Q. In response to our request for extension as per commerce ministry notification no.70 dated February 20, 2014, which states that wherever the holder of any EPCG Authorisation is granted relief under Corporate Debt Restructuring (CDR), then such Authorisation holder may be allowed EO extension of three years from the date of approval of the CDR mechanism/scheme, JDGFT, Mumbai has refused to grant extension on the grounds that the finance ministry has not yet amended notification 102/2009-Cus dated September 11, 2009 giving effect to the said change in the FTP. How shall we proceed?
I am surprised that the commerce ministry notification is disregarded by its own officials and the finance ministry. I suggest that you may take up the matter with the head of that office, DGFT and joint secretary (DBK), CBEC. If they do not respond positively, you may approach the High Court with a prayer for appropriate directions to the concerned JDGFT to follow the FTP and to the finance ministry to give effect to the said change in the FTP.
We refer to the notification no. 25/2014-CE dated December 11, 2014, which grants exemption from basic excise duty to goods donated or purchased out of cash donations for the relief and rehabilitation of people affected by the floods in the state of Jammu and Kashmir. The notification requires the manufacturer to certify on the relevant clearance documents that the goods are intended to be donated for the relief and rehabilitation of the people affected by the floods in the said state free of cost. How can a manufacturer fulfil this condition when the goods are not donated by him but sold to the government or any approved agency which makes payment out of cash donations received by them?
The manufacturer has to only certify that the goods are intended to be donated for the said purpose and not that the goods are actually donated by him. It is for the receiving agency to donate it for the said purpose and give the necessary certificate to the manufacturer. In the case of Texel Industries Ltd. [2012 (282) ELT 0047 (Guj.)], the Gujarat High Court observed that "prima facie it cannot be the intention of the Union Government that manufacturer himself must be the donor to be able to avail exemption. It would be sufficient if the goods are donated for the use of earthquake affected persons." However, it is better to seek the clarification of the CBEC and then proceed further so as to avoid litigation.
For provisional release of seized goods imported under the EPCG scheme, the Customs are demanding bank guarantee for the full value of the goods rather than for the duty amount. Is it justified?
Section 110A of the Customs Act, 1962 does not prescribe any specific amount for bond or security for provisional release of seized goods. In the case of Aban Exim Pvt. Ltd. [2014 (309) ELT 485 (Del.)], the Delhi High Court held a similar demand as excessive and reduced the bank guarantee to differential duty amount.
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