Exemption to goods imported under EPCG Scheme from Whole of the Duty of Customs and additional duty amount in excess of the amount calculated at the rate of 10% of the value of goods.

[As amended by Notification No.145/95-Cus., dated 19-9-95; No.154/95-Cus., dated 27-10-95; No.32/96-Cus., dated 17-6-1996; No.70/96-Cus., dated 10-9-96, No.96/96-Cus., dated 19-12-1996; No.70/97-Cus., dated 16-9-1997; No.88/97-Cus., dated 12-12-1997; No. 8/98-Cus., dated 23-4-1998; No.42/98-Cus., dated 30-6-1998 and No.75/98-Cus., dated 9-10-1998 and No.56/99., dated 11-5-1999.]

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods as specified in the Table annexed hereto from whole of the duty of custom leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and so much of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate of 10% of the value of goods:

Provided that where the said goods are required for the manufacture of leather garments, textile garments (including knitwears), agro products and products of hotriculture, floriculture and poultry, such goods shall be exempt from the whole of the additional duty leviable thereon under section 3 of the said customs Tariff Act.

2. The exemption contained in paragraph 1, shall be subject to the following conditions, namely:-

3. In a case of default in export obligation, when the duty on goods is paid to regularise the default, the amount of interest paid by the importer shall not exceed the amount of duty if such regularisation has been dealt in terms of Public Notice of the Government of India in the Ministry of Commerce No. 22 (RE-2013)/2009-2014 dated the 12th August, 2013.

(In the Notification, Paragraph Shall be Inserted Vide CUS NTF NO. 46/2013 DATE 26/09/2013)
 

CUS NTF NO. 65/2004 DATE 22/06/2004)
 

"Provided that where the CIF value of licence is not less than Rs.100crores, the export obligation shall be fulfilled within a period of 12 years from the date of issue of licence in the following proportions, namely: -
 

Provided further that where a sick unit notified by the Board for Industrial and Financial Reconstruction (BIFR) is subsequently taken over by another unit for revival, the export obligation may be fulfilled within a period of 12 years from the date of issue of license:

Provided also that export obligation of a particular block may be set off by the excess exports made in the said preceding block(s).

(In condition (3) second proviso has been substituted vide Cus Ntf No.116/2002 Date 28/10/2002)

[OLD Provided further that export obligation of a particular block may be set off by the excess exports made in the said preceding block(s);]

(In condition (3) proviso has been substituted vide Cus Ntf No.49/2002 date 24/04/2002)

[OLD Provided that export obligation of a particular block may be set off by the excess exports made in the proceeding blocks.]

(4) The importer produces within 30 days from the expiry of each block of two years from the second block or within such extended period as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow, evidence to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs showing the extent of export obligation fulfilled, and where the export obligation of any particular block of two years is not fulfilled in terms of the preceding conditions, the importer shall within three months from the expiry of the said block pay duties of customs of an amount equal to that portion of duties leviable on the goods but for the exemption contained herein which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation together with interest at the rate of 15% per annum from the date of clearance of the goods.

(5) The importer shall, if he fails to discharge a minimum of 25% of the export obligation pescribed for any particular block of two years for two consecutive blocks, be liable to pay forthwith, the whole of the duties of customs leviable on the goods imported but for the exemption contained in this notification together with interest at the rate of 15% per annum from the date of clearance of the goods.

(In conditions (4)&(5) bold figure has been substituted vide Cus Ntf No.113/2002 Date 16/10/2002)

(6) The importer shall, if he fails to import goods for a minimum value of twenty crores of rupees within the validity period of the import licence, be liable to pay forthwith the whole of the duties of customs leviable on the goods imported but for exemption contained in this notification together with interest at the rate of 24% per annum from the date of clearance of the goods.

(7) The capital goods imported, assembled or manufactured are installed in the importer"s factory or premises and a certificate from the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or independent Chartered Ecgineer, as the case may be, is produced confirming installation and use of capital goods in the importer"s factory or premises, within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow.

(8) Notwithstanding anything contained in conditions (4) and (5), where the Licensing Authority grants extension of blockwise period for any block(s) or overall period of fulfilment of export obligation upto a period of two years or regularisation of shortfall in export obligation not exceeding 5 per cent of such export obligation, the said blockwise period or overall period of export obligation may be extended and the said shortfall in export obligation be condoned by the Assistant Commissioner of Customs or Deputy Commissioner of Customs;

Provided that in respect of licence holder units affected by the earthquake in the State of Gujarat in the month of January 2001, the Licensing Authority may grant extension in the overall period of export obligation up to one more year:

Provided further that in case of a licence holder unit referred to in the first proviso, having overall export obligation period of 13 years and in case of other licence having export obligation period of 12 years, extension of overall period of export obligation shall not be allowed:

(In condition (8) proviso has been substituted vide CUS NTF NO.44/2003 DATE 21/03/2003)

[OLD Provided that in respect of licence having overall export obligation period of 12 years, the extension of overall period of export obligation shall not be allowed.]

(In condition (8) proviso has been substituted vide Cus Ntf No.116/2002 Date 28/10/2002)

(Condition 8 has been substituted vide Cus Ntf No.49/2002 date 24/04/2002)

[OLD (8). Notwithstanding anything contained in conditions (3) and (4), where the Licensing Authority grants an extension of block-wise period of overall period of fulfillment of export obligation or regularisation of shortfall, in export obligation, not exceeding 5% of such export obligation, the said block-wise period or overall period of export obligation may be extended and the said shortfall in export obligation be condoned by the Assistant Commissioner of Customs or Deputy Commissioner of Customs:

Provided that extension of blockwise period of export obligation shall not be allowed for more than one block of two years.

Provided further that extension of blockwise period of export obligation for the fourth block of two years shall not be allowed for a period of more than one year.]

(Condition No. (8) has been substituted vide Customs NTF )

[old (8) Notwithstanding anything contained in conditions (3) and (4), where the Licensing Authority grants an extension of the period for fulfilment of export obligation or regularisation of shortfall, in export obligation not exceeding 5% of such export obligation, in terms of paragraph 105(d) incorporate in the Handbook of Procedure, Volume-I by Ministry of Commerce vide Public Notice No.314/(PN)/92-97 dated the 25th September, 1995, the said period of fulfilment of export obligation may be extended and the said shortfall in export obligation condoned by the Assistant Commissioner of Customs.]

(2) "Export and Import Policy" means the Export and Import Policy 1 April 1992-31 March 1997 (Revised edition: March 1995) published vide notification of the Government of India in the Ministry of Commerce, No. 1(RE.95)/92-97, dated the 31st March 1995;

(3) "Licensing Authority" means the Director General, Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant a licence under the said Act;

(4) * * *

(5) export obligation means :

(i) export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification or making of supplies of such products in terms of clauses (a), (c), (e), (f) and (i) of paragraph 121 of the Export and Import Policy and para 10.2 (g) of the Export and Import Policy 1997 ­ 2002 corrected up to 13th April, 1998; and

(ii) export of goods in terms of the notification of the Government of India in the Ministry of Commerce and Industry (Department of Commerce) No.28(RE-2003)/2002-2007, dated the 28th January, 2004.

(Clause 5 has been substituted vide CUS NTF NO. 29/2004 DATE 28/01/2004)

[OLD (5) "export obligation" means export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification or making of supplies of such products in terms of clauses (a), (c), (e), (f) and (i) of paragraph 121 of the Export and Import Policy and para 10.2(g) of the Export and Import Policy 1997-2002 corrected up to 13th April, 1998.]

(6) "Net foreign exchange" means FOB value of products exported in discharge of obligation in terms of this notification minus CIF value of inputs used in manufacture thereof where such inputs has been -
 

(a) imported by the importer by the importer directly.

(b) imported by another person and supplied to importer without undergoing any process manufacture;

(c) procured indigeneously, for which the importer claims replenishment under the Duty Exemption Scheme as contained in Chapter VI of the Export and Import policy.

(Please refer Cir No. 07/2003-DGFT, Dt. 16/06/2003 for Export obligation fulfilment criteria in the case of bonding of an EPCG licence holder under the EOU scheme)