Notification No. 111/1995-Cus Dated 05-06-1995

Exemption relating to import of goods 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 specified in the Table annexed hereto from whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, 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;
 

(2) The importer at the time of clearance produces to the Assistant Commissioner of Customs a certificate from the Licensing Authority for having executed a legal undertaking in terms of paragraph 45 of the said Policy;
 

(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 binding himself to fulfil 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 sum as may be fixed by the Licensing Authority, 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.	2.	3.
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 export obligation of a particular block may be set off by the excess exports made in the said preceding blocks.
 

(4) The importer produces within 30 days from the expiry of each block of two years from the date of issue of licence from the second block or within such extended period as the Assistant Commissioner of Customs may allow, a certificate from the Licensing Authority 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 condition, 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.
 

(5) The importer, shall, if he fails to discharge a minimum of 25% of the export obligation prescribed 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.
 

(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;
 

(7) The capital goods imported, assembled or manufactured are installed in the importer’s factory and a certificate from the jurisdictional Assistant Commissioner of Central Excise is produced within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs may allow.
 

TABLE

Explanation. - In this notification, -
 

(1) “Capital goods” means any plant, machinery, equipment and accessories required for -
 

(a) manufacture or production of other goods, including packaging machinery and equipments, refractories, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge, and equipments and instruments for testing, research and development, quality and pollution control;
 

(b) use in manufacturing, mining, agriculture, aquaculture, 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) “CIF value”, in relation to second hand capital goods, means the CIF value of the corresponding new capital goods;
 

(5) “export obligation” means export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification;
 

(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 have been -
 

(a) imported by the importer directly;
 

(b) imported by another person and supplied to importer without undergoing any process of manufacture;
 

(c) procured indigenously, for which the importer claims replenishment under the Duty Exemption Scheme as contained in Chapter VI of the Export and Import Policy.
 

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