QUESTION

Customs has made some changes in import tariff heading effective from 2nd Feb and 1st May 2022. We are importing one item classified under HSN 846210 (Die spotting machine) from Japan and supplier has got a valid CEPA COO from the Japanese Authority under this HSN. Now while filing the BOE we found out that this HSN code is not appearing in the India`s import tariff. The new HSN code for this item is 846219. As per Not. No. 69/2011-customs dated 29.07.2011 at Sr. No. 605, HSN from 84619000 to 84639010 are covered.
What should be the correct process to get the shipment cleared under CEPA? Whether the supplier will be able to get CEPA COO under new HSN 846219 from Japanese authority?

ANSWER

FACTS OF THE CASE:

CEPA entered into in the year of 2011 between the Government of India and Government of Japan to promote business between two countries. For this Notification No. 69/2011 dt. 29.07.2011 was issued to provide benefit of import with concessional rate of duty for the item mentioned in the Notification if covered under the Chapter Heading given in the Notification.

There is change in HSN 846210 wef 01.02.2022 but there is no corresponding amendment in the Notification No. 69/2011 dt. 29.07.2011. The country of export is unable to provide COO with the amended Chapter Heading because the corresponding Notification is not changed.

INTERPRETATION:

At the time of making changes, the amendment in the Notification No. 69/2011 dt. 29.07.2011 is left to be made may be because of various reasons. It will be a lengthy exercise to discuss these reasons but the result is that the Custom Authorities will not permit clearance of goods because the portal is not providing facility to import under Notification No. 69/2011 dt. 29.07.2011 with the changed Chapter Heading.

Our suggestion is as follows:

1. Try to convince the Custom Officers about the change left to be made in Notification No. 69/2011 dt. 29.07.2011 because of oversight. Obviously the Custom Officer will deny the benefit. Now pay duty under protest and file a refund claim mentioning that the intention of lawmaker was not to disallow benefits. If this was the intention then it could be achieved by making necessary changes in the Notification. The whole system of classification cannot be disturbed just only to disallow one kind of import from a particular country.

2. Give a presentation to the CBIC to issue a clarification on this matter and request them to do needful amendment in the basic Notification No. 69/2011 dt. 29.07.2011.

3. You have to prepare a detail note about the technical background of the changes made in the Tariff.

Please be noted that there are number of changes made in the Tariff which are effective from 1st Feb/1st May 2022. So it is not a particular head which is changed. The reasons for these changes based on the technical development in the field of engineering can be explained by a good team of Engineering schoolers only. (Reply dt. 13/05/2022)