Permission to re-export capital goods imported at concessional / zero rate of duty under EPCG Scheme - Customs - 058/99

F. No. 605/39/99-DBK Circular No. 58/99-Cus dated 30/8/1999 Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs, New Delhi Subject : Permission to re-export capital goods imported at concessional / zero rate of duty under EPCG Scheme. It has come to the notice of the Board that capital goods imported cleared under EPCG Scheme at concessional / zero rate of duty were later on permitted re-export by Customs without recovery of duty on merits. Such re-export was inter-alia allowed on the ground that the imported machinery wa defective/damaged needed replacement. 2. Whereas there may not be objection to permit import of replacement machinery under EPCG Scheme with added export obligation etc., the permission granted by Customs for re-export of the machinery without recovery of customs duty on merits is incorrect. This is because there is no provision in the EPCG Customs Notifications which permits re-export of capital goods imported under it. In other words if, for any reason, the EPCG operator wants to re-export the capital goods imported under EPCG Scheme at concessional / zero rate of duty, the importer has to first pay full customs duty on merits on the Capital Goods @ inforce on the date of import. At the time of re-export, he can claim drawback under Section 74 of Customs Act, 62 read with Notification No. 19/65-Cus. dated 6.2.1965. 3. Action for recovery of customs duty on merits should, therefore, be initiated in all cases where the re-export of capital goods imported under EPCG Scheme at concessional / zero rate of duty has been allowed without payment of duty on merits and compliance reported to Board. 4. Suitable public notice for information of the trade standing orders for the guidance of staff may be issued. Sd/- (Sunil Kumar) Director (DBK)