Zero Duty
Pre Export 2013-14 EPCG Customs Notification Notified
[Customs
Notification No. 22 dated 18th April 2013]
In
exercise of the powers conferred by sub-section (1) of section 25 of the
Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it
is necessary in the public interest so to do, hereby exempts goods specified in
the Table 1 annexed hereto, from,-
(i) the whole of the duty of customs leviable
thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975),
and
(ii) the whole of the additional duty leviable
thereon under section 3 of the said Customs Tariff Act, when specifically
claimed by the importer.
2. The exemption
under this notification shall be subject to the following conditions, namely:-
(1) that the goods imported are covered by a valid authorisation
issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of
Chapter 5 of the Foreign Trade Policy permitting import of goods at zero
customs duty;
(2) that the
authorisation is registered at the port of import specified in the said
authorisation and the goods, which are specified in the Table 1 annexed hereto,
are imported within eighteen months from the date of issue of the said
authorisation and the said authorisation is produced for debit by the proper
officer of customs at the time of clearance:
Provided that the benefit of import of capital goods at
concessional duty under this notification for creation of modern infrastructure
shall be extended only to such retailers who have a minimum area of 1000 square
metres:
Provided further that the catalyst for one subsequent
charge shall be allowed, under the authorisation in which plant, machinery or
equipment and catalyst for initial charge have been imported, except in cases
where the Regional Authority issues a separate authorisation for catalyst for
one subsequent charge after the plant, machinery or equipment and catalyst for
initial charge have already been imported;
(3) that the
importer is not issued, in the year of issuance of zero duty EPCG authorisation,
the duty credit scrips under Status Holder Incentive
Scrip (SHIS) scheme under para 3.16 of the Foreign
Trade Policy. In the case of applicant who is Common Service Provider (herein
after referred as CSP), the CSP or any of its specific users should not be
issued, in the year of issuance of the zero duty EPCG authorisation,
the duty credit scrips under SHIS. This condition
shall not apply where already availed SHIS benefit that is unutilised is
surrendered or where benefits availed under SHIS that is utilised is refunded,
with applicable interest, before issue of the zero duty EPCG authorisation.
SHIS scrips which are surrendered or benefit refunded
or not issued in a particular year for the reason the authorisation has been
issued in that year shall not be issued in future years also;
(4) that the authorisation for annual requirement shall indicate
export product to be exported under the authorisation. The importer shall
submit a Nexus Certificate from an independent Chartered Engineer (CEC) in the
format specified in Appendix 32A of HBP (vol. I) notified under the Foreign
Trade Policy, certifying nexus of imported capital goods with the export
product, to the Customs authorities at the time of clearance of imported
capital goods. A copy of the CEC shall be submitted to the concerned Regional
Authority alongwith copy of the bill of entry, within
thirty days from the date of import of the Capital Goods;
(5) that the goods imported shall not be disposed of or
transferred by sale or lease or any other manner till export obligation is
complete;
(6) that the
importer executes a bond in such form and for such sum and with such surety or
security as may be specified by the Deputy Commissioner of Customs or Assistant
Commissioner of Customs binding himself to comply with all the conditions of
this notification as well as to fulfill export
obligation on Free on Board (FOB) basis equivalent to six times the duty saved
on the goods imported as may be specified on the authorisation, or for such
higher sum as may be fixed or endorsed by the Regional Authority in terms of
Para 5.10 of the Handbook of Procedures Vol I, issued
under para 2.4 of the Foreign Trade Policy, within a
period of six years from the date of issue of Authorisation, in the following
proportions, namely :-
|
S.
No. |
Period
from the date of issue of Authorisation |
Proportion
of total export obligation |
|
(1)
|
(2)
|
(3)
|
|
1.
|
Block
of 1st to 4th year |
50%
|
|
2.
|
Block
of 5th to 6th year |
50%
|
Provided
that in case the authorisation is issued to a CSP, the CSP shall execute the
bond with bank guarantee and the bank guarantee shall be equivalent to 100% of
the duty foregone, and the bank guarantee shall be given by CSP or by anyone of
the users or a combination thereof, at the option of the CSP:
Provided
further that the export obligation shall be 75% of the normal export obligation
specified above when fulfilled by export of following green technology
products, namely, equipment for solar energy decentralised and grid connected
products, bio-mass gassifier, bio-mass or waste
boiler, vapour absorption chillers, waste heat
boiler, waste heat recovery units, unfired heat recovery steam generators, wind
turbine, solar collector and parts thereof, water treatment plants, wind mill
and wind mill turbine or engine, other generating sets - wind powered,
electrically operated vehicles – motor cars, electrically operated vehicles –
lorries and trucks, electrically operated vehicles – motor cycle and mopeds,
and solar cells:
Provided
also that for units located in Arunachal Pradesh, Assam, Jammu and Kashmir,
Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, the export
obligation shall be 25% of the normal export obligation specified above:
Provided
also that spares (including refurbished or reconditioned spares), moulds, dies,
jigs, fixtures, tools and refractory for initial lining, for the existing plant
and machinery (imported earlier, under EPCG or otherwise), shall be allowed to
be imported under the EPCG scheme subject to an export obligation equivalent to
50% of the normal export obligation specified above in case of separate
authorisation issued, subject to the condition that the Cost, Insurance and
Freight (CIF) value of import of the said spares etc. is limited to 10% of the
CIF value of the plant and machinery imported under the EPCG authorisation or
10% of the book value of the plant and machinery imported earlier otherwise
than under EPCG Scheme, as the case may be:
Provided
also that where a sick unit is notified by the Board for Industrial and
Financial Reconstruction (BIFR) or where a rehabilitation scheme is announced
by the concerned State Government in respect of sick unit for its revival, the
export obligation may be fulfilled within time period allowed by the Regional
Authority as per the rehabilitation package prepared by the operating agency
and approved by BIFR or rehabilitation department of State Government. In cases
where the time period is not specified in the rehabilitation package, the
export obligation may be fulfilled within the time period allowed by the
Regional Authority which shall not exceed nine years:
Provided
also that where the capital goods are imported for technological upgradation as per conditions specified in Para 5.8 of the
Foreign Trade Policy, the export obligation shall be fixed equivalent to six
times the duty saved on the capital goods imported as may be specified on the
authorization, or for such higher sum as may be fixed by the Regional
Authority, to be fulfilled within period of six years from the date of issue of
authorization under the said para:
Provided
also that export obligation of a particular block may be set off against the
excess exports made in the said preceding block;
(7) that if the
importer does not claim exemption from the additional duty leviable
under section 3 of the Customs Tariff Act, 1975, the additional duty so paid by
him shall not be taken for computation of the net duty saved for the purpose of
fixation of export obligation provided the Cenvat
credit of additional duty paid has not been taken;
(8) that the
importer, including a CSP, produces within 30 days from the expiry of each
block from the date of issue of authorisation or within such extended period as
the Deputy Commissioner of Customs or Assistant Commissioner of Customs may
allow, evidence to the satisfaction of the Deputy Commissioner of Customs or
Assistant Commissioner of Customs showing the extent of export obligation
fulfilled, and where the export obligation of any particular block is not
fulfilled in terms of the condition (6), the importer shall within three months
from the expiry of the said block pay duties of customs equal to an amount
which bears the same proportion to the duties leviable
on the goods, but for the exemption contained herein, which the unfulfilled
portion of the export obligation bears to the total export obligation, together
with interest at the rate of 15% per annum from the date of clearance of the
goods;
(9) that where
the importer fulfills 75% or more of the export
obligation as specified in condition (6) (over and above 100% of the average
export obligation) within half of the period specified for export obligation as
mentioned in condition (6), his balance export obligation shall be condoned and
he shall be treated to have fulfilled the entire export obligation;
(10) that the
capital goods imported, assembled or manufactured are installed in the importer‟s factory or premises and a certificate from
the jurisdictional Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be, is produced confirming
installation and use of the capital goods in the importer‟s
factory or premises, within six months from the date of completion of imports
or within such extended period as the Deputy Commissioner of Customs or
Assistant Commissioner of Customs, as the case may be, may allow :
Provided
that in case of import of spares, the installation certificate shall be
produced within three years from the date of import:
Provided
further that if the importer, including an importer who is a Common Service
Provider (CSP), is not registered with the Central Excise or if the importer is
a service provider (other than a CSP), as the case may be, he may produce the
said certificate of installation and usage issued by an independent Chartered
Engineer:
Provided
also that in the case of manufacturer exporter and merchant exporter having
supporting manufacturer(s) or vendor(s) or in the case of import of irrigation
equipment for use in contract farming for export of agricultural products or in
the case of importer rendering services, the capital goods may be installed at
the factory or premises of such other person whose name and address is endorsed
on the authorisation referred to in condition (1) and also on the shipping
bills and where the bond for full difference of duty, if necessary, in terms of
condition (6) with or without a bank guarantee, as the case may be, is executed
by the importer and such other person binding themselves jointly and severally
to fulfill the export obligation and all other
conditions of this notification and to pay duty with interest at the rate of
15% per annum in case of default. This shall not apply to a CSP:
Provided
also that agro units located in Agri Export Zones or
service providers in Agri Export Zones may move the
capital goods within the Agri Export Zones under
intimation to the jurisdictional Deputy Commissioner of Central Excise or
Assistant Commissioner of Central Excise, as the case may be, subject to the
condition that the importer shall maintain accurate record of such movement;
(11) that the
imports and exports are undertaken through the seaports, airports or through
the Inland Container Depots or through the Land Customs Stations as mentioned
in the Table 2 annexed hereto or a Special Economic Zone notified under section
4 of the Special Economic Zones Act, 2005 (28 of 2005):
Provided that the Commissioner of Customs may, by
special order or a public notice and subject to such conditions as may be
specified by him, permit import and export through any other sea-port, airport,
inland container depot or through a land customs station within his
jurisdiction;
(12) that notwithstanding
anything contained in condition (6) above, where the Regional Authority grants
extension of block-wise period for any block(s) or overall period of fulfillment of export obligation up to a period of two
years or regularization of shortfall in export obligation, not exceeding five percent of such export obligation, the said block-wise
period or overall period of export obligation shall be extended or condoned by
the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the
case may be:
Provided
that in respect of sick units referred to in the fifth proviso to condition (6)
above, extension of overall period of export obligation shall not be allowed.
3. Where the
goods specified in the Table 1 are found defective or unfit for use, the said
goods may be re-exported back to the foreign supplier within three years from
date of payment of duty on the importation thereof:
Provided
that at the time of re-export, the goods are identified to the satisfaction of
the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the
case may be, to be the same as the goods which were imported.
Explanation
–
For the purpose of this notification,-
(A) “Authorisation”
includes “Authorisation for Annual Requirement”.
(B) “Capital goods”
has the same meaning as assigned to it in Paragraph of 9.12 of the Foreign
Trade Policy;
(C) “Common
Service Provider” (CSP) means a service provider who is designated or certified
as a Common Service Provider by the DGFT, Department of Commerce or State
Industrial Infrastructural Corporation in a Town of Export Excellence;
(D) “Export
obligation”,-
(I) means
obligation on the importer to export to a place outside India, goods
manufactured or capable of being manufactured or services rendered by the use
of capital goods imported in terms of this notification and the export
obligation shall be over and above the average level of exports achieved by the
importer in the preceding three licensing years for the same and similar
products within the overall export obligation period including the extended
period, if any and such average shall be the arithmetic mean of export
performance in the last three years for the same and similar products:
Provided
that in case of export of goods relating to handicraft, handlooms, cottage,
tiny sector, agriculture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture, carpet,
coir and jute, the importer shall not be required to maintain the average level
of exports:
Provided
also that in case of export of goods relating to aquaculture (including
fisheries), the importer shall not be required to maintain the average level of
exports subject to the condition that EPCG authorisation has been obtained for
goods other than fishing trawlers, boats, ships and other similar items:
Provided
also that the goods, excepting tools, imported under this notification by the
aforesaid sectors, shall not be allowed to be transferred for a period of five
years from the date of imports even in cases where export obligation has been
fulfilled. Transfer of capital goods would, however, be permitted within the
group companies, after fulfillment of export
obligation but before five years from the date of imports, under intimation to
Regional Authority and jurisdictional Central Excise Authority:
Provided
also that exports made to such countries as notified by Director General of
Foreign Trade, shall not be counted for fixing the average level of exports:
Provided
also that exports against only such shipping bills which mention the
authorisation number and date of the authorisation shall be counted for the fulfillment of the export obligation:
Provided
also that in the case of authorisation issued to a CSP, -
(i) the reference to „importer‟ in this Explanation shall
be taken to mean a reference to „CSP and specific users whose details are
informed prior to export by CSP to the Regional Authority‟;
(ii) for the
exports by users of the common service to be counted towards fulfilment of
export obligation of CSP, the respective shipping bills of the users of common
service shall contain the authorisation details of the CSP and the concerned
Regional Authority shall be informed about the details of the users prior to
such export; and
(iii) the exports
counted against the authorisation in terms of this notification shall not be
counted towards fulfillment of other specific export
obligations against all other authorisations issued under Chapter 5 of the
Foreign Trade Policy, including para 5.22 of Handbook
of Procedures Volume 1;
(II) shall be fulfilled through physical exports and the export
proceeds realised in freely convertible currency. However the following
categories of supplies, shall also be counted towards fulfillment of export obligation:
(a) deemed exports, namely:
(i) supply of goods against Advance Authorisation/Advance
Authorisation for Annual Requirement/ Duty Free Import Authorisation (DFIA);
(ii) supply of goods to Export Oriented Units (EOUs) or Software Technology
Parks (STPs) or Electronics Hardware Technology Parks (EHTPs) or Bio-Technology
Parks (BTPs);
(iii) supply of
goods to projects financed by multilateral or bilateral agencies or Funds as
notified by the Department of Economic Affairs (DEA), the Ministry of Finance
(MOF) under International Competitive Bidding (ICB) in accordance with
procedures of those agencies or Funds, where legal agreements provide for
tender evaluation without including customs duty; supply and installation of
goods and equipments (single responsibility of
turnkey contracts) to projects financed by multilateral or bilateral agencies
or Funds as notified by DEA, MOF under ICB, in accordance with procedures of
those agencies/Funds, where bids may have been invited and evaluated on the
basis of Delivery Duty Paid (DDP) prices for goods manufactured abroad;
(iv) supply of goods to any project or purpose in respect of
which the Ministry of Finance, by a notification, permits import of such goods
at zero customs duty and the supply is made under ICB procedure;
(v) supply of goods to mega power projects as provided in
sub-clause (ii) of clause (f) of para 8.2 of Foreign
Trade Policy;
(vi) supply of goods to nuclear power projects through
competitive bidding as provided in clause (j) of para
8.2 of Foreign Trade Policy;
(b) supply of ITA-1 items to Domestic Tariff Area, provided
realization is in free foreign exchange;
(c) royalty payments received in freely convertible currency and
foreign exchange received for Research and Development (R&D) services; and
(d) payments received in rupee terms for port handling services
in terms of chapter 9 of the Foreign Trade Policy.
(E) “Foreign
Trade Policy” means the Foreign Trade Policy, 2009-2014, published in the
Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification
number G.S.R. 1293 (E) of the Government of India, Ministry of Commerce and
Industry, Department of Commerce No.1 (RE – 2012) /2009-2014 dated the 5th
June, 2012, as amended from time to time;
(F) “Handbook of
Procedures, Volume 1” means the Handbook of Procedures Volume 1, 2009-14,
published in the Gazette of India, Extraordinary, Part I, Section 1 vide public
notice of the Government of India in the Ministry of Commerce and Industry,
Department of Commerce, No.1 (RE – 2012) /2009-2014 dated the 5th June, 2012,
as amended from time to time;
(G) “Manufacture”
has the same meaning as defined in clause (f) of section 2 of the Central
Excise Act, 1944 (1 of 1944);
(H) “Regional
Authority” means the Director General of Foreign Trade appointed under section
6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or
an officer authorised by him to grant an authorisation including a duty credit
scrip under the said Act;
(I) “Town of
Export Excellence” (TEE) means a selected town producing goods of Rs. 750 Crore or more based on
potential of growth in exports. However, for TEE in handloom, handicraft,
agriculture and fisheries sector the threshold limit would be Rs.150 Crore.
|
Table 1 |
|
|
SNo. |
Description
of goods |
|
(1)
|
(2)
|
|
1.
|
Capital
goods for pre-production, production and post production.
|
|
2.
|
Capital
goods in Semi Knocked Down (SKD) / Completely Knocked Down (CKD) conditions to
be assembled into capital goods by the importer. |
|
3.
|
Spare
parts of CIF value upto 10% of the CIF value of
goods specified at Serial Nos.1 and 2 as actually imported and required for maintenance
of capital goods so imported, assembled, or manufactured. |
|
4.
|
Spare
parts of CIF value upto 10% of the book value of
the existing plant and machinery of the importer. |
|
Table 2 |
||
|
SNo. |
Port,
ICD, LCS |
Located
at |
|
1.
|
Seaports
|
Bedi
(including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar, Haldia (Haldia Dock complex of
Kolkata port) Kakinada, Kandla, Kattupalli
(Tamilnadu), Kolkata, Krishnapatnam,
Ennore (Tamilnadu) and Karaikal (Union territory of Puducherry),
Magdalla, Mangalore, Marmagoa,
Muldwarka, Mumbai, Mundhra,
Nagapattinam, Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar.
|
|
2.
|
Airports
|
Ahmedabad,
Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim
(Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata, Lucknow
(Amausi), Mumbai, Nagpur, Rajasansi
(Amritsar), Srinagar, Trivandrum, Varanasi and Visakhapatnam. |
|
3.
|
Inland
Container Depots |
Agra,
Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chettipalayam (Tamilnadu), Chheharata (Amritsar), Coimbatore, Dadri,
Dappar (Dera Bassi), Daulatabad (Wanjarwadi and Maliwada),
Delhi, Dhannad Rau (District Indore), Dighi (Pune), Durgapur (Export Promotion Industrial
Park), Faridabad, Garhi Harsaru,
Gauhati, Guntur, Hyderabad, Irugur
Village (Tamilnadu), Irungattukottai
(SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk, Kanchipuram District, Tamilnadu),
Jaipur, Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur, Kheda (Pithampur, District Dhar),
Kota, Kundli, Loni
(District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep (District Raisen), Marripalem Village (in Edlapadu
Taluk of District Guntur), Miraj,
Moradabad, Nagpur, Nasik, Patli (Gurgaon), Pimpri (Pune), Pitampur
(Indore), Pondicherry, Raipur, Rewari, Rudrapur (Nainital), Salem, Singanalur, Surat, Surajpur, Talegaon (District
Pune), Thudiyalur (Tamilnadu),
Tirupur, Tondiarpet
(TNPM) in Chennai, Tuticorin, Udaipur, Vadodara, Varanasi,
Veerapandi (Tamilnadu)
and Waluj (Aurangabad). |
|
4.
|
Land
Customs Stations |
Agartala,
Amritsar Rail Cargo, Attari Road, Changrabandha, Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi. |
[F.No.605/10/2013-DBK]