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Customs Circular No.56/2002 dated 9.9.2002
Sub: Market verification for ascertaining the present market value under DEPB
Scheme and admissibility of DEPB credit-reg.
Attention is invited to Board’s Circulars No.15/97-Cus
dated 3.6.1997, 69/97-Cus dated 8.12.1997, 79/98-Cus dated 22.10.1998,
23/99-Cus dated 11.5.1999 and 26/2001-Cus dated 24.4.2001.
2. As per the existing instructions contained in these Circulars,
the DEPB credit is to be normally given on the FOB value of the exports.
However, where on the basis of market inquiry it is found that the declared
value of the export goods is more than their present market value then the
present market value shall be considered for the purposes of allowing DEPB
Credit.
3. Field formations have sought clarification whether these instructions
are also applicable to those goods where the declared f.o.b. value is more
than the declared present market value. Also, whether these instructions
shall also be applicable to those goods whose DEPB Credit rates are less
than 10%.
4. It is clarified that wherever, the declared f.o.b. value is more
than the present market value as declared by the exporter or as
ascertained by the Customs authorities, the present market value shall
be the basis for granting DEPB credit. Further, this principle will be
applied to all export products whether their rates are less than 10% or are
10% or above 10%.
5. As per the existing instructions the verification of the
present market value through market enquiries should be specifically assigned
to the Special Intelligence & Investigation Branch of the Custom House
and not to the Assessing Officer and the enquiry must be completed and
the final view taken in 30 days except where the Commissioner of
Customs has specified that it is necessary to extend the period beyond
30 days to collect further information/evidence, the enquiry period may be
extended upto 90 days from the date of the Shipping Bill. The show
cause notice should be issued within the extended period of 90 days.
However, if the Commissioner of Customs is satisfied that the enquiry
for determining the present market value of the goods has to be
extended for reasons involving fraud/collusion/wilful mis-statement or
suppression of facts, he may extend the period of 3 months till such
further period as is deemed necessary after recording the reasons
thereof in writing.
6. It has been brought to the notice of the Board that in many
cases the intelligence regarding over-valuation of the exports is
received much after the exports. Therefore, the existing instructions pose
a legal hurdle in investigation of DEPB frauds where the DEPB credit has
already been availed and in many cases even utilised.
7. This issue has been examined in the Board. It is clarified that in
respect of the cases involving fraud/collusion/wilful mis-statement or
suppression of facts, etc., the enquiry can be opened at any stage
within a period of 5 years and notice may be issued for recovery of
import duty involved.
8. Suitable public notices for information of the trade and standing
orders for guidance of the staff may kindly be issued accordingly.
9. The receipt of this Circular may kindly be acknowledged.
Yours faithfully,
(S.S. Renjhen)
Joint Secretary to the Government of
India
Tel.No.3341079.
F.No.605/38/2002-DBK
Government of India, Ministry of Finance, Department of Revenue