Second Hand capital goods - No more first check!

Routine Local CE certificate not to be demanded for old machinery implort,  unless under-valuation suspected!
RIIF:Used capital good [except a few]  may sail through RMS route if the transaction value is accepted by the system.
CBEC Circular No.4/2008 dt.4.2.2008 - on clearance of Second Hand Capital goods - salient features.
Decisions of Tribunals and one Judgement of the Hon'ble Supreme Court:
  • Transaction Value is acceptable.
  • Transaction value cannot be rejected without sufficient evidences
  • It is essential to reject the transaction value.
  • Transaction value can be rejected when  the assessing officer is able to assail the documents like Chartered Engineer's Certificate, Invoice etc. as manipulated or fraudulently obtained.
  • Where assessing officer proves that certain basic particulars like description, period of usage, extent of the re-conditioning, year of manufacture, model no., price when new etc. are misdeclared either in the Chartered Engineer's Certificate or in the invoice.
  •  
  • If transaction value is rejected, valuation can be done under Rule 9 - on the basis of value of new machine, and scaled down by allowing depreciation. [SC Gajra Beevel Gears]
  •  
NOTIFICATION NO. 35 (RE-2012)/2009-2014                   NEW DELHI: Dated: 28th February, 2013

Subject: Policy on Second Hand Goods:

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time, the Central Government hereby makes the following amendment in Para 2.17 of Foreign Trade Policy, 2009-2014:-

 Para 2.17 of Foreign Trade Policy, 2009-2014 is revised to read as under:-

Sl.No.  

Categories of Second Hand Goods  

Import Policy  

Conditions, if any

I  

Second Hand Capital Goods

(a)   

i. Personal computers/ laptops including their refurbished / re-conditioned spares 

ii. Photocopier machines/ Digital multifunction Print & Copying Machines 
iii. Air conditioners 
iv. Diesel generating sets  

Restricted  

Importable against  authorization

(b)   

i. Refurbished / re-conditioned spares of Capital Goods  

Free  

Subject to production of Chartered Engineer certificate to the effect that such spares have at least 80% residual life of original spare.

(c)   

i. All other second hand capital goods {other than (a) &( b) above}  

Free

II   

Second Hand Goods other than capital goods  

Restricted  

Importable against   authorization

3. Effect of this Notification:

While the import policy (in the third column) remains unchanged for various categories of second hand goods, more clarity has been imparted both in Categories (second column) and in Conditions (fourth column).

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