Circular No. 10 /2004-Cus.
30th January, 2004
Government of India
Ministry of Finance
Department of Revenue
Sub : Restriction regarding import of agriculture & dairy products under DFCEC Scheme for Status Holders Para 184.108.40.206 of EXIM Policy and Customs Notification No.53/2003-Cus. dated 1.4.2003) and DFCEC Scheme for Service Providers (Para 3.8 of EXIM Policy and Customs Notification No.54/2003-Cus. dated 1.4.03) – reg.
In terms of Para 220.127.116.11 of the EXIM Policy, Status Holders who show specified incremental exports during the financial year 2003-04 would be issued DFCEC Licences permitting duty free import of capital goods, office equipments and inputs free of customs duty with effect from 1.4.2004. Similarly, in terms of the amended provisions of Para 3.8 of the EXIM Policy specified service providers have been permitted duty free import of spares, office equipments and furniture, any capital goods, professional equipments and consumables. However, import of agriculture and dairy products is not permitted under the aforesaid two schemes.
2. DGFT have sought a clarification from DOR whether the restriction regarding agriculture and dairy products would apply to all products derived from agriculture/diary origin. A clarification has also been sought whether under DFCEC Scheme for Status Holders, under the category of inputs, import of crude edible oils may be permitted.
3. The issue is examined in DOR. The objective of restricting import of agriculture and dairy products under the aforesaid two DFCEC Schemes is to safeguard the interest of domestic agriculture and dairy sector. For this purpose substantially higher rates of customs duties have also been specified in respect of most of the agriculture and dairy products. Therefore, even if inputs like crude edible oil are required by a Status Holder in the manufacture of resultant product , on account of the restriction regarding import of agriculture/dairy products specified in the scheme, its import under DFCEC Scheme is not permissible. Similarly, import of any other product derived from agriculture/ dairy origin shall not be permitted as input under DFCEC Scheme for Status Holders and Service Providers because that would mean subverting the tariff barrier which has been specifically created to safeguard the interests of domestic agriculture/ diary industry.
4. It is, therefore, reiterated that the restriction regarding agriculture and dairy products as specified in DFCEC Scheme for Status Holders and Service Providers shall mean that import of all types of products derived from agriculture/dairy origin including crude edible oil shall not be permitted.
5. Suitable Public Notice for Trade and Standing Order for the guidance of customs field formations may be issued.
6. Receipt of this Circular may please be acknowledged.
Officer on Special Duty (DBK)