Notification No. 49/2000-Cus Dated 27-04-2000
Exemption on capital goods, component and spares thereof when imported against 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 so much of the duty of customs leviable thereon which
is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)
as is in excess of the amount calculated at the rate of 5% ad valorem and from
the whole of the additional duty and special additional duty leviable thereon
respectively 3[under
sub-sections (1), (3) and (5) of section 3 and section 3A] OLD[under sections 3 and 3A] 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 issued under the Export
Promotions Capital goods (EPCG) Scheme in terms of paragraph 6.2 of the Export
and import Policy permitting import of goods at the rate of 5% duty and the
said licence is produced for debit by the proper officer of the customs at the
item 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 fulfillment of the
export obligation in full.
(2) 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 five times the CIF value of the goods imported on FOB
basis, or four times the CIF value of capital goods 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 [OLD- or for such higher sum as may be fixed by the
Licensing Authority ], within a period of eight 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) |
(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 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 particular block may be set off
by the excess exports made in the said preceding block(s).
[OLD Provided further that export obligation of a particular block may be
set off by the excess export made in the said preceding block(s).]
[OLD Provided that export obligation of a particular block may be set off
by against the excess exports made in the said preceding blocks;]
(3) The importer produces within 30 days from the expiry of each block of two
years from the date of issue of licence 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 proceeding condition, the importer shall within three
months from the expiry of the said block pay duties of customs of an equal
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.
(4) 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
block, 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.
(In conditions (3)&(4) bold figure has been substituted vide Customs
notification No. 113/2002 Date 16/10/2002)
(5) 3[The capital goods imported, assembled
or manufactured are installed in the importer’s factory or premise and a
certificate from the Assistant Commissioner of Customs or Deputy Commissioner of
Customs having jurisdiction over the importer’s factory or premise or any
independent Chartered Engineer, as the case may be, is produced confirming
installation and use of the capital goods in the importer’s factory or premise,
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 referred to in condition (2) above may allow]
OLD[The capital goods imported, assembled or manufactured are installed in the
importers factory or premises and a certificate from the jurisdictional
Assistant Commissioner of Central Excise or Deputy Commissioner of Central
Excise or an independent Commissioner of Central Excise or an independent
Chartered Engineer, 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.]
Provided that in the case of, -
(i) manufacturer exporter and merchant exporter having supporting manufacturer
(s)/vendor(s),
(ii) import of irrigation equipment for use in contract farming for export of
agricultural products, and
(iii) importer rendering services,
the capital goods may be installed at the factory or premises of such other
person whose name and address are endorsed on the licence referred to in
condition (1) and where the bond for full difference of duty, if necessary, in
terms of condition (2), with a bank guarantee 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 in case of default.
(6) Notwithstanding anything contained in conditions (3) and (4), 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 block-wise 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 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.
[OLD Provided that in respect of licence having overall export obligation
period of 12 years, the extension of overall period of export obligation shall
not be allowed.]
[OLD (6) Notwithstanding contained in conditions (3) and (4), where the
Licensing Authority grants an extension of block-wise period or overall period
of fulfillment of export obligation or regularisation of shortfall in export
obligation, not exceeding 5% of such export obligation, the said block-wise
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 extension of block-wise period of export obligation shall not be
allowed for more than one block of two years.
Provided further that extension of block-wise period of export obligation for
the fourth block of two years shall not be allowed for more than a period of one
year.]
3. Where the goods are found defective or unfit for use, the said goods may be
re-exported back to the foreign supplier within 3 years form the date of payment
of duty on the importation thereof.
Provided that at the time or re-export the goods are identified to the
satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of
customs as the goods which were imported.
1 [4.
where the total exports of a sector or product group during the year 2007-08 has
declined by more than 5% as compared to the year 2006-07, the average export
obligation of the licencee for 2007-08 may be reduced proportionate to the
reduction in exports of that particular sector /product group during 2007-08 as
against 2006-07;]
2[5.
In a case of default in export obligation, when the duty on goods is paid to
regularise the default, the amount of interest paid by the importer shall not
exceed the amount of duty if such regularisation has been dealt in terms of
Public Notice of the Government of India in the Ministry of Commerce No. 22
(RE-2013)/2009-2014 dated the 12th August, 2013]
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 as actually imported and required for maintenance
of capital goods so imported, assembled, or manufactured. |
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
equipment, 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, marine, aquaculture, animal
husbandry, floriculture, horticulture, pisciculture, poultry, viticulture and
sericulture;
(c) rendering services;
(2) "Export and Import Policy: means the Export and Import Policy 1997-2002
published vide notification of the Government of India in the Ministry of
Commerce, No. 1 (RE-99)/1997-2002, dated the 31st march, 2000
(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) " export obligation",-
(i) in relation to importers other than those rendering services, means export
to a place outside India of products manufactured place outside India of
products manufacture with the use of capital goods imported, assembled or
manufactured in term of this notification or making of supplies of such
products in terms of clauses (a), (b), (d), (e), (f) an (g) of paragraph 10.2
of the Export and Import Policy; and
(ii) in relation to importers rendering services, means receiving payments in
freely convertible foreign currency for services rendered thought the use of
such capital goods;
(iii) means, 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 28th January, 2004.
1 [(iv)
shall be, over and above, the average level of exports achieved by the
licencee in the preceding three licencing years for same and similar products.]
(5) "Net foreign exchange", in relation to importers other than
those rendering services, 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 against a licence; or
(b) procured indigenously, for which the importer claims replenishment under
the duty Exemption Scheme as contained in Chapter 7 of the Export and Import
policy,
and the said foreign exchange is earned in freely convertible currency
1. Inserted vide Notification
No. 65/2008-Cus Dated 9/5/2008
2 Inserted vide Notification
No. 46/2013-Cus Dated 26/09/2013
3.Substituted
Vide: Notification No. 26/2017-Customs Dated 29/06/2017
as amended by Notification Nos.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.