TaxTMI 
TaxTMI 
Systemic, Compliance, and Monitoring Deficiencies in the Project Import Scheme (Customs Tariff Heading 9801)
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....H 9801. Reference is drawn to Project Import Regulations, 1986 as amended and various Notifications/Circulars/Instructions issued in this regard by CBIC from time to time. 1. REGISTRATION OF PROJECT IMPORT CONTRACTS It has been observed that once application has been submitted by an importer for registration of their contract for intended import under Project Import Regulation, all the requisite documents are not found to be enclosed with the application leading to issuance of deficiency letter to the importer by the Project Import Section, which inter alia delay the registration process of the contract. Though the Regulation 5 of Project Import Regulations (PIR), 1986 and Board's Circular No. 31/2013-CUS dated 06.08.2013 are self-speaking, even though complete documents are missing. In this regard, officers of this Commissionerate handling project imports should ensure that the application submitted by the importer for registration of the project import contract should specify: a. Location of plant or project, installed or designated capacity of the plant or project and in case of substantial expansion of an existing plant or project, the installed capacity or t....
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....for their completeness and deficiency noticed, if any, Deficiency memo shall be issued within 10 days of receipt of the Application. (ii) Letter for verification of Recommendatory letter for duty concession issued by the related and notified concerned sponsoring authority (Ministry/State Government Department and others shall be issued within 5 days of receipt of Application. (iii) The Bank Guarantee shall be checked immediately on its receipt to ensure that the BG should invariably contain suitable self-renewal/auto renewal/automatic extension clause inbuilt in the Guarantee itself and in cases it is found in order, letter for verification of genuineness of Bank Guarantee shall be issued within 3 days of receipt of Application and shall be followed by regular reminders until the verification report is received. (iv) It shall be ensured by the AC/DC in charge that no other unnecessary documents other than the documents as detailed above are called for from the importer for registration. In case of any specific document requirement in addition to the above detailed documents, the same shall be obtained with specific permission of JC/ADC in charge. 2. BO....
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.... it has been observed that some of importers have failed to make application and get contract amended with Customs leading to legal complication including denial of benefit of project import for excess quantity or value of imported goods including attracting penal action. Some of such situations, which require application by importer to get contract amended with Customs are: - i) Import taking place from subsidiary company of the supplier or other supplier, which is not reflected in the contract/application at the time of registration. ii) Change in quantity of item being imported than that given at the time of registration. iii) Change in value of the contract. The importer shall ensure that, in the event of any amendment to the contract, an application along with the necessary supporting documents is submitted to Customs. Upon receipt of such requests, Customs will review and scrutinize the submitted documents and, if found in order, will update the existing records in EDI not later than 2 working days to reflect the amendments accordingly. 5. Submission of the requisite documents & Finalization of Contract and Closure of Bond: Under Regulation....
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....ment Undertaking in the rank of Chairman/Executive Director specifying the individual items were actually installed in the project site (Board's Circular No. 14/2006-Cus dated 17.04.2006). The Government Department/Public Sector Undertakings should be advised to give such undertaking from the head of organisation to dispense with PSV and expedite finalisation of Contract by Customs. In cases where the requisite documents, as mandated under Regulation 7 of the Project Import Regulations, 1986, are not submitted within the prescribed time frame, or are submitted partially or incompletely-and where no extension for such delay has been sought from the Deputy/Assistant Commissioner (Project Import)-appropriate action may be initiated against the importer. This may include issuance of a demand notice for differential duty, interest and imposition of penalties for non-compliance with the provisions of the Regulation and enforcement of the bond and bank guarantee executed for the project. Upon verification and confirmation of the completeness of all required documents, the Project import staff/officers shall ensure that the finalization of the contract, final....