No Excise Duty on Jewellery
in No Sale Cases for Re-import from Exhibitions Outside
India – Position Clarified
[CBIC
Circular No. 17/2019-Customs
dated 19 June 2019]
SUB: Applicability of Additional Customs duty on goods re-imported under
Customs Notification No. 94/96-Customs dated 16.12.1996 exported
earlier for exhibition purpose/ consignment basis
Representations have been received for clarifying the issue of
availability of
exemption from the additional duty of customs leviable under Section 3 of Customs
Tariff Act, 1975 under notification no. 94/96-Customs dated 16.12.1996 on the re-
import of jewellery which had been earlier exported
either for participation in
exhibition or on consignment
basis.
2.
Matter
has been examined. It is to recall
that during the
2016-17
Union Budget, Central Excise duty of 1% (without
input tax credit) or 12.5% (with input tax
credit) was imposed on articles of jewellery falling under
heading 7113 of the First
Schedule to the Central Excise Tariff Act, 1985. As per section 3 of the Central Excise Act, 1944, all goods produced
or manufactured
in
India are leviable
to duty of Central
Excise at rates prescribed in the First Schedule to the Central Excise Tariff
Act, 1985. As per
Rule
4 of the Central Excise Rules, 2002, such duties are however
collected
by the Government at the time of removal from the
place of manufacture/ warehouse of such manufactured goods. After the levy
of
Central Excise Duty on articles of jewellery
during Budget 2016-17,
Articles of Jewellery
(Collection of Duty) Rules, 2016 were
notified vide Notification no.34/2016
(N.T.) dated 26.07.2016 by
the Government. As
per
Rule 6 of the said rules, liability to pay Central Excise duty arises at the time of
first sale by the manufacturer/ principal manufacturer from his registered premises. However, such payment of Central Excise duty is done on a monthly basis by the
5th/6th day of the following month. Prior to imposition of Central Excise duty on
jewellery,
the same was exported without Bond/LUT as
clarified by
Circular
no. 928/18/2010-CX
dated 28.06.2010.
On imposition of
Central Excise duty,
such jewellery
was exported under self declaration and submission of LUT to Customs without the need to get the LUT ratified by jurisdictional central excise authorities
vide Circular Nos. 1021/9/2016-CX dated 21.03.2016 and 1042/30/2016-CX dated 26.07.2016.
3.
Re-import
of jewellery which was exported
under bond/LUT
for exhibition abroad or on consignment basis, per se indicates that there was no sale involved. Thus, there was no
liability to pay Central
Excise duty as
it arises only at the time of
first sale by the manufacturer as per provisions under the Articles of Jewellery (Collection of
Duty) Rules, 2016, inspite
of leviability
of Central Excise duty that had already arisen at
the
time of manufacture. Condition 1(d) of
the notification no. 94/96- Cus
requires payment
at
the time of re-import of Central Excise duty not paid
initially at the time of export. As in the present case, no duty was required to be paid for goods
which
have not been sold and have been
re-imported, hence the said condition
requiring payment of Central Excise duty in such cases appears to be not applicable even if the re-import is taken to be falling under condition 1(d) of the notification. However, such cases appear to fall more appropriately under residuary entry at Sl.
No. 3 of the said notification as the goods were allowed to be exported under
simple LUT which was even not required to be registered with Central Excise authority. Hence, in
effect, claim of re-import under condition 1(d) or 3 does not materially alter the
situation. Therefore, no duty is payable in such cases of re-import provided all other conditions of the notification are met.
4.
In
the case where the export has taken place under claim of rebate, then it is clear
that Central Excise duty has been paid.
This means that as per Rule 6 of Articles of
Jewellery (Collection
of Duty) Rules, 2016,
sale
has taken place and then
at
the time of re-import, rightly it
has
to be done under condition 1(c) of the notification which requires repayment of the rebate claimed by
the exporter.
5.
Difficulties, if any, may be brought
to the notice
of
the Board.
F.No. DGEP/G&J/06/2019