Circular No. 27/2016-Customs
[As amended vide Board’s approval dated 31.07.2020]
F. No 484/31/2016 – LC
Govt. of India
Ministry of Finance
Dept. of Revenue
Central Board of Excise & Customs
********
New Delhi, dated 10
th
June 2016
To,
All Principal Chief Commissioners Customs,
All Principal Chief Commissioners of Customs & Central Excise,
All Chief Commissioners of Customs,
All Chief Commissioners of Customs & Central Excise,
All Directors General, Chief Departmental Representative,
All Principal Commissioners of Customs,
All Principal Commissioners of Customs & Central Excise, All Commissioners of Customs,
All Commissioners of Customs & Central Excise.
Sub: Procedure to be followed by nominated agencies importing gold/silver/platinum
under the scheme for ‘Export Against Supply by Nominated Agencies’ - reg.
Sir / Madam,
In connection with the changes made to Chapter IX of the Customs Act and
Regulations issued thereunder, requests for clarification have been received from field
formations and trade regarding the circulars 28/2009-Cus dated 14.10.2009 / Circular No.
34/2013- Cus. dated 04.09.2013 and warehousing of Gold/Silver/Platinum imported by
nominated agencies under notification 57/2000-Customs dated 8
th
May 2000.
2. Circular 28/2009-Cus. lays down the procedure to be followed by the Nominated
Agencies for supplying duty free gold imported under notification 57/2000-
Customs, to exporters. Consequent to the guidelines issued by RBI for import of gold and
gold dore bars vide AP (DIR Series) Circular No. 25 dated 14.8.2013 (80:20 scheme),
Circular 34/2013-Customs was issued to operationalize the same, prescribing the procedure
to be followed for import of gold and thereby amending circular 28/2009-Cus. Dated
14.10.2009.
3. Pursuant to the withdrawal of the 80:20 scheme by RBI vide Circular no. 42 dated
28.11.2014, Circular 34/2013-Customs was rescinded vide DGEP letter No.
DGEP/G&J/16/2009 (Pt. II). dated 03.12.2014. Further, DGFT had rescinded policy circular
No. 77 (RE-2008)/2004-09 dated 31.03.2009 and withdrew all circulars on the import of
precious metal by nominated agencies by circular no. 14 dated 01.02.2011. Later by issue
of Policy Circular no. 39 (RE-2010)/ 2009-14 dated 19.08.2011, a fresh monitoring
mechanism was laid out. Upon the issue of FTP 2015-20, circular no. 39 dated 19.08.2011
was also rescinded and para 4.41 of the Foreign Trade Policy and 4.94 of the Hand Book of
Procedures now lay down the procedure with regard to import of gold/silver/platinum,
duty free, by nominated agencies for supply to exporters for manufacture of jewellery and
export thereof. Accordingly, notification 57/2000-Cus. was amended by notification
33/2015-Cus to incorporate the relevant paras of the FTP.
4. Circular 28/2009-Cus. deals with two issues, namely, warehousing of
gold/silver/platinum imported by nominated agencies for supply to exporters and the
procedure for accounting of the same.
5. It is clarified that warehousing is a facility for duty deferment. As per section 2 (14)
of the Customs Act, Dutiable goods are defined as “any goods which are chargeable to duty
and on which duty has not been paid”. Chapter IX provides that only dutiable goods may be
deposited in a warehouse. Therefore, any exempted goods are not to be warehoused within
the meaning of chapter IX of the Customs Act. Accordingly, any gold/silver/platinum
imported under the notification 57/2000-Cus dated 8
th
May 2000 must be cleared on a bill
of entry for home consumption and not a bill of entry for warehousing.
5.1 Consignments of Gold / Silver / Platinum imported under notification no. 57/2000-
Cus. do not require to be warehoused. In order to facilitate a smooth transition to the new
procedure, it is being provided that nominated agencies shall file ex-bond bills of entry
under section 68 availing the benefit of notification no.57/2000-Cus. any time on or before
13
th
August 2016 (in terms of the transitional provisions in the licencing regulations). In the
meanwhile, the goods can continue to be stored in the existing vaults.
5.2
1
[The procedure regarding warehousing of dutiable precious metals under Section
58A is under consideration of the Board. In the meantime, any dutiable precious metals
already imported or to be imported (i.e. without availing notification no. 57/2000-Cus. or
any other exemption notification by virtue of which no duty is chargeable) can continue to
be stored in the existing vaults licensed under erstwhile Section 58. Since the licensing
regulations provide for a transitional period upto13
th
August,2016, importers may be
advised to plan for complying with the new regulations for storage of gold which is
imported without availing any duty free exemption in warehouses licensed under section
58A.]
1
Deleted vide Board’s approval dated 31.07.2020
5.2
2
[The procedure regarding warehousing of dutiable precious metals under Section
58A shall be guided by the Special Warehouse Licensing Regulations, 2016 and the Special
Warehouse (Custody and Handling) Regulations, 2016, and the relevant circulars issued in
this regard].
6. By circular 28/2009 – Cus dated 14.10.2009 the Board had in order to avoid
divergent practices and to streamline supply of precious metal for exports, laid down a
procedure for duty free import of gold/silver/platinum by nominated agencies for supply
to exporters. The same has now been reviewed by the Board and the following simplified
procedure shall henceforth be followed:
(i) the Nominated Agencies shall execute a bond to the Deputy/Assistant Commissioner
of Customs binding themselves to, -
(a) maintain accounts for the gold/silver/platinum imported; and
(b) to discharge the duty in the event of the exporter not fulfilling his export obligation
within the period prescribed under the foreign trade policy;
(ii) For the purpose of para (i) above, the Nominated Agencies may execute a bond for an
amount equivalent to the duty involved on the import of a particular consignment, or, a
general bond for an amount equivalent to the duty involved on quantity of precious metal
likely to be imported over a specified period as declared by the importer;
(iii) The Nominated Agency shall, along with the bond, furnish a bank guarantee equal to
25% of the estimated amount of duty involved.
(iv) However, the designated banks nominated by RBI as well as public sector
undertakings shall be exempt from the condition of furnishing bank guarantee, provided
they fulfill the following conditions:
(a) they have not defaulted in following the procedure and conditions specified by
DGFT;
(b) they have not defaulted in payment of duty within the specified period in cases
where there was a default in export of jewellery by an exporter to whom the
gold/silver/platinum had been supplied;
(c) they have not been involved in any violations involving fraud or collusion or
willful mis-statement or suppression off acts under relevant provisions of the
Customs Act, 1962, the Central Excise Act, 1944, the Finance Act, 1994, the Foreign
Trade (Development & Regulation) Act, 1992, the Foreign Exchange Management
Act,1999 and the rules made thereunder during the last three years;
2
Inserted vide Board’s approval dated 31.07.2020
(v) the exporters intending to receive precious metal from the Nominated Agencies will
register themselves with their jurisdictional Asst. Commissioners who will issue them a
one-time certificate specifying therein the details of their units. This certificate has to be
produced to the Nominated Agencies while taking gold. The exporter shall submit to the
Asst. Commissioner an undertaking to the effect that he shall export the jewellery made
from the gold/silver/platinum received from the nominated agency within the period
stipulated in the Foreign Trade Policy.
(vi) EOUs may submit a self-declaration to the Nominated Agencies stating therein the
details of their unit; As per para 6.01 (h) of FTP 2015-20, EOUs shall have to provide proof
of export within a period of 90 days from the date on which they are issued the gold
imported by nominated agencies.
(vii) As far as exporters operating under replenishment scheme are concerned, they may
be permitted to receive precious metal from the Nominated Agencies on submission of EP
copy of the shipping bill. Nominated agencies shall also monitor the export proceeds
realization of such shipments against which they have replenished precious metal, on the
basis of Bank certificate of realization to be submitted by exporters to the nominated
agencies, as a proof of having exported the jewellery.
(viii) the Nominated Agencies would supply the gold / silver / platinum for export
production and would submit an exporter-wise consolidated monthly account in format
enclosed by the 10
th
of the succeeding month to the Customs station of import;
(ix) the exporter shall furnish the EP copy of the shipping bill and Bank Realization
Certificate to the nominated agencies as a proof of having exported the jewellery made
from the duty free goods released to them within the period prescribed in the Foreign
Trade Policy;
(x) wherever such proof of export is not produced within the period prescribed in the
Foreign Trade Policy, the Nominated Agencies shall deposit the amount of duty calculated
at the effective rate leviable on the quantity of precious metal not exported, within 7 days
of expiry of the period within which the jewellery manufactured out of the said precious
metal was supposed to be exported.
7. Circular 28/2009 – Customs dated 14
th
October 2009 stands rescinded.
8. Difficulties, if any, may be brought to the notice of the Board.
9. Hindi version follows
Yours faithfully,
(Temsunaro Jamir)
Under Secretary to the Govt. of India
Format
(as per Circular No. 27/2016-Customs)
RECEIPTS
Bill of Entry No.
and date
Customs
station of
import
Description of
Goods (Gold/
Silver/ Platinum)
Quantity
(in kgs)
Tariff
Valu
e
Exemption
notification
availed
Duty assessed
on the goods
(but for
exemption)
1 2 3 4 5 6 7
ISSUE
Date of
Issue to
exporter
Bill of
Entry No.
and date
under
which the
goods
were
imported
Name
&
Address
of the
Exporter
Description
of goods
(Gold/
Silver/
Platinum)
Qty.
issu
ed
(in
kgs)
Tariff
Value
Duty
involved
on the
goods
Issued(but
for
exemption
)
Shipping
Bill
No.&
Date
Qty.
exported
within
period
prescribed
in FTP
Details
of BRC
Balance
quantity
Duty
credited
to
customs
(TR-6
Challan
No.&
Date)
1 2 3 4 5 6 7 8 9 10 11 12
Signature of Authorized Signatory Date:
