OFFICE OF THE CHIEF COMMISSIONER OF CUSTOMS,
MUMBAI ZONE - I, NEW CUSTOM HOUSE,
BALLARD ESTATE, MUMBAI 400 001.

MINUTES OF THE OPEN HOUSE MEETING OF THE CHIEF COMMISSIONERS OF CUSTOMS, MUMBAI ZONE-I, II & III HELD WITH THE REPRESENTATIVES OF THE TRADE AND INDUSTRY ASSOCIATIONS ON 07th MARCH 2007 AT 3.30 P.M. IN
THE CONFERENCE HALL OF THE MUMBAI CUSTOM HOUSE.

The Open House Meeting for the month of March, 2007 was held under the Chairmanship of Shri K. M. Tiwari, Chief Commissioner of Customs, Mumbai Zone I, Shri N. Sasidharan, Chief Commissioner of Customs. Mumbai Zone-II on 07.03.2007 at 3.30 P. M. in the in the Conference Hall, New Custom House, Ballard Estate, Mumbai - 400 001.

2. The following representatives of the BCHAA, Trade and Industry attended the meeting:

i) BCHAA (Bombay Custom House Agent’s Association).
Shri Naval Mehta, Shri R. Radhakrishnan, Shri Omprakash Agrawal,
Shri L.V. Shah.

ii) AIIEA (All India Importers & Exporters Association)
Shri Mohan Nihalani.

iii) Indian Merchant Chamber
Shri K. M. Doshi

iv) MANSA
Shri H.D. Kulkarni

v) ASSOCHAM
Shri George Joseph

vi) Synthetic and Rayon Textiles Export Promotion Council, Mumbai
Shri A. Ravindra Kumar (Deputy Director)

vii) Association of Importers & Exporters of Manmade Textiles
Shir Gulam Mohammed

viii) Pharmaceutical Export Promotion Council
Shri Raghuveer Kini

3. It was mentioned at the outset by both the Chief Commissioner of Customs, Zone – I and II that a meeting with the Chief Secretary, Maharastra, was held on 7th March, ‘07 at the initiative of the Customs and various issues relating to improvements of facilities and other related issues were discussed at length. The Chief Secretary assured to look into the matter and provide all possible help in improving the facilities both in Nhava Sheva Port and Mumbai Port. It was further enquired if the Trade was facing any difficulty in the clearance of goods or facing any, delay due to changes effected in the EDI System consequent to Budget 2007. The members expressed their satisfaction on the working of the EDI System after incorporation of the changes made consequent to Budget 2007. However, it was mentioned that in Notification No. 2/2005 CE (N.T.) duty was not being calculated properly Shri. Sunil Jain Addl. Commissioner Systems informed that the matter has been taken up with the Directorate of Systems.

4. Thereafter, the discussions on the action taken on the minutes of the previous Meeting were initiated.

5. POINT NO. 10 OF THE PREVIOUS MINUTES
With respect to point No. 8 of the previous minutes i.e. “Verification of export documents by the Customs”, it was informed the House that the procedure for verification will be simplified and time required for verification of documents, shall be reduced.

POINT NO. 12 OF THE PREVIOUS MINUTES
Regarding point No. 12 of the previous minutes i.e. the agenda point sponsored by M/s. Amritlal Chemaux Pvt. Ltd., regarding “ delay in verification of export documents”, it was informed that reports for all the 21 Shipping Bills pertaining to M/s Amritlal Chemaux Pvt. Ltd., have been forwarded to Central Excise, Raigad.
Regarding delay in verification of the export documents, it was stated that though no time frame can be fixed, however efforts will be made to simplify the procedure and expedite the verification process.
It was also felt that issues relating to individual Assessee may be taken up first with the concerned Commissioners for early resolution of the problems.


COMMENTS FOR PARA 10 AND 12:
It was informed that the reasons for delay in verifying proof of export shipment at JNCH was studied and a revised procedure has been put in place to ensure that verification is done without delay. The system of filing EGMs in MCD has been streamlined and all EGMs submitted in 2006 have been filed properly. Central Excise Commissionerate, Raigad, has been requested to seek the information in a prescribed format, which would make it easier to retrieve the data from concerned EGMs. The pending position regarding verification report would hence forth be monitored by Commissioner (Exports) on a weekly basis. The new Procedure would ensure that verification reports are given within 3 weeks of receipt of request in JNCH.
In view of above the points were considered to be closed.

6. POINT NO. 17 OF THE PREVIOUS MINUTES
Regarding the point sponsored by M/s Srinivas Chemical Industries Pvt. Ltd. viz. “Conversion from Advance Licence Notification No. 43/2002 to another Notification No. 32/97 for job work scheme”, it was informed that the matter is being examined by JNCH.
However, the representative of the said firm was asked to meet Commissioner of Customs (Export) JNCH, and also bring up the matter in the periodical meetings between DGFT & Customs. Shri Sanjeev Bihari, Commissioner of Customs (Export) JNCH, asked the representative to meet him separately in this connection.

COMMENTS:
A Show Cause Notice F.No.S/10-Adjn-30/2007 – Gr.VII D dated 29.01.2007 on the subject matter has been issued to M/.s Srinivas Chemicals as there is no provision in Customs Act. 1962 to convert Bill of Entry from one scheme to another post importation. Once the reply of SCN is received the same would be adjudicated.
The point was considered to be closed.

7. POINT NO. 18 (iii) OF THE PREVIOUS MINUTES
Cheque book facility stopped by SBI, JNPT:
Chief Commissioner of Customs Zone – II asked the Members to take up the matter directly with the higher Authorities of the Bank. He assured that the Customs would render necessary help in the matter, if required.

COMMENTS:
In this regard SBI, Nhava Sheva has reported as under :
(i) Cheque books are invariably issued to all exporters within Mumbai clearing Zone and to others based outside Mumbai they are issued whenever requested for.
(ii) Duty drawback account is only a collection account, where no third party/business transaction are permitted. Hence cheques issued to outstation exporters, often result in complaints of delay in realization and payment of collecting and paying back charges including incidental expenses such as courier, postage etc.
(iii) To mitigate the complaint at (ii) above, SBI has the following options of remittance of funds, which are working smoothly :
(a) Transfer by Auto Sweep facility for all exporters having accounts with SBI.
(b) Transfer by RTGS / NEFT facility for all exporters having accounts with other banks.
(c) Standing instructions by Auto Sweep facility, through which DD’s are prepared and sent by courier whenever Drawback is credited.
All the members expressed their sincere thanks and appreciation to the Department for resolving the issue.
The point was considered to be closed.

8. POINT NO. 19 (ii) OF THE PREVIOUS MINUTES
Delay in receipt of RA/TRA messages from New Custom House to various locations:
It was informed that now the ‘patch’ has been changed and in case of any RA not being transmitted in the 1st attempt, the same would be reflected in the EDI Menu of the concerned AO (sender) who has now been authorized to retry and retransmit the same. Also now New Custom House, Mumbai/CFS Mulund/JNCH have direct connectivity and can function even when ICEGATE is down, which will further speed up the transfer of messages between these locations.

The point was considered to be closed.

NEW POINTS

9. SL.No.1 Point sponsored by The Synthetic & Rayon Textiles Export Promotion Council, Mumbai: Delay in release of Duty Drawback amounts at JNPT.
Exporters have represented regarding difficulty faced by them due to inordinate delays in the release of Drawback amounts at JNPT Customs. It has also been pointed out that in many cases the Drawback amounts are reduced without giving any reason in writing to the concerned exporter. Further, no proper deficiency memos are issued. Also, many claims are reportedly pending due to some problems in the EGMs.
In view of the above, it is suggested that
(a) Specific time limit may be laid down along with operations guidelines for processing of Drawback Claims to minimize delays.
(b) Wherever the Drawback amounts are reduced, the reason for such reduction may be given in writing to exporters.
(c) Since exporters are not directly concerned with the EGMs, any problems related to EGM may be sorted out by the Customs Dept. and the concerned Shipping Lines.
COMMENTS:
It was informed that :
There is no delay in processing of DBK claims. Reasons for reduction of drawback amounts are made known to importer on line. Queries/comments of the department are available on line which can be viewed by the exporters. Some of the common reasons for reduction of DBK amount are as follows:

(i) Exporters are calculating delays from the date of S/Bills. However, S/Bills are coming in DBK queue only after filing of the EGMs. If EGM is filed with any error (or mismatch with the shipping bill), S/Bills comes to the DBK queue only when the errors are removed.
(ii) The reduction of drawback amount is mainly due to the wrong classification of Drawback serial no. when compared with description. Another reason is due to non-filing of CENVAT declaration to the extent of non- availment.
(iii) For Online Drawback claim, there is no separate provisions for issuing
deficiency memo.
Further the following efforts have been made by the Drawback section, JNCH to expedite drawback payment as well as settle disputes.

(a) A drawback help desk, with phone no. 27241260 has been started with effect from 01.03.2007 to address all drawback related issues.
(b) Special drive for clearance of Drawback pendency was made and a record disposal of 48,000 claims during the month of January, 2007 was achieved. Presently there is no pendency beyond three months and it will be reduced to 1 month shortly,

(c) EGMs are filed by the Steamer Agent/Shipping Lines with Customs. The Shipping Lines/CHA/Exporter are supposed to take utmost care to avoid any mis-match/discrepancy at the time of filing EGM.

The member requested that the queries raised should be in form of Email/correspondence to the individual exporter on a one-to-one basis and that they should not be posted only on website. Further the queries posted on website do not indicate the details of deficiencies in documents. The members were informed that due to sheer volume of work it was not possible to communicate to each exporter on each document by correspondence/Email. However to mitigate the problem faced in this area a help-desk has been started w.e.f. 01.03.07 to address all drawback related issues.
In view of above, the issue was treated as closed.

10. SL.No.2 Point sponsored by The Synthetic & Rayon Textiles Export Promotion Council, Mumbai : Import of spares under EPCG scheme:
Importers have represented that while JNPT Customs allows clearance of spares alongwith the capital goods under the EPCG Scheme, spares imported subsequently are not allowed to be cleared against EPCG Authorisation. In such cases, the concerned Customs Officials insist upon the endorsement of description, quantity and value of spare parts on the relevant EPCG Authorisation.
In this regard, it may be pointed out that para 5.1 of Foreign Trade Policy allows import of spares under EPCG Scheme within the overall value of Authorisation. It is requested that import of spares may be allowed under EPCG Scheme in accordance with the provisions of Foreign Trade Policy.

COMMENTS:
It was clarified that JNPT Customs is not allowing import of spares subsequent to the import of capital goods against same EPCG authorization. Reasons for the same are as follows:
(i) In EPCG authorizations, quantity and duty saved amount are limiting factors and EDI allows for import of any item mentioned in the licence only once in terms of quantity. Once the quantity of a particular item of the licence is debited, the balance in the quantity available is nil. Even though, there is balance of duty saved amount, the spares imported subsequently cannot be debited in the EDI system against the same serial no. in the licence for the same item. In view of this EDI system limitation, importers are being asked to get amendment in licence with spares shown separately from DGFT by adding one or more sr.no. to the list of import items as spares or to get separate authorization for import of spares.
(ii) Sometimes, DGFT is issuing either separate authorization for import of spares and in some other cases, DGFT is incorporating spares as separate item in the list of import item by amending the list of items,
(iii) Separate licence for import of spares are being issued by DGFT under Para 5.1" A. Para 5.1 A of Foreign Trade Policy reads “spares (including refurbished / re-conditioned spares)) tools, spares refractories, catalyst and consumable for the existing plant and machinery importedlto be imported under the Scheme shall also be allowed subject to an export obligation equivalent to 8 times of duty saved to be fulfilled over a period of 8 years reckoned from the date of Issuance of Authorisation”. This shows that issuance of specific EPCG authorization for import of spares is envisaged in the Foreign Trade Policy and therefore the importers were requested to either get fresh authorization or get amendment in the same authorization by including spares separately.
(iv) Para 5.3.4. (i) of Hand Book of Procedures. Vol-I reads that "The applicant may also apply for import of spares, including refractory catalyst and such consumables as are required for installation and maintenance of capital goods imported/to be imported under the scheme". While issuing the authorization in such cases, EPCG authorization shall not specify the list of spares but shall indicate:
(a) Name of plant / machinery for which spares are required
(b) Value of duty saved allowed under the Authorisation
(c) Description of product to be exported with value of export obligation as per the policy
This shows that a separate and specific authorization is required for import of spares and the same is being issued by DGFT for import of spares.
(v) Jt. DGFT informed that the import of spares specifically included in the license (alongwith the capital goods) can be done within the overall value. Further spares over and above the quantity would need license from DGFT. The members pointed that the problem was import of spares included in the licence alongwith the capital goods, but shipped separately at a date subsequent to the shipment of Capital Goods were not being permitted.
Chief Commissioner of Customs Zone II asked the member to bring specific instances to his notice so that the matter could be resolved.

11. Point sponsored by All India Importers and Exporters Association.
Shri Mohan H. Nihalani pointed out that the Minutes of the previous Permanent Trade Facilitation Committee at JNCH, were not being taken up for discussion in the subsequent meetings.
It was informed by Chief Commissioner Zone – II that during the Permanent Trade Facilitation Meeting held on 25.01.2007, at JNPT it was agreed that the Members of Trade give a brief on all long standing issues or points pertaining to JNCH. Since the Commissioner and Chief Commissioner joined only recently and did not have the full background of pending issues. This would enable the Department to take up all such issues for the purpose of finding solutions after carefully examining the same. However, it was noted that no such briefs were forwarded by the Members of the Trade for consideration in the next meeting held on 22.02.2007. Therefore such points could not be taken up for discussion during the said meeting held on 22.02.2007. This did not mean that the unresolved points of any previous Meeting would not be taken up for discussion in the subsequent Meetings. Further, urgent issues could always be raised in the Permanent Trade Facilitation Meetings.

12. The meeting ended with a vote of thanks to the Chair.

13. The venue and the date / time of the next Meeting will be intimated separately.

(J. S. CHANDRASHEKAR)
ADDL. COMMISSIONER OF CUSTOMS,
CHIEF COMMISSIONER’S OFFICE,
MUMBAI ZONE – I.

Copy to:
1. The Chief Commissioner of Customs, Mumbai Zone II and III.
2. All Commissioners of Customs, Mumbai Zone I, II and III.
3. The Addl./Joint Commissioners of Customs (E. D. I.), Mumbai Customs/Jawahar Custom House, Nhava Sheva/Air Cargo Complex, Mumbai – for immediate uploading of the Minutes on the website.
4. Shri S. S. Sandhu, Zonal Jt. D. G. F. T., Mumbai.
5. Shri Y.G. Parande, D.G. Systems.
5. Shri Bani Bhattacharya, Additional Director (Systems), NCH, Mumbai.
Copy for information and wide circulation to:
All Associations with a request to inform all their members to view the Minutes of the Meeting on the Website of Mumbai Customs at www.mumbaicustoms.gov.in