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Custom Circular No.56/2002
dated 9th September 2002
Sub:
Market verification for ascertaining the present market value
under DEPB Scheme and admissibility of DEPB credit-reg.
Attention is invited to Board’s Circulars No.15/97-Cus dated
3.6.1997, 69/97-Cus dated 8.12.1997, 79/98-Cus dated 22.10.1998,
23/99-Cus dated 11.5.1999 and 26/2001-Cus dated 24.4.2001.
2. As per the existing instructions contained in these
Circulars, the DEPB credit is to be normally given on the FOB
value of the exports. However, where on the basis of market
inquiry it is found that the declared value of the export goods
is more than their present market value then the present market
value shall be considered for the purposes of allowing DEPB
Credit.
3. Field formations have sought clarification whether these
instructions are also applicable to those goods where the
declared f.o.b. value is more than the declared present market
value. Also, whether these instructions shall also be applicable
to those goods whose DEPB Credit rates are less than 10%.
4. It is clarified that wherever, the declared f.o.b. value is
more than the present market value as declared by the exporter
or as ascertained by the Customs authorities, the present market
value shall be the basis for granting DEPB credit. Further, this
principle will be applied to all export products whether their
rates are less than 10% or are 10% or above 10%.
5. As per the existing instructions the verification of the
present market value through market enquiries should be
specifically assigned to the Special Intelligence &
Investigation Branch of the Custom House and not to the
Assessing Officer and the enquiry must be completed and the
final view taken in 30 days except where the Commissioner of
Customs has specified that it is necessary to extend the period
beyond 30 days to collect further information/evidence, the
enquiry period may be extended upto 90 days from the date of the
Shipping Bill. The show cause notice should be issued within the
extended period of 90 days. However, if the Commissioner of
Customs is satisfied that the enquiry for determining the
present market value of the goods has to be extended for reasons
involving fraud/collusion/wilful mis-statement or suppression of
facts, he may extend the period of 3 months till such further
period as is deemed necessary after recording the reasons
thereof in writing.
6. It has been brought to the notice of the Board that in many
cases the intelligence regarding over-valuation of the exports
is received much after the exports. Therefore, the existing
instructions pose a legal hurdle in investigation of DEPB frauds
where the DEPB credit has already been availed and in many cases
even utilised.
7. This issue has been examined in the Board. It is clarified
that in respect of the cases involving fraud/collusion/wilful
mis-statement or suppression of facts, etc., the enquiry can be
opened at any stage within a period of 5 years and notice may be
issued for recovery of import duty involved.
8. Suitable public notices for information of the trade and
standing orders for guidance of the staff may kindly be issued
accordingly.
Sd/-
(S S Renjhen)
Joint
Secretary to the Government of India
File No.605/38/2002-DBK
Dated:9th Sept.2002
Issued by:
Ministry of Finance,
Department of Revenue,
New Delhi.
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