GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 16/ 2015 – Customs
New Delhi, the 1st April, 2015.
G.S.R. 252 (E) - 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) (hereinafter referred to as the
said Customs Tariff Act), 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:-
- 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;
- 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 validity 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 goods imported should not fall under clause (f) of
paragraph 5.01 of Foreign Trade Policy:
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;
- that the importer is not issued, in the year of issuance of zero
duty EPCG authorisation, the duty credit scrips under the erstwhile Status
Holder Incentive Scrip (SHIS) scheme. 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;
- that the goods imported shall not be disposed of or transferred by
sale or lease or any other manner till export obligation is complete;
- 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 5.16 of the Handbook of Procedures, 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 |
Minimum 50% |
2. |
Block of 5th and 6th year |
Balance |
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 where a sick unit holding EPCG authorisation 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 holding EPCG authorisation 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 period specified in paragraph 5.05 of the Foreign Trade
Policy;
- 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;
- 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 (5), 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 fifteen per cent. per annum from the date of clearance of the goods;
- that where the importer fulfills 75% or more of the export obligation as
specified in condition (5) [over and above 100% of the average export
obligation] within half of the period specified for export obligation as
mentioned in condition (5), his balance export obligation shall be condoned and
he shall be treated to have fulfilled the entire export obligation;
- that the capital goods imported, assembled or manufactured, are installed
and put to use, after their import, in the importer’s factory or premises and a
certificate from the jurisdictional Deputy Commissioner of Central Excise or
Assistant Commissioner of Central Excise or from an independent Chartered
Engineer, is produced within a period of six months from the date of completion
of imports before the Deputy Commissioner of Customs or Assistant Commissioner
of Customs at the port of import confirming such installation and use of the
capital goods in the importer’s factory or premises:
Provided that where the Regional Authority grants extension of the said period
beyond six months from the date of completion of imports, the said overall
period shall be extended by the Deputy Commissioner of Customs or Assistant
Commissioner of Customs as the case may be:
Provided further that an importer (including an importer who is a CSP)
registered with the Central Excise opting for the independent Chartered
Engineer’s certificate shall send a copy of the certificate, upon its issuance,
to the jurisdictional Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be, as intimation or record:
Provided also that in case of import of spares, the installation certificate
shall be produced within three years from the date of import:
Provided also that in the case of manufacturer exporter and merchant exporter
having supporting manufacturer(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,
prior to installation, by the Regional Authority on the authorisation referred
to in condition (1). This would apply even when Regional Authority endorses a
change in the factory or premises or person. The name and address of such other
person shall also be mentioned on the relevant shipping bills. 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;
- 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;
- that notwithstanding anything contained in condition (5) 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 fourth proviso to
condition (5) above, extension of overall period of export obligation shall not
be allowed.
- 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 clearance of said goods:
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) “Capital goods” has the same meaning as assigned to it in paragraph 9.08 of
the Foreign Trade Policy;
(B) “Common Service Provider” (CSP) means a service provider who is designated
or certified as a Common Service Provider by the Director General of Foreign
Trade, Department of Commerce or State Industrial Infrastructural Corporation in
a Town of Export Excellence;
(C) “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:
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 specific export
obligations against all other authorisations issued to the CSP or user under
Chapter 5 of the Foreign Trade Policy, including para 5.28 of Handbook of
Procedures;
(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 or Advance Authorisation for
annual requirement or Duty Free Import Authorisation Scheme;
(ii) supply of goods to Export Oriented Units or Software Technology Parks or
Electronic Hardware Technology Parks or Biotechnology Park;
(iii) supply of goods to projects financed by multilateral or bilateral agencies
or funds as notified by Department of Economic Affairs, Ministry of Finance
under International Competitive Bidding (ICB) in accordance with the procedures
of those agencies or funds, where legal agreements provide for tender evaluation
without including customs duty;
(iv) supply and installation of goods and equipment (single responsibility of
turnkey contracts) to projects financed by multilateral or bilateral agencies or
funds as notified by Department of Economic Affairs, Ministry of Finance under
ICB in accordance with the procedures of those agencies or funds, where bids may
have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices
for goods manufactured abroad;
(v) supply of goods to any project or purpose in respect of which the Ministry
of Finance, by
Notification No. 12/2012-Customs dated 17-3-2012, as amended from
time to time, permits import of such goods at zero customs duty subject to
conditions specified in the said Notification and the supply is made under ICB
procedure;
(vi) supply of goods required for setting up of any of the mega power projects
specified in the list 32A at Sl. No. 507 of Notification No. 12/2012- Customs
dated 17.03.2012, as amended from time to time, provided the mega power project
conforms to the threshold generation capacity specified in the said
Notification. The supply should be made under ICB procedure. The ICB condition
shall not be mandatory if the requisite quantum of power has been tied up
through tariff based competitive bidding or if the project has been awarded
through tariff based competitive bidding;
(vii) Supply of goods to nuclear power projects through National Competitive
Bidding (NCB) or through ICB as provided in clause(h) of para 7.02 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 such services as are specified in
paragraph 5.04(h) of the Foreign Trade Policy.
(D) "Foreign Trade Policy" means the Foreign Trade Policy, 2015-2020, published
by the Government of India in the Ministry of Commerce and Industry vide
notification No. 01/2015-2020, dated the 1st April 2015 as amended from time to
time;
(E) “Handbook of Procedures” means the Handbook of Procedures 2015-20 published
by the Government of India in the Ministry of Commerce and Industry vide public
notice No. 01/2015-2020, dated the 1st April 2015 as amended from time to time;
(F) “Manufacture” has the same meaning as defined in clause (f) of section 2 of
the Central Excise Act, 1944 (1 of 1944);
(G) “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.
Table 1
S. No. |
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 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 required for the existing plant and machinery of the
importer |
Table 2
S. No. |
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 (Tamil Nadu), Kolkata, Krishnapatnam, Ennore (Tamil Nadu),
Karaikal (Union territory of Puducherry), Magdalla, Mangalore, Marmagoa,
Muldwarka, Mumbai, Mundra, Nagapattinam, Nhava Sheva, Okha, Paradeep,
Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar. |
2. |
Airports |
Ahmedabad, Bengaluru, Bhubaneswar, Calicut, 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), Melpakkam Village (Arakkonam
Taluk, Vellore District), Babarpur, Bengaluru, Bhadohi, Bhatinda,
Bhilwara, Bhiwadi, Bhusawal, Chettipalayam (Tamil Nadu), 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 (Tamil Nadu), Irungattukottai
(SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk,
Kanchipuram District, Tamil Nadu), 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
(Tamil Nadu), Tirupur, Tondiarpet (TNPM) in Chennai, Tuticorin, Udaipur,
Vadodara, Varanasi, Veerapandi (Tamil Nadu) 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.605/55/2014-DBK]
(Sanjay Kumar)
Under Secretary to the Government of India
|