ALC CIRCULAR NO. 01/2004, DATED 31/05/2004

Issue of Advance Licences for import of "Spices"-Fixation of nexus between import and export items in respect of Advance Licences issued under para 4.7/annual Advance Licences issued under no SION/no ad hoc norms category under para 4.24A and issue of Advance Licences under para 4.4.2 of the Hand Book of Procedures 2002-2007 (Vo1.I) - Review of ALC Circular No.4/2003-04 dated 21st November, 2003, regarding Sample Analysis

Attention is drawn to ALC Circular No.04/2003-04 dated 21st November, 2003 on the subject mentioned above.

2. Representations have been received from the All India Spices Exporters Forum against some of the provisions of the said ALC Circular and the Spices Board has also advised as follows:-

(i) The stipulation that import/re-export of spices can be allowed only as a single consignment and that part/multiple import or re-export shall not be allowed is impractical and should be dispensed with.

(ii) Subject to para 1 above, the regime proposed under the ALC circular No.04/2003-04 dated 21.11.2003 may apply in its entirety, only to imports of spices for re-export in whole form with or without cleaning/grading/polishing/separating/sterilizing as the case may be.

(iii) Sampling proposed under the circular referred to above will not be useful to establish the nexus between imported raw material and products manufactured for re-export through such process as extraction, distillation, powdering, crushing, mixing and blending. Sampling in these cases can be useful only for establishing the yield of exportable products that can be manufactured from imported raw material and nay be resorted to where standard input output norms are non existent or in doubt.

3. The matter was considered by the Advance Licensing Committee in its meetings held on 7th April, 2004, and on 27.5.2004 and in partial modification of ALC Circular No.4/2003-04 dated 21.11.2003, it has been decided, in consultation with the Spices Board & Department of Revenue and with the approval of the Director General of Foreign Trade, that : -

(i) The RLAs will continue to forward a copy of the licence, the application and Annexures furnished by the firm to the authority (Spices Board) mentioned in para 2 of the said ALC Circular. However, they shall not (except with respect to cases referred to at sub-para (ii)(a) here below) stipulate in the advance licences issued by them that the whole quantity specified in the licence shall be imported or re-exported as one consignment. The condition that each ingredient should be separately imported for processing and re-export of spice product containing multiple ingredients also stands deleted;

(ii) The drawing of samples of' spices by the field formations at the Customs, before these are sent to the Spices Board as laid down in para 2.1 of the said ALC Circular, shall however, be henceforth carried out as follows:-

(a) Import of spices for re-export in whole form with or without cleaning/grading/polishing/separating/ sterilizing:-

Samples shall be drawn front both import and export consignments and analyzed for physical and chemical parameters to verify the nexus between imports and re-exports.

(b) Import of spices for re-export after processes such as grinding/powdering/crushing/slicing/flaking/mixing/blending and/or extracting essential oils/oleoresins or food colors :-

Sample shall be drawn from import consignments and analyzed for physical and chemical parameters and the result thereof shall be used for verifying recovery/yield of rnaterial required to be re-exported and accounted for.

4. As per para 4.7.6 of HBP Vol-1; the norms are to be finalized by ALC within six months from the date of issuance of, the licence. The export/import of spices may, however, take place after six months from the date of' issue of advance licences under para 4.7 of HBP as per current practice. Therefore, in so far as `Spices' are concerned, the time limit of six months would mean "Six months from the date of import or export (whichever occurs first)". The firm shall intimate the export/import (whichever occurs first) under Registered cover to concerned RLA and DGFT Headquarters. The facility of repeat licence without reference to the Advance Licensing Committee allowed as per Public Notice 8 dated 14.5.2003 shall not be admissible in respect of licences for `Whole Spices'. However, repeat licences will be allowed to be issued without reference to the ALC on value added/processed spices, Requisite changes in the policy/procedure in this regard are being notified.

5. All other provisions of the ALC Circular No. 0412003-04 dated 21.11.2003 as well as all other terms and conditions as per policy shall remain unchanged.

6. The Department of Revenue shall also accordingly issue immediate instructions to all the concerned Customs authorities.

7. The contents of the circular may be widely circulated for information of the trade.

8. This issues with the approval of' Director General of Foreign Trade.

Sd/-
(B. Gangar)
Deputy Director General of Foreign Trade

No.01/85/162/186/AM-04/DES-VI

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