Conversion of Foreign Run Vessels to Coastal run Vessels-Customs Duty collection on Ship Stores consumed during Coastal-Reg - Customs - PUBLIC NOTICE No. 02/2024

OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS CUSTOMS HOUSE, PORT AREA, VISAKHAPATNAM - 530 035 www.vizagcustoms.gov.in Fax 0891-2562613 Email id: preomm1-cuavegy gov.in Tel: 089 -2564552 F No. S23/56/2023-AP Date: 12.01.2024 PUBLIC NOTICE No. 02/2024 Subject: Conversion of Foreign Run Vessels to Coastal run Vessels-Customs Duty collection on Ship Stores consumed during Coastal-Reg ***** Attention of all Importers, Exporters, CHAs and members of the trade is invited to Circular No 58/97 dated 06.11.1997 issued by the Central Board of Indirect Taxes Customs, New Delhi on the above subject matters. 2. It has come to notice that difficulties are being faced by trade relating to assessment and collection of duty on ship stores consumed during temporary conversion of vessels from foreign run to coastal] run and vice versa. Representation has been received from Federation of Ship Agents Association of India (FEDSAI) to redress the grievances of its members. 3. At Visakhapatnam Port, the bunker supply price of HPCL is being adopted by Customs for the purpose of valuation at the time of provisional assessment with respect to conversion of vessels where transaction value is not available. The HPCL bunker supply price includes freight, insurance and landing charges. 4. Commissioner(Appeals) at some of the ports, as submitted by Federation of Ship Agents Association of India (FEDSAI) have observed that HPCL export sale price which is taken as base price for provisional assessment of Bill of Entry and subsequently finalization of subject Bills of Entry on the consumed quantity of ship stores is not proper. 5. Keeping in view the Orders of the Commissioner(Appeals), the following guidelines are being laid down while doing provisional Assessment under section 18 of the Customs Act, 1962 in case of conversion of vessels from Foreign Run to Coastal run and vice versa: (i) As far as possible, the proper office may go by the transaction value of the bunker, wherever actual bunker receipts are available, in terms of Section 14(1) of the Customs Act read with Rule 3 of Customs Valuation Rules, 2007. (ii) In other cases, where transaction value of bunker is not available, valuation of bunker supply may be carried out at the time of provisional assessment of Bill of Entry, by following the Customs Valuation (Determination of value of imported goods) Rules, 2007, sequentially from 4 to 9. In other words, HPCL export sale price may be considered to be adopted under Rule 9 only when contemporaneous import price on the basis of NIDB data etc., cannot be adopted under Rule 4 or 5 for any reason. In case the ship owner/agent does not agree with the proposed valuation, principles of natural justice shall be followed while finalising all such provisional assessments. (iii) Quantification of bunker is to be calculated from Foreign run to Coastal run, as per Board's Circular No 58/1997 dated 06.11.1977. (iv) The final Assessment of Bills of Entry to be completed within 15 days from the receipt of reversion documents issued by Customs at reversion port as per instruction contains in Board s Circular No. 58/97 dated 06.11.1997. 6. Difficulty, if any, faced in implementation of this Notice may be brought to the notice of the undersigned. 7. The Notice shall come into force with immediate effect prospectively. The Notice may be treated as a standing order for Department Officers. N. Sridhar Principal Commissioner of Customs