Circular No. 48/2004-Customs
August 24, 2004

F.No.305/101/2004-FTT
Government of  India
Ministry of  Finance
Department of Revenue
Central Board of  Excise  and  Customs

Sub:- Drawal of Samples of Raw Silk Imported from China by 100% EOU/SEZ.

        I am directed to invite your attention to Board’s Circular Nos. 39/2003-Customs, dated 7-5-2003 where under it has been provided that consignments of raw silk imported for China be tasted for grade.

2.     Representations have been received from the trade that EOUs are facing difficulties because of this practice as drawal of sample is being insisted by the department for every import consignment of silk by EOUs from China. The matter has been examined by the Board. Board’s Circular 39/2003- Cus was issued to deter unscrupulous importers who misdeclare the grade of silk in order to circumvent anti-dumping duty leviable on Mulberry raw silk( not thrown) of grade 2A or below.( Notification No 2/2003-Cus dated 2-1-2003 read with Notification No 106/2003-Cus dated 10-7-2003 as amended by Notification No 136/2003-Cus dated 3-9-2003).

3.     EOUs are exempt from payment of anti-dumping duty. The rationale behind drawing of samples in case of import by EOUs is to ensure that in case the consignment imported by the EOUs of grade 2A or below , is not used for export production or diverted in to DTA clandestinely ,etc, the EOUs , would have to pay anti- dumping duty.

4.     In consideration of the genuine difficulties faced by the EOUs , the Board has decided that the practice of drawing samples in respect of consignments of raw silk imported from China by the EOUs may be discontinued subject to the condition that the EOUs give a Legal Undertaking ( without Bank Guarantee or Security) to the Assistant or Deputy Commissioner of Customs in charge of the port of import , Airport, ICD or LCS to the effect that in case duty becomes chargeable subsequently for any contravention, misuse etc, they will pay the anti-dumping duty as if the goods were of ISA grade 2A or below . The LUT ( in original) should be transferred, after retaining a copy, to the Assistant Commissioner / Deputy Commissioner having administrative control over the EOU for monitoring and enforcement, where necessary. The same procedure may also be adopted in case of import of raw silk from China by units in Special Economic Zones with only modification being that in case of Special Economic Zone the undertaking would be furnished before the Assistant/ Deputy Commissioner of Customs of the concerned Special Economic Zone.

5.     Wide publicity may please be given to the above said instruction by way of issuance of Public Notice.

6.     Hindi version follows.

Ranjit Kumar
Sr. Technical Officer (FTT)

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