FTP Para 4.14 vs Para 2 of 22/2023-Customs, mismatch trips importer

Customs notifications override FTP provisions on duty exemptions, while advance authorisation imports can bypass MIP for deemed exports if inputs aren't sold in the DTA

We have obtained an advance authorisation for intermediate supplies under Para 4.05 (c) (ii) of the FTP. At the time of imports, Customs say that one of our inputs attracts anti-dumping duty that is not eligible for exemption. We are taken by surprise because para 4.14 of the FTP denies exemption from anti-dumping duty only for imports for supplies covered under paragraph 7.02 (c) & (f) of the FTP. Our supply is covered under Para 7.02(a) of the FTP. Please clarify the correct position.  

 

I guess your advance authorization allows imports under notification no. 22/2023-Cus dated 1st April 2023. Para 2 of that notification says that the exemption from safeguard duty, transitional product specific safeguard duty, countervailing duty and antidumping duty shall not be available in respect of material required for final goods which are covered under sub-clauses (a), (c), (d) and (i) of clause (III) of the Explanation to this notification. The sub-clause (a) covers supply of goods against advance authorization or advance authorization for annual requirement or duty free import authorization scheme. Thus, the provisions under the FTP and Customs notification are not aligned and Customs cannot be faulted for asking you to pay the anti-dumping duty. You could have averted this problem by asking for endorsement of notification 21/2023-Cus dated 1st April 2023 which allows exemption of anti-dumping duty and discharge of export obligation by advance intermediate authorization holder by supplying the resultant products to exporter in terms of paragraph 4.05 (c) (iii) of FTP.  

 

We refer to the DGFT notification no.56/2025-26 dated 29th January 2026, prescribing minimum import prices (MIP) for import of Penicillin-G-potassium (Pen-G) and its salts, 6-APA and Amoxicillin and its salts. It says that the MIP condition will not apply for imports by EOUs, units in the SEZ and under the advance authorisation scheme subject to the condition that the imported inputs are not sold in domestic tariff area (DTA). Can we import these items below the MIP under advance authorisation for deemed exports? 

Yes. The restriction is only in respect of sale of imported inputs into the DTA and not in respect of sale of goods manufactured using the imported inputs. So, you can import the items mentioned in the notification below the stipulated MIP under advance authorization for deemed exports, use such items for manufacturing the final products and supply the final products as deemed exports to discharge the export obligation. 

  We have imported certain goods for jobbing under the notification 32/97-Cus dated 1st April 1997.  Can we use some indigenous material also for carrying out the jobbing process? 

The CBEC Circular no. 18/2004-Cus dated 20th February 2004 clarifies that use of indigenous materials in jobbing work will not take the processes undertaken out of ‘job-work’ or jobbing. The definition of jobbing may be derived from the scope of the term “job work” clarified by Hon’ble Supreme Court in para 17 of their judgment in the case of Prestige Engineering (India) Ltd. v. CCE, Meerut [1994 (73) E.L.T. 497 (S.C.)].

 

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