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) An amount equivalent to 3% of the CIF value of unutilised imported material through a TR in the authorised branch of the Central Bank of India indicating the “Head Account: 1453-Foreign Trade and Export Promotion and Minor head: 102”. 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 minimum prescribed value addition/positive value addition as the case may be. However, if the value addition falls below the minimum prescribed/positive, the licence holder shall be required to deposit an equivalent amount through TR in the authorised branch of Central Bank of India indicating the “Head Account: 1453-Foreign Trade and Export Promotion and Minor head: 102” so that 100 times the deposited amount and the FOB value realised in Indian rupees together account for minimum prescribed value addition or positive value addition, as the case may be, over the CIF value.

(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.

(Above (i), (ii) and (iii) has been amended vide PN. No. 37(RE-01), Dt. 17/9/2001)

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(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 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

(ii)If the export obligation is fulfilled in terms of quantity but there is shortfall in terms of value, no penalty will be imposed if the minimum prescribed value addition (or positive value addition, as the case may be) for the particular licence has been achieved. (In case the actual value addition imposed is lower than the minimum prescribed value addition, no penalty will be imposed if the former has been achieved).

However, in case the exporter fails to achieve the required minimum prescribed value addition (or positive value addition, as the case may be), he shall be required to deposit an equivalent amount through TR in the authorised branch of Central Bank of India indicating the “Head of Account :0037 - Customs and Minor Head: 101- Imports” so that the deposited amount and the FOB value realised in Indian Rupees together account for the minimum prescribed value addition (or positive value addition, as the case may be) over the CIF value.

(Above A (ii) has been amended vide PN.No. 34(RE-01), Dt. 31/8/2001.)

(iii) Deleted ]

(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 shipping bills to Drawback Shipping Bills.

B.
(i)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, the exporter shall not be required to surrender Special Import licence for regularisation of the case provided he has achieved the minimum prescribed value addition.

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. For valuewise shortfall, no penalty shall be imposed provided he has achieved the minimum prescribed value addition. Quantitywise shortfall shall be regularised as per paragraph 7.28A(i).

However, in case he fails to achieve minimum prescribed value addition, he shall be required to deposit an equivalent amount through TR in the authorised branch of Central Bank of India indicating the “Head Account: 1453-Foreign Trade and Export Promotion and Minor head: 102” so that 100 times the deposited amount and the FOB value realised in Indian rupees together account for minimum prescribed value addition over the CIF value.

(For Latest information Pl. See Cir. No. 16(RE-01), Dt. 04/01/2002)

(Above Bold paras Under (B) has been amended vide PN. No. 37(RE-01), Dt. 17/9/2001)

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(ii)However, in case he fails to achieve minimum prescribed value addition, he shall be required to deposit an equivalent amount through TR in the authorised branch of Central Bank of India indicating the “Head of Account :0037 - Customs and Minor Head: 101- Imports so that the deposited amount and the FOB value realised in Indian Rupees account for the minimum prescribed value addition over the CIF value.

(Above B (ii) has been amended vide PN.No. 34(RE-01), Dt. 31/8/2001.)]