2. The Chief Commissioner of Customs, Mumbai Zone –I (Shri K.M.Tiwari) welcomed all the members of trade, industry, CHAs Association and officers present in the meeting. He wished all the members and officers a “Happy New Year” and introduced S/Shri Jogendra Singh, Chief Commissioner of Customs, Mumbai Zone-III, D.S.Sra, Commissioner of Customs (Gen.), C.M.Mehra, Commissioner of Customs (Export Promotion), Mumbai-I and Anil Taneja, Commissioner of Customs (Export Promotion), ACC, Mumbai-II, who have taken over their respective charges recently. Shri K.M.Tiwari, Chief Commissioner of Customs, Mumbai Zone-I, also announced that the Optical Fibre Link with MbPT and EDI connection at CFS Mulund would commence by Feb.’2004. S/Shri Mark Fernandes, Rustom S. Tirandez, Gulam Mohd. and K.K.Thakur, representatives of various associations welcomed the new Chief Commissioner of Customs and Commissioners of Customs and also wished the Members and the officers
present a “Happy New Year”. Thereafter, Shri Joseph Dominic, Chief Commissioner of Customs, Mumbai Zone-II, took over the chair and confirmed the Minutes of the meeting held on 01.12.2003.

3. The agenda points were taken up for discussions. The representatives of trade, industry and CHA association raised the following points:-

I. Issues raised by MANSA :
3.1 Revenue deposits/refunds from Customs: MANSA stated that the list of outstanding cases as compiled for the Shipping Agents was forwarded by them to the Commissioner of Customs (Import) under MANSA’s letter dtd. 01.12.2003. They further requested that Commissioner (Import) may inform in writing to the Shipping Agencies (total 7 in no.) as to the status and the tentative time period for sanction of their refund.

3.1.1. The Chief Commissioner informed that, out of the 7 cases in one case the refund has since been sanctioned and is pending completion of audit formalities, in 2 cases the parties have not yet submitted the required documents for considering the sanction of their refund claims and in the remaining 4 cases their refund claims are being processed. The Chief Commissioner directed the Commissioner (Import) to individually inform the position to each one of them in writing.

II Points raised by AIIEA:
3.2 Conversion of Free Shipping Bill to DEPB Shipping Bill : AIIEA brought out that certain exporters have been forced by the Customs to convert the DEPB Shipping Bills to Free Shipping Bills due to high handedness of certain Customs officials and in some other cases certain exporters unwittingly and erroneously filed Free Shipping Bills when in reality they could have filed DEPB Shipping Bills. They stated that inspite of the Finance Ministry’s clarifications the Mumbai Customs are not permitting conversion of Free Shipping Bills to DEPB Shipping Bills. When the exporter enquired about the issue they have been informed that Mumbai Customs have sought certain clarifications from CBEC. However, Jawahar Custom House, Nhava Sheva are allowing conversion of Free Shipping Bills to the DEPB Shipping Bills. They wanted to know the reasons as to why New Custom House, Mumbai, is not allowing the said conversion.

3.2.1 The Chief Commissioner clarified that the Department is fully aware of the problem and therefore the issue was discussed in the recent Conference of Chief Commissioners held on 27th Sept., 2003 at Vizag. After due deliberations on the issue it was decided that Board will re-consider their instructions issued in May ‘2003 on the subject. The Chief Commissioner also stated that till the decision from the Board is received each case for conversion of Free Shipping Bills to Export Promotion Schemes will be considered by the concerned Commissioner as per the existing guidelines. Regarding diversion in practice in New Custom House, Mumbai and Nhava Sheva, the Chief Commissioner clarified that at Nhava Sheva also each case is decided on individual merit only.

3.3 At this point the Trade raised an issue that wherever there is a dispute in the rates of DEPB between the Department and the Exporters the shipment are not being allowed.

3.3.1 The Chief Commissioner clarified that instructions are already in vogue to allow provisional clearance in case of such disputes. However, these instructions will again be reiterated by the concerned Commissioners. However, in case the Members have any specific problem they should bring it to the notice of the concerned Commissioner for redressal immediately.

3.4 AIIEA pointed out that the Customs formations are not allowing full payment of Customs duty by debiting through DEPB scrip and certain formula has been worked out for such payments. It seems that Status Holders have been given a higher quota for such payments. Per se, it was illegal and bad in law to prohibit payment of duty through DEPB scrip. DEPB Scrip is a Govt. document and cannot be refused for payment. It was more unfortunate that there was a quota system for Status Holders. Fixation of such quotas only add to the woes of the non-status holders and importers per se.

3.4.1 The Chief Commissioner clarified that there is no mandate on directions issued in this matter and no quota system is being followed for Status Holders. It has been the practice to request the importers to pay maximum possible amount of duty through cash towards the end of the financial year to accelerate revenue collection. In no case any importer is compelled to pay a certain amount of duty through cash. He further clarified that inspite of these instructions if in case any Importer is compelled to pay through cash only he may approach the concerned Commissioner. It was also assured by the Chief Commissioner that no DEPB will be allowed to expire because of such requests.

III Points raised by M/s.Saraswati Clearing Agency:
3.5 Ex-bonding of cargo on physical warehousing waiver : The clarification was sought as to which sub-section of Section 15 of the Customs Act, 1962 would be applicable to the Ex-bonding Bill of Entry where after completion of Bond Bill of Entry subsequent to physical waiver has been permitted. Whether the duty rate applicable will be as per the date of filing of Bond Bill of Entry or as per the date of presentation of Ex-bonding Bill of Entry.

3.5.1 The Chief Commissioner clarified that sub-Section (b) of Section 15 of the Customs Act, 1962 will be applicable in such cases.

3.6 Levy of CESS on textile machinery : It was stated that several Less Charge notices for non payment of CESS on weaving looms have been issued. The looms are exempted from CVD vide Notification No.21/2002 dtd. 31.3.2002 Sr. No.251(1) List No. 31 Sr. No.9. It was stated that Board has since clarified that all additional duties are required to be collected under Section 3 of the Customs Tariff Act, 1975 and once exemption is issued under the said Section it would have the effect of exempting the goods both from Central Excise as well as CESS. For the above reasons CESS is not levied under the EDI system. However, after clearance Less Charge notices are being issued. In Jawahar Customs House, Nhava Sheva, CESS is being collected on separate challans as under EDI system no CESS is charged where additional duty is exempted.

3.6.1 The Chief Commissioner clarified that this is a legal matter, which will be examined on file, and a reference will be made to Board urgently for clarifications. Till the issue is clarified the present practice will continue.

IV Points raised by Shri Rajiv Gupta :
3.7 It was brought out that registration of EOUs is taking considerable time and putting hardship to the EOUs resulting in accelerating their transaction cost. It was requested that the provisional registration may be granted immediately which could be converted into final registration within 15 days time so that the trade does not suffer.

3.7.1 The Chief Commissioner clarified that this issue was discussed at length in the last Open House Meeting and it was informed that the EOUs may be advised to approach for registration, well in time and all out efforts may be made by Customs to register them as early as possible after due verification. The Chief Commissioner reiterated that they should apply for registration well in advance and no provisional registration can be permitted.

3.8 Issue of CT-3 and Procurement certificates : In the matter of issuance of Procurement certificates as well as CT-3 certificates the position was very bad. Because of this delay the EOUs have been put to disadvantage as compared to any DTA unit. The work handled by one Supdt. i/c of the Customs office is too high, which is causing delay.

3.8.1 The Chief Commissioner informed that the issue would be examined in details and we will improve upon the system for speeding issuance of CT-3 certificates and Procurement certificates.

(Action : Commissioner (Exp.), Mumbai Zone I & II)

3.9 Demand for C.Excise verification in case of deemed export licences for release of Bank Guarantee : It was stated that there was no such provision and earlier when the DEEC books were there the discharge was carried out on redemption certificate issued by RLAs. It was not clear how C.Excise authority can verify exports and therefore if necessary the matter could be taken up with the RLAs to attach the SEZ authority certificate, AR 3A duly certified with the licence/certificates of the exports. There should not be two bond waiver exercises in any case. Similar problem would also arise in case of additional intermediate licence also. It can, therefore, be simultaneously solved.

3.9.1 The Chief Commissioner clarified that as per Para 4.16 of the current EXIM Policy, the licence issued by the DGFT the verification is required to be done by the Customs and in case of deemed exports licences, the entire transaction takes place in the jurisdiction of Excise Commissionerates. In such circumstances, there is no option but to seek verification from the C.Excise authorities. Shri S.S.Sandhu and Shri Darshan Singh, Jt. Directors of Directorate General of Foreign Trade, Mumbai, who were also present decided that DGFT will examine as to whether the original certified documents submitted to them can be returned to the exporters for their production to the Excise/Customs authorities.
(Action : DGFT, Mumbai)

3.10 Shipments on valid for shipment endorsement counter receipts : As on date also, there arises a need when shipments have to take place on “Valid for shipment receipts”. For e.g. DGFT servers are not working and the file numbers cannot be generated. There should be no reason for Customs to hold up export shipments under any circumstances on the basis of these receipts. This is as per para 2.42 of EXIM Policy AM 02-07. The shipments are in any case provisional and at the cost and risk of the exporter in any case.

3.10.1 The Chief Commissioner clarified that since this problem will arise when EDI system with DGFT is not working or fails, DGFT will examine the issue independently and issue instructions. Shri S.S.Sandhu and Shri Darshan Singh, Jt. Directors of Directorate General of Foreign Trade, present during the meeting agreed to this.

V. The following points outside the agenda points were also taken up for discussions :
3.11 Shri Mark Fernandes, President, BCHAA brought out that the cases of refund of duty due to short-shipments are also being subjected to examination for unjust enrichments which is not correct as per Law. Similarly, when the provisional assessment is finalised and the refund claims are submitted these are also being subjected to examination for unjust enrichment.

3.11.1 The Chief Commissioner clarified that the refunds arising out of duty paid on short-shipments would not be subject to examination for unjust enrichments. However, the refunds resulting from finalisation of provisional assessments needs to be examined as the issue is pending before Hon’ble Supreme Court for decision.

3.12 Shri Rajeev Gupta stated that no anti-dumping duty could be charged after 5 yr. of the issuance of the Notification as “Sun-set” clause in the anti-dumping notification does not allow charging of anti-dumping duty beyond 5 yrs.

3.12.1 The Chief Commissioner clarified that anti-dumping duty shall be charged as long as Notification for charging anti-dumping duty is valid.

3.13 Shri Rajiv Gupta brought out that for quantifying the DEPB amount which date should be taken into account. Whether the date on which Let Export Order (LEO) has been given or the date on which remittance has been received.

3.13.1 The Chief Commissioner clarified that the issue will be examined and Trade will be informed accordingly.

3.14 Shri Gulam Mohd. stated that the testing of the textile material for presence of Azo-dyes may be dispensed with as no samples have so far been found to contain Azo-dyes. Use of Azo-dyes in textile material is banned World over and therefore no textiles material with the presence of Azo-dyes would be coming to India or so.

3.14.1 The Chief Commissioner clarified that in this context the importers may approach Ministry of Commerce to dispense with such requirements as Customs are implementing what has been prescribed by the Ministry of Commerce.

4. The Chief Commissioner thanked all the members present.
The next meeting will be held on Monday, the 9th Febuary, 2004 at 15.30 hrs.. The points sponsored for the meeting should reach the office of the Chief Commissioner of Customs, Mumbai Zone I, II & III latest by 30.01.2004 positively.

(O.P.KHANDUJA)
Addl. Commissioner of Customs/CCO
Mumbai - I

Copy to :

1. The Chief Commissioner of Customs, Mumbai Zone-II & Zone-III.
2. All Commissioner of Customs, Mumbai Zone-I, II & III.
3. The Addl. Commissioner of Customs (EDI), Mumbai – for website display.
4. The Jt. DGFT, Mumbai.

Copy for information and wide circulation to :
All Associations with a request to inform members to view the minutes on the website of Mumbai Customs at www.mumbaicustoms.gov.in.