CBEC weighs in on bulk cargo export

The Central Board of Excise and Customs (CBEC) has issued some new clarifications on the dispatch of bulk cargo for export under bond, allowed under an earlier notification, 42/2001-CE (NT), dated June 26, 2001. The idea is to avoid examination of the cargo at ports, delaying export consignments.

The said notification allows manufacturers to clear their goods from the factory for export without payment of excise duty.

The Customs department would otherwise examine any goods before export but in these cases, central excise officers or the exporters themselves may do so and seal the containers or packages at the factory. Usually, such excise-sealed consignments are not opened by Customs for examination. It is, however, difficult to seal in such containers or packages, any bulk cargo - for instance, coal, iron ore, alumina concentrate, heavy machinery and so on. To help exporters of such cargo, the finance ministry on October 30 issued an amendment to the said notification, 42/2001.

The amendment says exemption from sealing of package or container may be granted for bulk cargo on a case to case basis, for a specific period not exceeding a year, by the principal chief commissioner (PCC) or chief commissioner (CC) of central excise, subject to such safeguards as may be specified. These safeguards shall include the method of verification of the quantity and quality of goods, including testing where necessary, at the place of removal or dispatch and at the port of export or special economic zone (SEZ) where the goods are received.

No remission of duty shall be allowed for loss of goods in transit. Permission may be withdrawn in case of misuse; additional safeguards may also be specified.

CBEC followed this with a circular asking those who wanted the facility of bulk cargo export without sealing to write to the PCC/CC concerned, with a copy to the jurisdictional assistant/deputy commissioner (AC/DC) of central excise, giving details of what is to be exported, with justification regarding the difficulties faced in sealing. The jurisdictional AC/DC shall, within 15 days of getting the application, send this with comments to the jurisdictional PC or commissioner, who, in turn, will send this on to the PCC/CC with his or her recommendation, within three weeks of getting it, with report from the AC/DC.

The jurisdictional PC or commissioner shall consult the PC or commissioner with jurisdiction over the port of export or development commissioner of the SEZ where the goods will be received, incorporating what they have said in his recommendation. The PCC/CC shall grant or reject the request for waiver of sealing within 15 days of getting the application from the PC or commissioner.

CBEC, it appears, prefers that the field formations decide requests on merit, rather than prescribe uniform guidelines. So, it talks of 'due verification as needed', without saying what must be verified and how or what safeguards must be prescribed. Hopefully, the permissions will not contain unnecessarily onerous conditions.

tncrajagopalan@gmail.com