If the goods are subject to tariff valuation, the date for determination of value will be the same as that for determination of duty rate in the case of goods being cleared from a bonded warehouse.
We are buying goods from bulk importers who store the goods in a bonded warehouse and transfer the ownership to us. We want to know the rate of duty payable on the goods at the time of clearance and also the value on which duty is to be paid. Currently, the Customs are collecting duty at the price that we are paying to the importers.
According to Section 15 (1) (ii) of the Customs Act, 1962, the rate of duty in the case of goods cleared from a warehouse under section 68, is the date on which a bill of entry for home consumption in respect of such goods is presented under that section. However, according to the Supreme Court judgment in the case of Kesoram Rayon 1996 (86) ELT 464 (S.C.), goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyond the permitted period or its permitted extension. The importer of the goods may be called upon to pay Customs duty on them and, necessarily, it would be payable at the rate applicable on the date of their deemed removal from the warehouse, that is, the date on which the permitted period or its permitted extension came to an end.
Therefore, the date for determination of the rate of duty will be the date of filing the ex-bond bill of entry, in case of goods sought to be cleared for home consumption within the period permitted for warehousing. Otherwise, the relevant date is the date of expiry of the permittedbonding period.
Regarding valuation, if the goods are subject to tariff valuation under Section 14 (2) of the Customs Act, 1962, the date for determination of value will be the same as that for determination of duty rate in case of goods being cleared from a bonded warehouse. In case of other goods, the value determined at the time of import i.e. the value mentioned in the bill of entry for warehousing is the value on which duty is to be paid at the time of clearance from the warehouse. Para 15 of the Chapter on Warehousing in the Manual of Supplementary Instructions issued by the Central Board of Excise and Customs says that in so far as value for assessment of duty for warehoused goods is concerned, it is not required to be re-determined and it is the original value as determined at the time of filing of into bond bill of entry and assessments before warehousing. Therefore, it is not necessary to pay duty on the price at which transfer of ownership has taken place at the bonded warehouse. You may ascertain from the importers the value assessed on the in-bond bill of entry and file ex-bond bill of entry on that value. The Customs may be guided by the value that you declare on the bill of entry.
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