Payment of duty on imports

[SAPTHARISHI IYER]

As an EOU, LOP and LA/LUT has been executed. However due to oversight certain capital goods which are other wise eligble for duty free import remained to be included in the list approved by the Development Commissioner. These goods have been imported duty free. Audit has now taken an objection that such goods which are not approved by DC are not eligibe for duty free imports. Is duty to be paid on such imports? Saptharishi

[Guest]

It's not clear from your querry that whether you had followed the set procedure for imporatation of goods i.e. whether the invoices for intended goods were approved by Development Commissioner or not? Whether you had obtained a procurement/import certificate from local excise office or not. Whether the B/E had been endorsed by the Range Superintendent and Inspector of Central Excise or not at the time of warehousing of the said goods. Whether there was sufficient balance in your B-17 Bond running account. You can obtain post facto amendmend in your LOI if the SCN has not been issued to you.

[Prabhakar Vennalaganti]

As long as if it is not covered under the approval exemption can't be claimed. But, there are provisaons for inclusion, which should have been carried out prior to clearnce of imported goods. Next, whether the capital goods referred are machinerys or consumable? If it is conumbales and proper records evidencing that the imports are consumed only in exported product, there is a provision to claim duty drawback, ofcourse, for wqhich aslo dutydrawback Shipping bill should be filed atthe time of exportation. Whether domestic sales are there? If it is there, the CVD paid on such imporation can be claimed as cenvat credit and the same can be utilized towards payment of duty for Home consumption. Hence, based on facts the remidal action to be taken is to be decided.

AI Summary

Duty-free import eligibility: non-approved capital goods may attract duty unless procedural compliance or post-facto LOI amendment is secured. Where an EOU imported capital goods not approved by the Development Commissioner, duty-free entitlement depends on compliance with import procedures including invoice approval by the Development Commissioner, procurement/import certificate, bill of entry endorsements at warehousing, and sufficient B-17 bond balance; if no show-cause notice exists a post-facto LOI amendment may be possible. Remedies vary by fact: consumables used in exports may qualify for duty drawback on exportation; domestic sale allows claiming Cenvat credit for CVD paid to meet home-consumption duties.