Verification of DFIA Licences and Monitoring their EO under FTP 2009-14

The following Public Notice was issued by the Commissioner of Customs (Export) Jawaharlal Nehru Customs House on 17th November 2009.

[Customs Public Notice No. 85 dated 17th November 2009]

Sub: Verification of Duty Free Import Authorization (DFIA) Licences and monitoring of their Export obligation under the Foreign Trade Policy (FTP) 2009-14.

Attention of Importers/Exporters/CHAs and Members of the trade and all concerned is drawn to the procedures being followed under Public Notice No. 56/2006, dated 04.10.2006 and Customs Notification No. 40/2006, dated 01.05.2006 (as amended by Notification No. 19/09 dated 24.02.2009) in the matter of verification of DFI Authorizations issued by Regional Licencing Authorities (RLAs).

2.   The Board has issued Circular No.26/2009-Cus dated 30.09.2009 incorporating the new guidelines to be followed in the light of the FTP 2009-14 in the matter of verification of the DFIAs issued by the Regional Licencing Authorities. The DFIA holders are eligible to avail duty exemption for the materials imported by them only upon fulfilling the conditions laid down in the Customs Notification Nos. 40/2006-Cus dated 01-05-06 & 98/2009-Cus dated 11.09.2009. In addition to the above requirements the DFIA holders also have to comply with the minimum value addition and the period within which the Export Obligations (EO) have to completed, etc., as laid down by the FTP, 2009-14. Taking into account the changes that have been brought over the years in the Foreign Trade Policy and Circulars and Notifications issued from time to time, the procedure for verification of the DFIA Licences has been re-examined and the following procedure is henceforth prescribed with immediate effect for verification of DFIA licenses.

3.   The verification will be done to confirm the compliance of the conditions of the Customs Notification No. 40/2006, dated 01.05.2006 (as amended by Notification No. 19/09 dated 24.02.2009) and notification No.98/09-Cus dated 11-09-09 and the following :

(a)  Value addition norms, as prescribed in the Policy, have been met.

(b)  The SION Norms have been correctly followed.

(c)  The Export Obligation has been correctly fulfilled.

(d)  Any other condition as stipulated in the Policy with respect to DFIA Scheme has been fulfilled.

4.   As per the Para 4.26 read with Para 4.33 of FTP2009-14 of the Hand Book of Procedure (Vol I), the Regional Authority would issue an EODC/Redemption Certificate as prescribed in the Policy. The EODC/Redemption Certificate along with the following documents shall be submitted to the DFIA Verification Section for verification:-

i)    Original DFIA licence alongwith the EODC/NBC.

ii)   Self attested EP Copies of the Shipping Bills & export invoices/packing lists alongwith a Statement showing Shipping Bills wise details particularly the FOB & BRC value and weight/sqm etc.

iii)   Self attested copies of ARE-1/ARE-2, wherever applicable as a proof of non-availment of facility under Rule 18(rebate of duty paid on materials used in the manufacture of the resultant product) or sub-rule (2) of the Rule 19 of the Central Excise Rules 2002 or CENVAT Credit under CENVAT Credit Rules, 2004. In absence of the ARE-1 / ARE-2, a certificate issued by the jurisdictional Central Excise Authority on the above aspect may be submitted

iv)  Copy of Test Report / Chartered Engineers Certificate / Technical Opinion, wherever applicable.

v)   Self attested photo copy of the Bank Realization Certificate (BRC)

vi)  A declaration in compliance to the condition No. 7 of the Customs Notification No. 40/2006, dated 01.05.2006 (as amended by Notfn. No.19/2009 dated 24.02.2009) regarding non disposal/utilization of the exempt materials in any manner except for utilization in discharge of export obligation.

vii)  In case of Deemed exports/intermediate exports, the unit receiving the materials shall submit a certificate from central excise authorities regarding the items of supply, quantity, value and the date of supply along with the relevant invoices. In respect of supplies made to EOU/EHTP/STP/BTP, the supplier can either submit a copy of ARE-3/CT-3 duly signed by the jurisdictional central excise authorities or the concerned bond officer as the case may be. Payment certificate from the Project Authority in the prescribed format may be submitted. In regard to these categories of supplies, the suppliers have to submit a statement of export realization issued by the Bank and also a declaration to the effect that such proceeds were realized through the normal banking channel. In such cases, the supplier also will submit a statement of supplies indicating the details of invoice number, date, FOB value, description of the materials. Further, a statement of B/E-wise items of imports, quantity, and CIF value need to be submitted in this regard.

viii) Any other documents that may be required by the Assistant Commissioner of Customs (In charge of Verification Cell).

5.   The above documents may be submitted to the DFIA VERIFICATION CELL which is at present functioning from the following address:-

Office of the Assistant Commissioner of Customs DFIA/DEEC Verification Cell, Punjab Conware CFS, Nhava Sheva

6.   The staff while receiving Original DFIA Licence/file alongwith the aforesaid documents shall keep a record in the register prescribed for the purpose. The receiving staff will verify whether the original Licence and all other required documents have been correctly tendered at the time of submission. One copy of the acknowledgement (aas detailed in Annexure A) shall be given to the person submitting the License indicating therein the Sr. No. and the Date of the entry in Receipt register. The signature of the person submitting the Licence for verification with his full Name, CHA No. and Pass No. shall also be recorded in the said Register.

7.   The Licence should be duly verified as provided in the Para 4.26 read with Para 4.33 of the FTP2009-14 of the HBOP (Vol I) by the Superintendent/Appraiser for the said purpose. The verified Original DFIA Licence and the related file will be handled by the staff posted at the DFIA Verification Section. The Original verified DFIA Licence and the DFIA Statement shall be returned by the staff to the person from whom the licenses were received for verification between 3.00 pm and 5.00 pm on the day after the date on which the licenses were received for verification as far as possible. The DFIA Licence shall be delivered only to the person who had submitted the same for verification and not to any other person. The signature of the person collecting the verified Licence shall be taken on the copies of acknowledgments kept in office record and also in the prescribed Register.

8.   Any difficulties faced in implementation of this Public Notice may be brought to the knowledge of the undersigned immediately.

F.No. S/6-GEN-553/06(DFIA) Verification

Annexure –A

(To be presented in triplicate)

DFIA Section

JNCH, Sheva.

Date:-

Received DFIA Licence No……………. dated………… for verification which has been entered in the prescribed register at Sr. No. ………./……….(year). Verified licence may be collected between 3p.m. to 5 p.m. on ……………, by the person who has submitted the same.

                                                                                                           Clerk/TA

                                                                                                           DFIA Section

                                                                                                           JNCH, SHEVA.

Name & Signatures of the Person Submitting the Documents

Date:

……………………

Name & Signatures of the Person Receiving the Original DFIA Licence

Date:

                                                                                                           Clerk/TA

                                                                                                           DFIA Section

                                                                                                           JNCH, Sheva