Exemptions and remission
• Exemption can be granted by Government by issuing a notification.
• Capital goods and spares can be imported under project imports at concessional rate of customs duty.
• Remission can be obtained on goods lost/pilfered in port
• Title of imported goods can be relinquished and then no customs duty will be payable.
• Goods exported can be re-imported. Concessional customs duty is payable in most of such re-imports.
Warehousing in customs
• Imported goods can be kept in customs warehouse without payment of customs duty.
• Goods can be kept in warehouse awaiting receipt of import authorisation.
• Goods can be kept in warehouse upto one year, but interest is payable beyond 90 days, @ 15%.
• Goods can be manufactured in warehouse and exported without payment of customs duty. This facility
is useful to EOU.
• Warehoused goods cane be (a) Cleared on payment of duty (b) Cleared for export without payment of
duty or (c) transferred to another warehouse without payment of duty.
Penalties under Customs Act
• Smuggling in relation to goods is an act or omission which will make the goods liable to confiscation.
• Penalty can be imposed for improper imports or improper exports.
• Monetary penalty upto value of goods or ` 5,000 whichever is higher can be imposed. • Goods can be confiscated. Permission can be granted for re-export of offending goods.
• In case of goods covered under section 123 of Customs Act, burden of proof that the goods are not
smuggled goods is on the accused.
REFUND OF SPECIAL CVD OF CUSTOMS TO TRADERS
Traders selling imported goods in India after charging sales tax/Vat can claim refund of special CVD of 4% from
customs department – Notification No. 102/2007-Cus dated 14-9-2007. The dealer (trader) (if he is registered with Central Excise and is issuing Cenvatable Invoice) selling such imported goods must mention in his invoice that the buyer will not be able to avail Cenvat credit of such duty. This is required if he is claiming refund of the
special CVD. If he is not claiming refund, obviously, such remark is not required. A manufacturer using these
goods in his manufacture can avail Cenvat credit of this duty. Thus, he gets credit through central excise route.
ANTI DUMPING DUTY ON DUMPED ARTICLES
Often, large manufacturer from abroad may export goods at very low prices compared to prices normally
prevalent in export market. Such dumping may be with intention to cripple domestic industry or to dispose of
their excess stock. This is called ‘dumping’ and is an unfair trade practice. In order to avoid such dumping and
to protect domestic industry, Central Government can impose, under section 9A of Customs Tariff Act, antidumping duty, if the goods are being sold at less than its normal value. Levy of such anti-dumping duty is
permissible as per WTO agreement. Anti dumping action can be taken only when there is an Indian industry
producing ‘like articles’. In Shenyang Mastusushita v. Exide Batteries 2005 (181) ELT 320 (SC 3 member bench), it
was observed, ‘Principle behind anti-dumping laws is to protect the domestic industry from being adversely
affected by import of goods at export prices which are below the normal value of the goods in the domestic
market of the exporter. The duty is calculated on the margin of dumping which is the difference between the
export price and the normal value’.
In SS Enterprise v. Designated Authority AIR 2005 SC 1527 = 181 ELT 375 (SC 3 member bench), it was held that
purpose being imposition of anti-dumping duty is to curb unfair trade practices resorted to by exporters of a
particular country of flooding the domestic markets at rates which are lower than the rate at which the exporters
normally sell the same or like goods in their own countries, so as to cause or be likely to cause injury to the
domestic market. The levy of dumping duty is a method recognised by GATT (should be WTO) which seeks to
remedy the injury and at the same time balances the rights of exporters from other countries to sell their
products within the country with the interest of domestic markets. Thus the factors to constitute ‘dumping’ is (i)
an import at prices which are lower than the normal value of goods in exporting country (ii) the exports must be
sufficient to cause injury to domestic industry.
However, negligible quantity of imports would not be sufficient to cause such injury.
Presently, countries like China, Taiwan are said to be involved in dumping. Even Indian steel exporters are
facing charges of dumping goods in USA.
Provisional anti-dumping duty – Pending determination of margin of dumping, duty can be imposed on
provisional basis. After dumping duty is finally determined, Central Government can reduce such duty and
refund duty extra collected than that finally calculated. Such duty can be imposed upto 90 days prior to date of
notification, if there is history of dumping which importer was aware or where serious injury is caused due to
No CVD on anti dumping duty – Anti Dumping Duty and Safeguard Duty is not required to be considered
while calculating CVD – view confirmed in Tonira Pharma v. CCE (2007) 208 ELT 38(CESTAT 2 v. 1 order).
No education cess and SAHE cess on anti-dumping duty – Education cess and SAH education cess is not
payable on anti-dumping duty.
No anti dumping duty in case of imports by EOU and SEZ – Anti-dumping duty is not applicable for imports
by EOU or SEZ units, unless it is specifically made applicable in the notificationimposing anti-dumping duty.
[section 9A(2A) of Customs Tariff Act]
Margin of Dumping – ‘Margin of dumping’ means the difference between normal value and export price (i.e.
the price at which these goods are exported). [section 9A(1)(a)].
‘Normal Value’ means comparable price in ordinary course in trade, for like article, when destined for consumption in the exporting country or territory. If such price is not available or not comparable (a) comparable
representative price of like article exported from exporting country or territory to appropriate third country or
(b) cost of production plus reasonable profit, can be considered [section 9A(1)(c) of Customs Tariff Act]. The
‘normal value’ is to be determined as per rules.
In Reliance Industries Ltd. v. Designated Authority 2006 (202) ELT 23 (SC), it was held that ‘normal value’ are not
exporter specific but exporting country specific. Once dumping of specific goods from a country is established,
dumping duty can be imposed on all exports of those goods from that country in India, irrespective of the
exporter. Rate of duty may vary from exporter to exporter depending upon the export price.
‘Export Price’ means the price at which goods are exported. If the export price is unreliable due to association or
compensatory arrangement between exporter and importer or a third party, export price can be constructed
(revised) on the basis of price at which the imported articles are first sold to independent buyer or according
to rules made for determining margin of dumping. [section 9A(1)(b)].
Margin of dumping is determined on basis of weighted average of ‘normal value’ and the ‘export price’ of
product under consideration.
Dumping duty for WTO countries – Section 9B of Customs Tariff Act provides restrictions on imposing
dumping duties in case of imports from WTO countries or countries given ‘Most Favoured Nation’ by an
agreement. Dumping duty can be levied on import from such countries, only if Central Government declares
that import of such articles in India causes material injury to industry established in India or materially retards
establishment of industry in India. [WTO agreement permits levy of anti-dumping duty when it causes injury to domestic industry as a result of specific unfair trade practice by foreign producer, by selling below normal value].
‘Injury to domestic industry’ will be considered on basis of volume effect and price effect on Indian industry.
There must be a ‘casual link’ between material injury being suffered by dumped articles and the dumped
Rules for deciding subsidy or dumping margin – Central Government has been empowered to make rules
for determining (a) subsidy or bounty in case of bounty fed goods (b) the normal value and export price to
determine margin of dumping in case of dumping. Accordingly, Customs Tariff (Identification, Assessment and
Collection of Anti-dumping duty on Dumped Articles and for determination of Injury) Rules, 1995 [Customs
Notification No. 2/95 (N.T.) dated 1-1-95] provide detailed procedure for determining the injury in case of dumped
Procedure for fixing anti dumping duty – After the ‘designated authority’ is satisfied about prima facie case,
he will give notice to Governments of exporting countries. Opportunity to inspection of documents and making
representations will be given to interested parties who are likely to be affected. Designated Authority will first
give preliminary finding and then final finding within one year. Provisional duty can be imposed on basis of
preliminary finding which can continue upto 6 months, extendable to 9 months. Additional duty may be imposed
on basis of the final finding.
As per rule 18 of Anti-Dumping Duty Rules, Central Government has to issue a notification fixing anti-dumping
duty within three months from date of notification issued by designated authority.
Appeal against order determining dumping duty – Appeal against the order determining the duty can be
made to CESTAT. The appeal will be heard by at least three member bench consisting of President, one judicial
member and one technical member [section 9C of Customs Tariff Act].