Imp. No. 51/03
Exp. No. 51/03

PUBLIC NOTICE NO.92/2003 Date: 08.09.2003
Subject: Execution of Bond and Bank Guarantee under Advance Licence and EPCG Schemes-reg.

1. The Bonds/ Bank Guarantees shall be taken as per the following norms for the purpose of permitting clearance of import goods under Advance Licence and EPCG Schemes.

Category of Importer	Quantam of Bank Guarantee
(a) Super Star Trading House, Star Trading House, Trading House, Export House and Public Sector Undertakings.	Nil
(b) Service providers who are recognized as status holders by the appropriate authority	Nil
(c) Manufacturer exporters registered with Central Excise who have been exporting during the previous two financial years and have minimum export of Rs.1 crore or more during the preceding financial year.	Nil
(d) Manufacturer exporters registered with Central Excise, who have paid Central Excise Duty of Rs.1 crore or more during the preceding financial year.	Nil
(e) Manufacturer exporters who are not covered under (a), (c) & (d) above	25%
(f) others	100%

2. For the category of importers mentioned at (a) to (d) above, a bond without surety shall be accepted for the purpose of permitting import of goods under Advance Licence/EPCG Schemes. For the purpose, bond shall be furnished in the format annexed to DOR"s Circular No. 71/98-Cus dated 15.09.1998 by omitting all references of surety. The bond shall cover duty ordinarily leviable on the goods but for the exemption.

3. Bank Guarentee exemption has specified in para 1 above shall be admissible subject to the following conditions:-

(a) The licence holder has not defaulted on the export obligation in respect of any advance licence/EPCG licence issued to him in the past. The Bank Guarantee exemption shall stand withdrawn if DGFT or Customs comes across default in export obligation against any earlier Advance Licence/EPCG Licence issued.

(b) For the purpose of Bank Guarentee exemption to manufacturer exporters at 1(c) and 1(d) above, the certificate of export performance or payment of Central Excise duty shall be issued by the Jurisdictional Superintendent of Central Excise where the factory of the licensee is located.

(c) The Licence holder should not have been penalized under the Provisions of Customs Act, Central Excise Act, Foreign Exchange Maintenance Act (FEMA) or Foreign Trade (Development & Regulations) Act during previous two financial years.

(d) In individual cases where DGFT Authority/EPCG Committee/ALC/Jurisdictional Commissioner of Customs is satisfied that a higher quantum of Bank Gurantee is justified on account of risk to revenue 100% Bank Guarantee may be taken by Customs after recording the reasons therefor in file.

4 Where an importer so requests, a Bank Guarantee may be taken consignment-wise subject to the condition that such consignment wise BG shall only be acceptable by Customs at the port of registration of the licence.

5. Bond/BG shall be filed for a minimum period of 3 years with an undertaking to keep the BG alive for the entire period of export obligation viz 8+1=9 years or 12+1=13 years etc. under EPCG Schemes as the case may be.

6. Custom House shall properly maintain Bond/BG registers and ensure that wherever the Bank Guarantee are not renewed in time recovery action is initiated by enforcement of the Bank Guarantee within time. Customs shall also ensure that wherever required, Bank Guarantees are renewed well in time.

7. In the case of subsidiary company of a parent company of a recognized status, the facility of filing joint bond (both by the parent company as well as the subsidiary company holding the licence) alongwith BG/Cash Security/any other guarantee from financial institutions like IDBI, ICICI, UTI etc. shall also be available. The facility however shall be subject to the following conditions:-

(a) The parent company shall necessarily have more than 50% share holding in the subsidiary company.

(b) The bond shall be jointly signed by the parent company as well as the subsidiary company and shall be executed along with BG/Cash Security/or guarantee from financial institutions like IDBI, ICICI, UTI ect. Wherever applicable in terms of criterion laid down. The guarantee shall be in relation to terms and conditions of the Joint Board.

(c) The parent company shall stand surety for the subsidiary company that in the event subsidiary company fails to fulfil the export obligation and defaults on payment of customs duty and interest, the parent company shall make good the Government revenue and the interest. In other words the parent company will be severally and jointly liable for the action in terms of the Bond/BG jointly executed by them.

(d) This facility shall be extended only to those companies which have proven track record and reputation.

8. BG exemption specified in para 1 above shall also, be available in respect of past licence where licence holder had earlier filed BG but as on date he is entitled for BG exexption.

9. It shall be responsibility of the jurisdictional Superintendent of Central Excise that while issuing Certificate about export performance in terms of para 1 (c) or about the fact of payment of Central Excise duty for the purpose of para 1 (d) he satisfies himself about the genuineness of the declaration being given by the licence holder.

10. In order to thwart attempts to misuse the Advance Licence Schemes, DGFT authorities shall endorse a copy of the Advance Licence to the concerned Central Excise authorities by fax or e-mail with requiest to intimate the concerned DGFT Authority in case the party appears to be bogus/non-existent. In all cases where on physical verification by central Excise, the party is found to be bogus/non-existent, the jurisdictional Commissioner of Central Excise shall immediately inform the concerned authorities to suspend the Advance Licence and intimate the concerned Customs Authorities about it where the Advanced Licence is registered.

11. The jurisdictional Superintendent of Central Excise shall also issue Certificate about export performance in terms of para 1 (c) above in respect of units which are not in central Excise control so as to ensure that no frauds are perpetuated by obtaining bogus claims of exports.

12. For the compliance of para 3 (a) above, the trade is requested to approach the Monitoring cell of the DEEC section for cancellation of their outstanding Bonds/ BGs by completing required formalities so as to avoid delay at the time of registration of fresh licences.

13. This Public Notice is issued in super cession of earlier Public Notice No. 77/03 dated 16.07.2003 on the subject.

(SHISHIR KUMAR)
COMMISSIONER OF CUSTOMS (EP)

F. No. S/26-EPCG-5/03

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