EPCG / Advance Licences - Third Party Exports can be counted towards Export Obligation - Customs - 120/95

Circular No. 120/95-Cus. dated 23/11/95 F.No. 605/93-94-DBK Government of India Ministry of Finance Department of Revenue, New Delhi Subject: Third Party exports under Duty Exemption Scheme and EPCG Scheme. After introduction of para 41(II) and para 59 (A) in the EXIM Policy (92-97) with effect from 30th March, 1994, under which exports by Advance Licence holders through third party were allowed, doubts were expressed by some of the Commissioners of Customs whether and how the export through a third party by an Advance Licence holder under DEEC Scheme or EPCG holder could be counted for the purpose of discharge of export obligation of the licence holder. A view had been expressed that the definition of exporter under section 2(20) and the of importer under section 2(26) of the Customs Act, 1962 require that there can be only one importer/ one exporter at a time for the goods exported or imported, as the case may be. The matter was discussed by the Board and the issue was also referred to the Law Ministry for opinion. 2. The Law Ministry have now clarified that Section 13 of the General Clauses Act, 1897 provides that unless there is any thing repugnant in the subject, words used in singular shall include the plural and vice-versa. 3. Accordingly the terms 'Exporter' and 'Importer' can be said to cover one or more than one exporter/ importer of the goods within the meaning of section 2(20) and section 2(26) of the Customs Act, 1962. In view of Ministry of Law's opinion, it has been decided that there is no object on to allowing third party exports under the Customs Act. 4. In this regard, attention is invited to Ministry's Circular No. 23/94 dated 6-10-94 issued from F.No. 603/156/94-DBK (Pt) under which it was clarified that third country import of capital goods viz, by the EPCG licence holder through a leasing finance company could be allowed. 5. Accordingly, exports made through a third Party (export order holder) can be counted towards towards discharge of export obligation by the EPCG licence holder or to the Advance Licence holder as the case may be subject to the conditions, (a) There is a contractual agreement between the EPCG licence holder/ advance licence holder and the third party (export order holder) in respect of export goods sought to be exported. (b) Shipping Bill and all other export documents should prominently indicate that it is third party exports. (c) Shipping Bill shall be filed after jointly being signed by the EPCG licence holder/ Advance Licence holder as well as export order holder. (d) Both the licence holder as well as the export order holder will be required to make a declaration on the shipping bill that in a case of any default/ fraud, they will be jointly and severally liable for action under the Customs Act, 1962 or any other act for the time being in force at the time of making the exports. 6. All past cases of third party exports pending logging of DEEC books must be finalised where the manufacture- exporter holding an Advance licence can prove to the satisfaction of Asst. Commissioner, Customs that the exports were made through third party even if such exports do not strictly fulfil all the above mentioned conditions. In other words, where such proof can be furnished in the form or other document, the same may be accepted. 7. You are requested to issued a suitable Public Notice for information of trade and Standing Order for the guidance of the staff. copies of the same may be forwarded to Commissioner (DBK) and Director General of Inspection and Audit (C CE.) Sd/- Sunil Kumar Director (Drawback)