TaxTMI 
TaxTMI 
2015 (1) TMI 934
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....ter alia engaged in the business of manufacture and export of Acetyls. The petitioners submit that one of the major raw materials for manufacture and export of Acetyls is Acetic Acid. 5. We are concerned in this case with the import of Acetic Acid. The petitioners point out that they are leading exporters of Acetyls from India. In para-5 of the Writ Petition they have given the figures of total exports in last three years. The petitioners then contend that they import Acetic Acid which is a common input for production of the final products, namely, Ethyl Acetic and Dikelene Derivatives. They have set out details of the total imports of Acetic Acid in last three years. They also acquire this Acetic Acid from domestic manufacturers. The details thereof are set out as well. The petitioners concede that out of a total quantity of imported Acetic Acid and that acquired in domestic market, some portion is sold on "as is where is" basis in the local market. 6. In this Writ Petition, the petitioners are relying upon the import of Acetic Acid under an Advance License. In that regard they rely upon the Foreign Trade Policy for 2004-09 (para 2.27.1 and corresponding paragraph 6.12 of th....
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....spondent to the Writ Petition, insisted on the petitioners furnishing a bank guarantee equal to 25% of the duty amount. This was for clearance under Advance Licenses. The petitioners made enquiries and it was revealed that the bank guarantee has been demanded on account of the circular dated 4th March, 2013. Para-4 of this circular amends para 3.2(c) of the earlier circular dated 21st October, 2004. That is how the petitioners approached the authorities but they were informed that the condition of furnishing of this bank guarantee cannot be waived. It is that communication which is also impugned in this Writ Petition. 13. The petitioners did furnish the bank guarantees but are aggrieved by the fact that denial by the second respondent of the facilities and the privileges under the Foreign Trade Policy is totally discriminatory and arbitrary. 14. Mr. Shroff, learned Senior Counsel appearing on behalf of the petitioners submitted that the impugned circular violates the constitutional mandate enshrined in Articles 14 and 19(1)(g) of the Constitution of India. He submits that the same imposes an unreasonable fetter and restriction on the petitioners' fundamental rights to car....
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....arantee. In other words, the privileges attached to the advance license holders complying with the export obligation envisage exemption from furnishing of a bank guarantee or letter of undertaking. The bank guarantee and letter of undertaking is a requirement or a mode prescribed by Customs Authorities in terms of the Customs Act, 1962 so as to deal with the case of import and export of goods. That is the exclusive power conferred in them under the Customs Act, 1962. That is to facilitate levy, assessment and collection of the customs duty in terms of the Act and Rules framed thereunder. Therefore, the Foreign Trade Policy which grants certain privileges to Advance License holders and in cases of import of raw materials which go into the manufacture of export products equally empowers the Customs Authority to prescribe such norms. If the norms already prescribed have to undergo a change the Board is fully empowered to make such changes as well. Therefore, neither Foreign Trade Policy is amended or overridden nor the Customs Authorities in issuing the circular or amending it have carried any such exercise. They have acted within the ambit and scope of their power and under the Custo....
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....e envisaged in terms of this Policy are exports and imports are free unless regulated. The petitioners rely upon paragraph 2.2 to 7.1 and which gives exemption from bank guarantee. All the exporters who have export turn over of at least Rs. 5 crores in the current or preceding license year and have a good track record of three years export will be exempted from furnishing a bank guarantee for any of the schemes under this Policy and may furnish a letter of undertaking in lieu of a bank guarantee. The petitioners rely upon the Foreign Trade Policy and the Handbook of Procedures provide that such a policy and whereunder execution of a bank guarantee / letter of undertaking is envisaged, then, wherever a duty free import is allowed or otherwise specifically stated, importer shall execute the prescribed letter of undertaking / bank guarantee / bond with the Customs Authorities before clearance of goods. The procedures further provide in Chapter-6 that there are entitlements if an Export Oriented Unit has a turnover of Rs. 5 Crores or above, is in existence for at least three years and it will not be required to furnish bank guarantee at the time of import or going for job work in a DTA....
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....rts will be exempted from furnishing a Bank Guarantee (BG) for any of the Schemes under the Policy and may furnish a LUT in lieu of BG. Further, paragraph 2.20 of the Hand Book of Procedures (Vol. I) prescribes that in cases of direct import, before clearance of goods through Customs, the licence holder shall execute a legal undertaking (LUT)/Bank Guarantee (BG) with the Customs authorities in the manner as may be prescribed by them. 2. In the light of these Policy provisions, the issue regarding execution of Bond/BG under DEEC and EPCG Schemes has been reviewed by the Board and in supersession of earlier DOR Circular Nos. 45/96Cus., dated 28896, [1996 (86) E.L.T. T70], 71/98Cus., dated 15998 [1998 (103) E.L.T. T19], 48/2003Cus., dated 662003 [2003 (154) E.L.T. T57], 74/2003Cus., dated 2182003 [2003 (156) E.L.T. T68] and 79/2003Cus., dated 492003 [2003 (156) E.L.T. T94], the following revised norms are prescribed for the purpose of furnishing Bond and BG under the said Schemes. 3. The bond under Advance License and EPCG Schemes shall be furnished in the format annexed to this Circular. The bond shall cover the duty ordinarily leviable on the goods but for the exemption. The b....
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....Commissioner or Deputy Commissioner. The Chartered Account issuing the certificate will mention his STC code and other registration details in the certificate. (c) The License holder should not have been penalized under the provisions of the Customs Act, 1962, the Central Excise Act, 1944, the Foreign Exchange Management Act (FEMA), 1999 or the Foreign Trade (Development and Regulation) Act, 1992 during the previous three financial years. 4. The facility of filing "Corporate Guarantee" as provided in DOR Circular No. 38/97Cus dated 19997 [1997 (95) E.L.T. T44] shall also continue to be available subject to fulfillment of conditions specified in the said Circular. 5. In individual cases where the jurisdictional Commissioner of Customs/ DGFT authority /EPCG Committee/ALC/ is satisfied that a higher quantum of Bank Guarantee is justified on account of risk to revenue, 100% BG may be taken by the Customs after recording the reasons therefor in file. 6. Where an importer so requests, a BG may be taken consignmentwise subject to the condition that such consignmentwise BG shall only be acceptable by the Customs at the port of registration of the license. 7. The Bond/BG shall b....
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.... he satisfies himself about the genuineness of the declaration given by the license holder. 12. In order to thwart attempts to misuse Advance License Scheme, the DGFT authorities shall endorse a copy of the Advance License to the concerned Central Excise authorities by fax or email with request to intimate the concerned DGFT authority in case the party appears to be bogus/ nonexistent. Immediately on receipt of copy of the Advance License by Central Excise, the Superintendent of Central Excise having jurisdiction over the manufacturing premises of the license holder shall undertake physical verification within one month of the receipt of copy of Advance License from the relevant DGFT authority to ascertain that the party to whom Advance License has been issued is not bogus/nonexistent. In all cases where on physical verification by Central Excise, the party is found to be bogus/nonexistent, the jurisdictional Commissioner of Central Excise shall immediately inform the concerned Licensing Authority (who had issued the Advance License) so as to enable the DGFT authorities to suspend the Advance License and intimate the concerned Customs authorities about it where the Advance Licen....
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....thorization (DFIA)/Export Promotion Capital Goods (EPCG) Scheme - Norms revised. Circular No. 8/2013Cus., dated 432013 F.No.609/134/2012DBK Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi, Subject : Norms for Execution of Bank Guarantee in respect of Advance Authorization (AA) / Duty Free Import Authorization (DFIA) / Export Promotion Capital Goods (EPCG) - Regarding. The undersigned is directed to invite reference to Circular No. 58/2004Cus., dated 21102004 [2004(173) E.L.T. (T4)] on the above subject. This was amended by Cir. Nos.17/2009Cus [2009 (238) E.L.T. (T6)] and 32/2009Cus. [2009 (244) E.L.T. (T4)]. Circular No.58/2004 was further amended by Circular No.6/2011Cus., dated 1812011. By this amendment, para 3.2 (c) was amended and the conditions for availing of exemption from bank guarantee were modified. 2. Prior to amendment by Cir 6/2011Cus, one of the explicit criteria for denying benefit was that the license holder should have been penalized. However, the issue of penalty imposed for technical offences had arisen. The Circular 6/2011Cus asked for taking an affidavit from the license holde....
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....main unchanged. These instructions may be brought to the notice of the trade/exporters by issuing trade/Public Notices. Standing orders/instructions may be issued for guidance of the assessing officers. Difficulties faced, if any, in implementation of the Circular may please be brought to the notice of the Board at an early date. Receipt of this circular may kindly be acknowledged." 25. That circular further revised the norms and which have been prescribed by the earlier circular dated 21st October, 2004 which itself came to be amended by circular No.17/2009 and 32/2009. It was further amended by circular No.6/2009 dated 18th January, 2011. The last amendment and which has been put in issue before us contained in para 3.2(c) is now notified by the Central Board of Excise and Customs vide this circular of 4th March, 2013. It has been stated that prior to the issuance of the amended circular of 2011 one of the explicit criteria for denying benefit to the license order is that license holder should not have been penalized. However, the issue of penalty imposed for technical offences had arisen. Therefore an affidavit was insisted from the license holder with regard to the offenc....