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7.28 The cases of a bonafide default in fulfillment of export obligation may be
regularised by the licensing authority in the manner indicated below:
A. Advance Licence and Advance Licence for Annual Requirement
(i) If the export obligation is fulfilled in terms of value but there
is a shortfall in terms of quantity, the licence holder shall,
for the regularisation, pay:-
(a) To the customs authority, customs duty on the unutilised
value of the imported material alongwith interest at the
rate of 24% per annum thereon; and
(b) To the licensing authority, SIL of a value equivalent to
five times of the CIF value of the unutilised imported
material expressed in free foreign exchange. However, the
provision of this sub-paragraph (b) shall not be
applicable if the unutilised imported material was freely
importable on the date of import.
(ii) If the export obligation is fulfilled in terms of quantity but
not value, no penalty shall be imposed provided the licence
holder has achieved the positive value addition. However, if the
value addition falls below the minimum prescribed, the licence
holder shall be required to surrender SIL equivalent to the FOB
value of shortfall.
(iii) If the export obligation is not fulfilled both in terms of
quantity and value, the licence holder shall, for the
regularisation, pay as per (i) and (ii) above.
(iv) Deleted
(v) In case an exporter is unable to complete the export obligation
undertaken in full and he has not made any import under the
licence, the licence holder will also have an option to get the
licence cancelled and apply for drawback after obtaining
permission from the Customs authorities for conversion of white /
green shipping bills to Drawback Shipping Bills.
B. Quantity based / Value based licences issued as per Export and Import
Policy 1992-97, shall be governed, for the purpose of regularisation, in
accordance with the provisions of that Policy / Procedures, 1992-97
(RE.96). However, in such cases also, the license holder shall be
required to furnish Bank certificate of Exports and realisation showing
realisation of export proceeds. However, for value wise shortfall in
export obligation, the licence holder shall, for the regularisation,
have the option as given in 7.28A(ii) above.