Import goods destroyed in transit
This query is : Resolved
11 February 2009
A Company is an exporter. It has availed Advance Licence incentives as the benifit for export.
Now one of its import consignment (say valuing Rs. 20 lakhs) after clearing the custom department of mumbai on its way to nasik was destroyed. It was insured by the seller at 110% of FOB. As the goods have already cleared the customs there was an entry in the advance licence. So, no duty is paid. We have sold the scrap in the market for Rs. 2 lakhs and we get Rs. 21 lakhs as final settlement after adjustment of Scrap sale. The excess is due to the 10% margin in insurance and some exchange fluctuation.
Now, my question is whether there is any excise liabilty arising to the party as the goods that are destroyed have earned us some money... Actuallly its a case of import thats the reason for my confusion.
If it would have been local sale then the CENVAT CREDIT claimed by us would have to be reversed but it is a case of import where CVD is exempt under ADVANCE LICENCE so no case of Credit taken but we have recovered some addition money from the insurance and does that 10 % is for safeguarding the custom factor??????
Now one of its import consignment (say valuing Rs. 20 lakhs) after clearing the custom department of mumbai on its way to nasik was destroyed. It was insured by the seller at 110% of FOB. As the goods have already cleared the customs there was an entry in the advance licence. So, no duty is paid. We have sold the scrap in the market for Rs. 2 lakhs and we get Rs. 21 lakhs as final settlement after adjustment of Scrap sale. The excess is due to the 10% margin in insurance and some exchange fluctuation.
Now, my question is whether there is any excise liabilty arising to the party as the goods that are destroyed have earned us some money... Actuallly its a case of import thats the reason for my confusion.
If it would have been local sale then the CENVAT CREDIT claimed by us would have to be reversed but it is a case of import where CVD is exempt under ADVANCE LICENCE so no case of Credit taken but we have recovered some addition money from the insurance and does that 10 % is for safeguarding the custom factor??????
11 February 2009
On advance license, no CVD is paid, and hence there is no question of any cenvat or excise liability.
All that you have to do is to procure those inputs either domestically or import after payment of duty; use that to manufacture your export goods; export those goods and fulfill your export obligation.
All that you have to do is to procure those inputs either domestically or import after payment of duty; use that to manufacture your export goods; export those goods and fulfill your export obligation.
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13 February 2009
O.K so he is liable to bring again those specific import goods by payment of duty without using advance licence and the payment he had made in procuring such items is liable for cenvat credit... Bcoz 2 months ago he brought the goods with payment of duty and when i asked him why he didnt used that licence he quoted the same that its because he had used it in that destroyed goods....
which rule speaks about that issue....
thanksss
which rule speaks about that issue....
thanksss
13 February 2009
....
27 February 2009
Actually you get a license under the obligation that you will export goods. Even if the imported goods are destroyed, the obligation to export goods remains. And you have to procure material to export goods.
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