EPCG Scheme - Customs Instructions Revised - Customs - 005/97

Circular No. 5/97-Cus. dated 14/3/97 F.No. 605/71/95-DBK (Pt) Government of India Ministry of Finance Department of Revenue, New Delhi Subject:- Changes in Export Promotion Capital Goods (EPCG) Scheme as introduced by revised edition of Exim Policy published on 31.3.95 and revised edition of Handbook of procedures, Vol. I Published on 31.3.95 and revised edition of Handbook of procedures, Vol. I Published on 30.4.95- Monitoring of export Obligation. Consequent upon changes introduced in the Export Promotion Capital Goods (EPCG) Scheme w.e.f. 1.5.95, Directorate General of Inspection was requested to have a study conducted of the Standing Orders / Public Notices issued by various Custom Houses in this regard with a view to ensure that a uniform and effective system is followed by all Custom Houses for monitoring fulfillment of Export Obligation under both 15% and zero duty E.P.C.G. Scheme. D.G.I. has accordingly conducted a study and made recommendations in this regard. Some of the recommendations which have been accepted by the Board for implementation are reproduced below:- (a) Registration of the Licences: While some of the Commissionerates have issued elaborate instructions others have not given all the details in the Standing Order itself. It is suggested that details of the various heads of the licence register to be maintained for the scheme which is given at Annezure-I 1 be adopted by all the Commissionerates. The Following features appearing in Calcutta Custom House standing order could be included in the standing orders issued by all Custom Houses. Whenever a Release Advice is issued for clearance of goods at other port, bond and bank guarantee for the estimated amounts are to be obtained in advance and the details thereof shall be entered in the Register. The amount of Bond and Bank Guarantee should be indicated in the Release Advice. Similarly no RA of other ports shall be accepted unless details of Bond and Bank Guarantees executed is endorsed therein for the clearance of goods at the port of import. (b) Monitoring of Imports and Exports. A comprehensive format has been designed for monitoring various aspects of the EPCG Scheme which require monitoring, viz., details of the EPCG licences, FOB value of goods exportable by the licencee and actually Exported, the details of the Bond and Bank Guarantees including the Bank's name, details of duty payable and recoverable along with particulars of recovery and the details of certification by the Directorate General of Foreign Trade etc. (Annexure- II)*. This could be adopted by the Commissionerates for the Sake of uniformity. Commissioner, Cochin has prescribed " Time Diary" as in Annexure III* and as an effective method of monitoring the defaulters and for raising timely demands. This could be adopted by all the Commissioners of Customs. A model Show Cause Notice (Annexure-IV)* has also been prepared by Commissioner, Cochin wherever the licence holder has failed to import / export as per Notification No. 111/95-Customs. This could be adopted by other Custom Houses for uniformity. (c) Bonds and Bank Guarantees It is noticed that the language of the bond does not mention the amount of interest that has to be collected on delayed payments. It is, therefore, suggested that Commissioners should amend the language of the Bond so that in the event of non-fulfilment of any of the conditions of the Customs Notification or the provision in the Exim Policy Handbook of Procedures, such licence holder is liable to pay not only the amount of bond but also interest @ 24% per annum as specified in relevant notifications. (d) Duties of various Officers Except for Madras Custom House no other Custom House has issued a list of details to be followed by different level of officers for implementing the scheme (Annexure-V) 1 . This could be adopted by others for uniformity and accountability. 2. Necessary Standing Orders for guidance of staff on the above lines may please be issued immediately. It must be ensured that the instructions contained in this Circular are followed scrupulously and register maintained are supervised every month by the Assistant Commissioner of Customs and Every quarter by Deputy Commissioner of Customs. Sd/- (Sunil Kumar) Director (Drawback)