EPCG items not installed in the Exporter premises, Customs - Exim - SEZ

[Rajan Rajan]

Dear Sir,

We have Export thro Merchant Exporter under CT-1 at the time of SB we indicate EPCG No. for EO obligation, EPCG Lic in the name of our Group company all the Import CG installed @ original EPCG holder. But our Export Item indicated in this EPCG.

Query: DC customs deny sign the SB reason EPCG items not installed in the Exporter premises.

Export obligation may also be fulfilled by exports of other goods manufactured by the same firm or company, which has the EPCG authorisation.

Please advise is there any notification/circular.

Posts / Replies

[Kishan Barai]

Respected, Rajan Jee kindly read FTP 15-20 Hand Book of Procedure

5.03 Nexus Certification

(a) RA concerned shall, on the basis of nexus certificate from an Independent Chartered Engineer (CEC) submitted by the applicant in Appendix 5A, issue EPCG authorisation. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the nexus certificate and the same would be mentioned in the condition sheet of the EPCG authorisation at the time of issue.

(b) RA shall thereafter forward a copy of the EPCG authorisation to the concerned Jurisdictional Central Excise Authority. The wastage so permitted at the time of issuance of authorisation would be allowed to be sold as scrap/waste on payment of applicable duty.

5.04 Certificate of Installation of Capital Goods

(a) Authorization holder shall produce, within six months from date of completion of import, to the concerned RA, a certificate from the jurisdictional Central Excise Authority or an independent Chartered Engineer, at the option of the authorisation holder, confirming installation of capital goods at factory/premises of authorization holder or his supporting manufacturer(s). The RA may extend the said period for producing the certificate by a maximum period of another 12 months. Where a unit registered with Central Excise opts for independent Chartered Engineer’s certificate, the authorisation holder shall send a copy of the certificate to the jurisdictional Central Excise Authority as intimation/record.

(b) In the case of import of spares, the installation certificate shall be submitted by the Authorization holder within a period of three years from the date of import.

5.10 Conditions for fulfilment of Export Obligation

In addition to conditions in paragraph 5.04 of FTP, the following conditions shall also be applicable for fulfilment of export obligation:

(a) Name of the supporting manufacturer as well as the exporter shall be indicated on export documents.

(b) EPCG authorisation holder may export either directly or through third party(ies).

(c) In case the Authorization Holder wants to export through a third party, export documents viz., shipping bills / Bill of exports etc. shall indicate name of both authorization holder and supporting manufacturer, if any, along with EPCG authorization number. BRC, GR declaration, export order and invoice should be in the name of third party exporter. The goods exported through third party should be manufactured by the EPCG Authorisation Holder or the supporting manufacturer where the capital goods imported under the authorisation have been installed.

(d) The EPCG authorization holder shall submit the following additional documents for discharge of EO through third party (ies):

(i) A copy of agreement entered into between the authorization holder and the ultimate exporter undertaking to export the goods manufactured by the authorization holder/supporting manufacturer for fulfilment of the export obligation against the EPCG authorization in question.

(ii) Proof of having despatched the goods from authorization Holder’s factory premises to the ultimate exporter/port of export viz. (a) ARE-1 Certificate issued by Central Excise with due authentication by the Customs verifying the exports along with the shipping bill number, date and EPCG authorization number (b) Invoice duly incorporating the relevant EPCG authorization number & date at the time of dispatch.

(iii) Lorry Receipt (LR) /Logistical evidence for transportation of goods from the premises of the authorization holder to the third party/port of export.

(iv) An undertaking from the 3rd party on a stamp paper, declaring that the products exported for fulfillment of EO by them on behalf of the license holder as per details given in the statement of exports, were manufactured by the license holder.

(v) Financial evidence for having received proceeds through normal banking channel from third party exporter’s account to the authorization holder’s account towards such third party supplies.

(vi) Disclaimer certificate from third party that they shall not use such proceeds towards EO fulfillment of any EPCG authorization (s) obtained by them.

Cordially yours,

Kishan Barai

[Rajan Rajan]

Thanks a lot Sir,

As per my understanding, installation of EPCG items is not compulsory by the Mfg/Exporter premises, only thing Export item must be indicated in the EPCG Licence.

Pls clarify.

[surya narayana]

Dear Friend,

While, you are clearing export consignment through your Merchant exporter ( being the ultimate exporter), you should have insist him for stating your name in the Shipping Documents ( especially in the Shipping Bill).

Being the consignment is through Merchant exporter, you might have received the payment from him in INR. But being the ultimate exporter, the Merchant exporter would be receiving the export proceeds in foreign currency.

In this situation, you cannot include the subject export consignment for EO fulfilment.

Further, in terms of FTP, installation of the CG imported under EPCG is a must either in the manufacturer/exporter's premises or in the supporting manufacturer's premises in case while applying for the authorization, if you have incuded any supporting manufacturer.

Best Regards

Suryanarayana

[Kishan Barai]

According to me installation is must. Installation certification is required in order to get benefits under EPCG & fulfill EO

[Ganeshan Kalyani]

Sir, our EPCG number should have been endorsed on Shipping bill by ultimate exporter. The foreign currency received by them can be submitted for EO along with other doc. Thanks.

[Rajan Rajan]

Dear Experts,

Good Morning!

Thanks a lot to all timely help resolve my query.

[CS SANJAY MALHOTRA]

Dear Mr. Rajan,

Consolidating all to mention that :

Installation of Capital Goods is must,

Merchant Exporter SB to specify your EPCG No. & Name as supporting manufacturer.

You should have payment evidence both i.e. for your supplies in INR and E-BRC (Foreign exchange received by Merchant Exporter) to be submitted for EODC.

[raghunandhaanan r vi]

Sir,

Supporting manufacturer name and address must be mentioned in the EPCG licence

Installation certificate also required from Central excise Department if export item is excisable

Shipping bill of merchant exporter also must show the name and address of supporting manufacturer.

Thanks