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

EOU Faces Audit Concerns Over Unapproved Duty-Free Imports; Considers Post-Facto Amendments and Duty Drawback Options An entity operating as an Export Oriented Unit (EOU) executed necessary agreements but failed to include certain capital goods in the approved list for duty-free import. An audit raised concerns about these unapproved imports. Respondents advised checking if proper procedures were followed, such as obtaining necessary approvals and certificates. Suggestions included seeking post-facto amendments if no Show Cause Notice (SCN) was issued, considering duty drawback provisions for consumables used in exports, and utilizing CVD as CENVAT credit for domestic sales. The entity needs to assess the situation based on these factors to determine the appropriate course of action.