Annual Advance Licences shall be issued with positive value addition for an export product group and the entitlement under the scheme shall be upto 125% of the average FOB value of exports in the preceding licencing year.

The scheme shall be applicable to only those export products of the said export products group for which the standard Input Output norms (S10 norms) are specified in Volume II of the handbook of Procedures of Exim Policy 1997-2002.

Annual Advance Licences shall be issued indicating the export product group by the DGFT authortities. The full details of the inputs imported against the licence shall be entered in Part ‘C’ of the DEEC book by the proper officer of Customs at the time of import

Inputs imported duty free under the scheme shall only be utilised in the manufacture of export product.

a. The imported inputs shall not be disposed off or utilised in any manner except for discharge of export obligation. The Annual Advance Licences shall be subjecte to actual user condition and its transfer shall not be allowed.

b. Waste/scrap arising in the course of processing or manufacture of resultant product as prescribed in Standard input/output norms shall be allowed without payment of customs duty.

The export obligation shall be discharged by exporting the resultant products within the period specified in the Annual Advance Licence. The licence holder shall account for utilisation of the imported inputs in the export product in terms of the S10 norms. Export obligation shall be treated as discharged when the importer inputs are utilised in the export product which is exported and the export obligation specified in the Annual Advance Licence is discharged in full by exporting resultant product and the export proceeds are realised in full.

1. Filing of Shilling Bill for export :


Exporters working under Annual Advance Licencing Scheme shall file a Shipping Bill for export of dutiable goods (where export duties are leviable) or shipping Bill for export of duty free goods (whre export duties are leviable). Each endorsement of the Shipping Bill shall contain the following endorsement by the exporter –

"Shipping Bill for export under Annual Advance Licencing Scheme"

"Exported under DEEC No……………….dated…………

The export goods shall be examined with reference to the description and technical specifications of the export product given in the Shipping Bill and also the description and technical specification of imported and other inputs declared to have been used in the export product. Samples for testing may not be drawn where goods are exported under Central Excise Seal or accompained by test reports of statutory authorities. Samples for testing shall be drawn only when considered necessary.

Customs Officer at the port of export, shall enter the full details of the export goods in part ‘F’ of the DEEC Book at the time of permitting exports. He shall also endorse the exports in part ‘F’ of the DEEC. Simultaneously, the fact of endorsement of export on the DEEC shall be recorded on the Shipping Bills as follows :

"Entered at Sr. No…………… of part ‘F’ of DEEC No…………dated………………."

1. Imports :


1. Registration of Annual Advance Licence & issue of TRA :

Prior to first import against Annual Advance Licence, the Licence and DEEC (imports) shall be registered at the port of registration mentioned on the licence and the DEEC. A copy of the licence and import part of the DEEC book shall also be kept on records of the Custom House of registration. Where imports are intended from another port, licence holder shall give intimation to port of registration with request for issue of TRA. Port of registration shall then issue a Telegraphic Release Advice (T.R.A.) to the port of import for clearance of goods.

2. Maintenance of separate register for Annual Advance Licence.

Every Custom House registering DEEC cases shall maintain a separate for Annual Advance Licence. Each licence shall be serially numbered at the time of registration and the serial no. allotted shall be entered on the licence and the DEEC. Against each registered licence, following minimum information shall be kept in the register :-

Name of the Licencee

DEEC No. and Date

Licencing Authority

Date of first import

Date of expiry of export obligation

Details of TRA issued

Custom House file No.

Details of notices issued, if any.

3. The licence holder shall have the flexibility import any input upto the quantity limit specified in Part C by proper officer based on the input-output norms contained inVolume 2 of the Handbook of Procedure of Exim Policy 1997-2002 under the export product group specified in the Annual Advance Licence. The licence holder shall have to maintain the nexus between the imported input and the resultant product and account for the after the date of amendment, as per the revised norms.

4. In case there is a change in SIO norms during the validity period of the licence, the licence holder shall account for raw material in respect of the exports made prior to the date of amendment as per the pre-revised norms and for exports made on or after the date of amendment, as per the revised norms.

5. Full details of imports to be given in B/E and import documents :

At the time of clearance of goods from Customs, the licence holder shall furnish the full details of the inputs under import alongwith the B/E and import documents which shall be entered in the part ‘D’ of the DEEC book by the Customs.

6. Imports subject to normal checks/examination.

Imports effected under the scheme shall not be cleared under fast track/green channel scheme and would be subjected to normal checks/examination procedure.

7. Sourcing of inputs from private bonded warehouses:

The facility of sourcing inputs from private bonded warehouses under para 5.15 of the Exim Policy shall be available and for this purpose the provisions of section 68 of the Customs Act,1962 shall be applicable except that the clearance of inputs from bond shall be allowed free of duty as well as interest chargeable on duty against Annual Advance Licence subject to fulfillment of the terms and conditions mentioned in the Cicular, Notification No. 48/99 CUS dated 29.4.99 and amendment notification No. 90/99-Cus dated 06.07.99. In this connection attention is also invited to Custom House Public Notice No. 19 dated 10.02.99.

8. Debiting of Annual Advance Licence and DEEC Book:

No clearance shall be allowed under Customs Notification no. 48/99 Cus dated 29.04.99 unless a debit entry has been made in the licence and part ‘D’ of the DEEC (Imports).

2. Restriction on ports:


1. Imports and Exports, under the scheme shall be permissible only from ports, Airports and inland container depots, specified in the condition (iv) of the Customs notification No. 48/99 Cus dated 29.04.99. Commissioner of Customs have been empowered to permit imports and exports from any port, Airport, land Customs Station, or inland container depots subject to such conditions as may be specified by the Commissioner.

3. Monitoring of export obligation :


1. Custom House at the port of registration shall call from the exporter the details of export alongwith part 2 of the DEEC (copies to be kept on records), within 30 days of expiry of export obligation. If the export obligation is not discharged in full in the manner as specified in para 3(vi) above, the Customs shall proceed to recover the Customs duties with 24% interest. The intimation of recovery proceedings shall also be endorsed to the concerned DGFT authority to enable it to take action for recovery of duty in terms of para 7.29 of the Handbook of Procedure Vol. 1, 1997-2002. Bond, Bank Guarantee shall be discharged only on production of certificate of discharge of E.O. from Licencing authorities.

2. Endorsement of the DEEC shall be countersigned by the Asstt. Commissioner of Customs.

0. Part H of DEEC to be filled:


DEEC holder seeking doscharge of Bond/Bank Gurantee shll fill the information in part ‘H’ of consolidated imports and exports made under the scheme. Normal procedure for logging of DEEC book shall be followed.

1. In addition to above, the following steps should be taken for proper implementation of the scheme :

a. At the time of registration of Annual Advance Licence, the licence holder should be required to declare all export products, their Standard input Output Sr. Nos., quantities and value of each such product to be exported. The licence and value of each such products to be exported. The licence holder should also declare the inputs required for manufacture of such declared quantities of export product as per Standard inputs output norms, including quantity and value of each of the inputs so required. After verification of conformity of declaration with reference to Standard input output norms, the particulars of export products(s) shall be endorsed by the proper officer of the Customs in part ‘E’ of the DEEC whereas particulars of inputs, their quantities and value shall be endorsed in para ‘C’ of the DEEC. All import of in, the inputs thereafter shall be debited from such quantities and value by making suitable endorsements in part ‘D’ of the DEEC. Similarly all exports made shall be endorsed in part ‘F’ of the DEEC book by the proper officer of Customs at the port of export in the same manner in which it is presently done for other types of advance Licences. On completion of export obligation period, the licence holder shall be required to account for use of all imported inputs in the export product as entered in part ‘E’of the DEEC. Though quantities of export product declared by the exporter at the time of registration may be only approximate, the final accountal will be with reference to actual quantities of exports made vis-ΰ-vis quantities of imports made. The exporter shall have freedom to get any other eligible export products endorsed in the ‘E’ of the DEEC book and its inputs in part ‘C’ of the DEEC book during the validity period of the licence.

0. As the description, quantity and value of inputs will not be definitely known at the initial stages and the licence holder has flexibility to add one or more of export products to part ‘E’ of the DEEC during the validity period of licence, the bond for discharge of export obligation shall be executed for an amount equal to 150% of the CIF value as endorsed on the licences by the licencing authorities together with amount of Bank Guarantee as specified in various instructions issued from time to time.

a. The records of all imports and exports are required to be maintained in separate registers to be opened specially for this scheme. All DEEC files opened under the scheme shall bear no. S/16-DEEC-ANNUAL/99-Gr. VII. The discharge of export obligation against such licences shall be monitored by Monitoring Cell of Gr. VII in the same manner in which discharge of Export Obligation against Quantity based Advance Licence is being monitored.

Sd/-
( R. SHARMA)
COMMISSIONER OF CUSTOMS (E.P.)



A T T E S T E D B Y

( A. K. MADAN)
DY. COMMISSIONER OF CUSTOMS