F.No. 435/3/95- Cus.
IV - (Pt)
Government of India
Ministry of Finance
Department of Revenue,
Amendment to section 20 of the Customs Act, 1962 vide Finance Act,
1962 - Regarding
I am directed to say that with the enactment of the Finance Bill, 1995
on 26.5.1995 section 20 of the customs Act, 1962 stands amended so as to
provide for the levy of customs duty on all re- imported goods in the same
manner as goods being imported for the first time. As may be seen this
is a substantial change from the hitherto existing position wherein section
20 provided for the charging of duty on specified categories of goods at
the rate of duties indicated in the section itself.
With a view to exempt certain goods when re-imported into India from the
levy of Customs duty otherwise applicable in terms of section 20 of Act,
two notifications namely Notification No. 97/95-Cus and No. 98/95-Cus.
both dated 26.5.95 have been issued.
In terms of Notification No. 97/95-Customs dated 16.5.95, the goods in
respect of which any benefit of drawback of customs or excise duties or
rebate of excise duty was claimed at the time of their export or which
had been exported under bond, can be imported on payment of duty equal
to the amount of drawback claimed/ excise duty not paid at the time of
Further, the goods which had been sent for repairs abroad, would on their
re- importation, be subjected to a customs duty calculated on the fair
cost of repairs including the cost of materials used in repairs, insurance
and freight charges, both ways. (This provision is in line with the hitherto
existing Notification No. 204/ 76-Cus. dated 2.8.1976).
The goods other than the aforesaid two categories are eligible to be imported
without payment of any duty. This category would include such of the goods
which bad not claimed any benefit at the time of their export. In this
class would fall good which had been sent for demonstration or exhibition
aboard or as samples. The aforesaid exemptions are, however, subject to
certain conditions such as establishment of the identity of the goods and
re-importwithin three years, etc. The duty exemption, however, does not
apply in the case of re-imports effected by the 100% EOU/ EPZ units or
those which had been exported in fulfillment of export obligation under
the Advance License Scheme or the EPCG Scheme or which had been exported
from a bonded warehouse. These type of goods would have to pay full customs
duties under section 12 as if imported as such unless there are special
exemption for these in other notifications.
Notification No. 98/95-Cus. dated 26.5.1995 is a specific notification
for exempting goods manufactured in India and parts of such goods when
re- imported into India for repairs from the duty of customs. Here also,
similar conditions such as identity of goods being established; re- importation
taking place within a period of three year etc. is provided. Importantly
another condition is that the re-imported goods are re-exported after
repairs within a period of six months or such extended period not exceeding
one year as the Commissioners of Customs may allow. For this purpose, the
importer has to execute a bond undertaking to re-export the goods within
the specified period after satisfying the customs regarding the identity
of the goods. In the event of failure of re-export the duty will have to
be paid. It is desired by the Board that such Bond should be supported
by a security of 25% of the duty amount so exempted as bank guarantee.
The security is considered necessary for monitoring the adherence to the
condition of the notification. This notification basically re-intorduces
the exemption in terms of Notification No. 132/ 61.
aforesaid notifications with their implications may be immediately brought
to the attention of the Department officers and also the trade by issue
of suitable standing orders/ public notices. In case of any difficulty
in implementation the notification the Board may be suitably informed.
of the Government of India