Notification No. 28 dated 1st
April 1997 (As
amended by notification nos. 8/98, 33/98, 56/99, 52/2000, Notification No. 49
dated 24th April 2002, Notification No.
113 dated 16th October 2002, Notification No. 14 dated 21st
January 2003)
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 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 10%
ad valorem and from 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 issued 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 on payment of duty of Customs at the rate of 10% 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)������ 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 four times the CIF value of the goods imported or for such higher
sum as may be fixed by the Licensing Authority within a period of five years
from the date of issue of the said licence in the following proportions: -
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S. No.
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Period from the date of issue of licence
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Proportion of total export obligation
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1.
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1st
year
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Nil
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2.
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2nd
year
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10%
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3.
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3rd
year
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20%
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4.
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4th
year
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30%
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5.
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5th
year
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40%
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Provided that where a
sick unit notified by the Board for Industrial and Financial Reconstruction is
subsequently taken over by another unit for revival, the export obligation may
fulfilled within a period of 12 years from the date of issue of said license;
Provided further that export obligation of a
particular year may be set off by the excess exports made in the preceding years.
(3)������ The
importer produces within thirty days of the expiry of each year from the date
of issue of licence from 2nd year or within such extended period as
the Assistant Commissioner of Customs may allow, evidence to the satisfaction
of the Assistant Commissioner of Customs showing the extent of export
obligation fulfilled, and where export obligation of any particular year is not
fulfilled in terms of the preceding condition, the importer shall within three
months from the expiry of the said year pay an amount equal to that portion of
the duty 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)������ Spare parts including Jigs, Fixture Dies,
Moulds 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.
(5)������ 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;
Provided that
in 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
agriculture products, and
(iii) importer rendering services,
the
capital goods may be installed at the factory/ premises of such other person
whose name and address are endorsed on the licence referred to in condition (1)
and where a bond for the 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 fulfil the export obligation
and all other conditions of this notification and to pay duty with interest in
case of default.
Provided further that in case of importers rendering services not required to be
registered with Central Excise authorities, a certificate from independent
Chartered Engineer confirming the installation and use of capital goods in the
importer�s premises may be produced.
(6)
Notwithstanding anything contained in conditions (3)
and (4), where the Licensing Authority grants extension of year-wise period for
any year (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 year-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.
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S. No.
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Description of goods
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(1)
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(2)
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1.
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Capital
goods
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2.
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Capital
goods in SKD/ CKD condition to be assembled into capital goods by the importer
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3.
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Components
of capital goods required for assembly or manufacture of capital goods by the
importer
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4.
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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
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Provided that in respect of licence having overall export
obligation period of 12 years, further extension of overall export obligation
period shall not be allowed.
Explanation:In this notification -
(i)������� �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 equipment and instruments for testing, research and
development, quality and pollution control;
(b) use in manufacturing,
mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture,
pisciculture, poultry viticulture and sericulture;
(c) rendering services;
(ii)������ �Export and Import Policy� means the Export and Import Policy,
Policy April, 1997-March, 2002 published vide notification of the Government of
India in the Ministry of Commerce No. 1/1997-2002, dated the 31st
March, 1997.
(iii)������ �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;
(iv)������ �Export obligation�, in relating to importers other than those
rendering services, 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, or making of supplies of such products in terms
of clauses (a), (b), (d), (f) and (g) of paragraph 10.2 of the Export and
Import Policy and, in relation to importers rendering services, means receiving
payment in freely convertible foreign currency for services rendered through
the use of such capital goods.