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DGFT Hand Book of Procedures HB Vol.1 (upto 31/03/2001) 7.5

7.5: The licensing authority may also issue Advance licences, other than Advance Licence for annual requirement, where SION are not fixed, based on self declaration and an undertaking by the applicant for a final adjustment as per Adhoc / SION fixed by ALC.

"However,for the purpose of calculating the CIF value for "Advance Licence for Deemed exports/intermediate supply",deemed export performance of the preceding year (FOR value),in addition to the FOB value of preceding year physical exports,shall also be taken into consideration".

The CIF value of one or more such licences shall be Rs.50 lakhs or 100% of the FOB value of preceding year exports, whichever is more. The new comers shall also be entitled for licenses in this category for a CIF value not exceeding Rs.50 lakhs subject to furnishing of 100% Bank Guarantee to Customs authority to cover the exemption from Customs duties. A specific endorsement to this effect shall be made on the licence / DEEC Book.

Once the norms are fixed by ALC, the value limits mentioned above in the second subparagraph would not be applicable to advance licences issued under this paragraph. Such licences, subsequent to fixation of norms by ALC, may be enhanced to a value originally applied for or as decided by the competent authority. The value of the licences, deducted from the entitlement (i.e. Rs. 50 lakhs or 100% of the fob value of preceding year exports, whichever is more), shall be re credited upon fixation of norms by ALC.

(Above Para has been added vide P.N. No. 55(RE-00)/1997-2002, Dt. 16-02-2001)

The original application with prescribed documents shall be submitted to the concerned Regional Licensing Authority. The licensing authority shall forward a copy of the application within 7 days from the date of issue of such licences to ALC for fixation of norms within the prescribed time.

The applicant shall give an undertaking that he shall abide by the norms fixed by ALC and accordingly pay duty, together with 24% interest, on the unutilised inputs as per norms fixed by ALC. He shall also surrender SIL as per paragraph 7.28A(i)(b)

In such cases, where the norms are not finalised by ALC within six months, the norms as applied for shall be treated as final and no adjustment will be made. However, where the application for fixation of adhoc / SION is rejected on account of non furnishing of required documents / information, the licence holder shall be liable for penalty as stated in the above paragraph. In such cases where the export obligation is completed pending fixation of norms by ALC, the entitlement for the licence as given in second paragraph may be recredited upon production of documentary evidence showing fulfillment of export obligation and realisation of foreign exchange in respect of the previous licenses. However, bond waiver / redemption shall not be allowed pending fixation of norms in such cases.

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