Exempts materials imported into India against a Duty Free Import Authorisation - 040/2006 - Customs -Tariff

Exempts materials imported into India against a Duty Free Import Authorisation 1 st May, 2006 Notification No. 40/2006-Customs In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India against a Duty Free Import Authorisation issued in terms of paragraph 4.4.1 and 4.4.2 of the Foreign Trade Policy (hereinafter referred to as the said authorisation) from the whole of the duty of Customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and 17 [from the whole of the additional duty leviable thereon under sub-sections (1), (3) and (5) of section 3, safeguard duty leviable thereon under section 8B and anti-dumping duty leviable thereon under section 9A ] of the said Customs Tariff Act, subject to the following conditions namely :- (i) that the description, value and quantity of materials imported are covered by the said authorisation and the said authorisation is produced before the proper officer of customs at the time of clearance for debit: Provided that in respect of resultant product specified in paragraph 4.55.3 of the Hand Book of Procedures (Vol. I) of the Foreign Trade Policy, the materials permitted in the said authorisation or a duty free import authorisation for intermediate supply, as the case may be, shall be of the same quality, technical characteristics and specifications as the materials used in the said resultant product. Provided further that in respect of the said resultant product the exporter shall give declaration with regard to the quality, technical characteristic and specifications of materials used in the shipping bill; (ii) that where import takes place after fulfilment of export obligation, the shipping bill number(s) and date(s) and quantity and Free on Board (FOB) value of the resultant product are endorsed on the said authorisation: Provided that where import takes place before fulfilment of export obligation, the quantity and FOB value of the resultant product to be exported are endorsed on the said authorisation; 1 [ (iii) that in respect of imports made before the discharge of export obligation in full, the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification are not complied with, together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials; 1 and 5A [(iiia) that in respect of imports made after the discharge of export obligation in full, if facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 or CENVAT Credit under CENVAT Credit Rules, 2004 has been availed, then the importer shall, at the time of clearance of the imported materials furnish a bond to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself, to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture of dutiable goods and to submit a certificate, from the jurisdictional Central Excise officer within six months from the date of clearance of the said materials, that the imported materials have been so used: Provided that, in case, (a) materials are imported against an authorisation transferred by the Regional Authority, or (b) the imported materials are transferred with the permission of Regional Authority, then the importer shall pay an amount equal to the additional duty of customs leviable on the materials so imported or transferred, but for the exemption contained herein, together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials: Provided further that if the importer pays additional duty of customs leviable on the imported materials but for the exemption contained herein, then the imported materials may be cleared without furnishing a bond specified in this condition and the additional duty of customs so paid shall be eligible for availing CENVAT Credit under the CENVAT Credit Rules, 2004;] (iiib) that in respect of imports made after the discharge of export obligation in full, and if facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule 2 of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 has not been availed and the importer furnishes proof to this effect to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs as the case may be, then the imported materials may be cleared without furnishing a bond specified in condition (iiia);] (iv) that the imports and exports are undertaken through seaports at Mumbai, Kolkata, Cochin, Magdalla, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra, Nagapattinam, Okha, Bedi (including Rozi-Jamnagar), Muldwarka, Porbander, Dharamatar and Vadimar Haldia (Haldia Dock complex of Kolkata port) and 6 [Krishnapatnam 10[14 [ Ennore (Tamil Nadu), Karaikal (Union territory of Puducherry) and Kattupalli (Tamil Nadu) ]]] or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Coimbatore, Delhi, Hyderabad, Jaipur, Chennai, Srinagar, Trivandrum, Varanasi, Nagpur, Cochin, Rajasansi (Amritsar), Lucknow (Amausi) 13 [ Indore, Dabolim (Goa) and Visakhapatnam] or through any of the Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Daulatabad (Wanjarwadi and Maliwada), 7 [Waluj (Aurangabad) , Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur, District Dhar)[ 8 [Patli (Gurgaon), Irugur Village (Tamil Nadu), Thudiyalur (Tamil Nadu), Chettipalayam (Tamil Nadu) 9 [Veerapandi (Tamil Nadu) 11 [Marripalem Village in Taluk of Edlapadu, District Guntur 12 [Tondiarpet (TNPM), Chennai and Irungattukottai, SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk, Kanchipuram District, Tamil Nadu]]] Anaparthy (Andhra Pradesh), Salem, Malanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri, Tuticorin, Kundli, Bhadohi, Raipur, Mandideep, Durgapur, Babarpur and Loni (District Ghaziabad) or through the Land Customs Station at Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Nepalganj Road, Dawki, Agartala, Sutarkhandi, 1 Amritsar Rail Cargo and Attari Road, Hilli, Ghojadanga and Changrabandha or 2 [a Special Economic Zone notified under section 4 of the Special Economic Zones Act, 2005 (28 of 2005) .]. Provided that the Commissioner of Customs may, by special order or by a Public Notice and subject to such conditions as may be specified by him, permit import and export from any other seaport/airport/inland container depot or through any land customs station; 3 and 5C [(v) that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within the period specified in the said authorization or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorization: Provided that an Advance Intermediate authorization holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.1.3 (ii) of the Foreign Trade Policy.] (vi) that the importer produces evidence of discharge of export obligation to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, within a period of thirty days of the expiry of period allowed for fulfilment of export obligation, or within such extended period as the said Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow; (vii) that exempt materials shall not be disposed of or utilised in any manner, except for utilisation in discharge of export obligation, before the export obligation under the said authorisation has been discharged in full; (viii) that where the Bond filed under condition (iii) against the said authorisation has not been redeemed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, the unutilised material may be transferred to any other manufacturer for processing under actual user condition after 18 [ complying the central excise procedure or the goods and services tax procedure relating to job work, as the case may be ] (ix) that in relation to the said authorisation issued to a merchant exporter,- (a) the name and address of the supporting manufacturer is specified in the said authorisation and the bond required to be executed by the importer in terms of condition (iii) shall be executed jointly by the merchant exporter and the supporting manufacturer binding themselves jointly and severally to comply with the conditions specified in this notification; and (b) exempt materials are utilised in the factory of such supporting manufacturer for discharge of export obligation and the same shall not be transferred or sold or used for any other purpose by the said merchant exporter until the export obligation specified in condition (v) has been discharged in full. 2. After discharge of export obligation as specified in condition (v) of paragraph 1, the Regional Authority shall permit transfer of the said authorisation and/or the goods imported under it subject to such conditions as may be specified. 3. Where the materials are found defective or unfit for use, the said materials may be re-exported back to the foreign supplier within three years from the date of payment of duty on the importation thereof : Provided that at the time of re-export the materials are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, as the materials which were imported. 15 [4. In a case of default in export obligation, when the duty on goods is paid to regularise the default, the amount of interest paid by the importer shall not exceed the amount of duty if such regularisation has been dealt in terms of Public Notice of the Government of India in the Ministry of Commerce No. 22 (RE-2013)/2009-2014 dated the 12 th August, 2013. ] Explanation - For the purposes of this notification,- (i) Foreign Trade Policy means the Foreign Trade Policy 2004-2009 published vide notification of the Government of India in the Ministry of Commerce and Industry, No.1/2006 dated the 7th April, 2006; (ii) Regional Authority means the Director General of Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant an authorisation under the said Act; (iii) Materials means - (a) raw materials, components, intermediates, consumables, catalysts, and parts which are required for manufacture of resultant product; (b) mandatory spares within a value limit of ten per cent of the value of the authorisation which are required to be exported alongwith the resultant product; (c) fuel required for manufacture of resultant product; and (d) packaging materials required for packing of resultant product. (iv) manufacture has the same meaning as is assigned to it in paragraph 9.37 of the Foreign Trade Policy. 4 and 5D [(v) dutiable goods means excisable goods which are not exempt from central excise duty and which are not chargeable to 'nil' rate of central excise duty.] F. No.605/36/2006-DBK (Pt.) ************* Notes: As amended by Notification No. 63/2007 dated 4/5/2007, 116/2007 Cus. Dated 30/11/2007 , 125/2008 Cus dated 21/11/2008 , 19/2009 Customs dated 24/2/2009 and further [For further addition of more ports, see notification no. 123/2009 Customs dated 10/11/2009 ] 1. Conditions (iii) substituted vide notification no. 17/2009 Customs dated 19/2/2009 , before it was read as, (iii) that the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification have not been complied with, together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials : Provided that bond shall not be necessary in respect of imports made after the discharge of export obligation in full; 2. Substituted vide notification no. 17/2009 Customs dated 19/2/2009 , before it was read as, Special Economic Zone as specified in the notification issued under section 76A of the Customs Act,1962(52 of 1962) 3. Substituted vide notification no. 17/2009 Customs dated 19/2/2009 , before it was read as, (v) that the export obligation as specified in the said authorisation (both in value and quantity terms) is discharged within the period specified in the said authorisation or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorisation and in respect of which facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule 2 of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT credit rules, 2004 in respect of materials imported/procured against the said authorisation has not been availed : Provided that an Advance Intermediate authorisation holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.1.3 (ii) of the Policy; 4. Inserted vide notification no. 17/2009 Customs dated 19/2/2009 . 5A. Inserted vide Finance (No. 2) Act, 2009 with effect from 1-5-2006 as, (iiia) that in respect of imports made after the discharge of export obligation in full, if facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 or CENVAT Credit under CENVAT Credit Rules, 2004 has been availed, then the importer shall use the imported materials for the manufacture of dutiable goods in his factory or in the factory of his supporting manufacturer and shall submit a certificate from the jurisdictional Central Excise Officer that the imported materials have been so used: Provided that, in case,- (a) materials are imported against an authorisation transferred by the Regional Authority, or (b) the imported materials are transferred with the permission of Regional Authority, then the importer shall pay an amount equal to the additional duty of customs leviable on the materials so imported or transferred, but for the exemption contained herein, together with interest at the rate of fifteen per cent. per annum from the date of clearance of the said materials: Provided further that no such amount shall be payable in respect of authorisation issued from the 1st day of May, 2006 to the 31st day of March, 2007. [ In the notification this amendment is not incorporated since the similar amendment has been made vide notification no. 17/2009 Customs dated 19/2/2009 ] 5B . Finance (No. 2) Act, 2009 with effect from 19-2-2009 as, (ii) in condition (iiia), after the second proviso, the following proviso shall be inserted, namely: - Provided also that if the importer pays additional duty of customs leviable on the imported materials but for the exemption contained herein, then the imported materials may be cleared without furnishing a bond specified in this condition and the additional duty of customs so paid shall be eligible for availing CENVAT Credit under the CENVAT Credit Rules, 2004. ; [ In the notification this amendment is not incorporated since the similar amendment has been made vide notification no. 17/2009 Customs dated 19/2/2009 ] 5C. Substituted vide Finance (No. 2) Act, 2009 with effect from 1st May, 2006 to 18th February, 2009 for condition (v), the following condition shall be substituted, namely:- (v) that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within the period specified in the said authorisation or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorisation: Provided that an Advance Intermediate authorisation holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.1.3 (ii) of the Foreign Trade Policy. ; [ In the notification this amendment is not incorporated since the similar amendment has been made vide notification no. 17/2009 Customs dated 19/2/2009 ] 5D. Inserted vide Finance (No. 2) Act, 2009 with effect from 1st May, 2006 to 18th February, 2009 as, in the Explanation, after clause (iv), the following clause shall be inserted, namely:- '(v) dutiable goods means excisable goods which are not exempt from central excise duty and which are not chargeable to 'nil' rate of central excise duty.'. [ In the notification this amendment is not incorporated since the similar amendment has been made vide notification no. 17/2009 Customs dated 19/2/2009 ] 6. For the words and Krishnapatnam , the words and brackets, Krishnapatnam and Ennore (Tamil Nadu) has been substituted vide Notification No. 93/2010. 7. For the words and brackets Waluj (Aurangabad) , the words, brackets and punctuations Waluj (Aurangabad), Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur, District Dhar) and Patli (Gurgaon) , has been substituted vide Notification No. 123/2009-Cus, dated 10-11-2009 8. For the words and brackets and Patli (Gurgaon) the words and brackets, Patli (Gurgaon), Irugur Village (Tamil Nadu), Thudiyalur (Tamil Nadu), Chettipalayam (Tamil Nadu) and Veerapandi (Tamil Nadu) , has been substituted vide Notification No. 93/2010-Cus, dated 14-9-2010. 9. Substituted vide Notification No. 40 /2011 Customs, Dated 19/05/2011, before it was read as:- and Veerapandi (Tamil Nadu), 10. Substituted vide Notification No. 37/2012-CUSTOMS, Dated 24/05/2012 , before it was read as:- and Ennore (Tamil Nadu) 11. Substituted vide Notification No. 40/2012-CUSTOMS, Dated 14/06/2012 , before it was read as:- and Marripalem Village in Taluk of Edlapadu, District Guntur 12. Substituted vide Notification No. 50/2012-Customs, dated 10/09/2012 , before it was read as:- and Tondiarpet (TNPM), Chennai 13. Substituted vide Notification No. 4/ 2013 Customs, dated 14/02/2013 before it was read as:- Indore and Dabolim (Goa) . 14. Substituted vide Notification No. 20/2013 Customs dated 3/04/2013 , before it was read as Ennore (Tamil Nadu) and Karaikal (Union territory of Puducherry) . 15. Inserted vide Notification No. 46/2013-Customs dated September 26, 2013. 16. Substituted vide THE SECOND SCHEDULE - THE FINANCE ACT, 2016 , w.e.f. 1st May, 2006 , before it was read as, under section 3,8, and 9A 17. Substituted vide Not. 26/2017 - Dated 29-6-2017 , 1st day of July, 2017 , before it was read as. from the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon, respectively, 16 [ under sections 3, 8B and 9A ] 18. Substituted vide Not. 26/2017 - Dated 29-6-2017 , 1st day of July, 2017 , before it was read as. complying the central excise procedure relating to job work