Change of Co-Licensee in an Advance Licence - DGFT - 11/2002

Change of Co-Licensee in an Advance Licence TRADE NOTICE NO. 11/2002 Dated 25/09/2002 Sub: 1. PMV declaration as prescribed in Hand of Para 4.41. 2. Request for change of co-licensee in an advance licence after waiver of bond condition. 3. Issue of Advance licences for Deemed Exports for Supplies to EOUs /EPZs/ EHTPs/ STPs 4. Acceptance of Shipment Certificate in lieu of EP Copies of Shipping Bills - Which could not be generated under Custosm EDI System- Regarding I .PMV declaration as prescribed in Hand of Para 4.41. Some exporters have represented that Customs have dispensed with the system of endorsement of separate PMV declaration in Annexure 'D' in case of EDI shipping bills and that thereby the exporters are not in a position to produce the same before the Licensing Authority. The facts have been examined and it is found that in all the Customs in this Zone (a) PMV, as required, is declared in respect of each of the items of exports, in EDI shipping bills, and (b) A separate PMV declaration in Annexure-D (for all of the items, collectively) is also being verified and endorsed by this department. Thus the system of endorsing separate PMV declaration in Annexure-D in EDI shipping bills has not been done away with. This is for compliance for all exporters. II. Request for change/addition of name of co-licensee in an advance licence after waiver of bond condition. The matter related to change/addition of name of co-licensee after completion of export obligation in advance licence has been examined by the O/O. Director General of Foreign Trade, New Delhi and it is clarified that:- (i) The change/addition of name of co-licensee after completion of export obligation in an advance licence tantamount to making a "non-transferable" advance licence into a "transferable" advance licence. (ii) The change/addition of name of co-licencee in an advance licence after completion of export obligation would make the conditions of the licence meaningless as no legal action can be initiated against the co-licencee in case of any violation of Exim Policy/Customs Rules. (iii) An advance licence holder has an option either to export the goods first and then get the materials replenished or import the goods first and then fulfill the export obligation. In case of former situation (export first and replenishment later), the replenished raw materials should only go to the factory from where goods manufactured. This is because in terms of Para 4.30 of Hand Book of prcedures, 02-07, every licence holder shall maintain a true and proper account of licence wise consumption and utilization of imported goods and such records shall be preserved for a period of at least 3 years from the date of redemption. If replenished materials are permitted to be passed on to the other factory (co-licencee), then it would amount to transfer of goods. This is not permissible in an advance licence issued with Actual User condition. III. Issue of Advance licences for Deemed Exports for Supplies to EOUs/ EPZs/ EHTPs/ STPs. It has been noticed that some of the applicants for Advance licence for deemed exports are obtaining licences for supplying the goods, which are fully finished items for which no further processing is required in the EOUs/EPZs/EHTPs/STPS. It may be noted that when EOUs/EPZs/EHTPs/STPs are allowed to procure inputs, it is allowed to manufacture the goods as declared and approved by the Development Commissioner in the Legal Undertaking/Letter of Permission/letter of Intent. In supercession of Trade Notice No.4 dated 28.5.2002 now it has been decided that all the applicants who desire to make rawmaterial/input supplies to EOUs/EPZs/SEZs/EHTPs/STPs under Advance license for deemed exports shall also submit Legal Undertaking/Letter of Permission of EOUs/EPZs/EHTPs/STPs Units. Only items of inputs required to manufacture the goods given in Legal Undertaking/Letter of Permission/Letter of Intent shall be allowed under the license IV. Acceptance of Shipment Certificate in lieu of EP Copis of Shipping Bills - Which could not be generated under Custosm EDI System- Regarding It has been reported that in certain cases EP copies of Shipping Bills Could not be generated by CustomsEDI system due to some technical problems. It has now been decided to accept Shipment Certificates in lieu of EP Copies of Shipping Bills subject to following conditions. (i) The "Shippment Certificates" should be issued by Dy/Asstt Commissioner of Customs under his signature and seal ( indicating his name and designation in Block letter) (ii) The shipment certificate shall contain all the particulars and declarations required under DEPB Scheme. (iii) Customs should certify that the shipment certificate has been issued in lieu of EP copy of Shipping Bill for the purpose of claiming DEPB and that no further Shipment Certificate or EP Copy related to this particular shipping bill will be issued. Sd/- (Subrat Ratho) Zonal Joint Director General of Foreign Trade.