Option to destroy prohibited goods and refund of duty paid

[Pralhad Jadhav]

Hi All, need views on below:

1. FACTS

The goods were seized for not complying with FSSAI. Duties were already paid. SCN was issued and we filed a reply. OiO has been issued demanding redemption fine allowing reexport. Penalty is also levied under 112(a)(i).

2. Relevant provisions of the law

111(d), 112(a) and 125

3. The Query

(i) Can we request for destruction of goods instead of reexport.

(ii) Do we have to pay redemption fine and penalty in case destruction is allowed?

(iii) Can we seek refund of duties under either options i.e. reexport or destruction.

[KASTURI SETHI]

So many goods have been prohibited for the purpose of import and export. Name the goods involved. 

[Pralhad Jadhav]

Hi Sir

We imported olive oil which did not meet the requirements of lead as per FSSAI and accordingly it was seized.

[KASTURI SETHI]

Answer to query no.

(i) YES, 

(ii) YES.

(iii) NO.

 

[Pralhad Jadhav]

Thank You Sir. In case of (i) we will have to file an appeal seeking directions for destructions or a rectification application or a letter to assessing authority requesting destruction instead of re-export?

[KASTURI SETHI]

Circular No. 60/99-Cus., dated 10-9-1999. This is still in force as per the status in R.K. Jains  EXCUS Electronic DVD

EOU/EPZ/STP units — Replacement of goods exported or imported and found damaged or defective or otherwise unfit for use

Subject : Difficulty being faced by EOU/EPZ/EHTP/STP units in regard to replacement of goods exported or imported and found damaged or defective or otherwise unfit for use - Regarding.

It has been brought to the notice of the Board by the Ministry of Commerce that EOU/EPZ/EHTP/STP units are facing difficulties in sending replacement of goods exported and found defective, damaged or otherwise unfit for use and in getting replacement of goods imported and found defective/damaged or unfit for use.

2. The matter has been examined. I am directed to say that following instructions may be followed in this regard :

(A) Goods exported and found defective, damaged or otherwise unfit for use by foreign buyer

(i) The units may be allowed to make free replacement of the goods exported and found defective, damaged or otherwise unfit for use prior to physical re-import of the such goods subject to grant of GR Waiver by Reserve Bank of India. However, such defective, damaged or otherwise unfit for use goods shall be subsequently brought back to the country.

(ii) The units may be allowed to re-import part consignment/full consignment not necessarily for the purpose or re-export in case of failure of the foreign buyer to take the delivery.

(B) Goods imported and found defective/damaged or otherwise unfit for use

(i) The units may be allowed to receive free replacement of the goods imported and found defective, damaged or otherwise unfit for use, prior to re-export of the same. However, re-export of such defective/damaged or otherwise unfit for use goods may be subsequently made later.

(ii) In case, the supplier of such defective, damaged or otherwise unfit for use goods does not insist on re-export of such goods, the same may not be re-exported subject to the condition that such goods shall be either destroyed with the permission of Assistant Commissioner of Customs/Central Excise in charge of unit or cleared into DTA on payment of full customs duty.

3. The instructions may be given wide publicity in the form of Public Notice.

4. Kindly acknowledge receipt of this Circular. Difficulties, if any, faced in the implementation of the above changes, may be brought to the notice of the Board immediately.

[Pralhad Jadhav]

Thank You Sir, however we are DTA unit. Please advise if I can take the benefit of this being a DTA unit as well.

[KASTURI SETHI]

With reference to serial no. 2.1, write a letter to the jurisdictional A.C./D.C. seeking permission for destruction of the goods. Reasons for destruction must be mentioned in the letter

[Pralhad Jadhav]

Thank you Sir.

[KASTURI SETHI]

With reference to serial no.3.1, answer is in the negative.

AI Summary

Destruction of prohibited imports permitted but redemption fine and customs penalty remain payable; duties are non refundable.
Destruction of imported goods unfit for use may be permitted instead of re export, subject to prior permission from the Assistant Commissioner/Deputy Commissioner and reasons for destruction. Permission follows existing administrative guidance allowing destruction of defective imports, but statutory obligations remain: redemption fine and customs penalty continue to apply, and duties already paid are not refundable where destruction is authorised; re export remains the route for seeking duty relief.