Notification No. 111/95-Cus Dated 05-06-95
Exemption on goods imported under EPCG Scheme.-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 as specified in the Table annexed
hereto from whole of the duty of custom leviable thereon which is specified in
the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and so much of
the additional duty leviable thereon under section 3 of the said Customs Tariff
Act, as is in excess of the amount calculated at the rate of 10% of the value of
goods:
Provided that where the said goods are required for the manufacture of leather
garments, textile garments (including knitwears), agro products and products of horticulture,
floriculture and poultry, such goods shall be exempt from the whole of the
additional duty leviable thereon under section 3 of the said customs Tariff Act.
2. The exemption contained in paragraph 1, shall be subject to the following
conditions, namely:-
(1) The goods imported are covered by a valid licence under the Export
Promotion Capital Goods (E.P.C.G.) Scheme in terms of Export and Import Policy
(hereinafter referred to as the said Policy) permitting import of goods free
of duty and the said licence is produced for debit by the proper officer of
the customs at the time of clearance;
Provided that for the import of spare parts, the validity period of the
licence shall be deemed to be the period permitted for fulfilment of the
export obligation in full.
(2) Omitted
(3) The importer executes a bond in such form and for such sum and with such
surety or security as may be specified by the Assistant Commissioner of
Customs or Deputy Commissioner of Customs binding himself to fulfill export
obligation equivalent to six times the CIF value of the goods imported on FOB
basis, or four times of the CIF value on Net Foreign Exchange basis as
specified in the licence or for such higher amount as may be fixed by the
Licensing Authority or for such amount as may be fixed by the Licensing
Authority in terms of clause (i) of Paragraph 5.4 of the Export and Import
Policy, 2002-2007, within a period of eight years in the following proportions
:-
| S. No. |
Period from the date of issue of licence |
Proportion of total export obligation |
| 1. |
Block of 1st and 2nd year |
NIL |
| 2. |
Block of 3rd and 4th year |
15% |
| 3. |
Block of 5th and 6th year |
35% |
| 4. |
Block of 7th and 8th year |
50% |
Provided that where the CIF value of licence is not less than
Rs.100crores, the export obligation shall be fulfilled within a period of 12
years from the date of issue of licence in the following proportions, namely:
-
| S. No. |
Period from the date of issue of licence |
Proportion of total export obligation |
| 1. |
Block of 1st, 2nd, 3rd, 4th and 5th Year |
NIL |
| 2. |
Block of 6th 7th and 8th Year |
15% |
| 3. |
Block of 9th and 10th Year |
35% |
| 4. |
Block of 11th and 12th Year |
50% |
Provided further that where a sick unit notified by the Board for
Industrial and Financial Reconstruction (BIFR) is subsequently taken over by
another unit for revival, the export obligation may be fulfilled within a
period of 12 years from the date of issue of license:
Provided also that export obligation of a particular block may be set
off by the excess exports made in the said preceding block(s).
(4) The importer produces within 30 days from the expiry of each block of two
years from the second block or within such extended period as the Assistant
Commissioner of Customs or Deputy Commissioner of Customs may allow, evidence
to the satisfaction of the Assistant Commissioner of Customs or Deputy
Commissioner of Customs showing the extent of export obligation fulfilled, and
where the export obligation of any particular block of two years is not
fulfilled in terms of the preceding conditions, the importer shall within
three months from the expiry of the said block pay duties of customs of an
amount equal to that portion of duties leviable on the goods but for the
exemption contained herein which bears the same proportion as 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.
(5) The importer shall, if he fails to discharge a minimum of 25% of the
export obligation pescribed for any particular block of two years for two
consecutive blocks, be liable to pay forthwith, the whole of the duties of
customs leviable on the goods imported but for the exemption contained in this
notification together with interest at the rate of 15% per annum from the date
of clearance of the goods.
(6) The importer shall, if he fails to import goods for a minimum value of
twenty crores of rupees within the validity period of the import licence, be
liable to pay forthwith the whole of the duties of customs leviable on the
goods imported but for exemption contained in this notification together with
interest at the rate of 24% per annum from the date of clearance of the goods.
(7) The capital goods imported, assembled or manufactured are installed in the
importer's factory or premises and a certificate from the jurisdictional
Assistant Commissioner of Central Excise or Deputy Commissioner of Central
Excise or independent Chartered Ecgineer, as the case may be, is produced
confirming installation and use of 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 said Assistant Commissioner of Customs or Deputy
Commissioner of Customs may allow.
(8) Notwithstanding anything contained in conditions (4) and (5), where the
Licensing Authority grants extension of blockwise period for any block(s) or
overall period of fulfilment of export obligation upto a period of two years
or regularisation of shortfall in export obligation not exceeding 5 per cent
of such export obligation, the said blockwise period or overall period of
export obligation may be extended and the said shortfall in export obligation
be condoned by the Assistant Commissioner of Customs or Deputy Commissioner of
Customs;
Provided that in respect of licence holder units affected by the
earthquake in the State of Gujarat in the month of January 2001, the Licensing
Authority may grant extension in the overall period of export obligation up to
one more year:
Provided further that in case of a licence holder unit referred to in
the first proviso, having overall export obligation period of 13 years and in
case of other licence having export obligation period of 12 years, extension
of overall period of export obligation shall not be allowed:
TABLE
| S.No. |
Description of goods |
| (1) |
(2) |
| 1. |
Capital Goods |
| 2. |
Capital goods in SKD/CKD condition to be assembled into capital goods
by the importer |
| 3. |
Components of capital goods required for assembly or manufacture of
capital goods by the importer |
| 4. |
Spare parts not exceeding 20% of the value of goods specified at
serial Nos. 1,2 and 3 actually imported and required for maintenance of
the capital goods so imported, assembled, or manufactured. |
Explanation.- In this notification,-
(1) "Capital Goods" means any plant, machinery, equipment or
accessories required for -
(a) manufacture or production of other goods, including packaging machinery
and equipment, refractories, refrigeration equipments, power generating sets,
machine tools, catalysts for initial charge, and equipment and instruments for
testing, research and development, quality and pollution control;
(b) use in manufacturing, mining, agriculture, acquaculture, animal husbandry,
floriculture, horticulture, pisciculture, poultry and sericulture;
(2) "Export and Import Policy" means the Export and Import Policy 1
April 1992-31 March 1997 (Revised edition: March 1995) published vide
notification of the Government of India in the Ministry of Commerce, No.
1(RE.95)/92-97, dated the 31st March 1995;
(3) "Licensing Authority" means the Director General, 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 a licence under the
said Act;
(4) Omitted
(5) export obligation means :
(i) export to a place outside India of products manufactured with the use of
capital goods imported, assembled or manufactured in terms of this notification
or making of supplies of such products in terms of clauses (a), (c), (e), (f)
and (i) of paragraph 121 of the Export and Import Policy and para 10.2 (g) of
the Export and Import Policy 1997 2002 corrected up to 13th April, 1998; and
(ii) export of goods in terms of the notification of the Government of India in
the Ministry of Commerce and Industry (Department of Commerce)
No.28(RE-2003)/2002-2007, dated the 28th January, 2004.
(6) "Net foreign exchange" means FOB value of products exported in
discharge of obligation in terms of this notification minus CIF value of inputs
used in manufacture thereof where such inputs has been -
(a) imported by the importer by the importer directly.
(b) imported by another person and supplied to importer without undergoing any
process manufacture;
(c) procured indigeneously, for which the importer claims replenishment under
the Duty Exemption Scheme as contained in Chapter VI of the Export and Import
policy.
as amended by Notification Nos. 145/95-Cus dt 19-9-95, 154/95-Cus dt 27-10-95, 32/96-Cus dt 17-6-1996, 70/96-Cus dt 10-9-96, 96/96-Cus dt 19-12-1996, 70/97-Cus dt 16-9-1997, 88/97-Cus dt 12-12-1997, 8/98-Cus dt 23-4-1998, 42/98-Cus dt 30-6-1998, 75/98-Cus dt 9-10-1998,
56/99 dt 11-5-1999, 49/2002-Cus dt 24-4-2002, 113/2002-Cus dt 16-10-2002,
116/2002-Cus dt 28-10-2002, 44/2003-Cus dt 21-3-2003, 29/2004-Cus dt 28-1-2004
and 65/2004-Cus dt 22-6-2004.