Our products are covered under notification no. 49/2008-CE (NT) dated 24.12.2008, issued under Section 4A of the Central Excise Act, 1944. So, we are clearing goods on payment of excise duty on the basis of Maximum Retail Price (MRP). We are clearing free samples also on the basis of MRP. Now the excise authorities are raising some issues. Can you say whether we are correct?
In the case of Cadila Pharmaceuticals Ltd. [2008 (232) ELT 245 (Tri. LB)], the Larger Bench of the Tribunal held that, “notwithstanding the non-availability of the normal sale price under Section 4(1)(a) of the Act, by reason of the goods being specified under Section 4A(1) making the retail sale price, i.e. MRP, as its deemed value, the appropriate rule governing the valuation of physician’s samples would continue to be Rule 4 and the decision of the Larger Bench in Blue Cross Laboratories Ltd.’s case (supra) mutatis mutandis continues to be good law.” The Central Board of Excise and Customs (CBEC) has also issued Circular no. 915/5/2010-CX dated 19th February, 2010, stating that the aforesaid decision of CESTAT would, mutatis mutandis, be applicable in respect of free samples of other products which are under MRP assessment. The CBEC has clarified that valuation of samples which are distributed free as part of marketing strategy, or as gifts or donations, shall be determined in terms of the Board’s Circular No. 813/10/2005-CX., dated 25-4-2005, and the aforesaid decisions of CESTAT, whether the final products are assessed under MRP-based assessment or otherwise.”
Our bonds and bank guarantees submitted to Customs under the Advance Authorisation and EPCG Authorisation schemes are not redeemed even after we have submitted to Customs all the documents necessary for verification, including the Export Obligation Discharge Certificate (EODC) issued by the Regional Authorities of the DGFT. Is there any way we can persuade the authorities to release our bonds and bank guarantees?
As per the CBEC Circular no. 5/2010-Cus dated 16th March 2010, in the case of the EPCG scheme, the Customs at the port of import shall ensure that the installation certificates are submitted within six months of completion of imports, as stipulated in the corresponding customs notifications. The correctness of the installation certificates, which are issued by the Chartered Engineers, shall be verified on a random basis through Central Excise divisions. Further, the EPCG notifications stipulate fulfilment of at least 50 per cent of the export obligation within the first block. This shall be verified in detail. In case this is found satisfactory, the EODC issued by the Regional Authority at the end of the second block may be accepted without further verification, unless there is specific intelligence suggesting the need for detailed verification. In case of the Advance Authorisation scheme, the EODC should normally be accepted unless there is any intelligence suggesting misuse, says the Circular.
Therefore, you may approach the concerned authorities and if need be, the concerned Customs Commissioner and ask for immediate release of your bonds and bank guarantees.