CUS CIR NO. 81/2003 DATE 05/09/2003

Dutiability on Certification Charges incurred on Cut and Polished Diamond Re-imported after Certification under Exemption Notification No. 55/2001-Cus dated 16-03-2001- Reg.
It has been brought to the notice of the Board that benefit of notification No. 55/2001-Customs, dated 16-05-2003 is being denied on cut and polished diamonds re-imported after Certification / grading from specified laboratories or agencies abroad. The benefit is stated to have been denied on the grounds that one of the conditions of the notification relating to the value of the graded cut and polished re-imported diamonds, which has to match with corresponding value of diamonds mentioned in the invoice at the time of exportation from India, is not fulfilled on account of expenditure incurred for obtaining such certificate.

2. The matter has been examined. It is noted that the notification No. 55/2001-Customs, dated 16-3-2001 wholly exempts the cut and polished diamonds from payment of import duty when such diamonds are re-imported after certification/ grading from specified agencies abroad. It is understood that the exporter pays charges/fee to such certification agencies for certifying such diamonds. It was not the intention of the Government to charge duty on such charges and freight expenses incurred by the exporter. The condition in the notification that such diamonds re-imported will match with the value, circumference, height and weight of the diamond exported has been incorporated, only with the intention of preventing any substitution of diamonds in the process of such certification. It is not the intention of the Government to impose duty on certification charges/fee and freight incurred and such an interpretation defeats the very purpose of the exemption notification.

3. In view of position explained above, I am directed to clarify that certification charges paid by the exporter to the certifying agencies shall not be considered to be additional value for the purpose of this notification and diamond re-imported after certification by the specified agencies abroad shall be eligible for duty free import provided other conditions of the said notification are fulfilled.

4. Difficulty, if any, faced in implementation of the above said instruction, may please be brought to the notice of the Board at the earliest.

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

6. Please acknowledge receipt.

7. Hindi version follows.

H. K. Sharma
Sr. Technical Officer (TU)
Phone: 011-23093947

F. No. 305/116/2003-FTT

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