CBEC issues circular on Transferability of Goods Imported/Procured by debiting duty in SFIS Scrips [Read Circular]

Bagasse - CBEC - Taxscan

The Central Board of excise and Customs has recently issued a circular regarding the transferability of goods imported/procured by debiting duty in SFIS scrips in consequent to the judgment of the Delhi High court in Great India Ltd’s case. In the above case, the Court held that the DoR cannot insist that the vessels of the Petitioner that have completed more than three years after import should be transferred only by sale within group companies or managed hotels or be re-exported. Further, the Customs Notification No. 91/2009 dated 11th September 2009 under Section 25 (1) of the CA to the extent it restricts the transfer/sale of goods imported using the SFIS duty certificates/scrips for the purpose of payment of customs duty, even where such goods satisfy the criteria for transferability under the FTP and HBP, is in violation of the FTDR Act, the FTR Rules as well as FTP 2004-2009 and FTP 2009-2014.

Consequently, the Board has  consulted with the DGFT. In order to give effect to the above decision, it is clarified that the goods imported/procured utilizing SFIS Scrip issued in terms of FTP 2009-14 may be sold/transferred on completion of 3 years from the date of clearance of import/ procurement in terms of the Department of Commerce notification no. 30 dated 1.8.2013.

The circular also clarifies that “In the light of the Hon’ble High Court’s order and absence of specific amendment by Dept. of Commerce to the FTP 2004-09, requests for sale/transfer of goods imported/procured utilizing SFIS scrip issued in terms of FTP 2004-09 shall be considered by DGFT in terms of para 2.5 of FTP 2004-09 on merits keeping in view the spirit of the Hon’ble High Court’s order to the effect that transferability of goods that have completed 3 years is not deniable only on the ground that imports were in terms of the FTP 2004-09.”

It also provided that the provision of transferability after 3 years is not applicable to consumables (including food items and alcoholic beverages) since such consumables are meant to be consumed in the course of day to day business of the applicant, such consumables are non-transferable even after 3 years. However, the above instances are exempted from this.

As per the circular the DGFT will also consider the requests for export sale of goods any time after import/procurement, subject to such export being without claim for any export incentive, rebate, refund, drawback and/or re-credit of incentive and the bringing back into India being treated as a fresh import.

Read the full text of the circular below.