Capital Goods Imported under EPCG Scheme and kept in the Customs Bond and the EPCG Licence cancelled before clearance of Goods - Clarification - Regarding - Customs - 075/99

Circular No. 75/99-Cus. Dated 10-11-1999 [From F.No. 305/91/99-FTT] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Capital Goods Imported under EPCG Scheme and kept in the Customs Bond and the EPCG Licence cancelled before clearance of Goods - Clarification - Regarding. It has come to the notice of the Board that in a particular case an importer had imported two consignments of weaving looms under the EPCG Scheme. The goods were kept in a Customs bonded warehouse. Meanwhile, the importer approached the Government to work under the EOU Scheme. They got the necessary approval from the Ministry of Industry and thereafter they approached DGFT for cancellation of EPCG Licences. The EPCG Licences were cancelled as unutilised. In this connection, a doubt has been raised as to whether the importer should be allowed to switch over the another scheme without contravening the provisions of Notification No. 110/95-Cus., dated 5-6-1995, under which an obligation has been cast on the importer under the EPCG Scheme. 2. The matter has been examined. It is observed that mere issuance of EPCG Licence does not mean that the provisions of the Scheme have become operational. In this case, the goods were not cleared under the EPCG Scheme and therefore, it cannot be held that the importer is liable to penal action for non-fulfilment of obligations under the said scheme. It is felt that as long as the goods are under Customs bond, it would be inappropriate to take a view that the importer has violated the conditions of the notification. Accordingly, it has been decided that, in a case where EPCG Licence is cancelled by DGFT as unutilised and the goods are still lying with the Customs, ex-bonding of goods from the warehouse may be allowed in the same manner as normal goods subject to fulfilment of conditions envisaged in the particular scheme under which the goods are intended to be cleared. In such cases no contravention of the conditions of the EPCG Scheme is construed to have occurred. 3. The above instruction may be given wide publicity in the form of Public Notice. 4. Kindly acknowledge receipt of this Circular. Difficulties, if any, faced in the implementation of the above instruction, may be brought to the notice of the Board as an early date.