief Commissioner approvals, written reasons for arrests, maintenance of prosecution registers, timely decision-making, and active monitoring and training to ensure quality investigations and effective prosecution.

Reduced physical examination thresholds for export consignments introduced; selection percentages and self certification eligibility for EOUs clarified.
Amendment prescribes that 10% of consignments under Free Shipping Bills are to be randomly examined daily; consignments by SSTh/STH/TH/EH units or Government Departments/PSUs under export schemes face 10% examination if estimated export incentives per shipping bill are below the prescribed threshold; other exporters with incentives below the threshold face 50% examination; consignments with incentives at or above the threshold are taken up for full examination. Self-certification applies to EOUs/EPZ/EHTP/STP units with EH/TH/STH/SSTH status.

Rebate of excise duty on exported processed textiles permitted, applying prescribed computation formula and allowing amended claims for specified periods.
Exporters of processed textile fabrics notified under section 3A are entitled to rebate of excise duty for goods cleared from factories of independent manufacturers or processors during the earlier specified periods; the later notifications prescribing a computation formula merely provide a method to ascertain duty content and do not create or extinguish the pre-existing rebate right. The prescribed formula and procedures should be applied to compute rebates, exporters may submit amended calculation sheets for pending claims, and all such claims must be prioritized.

Service tax on international roaming: tax applies to the home operator's gross bill including foreign usage and roaming surcharge.
Where foreign visited network usage charges and roaming surcharges are forwarded to and included by the Home Network operator in a subscriber's monthly bill, the taxable value is the gross total amount charged by the telegraph authority; service tax is chargeable on the comprehensive bill inclusive of foreign usage and roaming surcharges, and Circular No. 22/2/97 applies mutatis mutandis to international automatic and plastic roaming facilities.

Valuation integrity: customs instructed to use published price data to detect and prevent under-declared polymer imports.
Customs formations must use published price information circulated by the Directorate of Valuation to determine correct assessable values for polymers and related commodities, ensure uniform valuation practices nationwide, and consult the Directorate of Valuation or the Directorate General of Revenue Intelligence wherever under-declaration of value is suspected, taking pre-emptive checks to curb fraudulent practices.

Ad-hoc customs exemption limited to defence, police, and charitable donations, subject to non-commercial use and inspection.
Ad-hoc exemptions under Section 25(2) are limited to specified categories-government secret imports, defence and DRDO R&D hardware/software, central and state police equipment for security/intelligence, and charitable institutions providing free or no-profit public services-subject to donor and recipient institutional status, certification by district authorities, prohibition on commercial use or disposal without prior Ministry permission, and availability for customs inspection; requests outside these categories will not be considered.

Import of cinematograph feature films: amendment adds Directorate of Film Festivals to authorised import entities
Amendment to a public notice under the Export and Import Policy modifies paragraph (i) by deleting a conjunction before the named institute and inserting the Directorate of Film Festivals, thereby adding that Directorate to the list of entities referenced for the import of cinematograph feature films and video films.

Classification of laminated aluminium foil: treat double sided plastic laminated foil as plastic sheets with aluminium interlayer, not backed foil.
Where aluminium foil is laminated on both sides with plastic films or is multilaminated, it is not to be classified as backed aluminium foil; instead such multi laminated constructions are classifiable as plastic sheets/foils separated by a layer of aluminium foil and must be treated under the plastics heading applicable to plastic sheets/foils with an aluminium interlayer, applying the construction based classification principle.

Risk assessment-based anti-evasion strategy mandates profiling, intelligence-led audits and Modvat verification to curb central excise evasion.
A multi-pronged administrative strategy mandates Commissionerates to build unitwise databases for scientific risk assessment, enabling selective in-depth scrutiny and audits of high-risk assessees; the DGAE will identify evasion-prone commodities, issue alerts and coordinate regional action. Small-scale unit micro-plans require monitoring threshold claims, detecting fragmentation, conducting surveys and supervising officers. Operational measures include road checks, surprise stock verification, surveillance, special Modvat verification drives, selective monthly-return scrutiny and prompt reporting of novel modus operandi for dissemination and enforcement.

Tax treatment of ex gratia payments: government ex gratia to heirs or injured employees is not taxable under income tax law.
Lump sum ex gratia payments paid by the Central Government, State Government, Local Authority or Government Public Sector Undertakings to the widow, legal heirs, or to a person injured (or dependants) consequent upon death or injury sustained while on duty are not includible as taxable income under the Income tax Act, following prior circular guidance that treated ex gratia to heirs of employees who die in service as exempt from income tax.

TDS defaults: penalty applies for failure to deduct; prosecution may follow for false verification or non-payment of deducted tax.
Penalty for failure to deduct tax at source is imposed where whole or part of tax required to be deducted is not deducted, subject to affording the assessee a reasonable opportunity of being heard and consideration of conditions for waiver or reduction. Prosecution for false verification of TDS returns is to be examined based on voluntariness of any revised return and payment of tax with penal interest. Prosecution for failure to pay deducted tax to the Government may be initiated for non-payment of collected TDS, subject to applicable procedural safeguards.

Deemed export eligibility for specified mega hydel power projects upon capacity certification by senior ministry official.
Supplies for setting up listed mega power projects qualify for deemed export benefits under paragraph 10.33(a)-(d) of the Exim Policy where the project is an inter-state hydel power plant meeting the prescribed capacity thresholds and where such capacity is certified by an officer not below the rank of Joint Secretary in the central ministry.

Selection for scrutiny under section 143(3) requires credible information and joint supervisory approval to target revenue risk.
Selection for assessment under section 143(3) must be based on specific credible information with application of mind at two levels: joint written reasons by the Assessing Officer and his next superior. Chief Commissioners/Directors General will determine the number of 143(3) assessments per Assessing Officer based on case nature and workload, ensure even distribution, and may lay down objective parameters (e.g., concealment or revenue potential) to justify selection and ensure accountability. Designated categories (search and seizure, survey, reassessment, set aside, court mandated cases) shall continue to be assessed under section 143(3).

Tariff classification guidance clarifies applicable ITC(HS) Exim Codes for specified products to aid consistent trade classification.
Clarification of tariff classification under the ITC(HS) Exim Code was issued after committee review of item specific representations; the circular lists items with assigned Exim Codes and brief remarks where classification depends on composition or use, providing administrative guidance to apply the ITC(HS) headings consistently for export/import purposes.