NEW CUSTOMS BROKERS LICENSING REGULATIONS OF 2018

Government of India Vide Notification No. 41/2018- Customs (N.T.) dated 14/05/2018 has issued the new Customs Brokers Licensing Regulations of 2018 in supersession of Customs Brokers Licensing Regulations, 2013. The key provisions of which are as under (Notification is attached) CHA-18

clause 1. Invitation of application.—(1) The Directorate General of Performance Management (DGPM) shall in the month of April of every year invite applications for conducting examination and subsequent grant of license to act as Customs Broker in Form A by publication in two leading national daily newspapers in English and Hindi in addition to disseminating the information on the web portal.

(2)The application for a license to act as a Customs Broker in a Customs Station in Form A along with a fee of five hundred rupees shall be made to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, having jurisdiction over the area where the applicant intends to carry on his business.

clause 2. Conditions to be fulfilled by the applicants.—(1) The applicant for a license to act as a Customs Broker in a Customs Station, shall before applying to the Principal Commissioner of Customs or Commissioner of Customs, meet the following conditions that: — 

(a) he is a citizen of India;

(b) he is a person of sound mind;

(c) he is not adjudicated as insolvent;

(d) he holds an Aadhaar number;

(e) he holds a valid PAN card;

(f) he has not been penalised for any offence under the Act, the Central Excise Act, 1944 (1 of 1944), the Finance Act, 1994(32 of 1994), the Central Goods and Services Act, 2017 (12 of 2017) and Integrated Goods and Services Tax Act, 2017 (13 of 2017);

(g) he has neither been convicted by a competent court for an offence nor any criminal proceeding is pending against him in any court of law;

(h) an individual applicant or in case the applicant is a firm, its partner or in the case of a company, its director or an authorised employee who may handle the Customs work shall—

(i) be a graduate from a recognized University; and

(ii) possess a professional degree such as Masters or equivalent degree in Accounting, Finance or Management, CA/CS/MBA/LLM/ACMA/FCMA or Diploma in Customs Clearance work from any Institutes or University recognised by the Government oris having at least two years’ experience in transacting Customs Broker work as G-Card holder; (i)the applicant has financial viability as evidenced by a certificate issued by a Scheduled Bank or such other proof acceptable to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, in terms of possession of assets of value of not less than five lakhs rupees.

(2) A retired Group A officer from the Indian Revenue Service(Customs and Central Excise)having a minimum of five years’ experience in Group ‘A’ post shall also be eligible to apply for a license to act as a Customs Broker provided he satisfies the conditions specified at (a), (b), (c), (d), (e), (f), (g) and (i)of sub-regulation (1) above.

(3) The Principal Commissioner or Commissioner of Customs, as the case may be, may for the purpose of this regulation, make such enquiries to verify the eligibility of the applicant as he may deem fit before forwarding the application to Directorate General of Performance Management.

clause 3. Examination of the applicant.(1) An applicant, who satisfies the requirements of regulation 5, shall be required to appear for a written (preferably online) as well as oral examination conducted by the Directorate General of Performance Management:

Provided that an applicant who has already passed the examination referred to in regulation 9 of the Custom House Agents Licensing Regulation, 1984 or regulation 8 of the Custom House Agents Licensing Regulation, 2004 or regulation 6 of the Customs Brokers Licensing Regulations, 2013 shall not be required to appear for any further examination.

(2) The written examination shall be conducted on specified dates in the month of January of each year for which intimation shall be sent individually to applicants in advance before the date of examination and the result of the said examination shall be declared by end of May each year.

(3) The applicant who is declared successful in the written examination shall be called for an oral examination on specified dates in the month of June of each year, the result of which shall be declared in the month of July of each year.

(4)The applicant shall be required to clear both the written examination as well as corresponding oral examination.

(5) An attempt at the written exam shall be deemed to be an attempt and notwithstanding the disqualification/ cancellation of application, the fact of appearance of the applicant at the examination will count as an attempt.

(6) An applicant shall be allowed a maximum of six attempts to clear the examination. 

(7) The examination may include questions on the following:

(a) preparation of various kinds of bills of entry, bills of export, shipping bills, and other clearance documents;

(b) arrival entry and clearance of vessels;

(c) tariff classification and rates of duty;

(d) determination of value of imported and export goods;

(e) conversion of currency;

(f) nature and description of documents to be filed with various kinds of bills of entry, shipping bills and other clearance documents;

(g) procedure for assessment and payment of duty including refund of duty paid;

(h) examination of goods at Customs Stations;

(i) prohibitions on import and export;

(j) bonding procedure and clearance from bond;

(k) re-importation and conditions for free re-entry;

(l) drawback and export promotion schemes including the Special Economic Zone scheme;

(m) offences under the Act;

(n) provisions of the allied Acts including the Central Goods and Services Act, 2017 (12 of 2017) and section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Indian Explosives Act, 1884 (4 of 1884), the Destructive Insects and Pests Act 1914 (2 of 1914), the Dangerous Drugs Act, 1930 (2 of 1930), the Drugs and Cosmetics Act, 1940 (23 of

1940), the Central Excise Act, 1944 (1 of 1944), the Copy Right Act, 1957 (14 of 1957), the Trade and Merchandise Marks Act 1958 (43 of 1958), the Arms Act 1959 (54 of 1959), the Patents Act, 1970 (39 of 1970), the Narcotics Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the Environment (Protection) Act, 1986 (29 of 1986), the Foreign Trade (Development and Regulations) Act, 1992 (22 of 1992), the Foreign Exchange Management Act, 1999 (42 of 1999), the Design Act, 2000 (16 of 2000) and the Food Safety and Standard Act, 2006 (No. 34 of 2006) and other laws for the time being in force applicable to EXIM trade and the rules and regulations made under these Acts in so far as they are relevant to clearance of goods through Customs;

(o) provisions of the Prevention of Corruption Act, 1988 (49 of 1998);

(p) procedure for appeal and revision applications under the Act; and

(q) online filing of electronic bills of entry and shipping bills vide the Indian Customs and Central Excise Electronic Commerce or Electronic data interchange gateway (ICEGATE) and Indian Customs Electronic data Interchange System (ICES).

(r) knowledge of regulations, rules, notifications, etc. under the Customs Act and other Allied Acts.

(8) The Principal Commissioner of Customs or Commissioner of Customs shall satisfy himself that the individual applicant or in cases where applicant is a firm or company, its partner or Director or authorised employees who may be engaged for handling the customs work shall possess satisfactory knowledge of English and the local language of the Customs Station:

Provided that in case of a person deputed to work extensively in the docks, knowledge of English shall not be compulsory and knowledge of Hindi shall be considered as desirable qualification.

clause 4. Grant of License.—(1)The applicant who has passed the written as well asoral examination shall make a payment of a fee of five thousand rupees within two months of the declaration of the results of the oral examination and inform the payment particulars to the Principal Commissioner or Commissioner of Customs referred to in sub-regulation (2) of regulation 4 and the said 

Principal Commissioner or Commissioner shall, on verification of the payment particulars grant license to the applicant within one month of the payment of the said fee:

Provided that where the successful applicant fails to make the payment of the said fee within the stipulated period, the right to be granted a license to an applicant shall be forfeited.

(2) The applicant who has paid the fee referred to in sub-regulation (1) shall be granted a license by the Principal Commissioner or Commissioner of Customs, as below:—

(a) An individual shall be granted the license in FormB1 if that individual has passed the examination referred to in regulation 6.

(b) A customs broker’s license may be granted to any company, firm or association in FormB2 if at least one director, partner, or an authorised employee, as the case may be, has passed the examination referred to in regulation 6:

Provided that at any given time such director, partner or an authorised employee shall not engage himself for transacting business under these regulations on behalf of more than one such firm or company:

Provided further that where a company or a firm which has been granted a license under this regulation undergoes any change in the directors, or managing director or partner, such change shall forthwith be communicated by such licensee to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, within one month of such change:

Provided also that where a company or a firm which has been granted a license under this regulation undergoes any change whereby there is a change in the PAN, the licensee shall apply for a fresh license to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, within sixty days of such change.

(3) The applicant who has been granted license under sub- regulation (2) shall be eligible to work as Customs Broker in all Customs Stations subject to intimation in Form C to the Principal Commissioner or Commissioner of Customs of the Customs Station where he intends to transact business and a copy of this intimation shall also be sent to the Principal Commissioner or Commissioner of Customs who has issued the license in Form B1 or FormB2, as the case may be.

(4) A customs broker shall be eligible to transact business under these regulations at a customs station which requires intimation under the said Form C, subject to the condition that such customs broker shall be able to transact such business only after a period of two years from the date of issue of license in FormB1 or FormB2:

Provided that the said period of two years shall be waived in respect of a license issued to a customs broker under the respective provisions of the Customs House Agents Licensing Regulations, 1984 or the Customs House Agents Licensing Regulations, 2004 or the Customs Brokers Licensing Regulations, 2013:

Provided further that the period of two years referred to in sub-regulation (4) shall not be applicable where the intimation under the said Form C is to the Principal Commissioner or the Commissioner of Customs, as the case may be, referred to in sub-regulation (2) of regulation 4.

Clause5.  Period of validity of a license.—(1) A license granted under regulation 7 shall be valid for a period of ten years from the date of issue and shall be renewed from time to time in accordance with the procedure specified in sub-regulation (2):

Provided that the renewal procedure and fees for licenses issued under the Customs House Agents Licensing Regulations, 1984 or the Customs House Agents Licensing Regulations, 2004 or the Customs Brokers Licensing Regulations, 2013 shall be in accordance with the procedure specified in sub-regulation (2) and fees specified in sub-regulation (3) respectively:

Provided further that a license granted to a Customs Broker, authorised under the Authorised Economic Operator Programme referred to in Board’s Circular No. 28/2012-Customs dated 16.11.2012 or 33/2016-Customs dated 22.7.16, shall not require renewal till such time the said authorisation is valid.

(2) Subject to the provisions of regulation 7, the Principal Commissioner of Commissioner of Customs may, on an application made by the licensee before the expiry of the validity of the license under sub-regulation (1), renew the license for a further period of ten years from the date of expiration, if the performance of the licensee is found to be satisfactory with reference, inter alia, to the obligations specified in this regulation including the absence of instances of any complaints of misconduct within one month of the date of receipt of application.

Provided that where the Customs Broker fails to submit the application for renewal before the expiry of the validity of the license, the Principal Commissioner or Commissioner of Customs may after satisfying himself to the genuineness of the reasons of delay, renew the license upon payment of two thousand rupees as late fee by the Customs broker in addition to the fee for renewal within one month of the date of receipt of application.

(3) The fee for renewal of the license shall be fifteen thousand rupees.

clause 6. Obligations of Customs Broker.—A Customs Broker shall —

(a)obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

(b) transact business in the Customs Station either personally or through an authorise employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

(c) not represent a client in any matter to which the Customs Broker, as a former employee of the Central Board of Indirect taxes and Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service;

(d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

(e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;

(f) not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Customs authorities, as the case may be, from a client who is entitled to such information;

(g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of cargo or baggage on behalf of the client;

(h) not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by the proper officer;

(i) not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value;

(j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs Broker which is sought or may be sought by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be;

(k) maintain up to date records such as bill of entry, shipping bill, transhipment application, etc., all correspondence, other papers relating to his business as Customs Broker and accounts including financial transactions in an orderly and itemised manner as may be specified by the Principal Commissioner of Customs or Commissioner of Customs or the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

(l) immediately report the loss of license granted to him to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be;

(m) discharge his duties as a Customs Broker with utmost speed and efficiency and without any delay;

(n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information;

(o) inform any change of postal address, telephone number, e-mail etc. to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, of all Customs Stations including the concerned Deputy Commissioner or Assistant Commissioner of the Commissionerate who has granted the license immediately within two days;

(p) maintain all records and accounts that are required to be maintained under these regulations and preserve for at least five years and all such records and accounts shall be made available at any time for the inspection of officers authorised for this purpose; and

(q) co-operate with the Customs authorities and shall join investigations promptly in the event of an inquiry against them or their employees.

clause 7. Engagement or employment of persons.—(1)A person who has qualified the examination referred to in regulation 6 may engage himself in the work relating to the clearance of goods through customs on behalf of a firm or a company licensed under these regulations. 

(2) A Customs broker who has been issued a license under sub-regulation (2) of regulation 7 shall be issued a photo-identity card in Form F by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be:

Provided that in the case of the license issued under clause (b) of sub-regulation (2) of regulation 7, the photo-identity card in Form F shall be issued to the person or persons who has actually passed the examination referred to in regulation 6.

(3) A Customs Broker may, having regard to the volume of business transacted by him, employ any number of persons other than an F card holder to assist him after verifying their antecedents and identity at the declared address by using reliable, independent, authentic documents, data or information:

Provided that such an employed person shall possess the Aadhaar number issued to him and that the minimum educational qualification of such persons so employed shall be 10+2, or equivalent.

(4) Employment of a person referred to in sub-regulation (3) shall be made only after obtaining the approval of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, who shall in granting approval, take into consideration the antecedents and any other information pertaining to the character of such person.

(5) The person referred to in sub-regulation (3) shall, within four attempts from the date of his appointment, pass a written examination conducted by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and the examination shall be such as to ascertain the adequacy of knowledge of such person regarding the provisions of the Act subject to which goods and baggage are cleared through Customs and the person shall, on passing the examination, be issued a photo-identity card in Form G by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be.

(6) Notwithstanding anything contained in sub-regulation (5), a G card holder who is employed under a Customs Broker may, on his employment under any other Customs Broker, with the approval or no objection of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, be exempted from passing of such examination.

(7) A Customs Broker shall authorise only such employee who has been issued a photo identity card in Form F or Form G as the case may be to sign the declaration on the bills of entry, shipping bills, annexure thereof or any other document generated in connection with the proceedings under the Act or the rules or regulations made thereunder.

(8) Where the Customs Broker has authorised any person employed by him in accordance with sub-regulation (7) to sign documents relating to his business on his behalf, he shall file with the Deputy Commissioner of Customs or Assistant Commissioner of Customs of each Customs Station, as the case may be, a written authority in this behalf and give prompt notice in writing if such authorisation is modified or withdrawn.

(9) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall issue a photo-identity card to every person employed by a Customs Broker in Form H in case he has not passed the examination referred to in sub-regulation (4) for a period of five years:

Provided that the minimum educational qualification of such a person shall be 10+2.

(10) Any person who has been issued a photo identity card under this regulation shall, at all times when he transacts the work at the Customs Station, carry photo identity card with him and produce it for inspection on demand by any officer of the Customs Station.

(11) Any change in the persons issued a F card or G card or H card and actually engaged in the work in the Customs Station on behalf of a licensee firm or company shall be communicated forthwith by the firm or the company, as the case may be, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and no new person other than ‘F’, ‘G’ or ‘H’ card holders, shall be allowed to work in the Customs Station as a duly authorised employee on behalf of that firm or company.

(12) The Customs Broker shall exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment.

clause 8. Revocation of licence or imposition of penaltyThe Principal Commissioner or Commissioner of Customs may, subject to the provisions of regulation 17, revoke the license of a Customs Broker and order for forfeiture of part or whole of security, on any of the following grounds, namely:— 

(a)  failure to comply with any of the conditions of the bond executed by him under regulation 8;

(b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else;

(c) commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station;

(d) adjudicated as an insolvent;

(e) of unsound mind; and

(f) convicted by a competent court for an offence involving moral turpitude or otherwise.

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Creation of Directorate General of Trade Remedies (DGTR) by INDIA

Government of India (Department of Commerce) has formally issued notification for creation of Directorate General of Trade Remedies (DGTR) in the Ministry of Commerce and Industry, consequent upon amendment carried out by Government of India to the Government of India (Allocation of Business) Rules, 1961 on May 7, 2018 in this regard. DGTR will be the apex National Authority for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures. The DGTR will bring Directorate General of Anti-dumping and Allied duties (DGAD), Directorate General of Safeguards (DGS) and Safeguards (QR) functions of DGFT into its fold by merging them into one single national entity. It will also provide trade defence support to our domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.  In the last three years, India initiated more than 130 anti-dumping/countervailing duty/safeguard cases to deal with the rising incidences of unfair trade practices and to provide a level playing field to the domestic industry.

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IMPORT AND EXPORT POLICY OF INDIA FOR CHAPTER 87 ITEMS I.E. VEHICLES (Other Than Railway or Tramway Rolling- Stock) AND PARTS AND ACCESSORIES THERE OF

 

IMPORT AND EXPORT POLICY OF INDIA FOR CHAPTER 87 ITEMS I.E. VEHICLES (Other Than Railway or Tramway Rolling- Stock) AND PARTS AND ACCESSORIES THERE OF 

Import Policy Conditions of this Chapter:

  • (I) A second hand or used vehicle (including all the vehicles other than Railway or Tramway) for the purposes of this Chapter shall mean a vehicle that:- 
  • has been sold, leased or loaned prior to importation into India; or
  • has been registered for use in any country according to the laws of that country, prior to importation into India;

(II) The import of second had or used vehicles shall be subject to the following conditions:-

  • The second hand or used vehicle shall not be older than three years from the date of manufacture;
  • The second hand or used vehicle shall:
  • have right hand steering, and controls (applicable on vehicles other than two and three wheelers);
  • have a speedometer indicating the speed in Kilometers; and
  • have photometry of the headlamps to suit “keep left” traffic.
  • In addition to the conditions specified in (a) and (b) above, the second hand or used vehicle shall conform to the provisions of the Motor Vehicle Act, 1988 and the rules made thereunder.
  • Whoever being an importer or dealer in motor vehicles who imports or offers to import a second hand or used vehicle into India shall,
  • at the time of importation, submit a certificate issued by a testing agency, which the Central Government may notify in this regard, that the second hand or used vehicle being imported into India has been tested immediately before shipment for export to India and the said vehicle conforms to all the regulations specified in the Motor Vehicles Act, 1988 of India and the rules made thereunder.
  • At the time of importation, submit a certificate issued by a testing agency, which the Central Government may notify in this regard, that the second hand or used vehicle being imported into India has been tested immediately before shipment for export to India and the said vehicle conforms to the original homologation certificate issued at the time of manufacture.
    • On arrival at the Indian port but before clearance for home consumption, submit the vehicle for testing by the Vehicle Research and Development Establishment, Ahmednagar of the Ministry of Defence of the Government of India or Automotive research Association of India, Pune or Central Farm Machinery Training and Testing Institute, Budni, Madhya Pradesh for tractors, and such other agencies as may be specified by the Central Government, for granting a certificate by that agency as to the compliance of the provisions of the Motor Vehicles Act, 1988 and any rules made thereunder.
  • Import of these vehicles shall be allowed only through the customs port at Mumbai.
  • The second hand or used vehicles imported into India should have a minimum roadworthiness for a period of 5 years from the date of importation into India with assurance for providing service facilities within the country during the five year period. For this purpose, the importer shall, at the time of importation, submit a declaration indicating the period of roadworthiness in respect of every individual vehicle being imported, supported by a certificate issued by any of the testing agencies, which the Central Government may notify in this regard.
  • Cars manufactured prior to 1st January, 1950 are free for import by Actual Users. Policy Condition (I) and (II) above shall not be applicable for these cars. However, such of the cars that would be plying on public roads will continue to be subject to Central Motor Vehicles Act, 1988 and Rules, 1989. 
  • (I) A new imported vehicle (including all the vehicles other than Railway or Tramway) for the purposes of this Chapter shall mean a vehicle that:- 
  • has not been manufactured/assembled in India; and
  • has not been sold, leased or loaned prior to importation into India; or
  • has not been registered for use in any country according to the laws of that country, prior to importation into India.
  • The import of new vehicles shall be subject to the following conditions:
  1. The new vehicle shall-
  • have a speedometer indicating the speed in Kilometers per hour;
  • have right hand steering, and controls (applicable on vehicles other than two and three wheelers);
  • have photometry of the headlamps to suit “keep-left” traffic’; and
  • be imported from the country of manufacture. The country of manufacture will also mean a Single Market like the European Union (EU).”
  1. In addition to the conditions specified in (a) above, the new vehicle shall conform to the provisions of the Motor Vehicles Act, 1988 and the rules made thereunder, as applicable, on the date of import.
  1. Whoever being an importer or dealer in motor vehicles who imports or offers to import a new vehicle into India shall,
  • at the time of importation, have valid certificate of compliance as per the provisions of rule 126 of Central Motor Vehicle Rules(CMVR), 1989, for the vehicle model being imported, issued by any of the testing agencies, specified in the said rule;
  • be responsible for all the provisions assigned to the manufacturer as per Rules 122 & 138 of CMVR, 1989 and for issuing Form 22, as per provisions of CMVR, 1989; and
  • give an undertaking in writing that the proof of compliance to conformity of production as per rule 126A of CMVR shall be submitted within six months of the imports. In case of failure to do so, no further import of new vehicle of that model shall be allowed thereafter.
  1. The import of new vehicles shall be permitted only through the following Customs port at Nhava Sheva, Kolkata, Chennai and Chennai Airport, Cochin, ICD-Tughlakabad and Delhi Air Cargo, Mumbai Port and Mumbai Air Cargo Complex, ICD Talegaon Pune, ICD Faridabad, Ennore port, Kattupalli Port, APM Terminals, Pipavav Port and Krishnapatnam Port. In addition, import of new motorcycles is also permitted through LCS Benapole / Petrapole and LCS Agartala.
  1. The provisions of this notification will not apply to the imports of new vehicles-
  • for the  purpose  of  certification  as  per  para  c(i) above;
  • for the purpose of defence requirements;
  1. The above mentioned provisions will also not apply to the import of new vehicles for R & D purpose by vehicle manufacturers and auto component manufacturers. However, the vehicles imported by both these categories for R & D will not be registered under the CMVR Rules in the country and will not ply on Indian roads. The customs will make necessary endorsement at the time of clearance of these vehicles.
  1. In case the country of manufacture is a land locked country and the shipment takes place from another country, the vehicles would deemed to have been exported from the country of manufacture provided there are supporting documents to track the vehicles from the country of manufacture to the Port of Landing and from there, to the Port of Destination.
  • (I) The conditions at Sl. Nos. 1 & 2 above shall not be applicable on import of passenger cars/jeeps/multi utility vehicles etc. on payment of full Customs duty by the following categories of importers:
  • An individual coming to India for permanent settlement after two years continuous stay abroad provided the car has been in the possession of the individual for a period of minimum one year abroad.
  • Resident Indians presented with a car as an award in any international event/match/competition;
  • Legal heirs/successors of deceased relatives residing abroad;
  • Physically handicapped persons;
  • Companies incorporated in India having foreign equity participation;
  • Branches/offices of foreign firms;
  • Charitable/Missionary/Religious institutions registered as per the law relating to the registration of the societies or trusts or otherwise approved by the Central or State Government, subject to the condition that the importer is an established institution and is functioning for the common benefit of the community, and subject further to production of necessary clearance under the Foreign Contribution (Regulation) Act, 1976. 
  • Honorary Consuls of foreign countries on the recommendations of the Ministry of External Affairs, Government of India.
  • Journalists/Correspondents of foreign news agencies having accredition certificate with the Press Information Bureau, Ministry of Information and Broadcasting, Govt. of India.

However, these imports shall be subject to the condition that, the vehicle should have right hand steering and controls (applicable on vehicles other than two and three wheelers).

  • All the above categories shall be entitled to import only one vehicle except categories (e) and (f), which shall be entitled to import maximum of three vehicles. Persons in category (d) shall be entitled to import only specially designed vehicles suitable for use by handicapped. All such imports shall carry a “NO SALE” condition of two years which shall be endorsed by the Customs authorities on the passport/ registration documents at the time of import and by the Regional Transport Authorities when such vehicles are presented for registration in India. The DGFT may, however, permit relaxation of these conditions or imports by any other category not listed above in special circumstances.
  • All bonds/ bank guarantees executed by importers of cars/two wheelers etc. prior to 31.03.97, where the vehicle has not been transferred, shall be deemed to have been discharged with effect from 31.03.2000 (from the date of issuance of public notice no. 3(RE-2000)/97-02.
  • The import of vehicles (as classified under this Chapter) by Foreign Diplomats and Other Privileged Persons in this category, who are exempt from payment of customs duty, shall be exempt from the conditions specified at Sl. No. 1 & 2 above. Such imported vehicles shall be disposed off in the manner specified in the Foreign Privileged Persons (Regulations of Customs Privileges) Rules, 1957, as amended from time to time. 
  • The import of vehicles namely, Digital Satellite News Gathering Vans (DSNG van)/ Outdoor Broadcasting Vans (OB Van), as classified in this Chapter, fitted with equipments for telecasting shall be exempted from the conditions specified at Sl. No. 1 & 2 above. However, these imports shall be subject to the condition that the vehicle should have right hand steering and controls (applicable on vehicles other than two and three wheelers). 
  • The import of vehicles namely, ATVs (All Terrain Vehicles) which are specifically designed for off-the-road sports, recreation and some farm usage and do not require registration under provisions of the CMVR, shall be exempted from the conditions mentioned at Sl. No. 1 and 2 above. 
  • Import of new vehicles having an FOB value of US $ 40,000 or more and engine capacity of more than 3000cc for petrol run vehicle and more than 2500cc for diesel run vehicles by (a) Individuals, (b) Companies and firms or (c) OEMs (Original Equipment Manufacturers- who have manufacturing and service network in India) will be exempt from the conditions at Sl. No. 2(II)(a)(iv) and 2(II)(c) above. However, at the time of Customs clearance, a Type Approval Certificate / COP of an international accredited agency from the country of origin or an EC Type Approval Certificate / Certificate of COP, of an accredited agency from any member state of EU, including a notarized English translation thereof, shall be furnished. This Type Approval shall stipulate that the vehicle to be imported complies with all the ECE Regulations for the complete vehicle. The accredited agencies have been notified vide Policy Circular No. 12 (RE-2013)/2009-14 dated 15/01/2014
  • Import of new and second hand vehicles (not older than three years from the date of manufacture) shall be exempt from the condition at Sl. No. 2(II) (c) above only for jobbing and subsequent re-export in terms of Customs Notification No. 32/97 CUS (N.T.) dated 01.04.1997. 
  • Import of new motorcycles with engine capacity of 800 cc or more, by all categories of importers, including: (a) Individuals; (b) Companies and firm; or (c) OEMs (Original Equipment Manufacturers- who have manufacturing and service network in India) will be exempt from the conditions at Sl. No. (2) (II) (c) above. However, at the time of Customs clearance, an EC Type Approval Certificate / Certificate of COP, of an accredited agency from any member state of EU, including a notarized English translation thereof, shall be furnished. This Type Approval shall stipulate that the vehicle to be imported meets the technical requirements of EU Directive 168/2013/EU of the European Parliament and Council. Such imported motorcycles shall meet the EURO IV emission norms as specified in the said regulation with test procedure as per Commission Delegated Regulation (EU) No.134/2014. The accredited agencies have been notified vide Policy Circular No. 12 (RE-2013)/2009-14 dated 15/01/2014.

Also all imported motorcycles which meet the EURO III emission norms as defined in EU Directive 2003/77/EC will continue to be exempted from the conditions at Sl. No.(2) (II) (c) above, until 31st March, 2017. However, at the time of Customs clearance, an EC Type Approval Certificate / Certificate of COP, of an accredited agency from any member state of EU, including notarized English translation thereof, shall be furnished. This Type Approval shall stipulate that the vehicle to be imported meets the technical requirements of all relevant separate directives, as last amended and as listed in EU Directive 2002/24/EC.

  • The import of customized Cars/Motorcycles and parts thereof required for the race events shall be subject to the following conditions:-
  • The conditions at Sl. Nos. 1 & 2 above shall not be applicable on import of customized Cars/Motorcycles and parts thereof.
  • At the time of Customs clearance, a Type Approval Certificate/ COP of an international accredited agency from the country of origin will not be required.
  • A certificate from Nodal Agency (to be nominated by Govt. of India) indicating the details of the vehicle shall be required at the time of Customs clearance. Import shall be permitted only through such Customs ports as per Policy Condition (1) (II) (d) (iv).
  • These vehicles will be used only for the purpose for which these are imported. Vehicles imported under this provision will not be registered CMV Act/ Rules; nor be alienated/ sold to any individual/ organization /institution etc. anywhere in India. These vehicles shall not ply on public roads and can only be used within the enclosed premises with requisite safety precautions and will not be engaged in any sort of commercial activities.
  • The importer shall be required to execute a Bond with Customs with adequate security/ surety to re-export the vehicle(s) within 30 days of the completion of the event or within such extended period as the appropriate officer may allow after being shown a reasonable cause.

Vide Notification No.07/2015-2020 dated 08/05/2018 a new Policy condition has been inserted under Chapter 87, which reads as follow: 

  • Policy Condition 1 and 2 [except for 1 (II) (d) (iv) and 2 (II) (d)] above shall not be applicable for import of automotive mining equipment’s, oil rigging equipment’s for operation in captive mines/ oil rigging areas and vehicles for research and development purpose subject to the condition that the imported item is re-exported/ scrapped under certification from the concerned authorities, once its purpose is served. Above condition is applicable for both old/used and new equipment’s/ vehicles. Further these equipment’s/ vehicle shall not ply on public roads, except for mobilization and demobilization purposes.

Effect of this Notification: Policy condition for import of old/used and new automotive mining equipment’s, oil rigging equipment’s for operation in captive mines/ oil rigging areas and other vehicle for research and development purpose is introduced.

EXPORT POLICY OF CHAPTER 87 ITEMS: 

The export of vintage motor cars, parts and components there of manufactured price to 01.01.1950 is restricted and Export is permitted only under Licence.

The export of vintage motorcycles, parts and components there of manufactured price to 01.01.1940 is restricted and Export is permitted only under Licence.

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PRIMER ON EXPORT-IMPORT BANK 0F INDIAs LINEs OF CREDIT

Government of India, with a view, inter-alia, to promoting India’s trade and economic relations with developing countries in particular, launched the India Development Initiative (IDI), later renamed as the Indian Development and Economic Assistance Scheme (IDEAS), through General Budget for fiscal year 2003-04. Since then, the LOCs extended to foreign governments or their nominated agencies are being routed by the Government, through the Export-Import Bank of India (Exim Bank). These LOCs are extended to sovereign governments or their nominated agencies, to enable buyers in those countries, to import goods and services from India on deferred credit terms. The Indian exporters can obtain payment of eligible value from Exim Bank, without recourse to them, against negotiation of shipping documents/provision of services. Indian exporters realise full payment on shipment of goods, through Exim Bank, without being exposed to risk on the buyer or the buyer’s country. The LOCs enable the recipient countries to set up developmental projects in a variety of sectors e.g. agricultural mechanization, rural electrification, power generation, power distribution, sugar, cement, mini hydro-plants, transportation-rail and road, infrastructure.

Procedures and guidelines for LOCs have been issued by Ministry of Finance, Department of Economic Affairs (MOF-DEA) vide OM No. 21/3/2015-IDEAS dated December 07, 2015. Goods and services for minimum 75% value of the contracts covered under these loans must be sourced from India. A relaxation not exceeding 10% may be considered on a case to case basis for projects involving significant civil construction work. Further, this exemption should be sought before the project is tendered. LOCs may finance up to 100% value of contract on FOB/CFR/CIF/CIP basis. The LOCs will be free from all kinds of taxes and duties levied in the Borrowing country including all Corporate/personal/value added taxes, import/custom duties, special levies and social security contributions for temporary employees deputed by Indian exporters in relation to the project execution in the borrowing countries. However, the tax exemption for eligible services to be rendered locally will be mutually agreed and finalized prior to any utilization under the LOC. If the domestic rules/laws of the borrowing country prohibits exemption of any taxes to bilateral partner/multilateral institution extending development assistance to it, the same have to be paid by the contractor from its own resources and should be reimbursed by the buyer to the contractor. No tax is liable to be paid from the LOC.
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THE EDITORIAL POLICY OF THE BLOG TAX AND REGULATORY AFFAIRS FOR ITS VALUED READERS:

 

This blog was started way back in 2011. The intention was to make aware its readers important topical changes in the taxation and regulatory framework specifically in the Indian Context. The blog went full steam ahead and expanded its coverage. However, the momentum somewhat suffered due to receding interest of mine, in between. I have now renewed my commitment to the field of the ever changing word of taxation and regulatory affairs and now it would even travel to developments beyond the Indian boundaries. The older blog/posts remains, they are not being deleted, in many instances they would have archival value only. Readers who wish to obtain greater clarity on any post may offer their comments or send a mail to which I would make all possible efforts to respond. Please note that post(s) on this blog is an attempt to educate and inform only, for initiating any decision having legal commercial or personal implications, please do consult authoritative sources. Happy  reading.!!

Neeraj Prasad; neeraj001@gmail.com

 

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PROCEDURE TO BE FOLLOWED BY NOMINATED AGENCIES IMPORTING GOLD/SILVER/PLATINUM UNDER THE SCHEME FOR ‘EXPORT AGAINST SUPPLY BY NOMINATED AGENCIES’

CBEC/CBIC through Circular No. 27/2016- Customs, dated 10th June 2016 has prescribed the Procedure to be followed by nominated agencies importing gold/silver/platinum under the scheme for ‘Export Against Supply by Nominated Agencies’. It essentially states that:

In connection with the changes made to Chapter IX of the Customs Act and Regulations issued thereunder, requests for clarification have been received from field formations and trade regarding the circulars 28/2009-Cus dated 14.10.2009 / Circular No. 34/2013- Cus. dated 04.09.2013 and warehousing of Gold/Silver/Platinum imported by nominated agencies under notification 57/2000-Customs dated 8th May 2000.

  1. Circular 28/2009-Cus. lays down the procedure to be followed by the Nominated Agencies for supplying duty free gold imported under notification 57/2000-Customs, to exporters. Consequent to the guidelines issued by RBI for import of gold and gold dore bars vide AP (DIR Series) Circular No. 25 dated 14.8.2013 (80:20 scheme), Circular 34/2013-Customs was issued to operationalize the same, prescribing the procedure to be followed for import of gold and thereby amending circular 28/2009-Cus. dated 14.10.2009.
  1. Pursuant to the withdrawal of the 80:20 scheme by RBI vide Circular no. 42 dated 28.2014, Circular 34/2013-Customs was rescinded vide DGEP letter No. DGEP/G&J/16/2009 (Pt.II). dated 03.12.2014. Further, DGFT had rescinded policy circular No. 77 (RE-2008)/2004-09 dated 31.03.2009 and withdrew all circulars on the import of precious metal by nominated agencies by circular no. 14 dated 01.02.2011. Later by issue of Policy Circular no. 39 (RE-2010)/ 2009-14 dated 19.08.2011, a fresh monitoring mechanism was laid out. Upon the issue of FTP 2015-20, circular no. 39 dated 19.08.2011 was also rescinded and para 4.41 of the Foreign Trade Policy and 4.94 of the Hand Book of Procedures now lay down the procedure with regard to import of gold/silver/platinum, duty free, by nominated agencies for supply to exporters for manufacture of jewellery and export thereof. Accordingly, notification 57/2000-Cus. was amended by notification 33/2015-Cus to incorporate the relevant paras of the FTP.
  1. Circular 28/2009-Cus. deals with two issues, namely, warehousing of gold/silver/platinum imported by nominated agencies for supply to exporters and the procedure for accounting of the same.
  1. It is clarified that warehousing is a facility for duty deferment. As per section 2 (14) of the Customs Act, Dutiable goods are defined as “any goods which are chargeable to duty and on which duty has not been paid”. Chapter IX provides that only dutiable goods may be deposited in a warehouse. Therefore, any exempted goods are not to be warehoused within the meaning of chapter IX of the Customs Act. Accordingly, any gold/silver/platinum imported under the notification 57/2000-Cus dated 8th May 2000 must be cleared on a bill of entry for home consumption and not a bill of entry for warehousing.

5.1      Consignments of Gold / Silver / Platinum imported under notification no. 57/2000-Cus. do not require to be warehoused. In order to facilitate a smooth transition to the new procedure, it is being provided that nominated agencies shall file ex-bond bills of entry under section 68 availing the benefit of notification no.57/2000- Cus. any time on or before 13th August 2016 (in terms of the transitional provisions in the licencing regulations). In the meanwhile, the goods can continue to be stored in the existing vaults.

5.2      The procedure regarding warehousing of dutiable precious metals under Section 58A is under consideration of the Board. In the meantime, any dutiable precious metals already imported or to be imported (i.e. without availing notification no. 57/2000-Cus. or any other exemption notification by virtue of which no duty is chargeable) can continue to be stored in the existing vaults licensed under erstwhile Section 58. Since the licensing regulations provide for a transitional period upto 13th August, 2016, importers may be advised to plan for complying with the new regulations for storage of gold which is imported without availing any duty free exemption in warehouses licensed under section 58A.

  1. By circular 28/2009 – Cus dated 14.10.2009 the Board had in order to avoid divergent practices and to streamline supply of precious metal for exports, laid down a procedure for duty free import of gold/silver/platinum by nominated agencies for supply to exporters. The same has now been reviewed by the Board and the following simplified procedure shall henceforth be followed:
  • the Nominated Agencies shall execute a bond to the Deputy/Assistant Commissioner of Customs binding themselves to, –
  • maintain accounts for the gold/silver/platinum imported; and
  • to discharge the duty in the event of the exporter not fulfilling his export obligation within the period prescribed under the foreign trade policy;
  • For the purpose of para (i) above, the Nominated Agencies may execute a bond for an amount equivalent to the duty involved on the import of a particular consignment, or, a general bond for an amount equivalent to the duty involved on quantity of precious metal likely to be imported over a specified period as declared by the importer;
  • The Nominated Agency shall, along with the bond, furnish a bank guarantee equal to 25% of the estimated amount of duty involved.
  • However, the designated banks nominated by RBI as well as public sector undertakings shall be exempt from the condition of furnishing bank guarantee, provided they fulfill the following conditions:
  • they have not defaulted in following the procedure and conditions specified by DGFT;
  • they have not defaulted in payment of duty within the specified period in cases where there was a default in export of jewellery by an exporter to whom the gold/silver/platinum had been supplied;
  • they have not been involved in any violations involving fraud or collusion or willful mis-statement or suppression of facts under relevant provisions of the Customs Act,1962, the Central Excise Act, 1944, the Finance Act, 1994, the Foreign Trade (Development & Regulation) Act, 1992, the Foreign Exchange Management Act,1999 and the rules made thereunder during the last three years;
  • the exporters intending to receive precious metal from the Nominated Agencies will register themselves with their jurisdictional Asst. Commissioners who will issue them a one-time certificate specifying therein the details of their units. This certificate has to be produced to the Nominated Agencies while taking gold. The exporter shall submit to the Asst. Commissioner an undertaking to the effect that he shall export the jewellery made from the gold/silver/platinum received from the nominated agency within the period stipulated in the Foreign Trade Policy.
  • EOUs may submit a self-declaration to the Nominated Agencies stating therein the details of their unit; As per para 6.01 (h) of FTP 2015-20, EOUs shall have to provide proof of export within a period of 90 days from the date on which they are issued the gold imported by nominated agencies.
  • As far as exporters operating under replenishment scheme are concerned, they may be permitted to receive precious metal from the Nominated Agencies on submission of EP copy of the shipping bill. Nominated agencies shall also monitor the export proceeds realization of such shipments against which they have replenished precious metal, on the basis of Bank certificate of realization to be submitted by exporters to the nominated agencies, as a proof of having exported the jewellery.
  • the Nominated Agencies would supply the gold / silver / platinum for export production and would submit an exporter-wise consolidated monthly account in format enclosed by the 10th of the succeeding month to the Customs station of import;
  • the exporter shall furnish the EP copy of the shipping bill and Bank Realization Certificate to the nominated agencies as a proof of having exported the jewellery made from the duty free goods released to them within the period prescribed in the Foreign Trade Policy;
  • wherever such proof of export is not produced within the period prescribed in the Foreign Trade Policy, the Nominated Agencies shall deposit the amount of duty calculated at the effective rate leviable on the quantity of precious metal not exported, within 7 days of expiry of the period within which the jewellery manufactured out of the said precious metal was supposed to be exported. Circular 28/2009 – Customs dated 14th October 2009 stands rescinded.

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Implication of Supreme Court Judgment dt: 01.02.2018 in the Civil Appeal no. 11261 of 2016 involving CCE vs. Ultra Tech Cement Ltd, with respect to input service(tax) credit.

Honourable Supreme Court in its ruling, in the Civil Appeal no. 11261 of 2016 [Commissioner of Central Excise & Service Tax Vs. Ultra Tech Cement Ltd] has held that Cenvat Credit on Goods Transport Agency service availed for transport of goods from the place of removal to buyer’s premises is not admissible. This ruling in effect overturns the ruling of Honourable Karnataka High Court in the matter. The issue in focus pertains to the availment of CENVAT credit on input service as per the CENVAT Credit Rules, 2004. The CENAT Credit Rule, 2004 were amended on 01.03.2008. Vide serial no. 2 of notification no. 10/2008-Central Excise (N.T.) dated 01.03.2008 (F/A) following amendment was made: –

  1. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 2,-

(i) in clause (l), for the words “clearance of final products from the place of removal”, the words “clearance of final products, upto the place of removal,” shall be substituted;

(ii) in clause (p), for the words “any taxable service provided by the provider of taxable service”, the words “any taxable service, excluding the taxable service referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, provided by the provider of taxable service” shall be substituted with effect from the 1st day of March, 2008.

Hence, clause (l) of rule 2 of the CENVAT Credit Rules, 2004 which became effective on 01.03.2008 read as follows:-

“2(l) “input service” means any service: –

(i)                 Used by a provider of taxable service for providing an output services; or

(ii)               Used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;”

In the said case, Ultra Tech Cement Ltd. got the finished goods (cement) from its parent unit on stock transfer basis and further sold the same in bulk form and packed bags. During the period from January, 2010 to June, 2010, Ultra Tech Cement Ltd. availed Cenvat Credit of service tax paid on outward transportation of goods through a transport agency from its premises to the customer’s premises. For availment of aforesaid credit, a show cause notice was issued by the Office of the Commissioner of Central Excise, Bangalore II Commissionerate and the Adjudicating Authority in its order in original held that Ultra Tech Cement Ltd has wrongly availed the Cenvat Credit. The order further stated that once the final products were fully manufactured and cleared from the factory premises, the question of utilization of service did not arise as such services could not be considered as used in relation to the manufacture of the final product. Therefore, extending the credit beyond the point of removal of the final product on payment of duty would be contrary to the scheme of Cenvat Credit Rules. Ultra Tech Cement Ltd appealed against the adjudication order. Commissioner (Appeal) reversed the decision of the Adjudication Authority. The Commissioner(Appeal) order was essentially based on Board Circular no. 96/7/2007 dated 23.8.2007. The circular had clarified the definition of ‘place of removal’ and stipulated following three conditions that was needed to be satisfied to avail credit: –

(i)                 regarding ownership of the goods till the delivery of the goods at the purchaser’s door step;

(ii)               seller bearing the risk of or loss or damage to the goods during transit to the destination and;

(iii)             freight charges to be integral part of the price of the goods.

In this case, goods were to be delivered on FOR basis and it was responsibility of the appellant to deliver the goods in good condition till it reached the destination and accordingly ownership/title of the goods were with the appellant and hence the appellant had satisfied all the three conditions laid in the said circular. And hence CENVAT credit was allowed on the same. Further, CESTAT and High Court of Karnataka dismissed the appeal of the Department.

Supreme Court while overturning the ruling of Karnataka High Court, in its judgment on 01.02.2018 upheld the decision of the Adjudicating Authority. Supreme Court observed that it needs to be kept in mind that Board’s Circular dated August 23, 2007 was issued in clarification of the definition of ‘input service’ as existed on that date i.e. it related to un-amended definition. Therefore, it cannot be applied after amendment in the definition of ‘input service’ which brought about a total change. After the amendment, the definition of ‘place of removal’ and the conditions which were to be satisfied have to be in the context of ‘up to’ the place of removal. It is that amendment which made the entire difference. Secondly, if such a circular was made applicable even in respect of post amendment cases, it would had been violative of Rule 2(l) of Rules, 2004 and such a situation could not be countenanced. Based on the following rational, the said credit was disallowed by the Supreme Court.  Further, Hon.SC by its order dated :24/04/2018 has dismissed the review petition of Ultra-Tech Cement, thus giving a final closure to the issue.

The implication of this ruling is fairly stark for virtually all manufacturing units and the spill over effect would be there on the GST transitional credit as well. Prior to the Honourable SC ruling assessees across the country would have been availing CENVAT credit on input service per Karnataka HC ruling in the Ultra –Tech matter (this remained the legal position till 30/06/2107). However, in light of the SC judgment dt :01.02.2018, CENVAT credit availed on input service provided after the place of removal would now be liable to be reversed. Although, very clearly, extended period cannot be invoked in this issue, as prior to the referred ruling of Honourable SC, the stated legal position was diametrically different vide the Karnataka HC ruling.  

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