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TMI BlogEXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEX X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.05 Port of Registration EPCG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorisations issued to the firm / company (other than de-bonding unit) shall remain unchanged and the average EO, after de-bonding of the unit, shall be fixed by excluding the exports made by the de-bonded unit from the total exports of the firm / company, which runs concurrently for all the units of the firm / company. In such a case, specific EO equivalent to six times of the proportionate duty saved amount on the depreciated value of the Capital Goods would be imposed on the de-bonding unit shifting to the EPCG Scheme. 5.08 Sourcing of Capital Goods Manufactured Indigenously (a) EPCG authorisation holder intending to source capital goods manufactured indigenously shall make a request to the RA for invalidation of EPCG authorisation for direct import / issuance of Advance Release Order (ARO) for availing deemed export benefits as given in paragraph 7.03 of FTP read with paragraph 7.02(c) of HBP. (b) This request can be made either alongwith application or during the validity period of EPCG Authorisation. (c) Applicant shall give the name and address of the manufacturer(s) of capital goods. (d) RA concerned will issue the invalidation letter / ARO, in quadru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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. 5.11 Realization of Export proceeds Export proceeds shall be realized in freely convertible currency except for deemed exports. Exports to SEZ units /Supplies to developers/ co-developers irrespective of currency of realization, would also be counted for discharge of Export Obligation. Realization in case of supplies to SEZ units shall be from foreign currency account of the SEZ unit. 5.12 Calculation of Average Export Obligation While calculating Average Export Obligation, exports counted/being counted for fulfilling specific EO against EPCG Authorisations within valid EO Period (whether original or extended) that have been made in the preceding 3 years will not be taken into accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of paragraph 5.8 of HBP Vol. 1 (RE-02) as amended from time to time. (ii) Authorisations issued from 1st September, 2004 upto 17th April, 2013 shall be governed by provisions of paragraph 5.8 of HBP Vol. 1 (RE-12) as amended till 17.04.2013. (iii) Authorisations issued from 18th April, 2013 till issue of Notification of FTP 2015-20 shall be governed by provisions of paragraph 5.8 of HBP Vol. 1 as amended through PN No. 1 dated 18.04.2013. 5.15 Monitoring of Export Obligation Authorisation holder shall submit to RA concerned by 30th April of every year, report on fulfilment of export obligation by secured electronic filing using digital signatures. RA concerned may issue partial EO fulfilment certificate, provided export performance is proportionately adequate for fulfilment of export obligation. 5.16 Automatic Reduction/ Enhancement upto 10% Duty saved amount and pro rata Reduction/ Enhancement in export obligation If authorization issued has actually been utilized for import of goods: - (a) in excess of duty saved amount indicated on the authorization by not more than 10%, the authorization shall be deemed to have been enhanced by that proportion. Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relief in Average Export Obligation (a) To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year. However, in case export decline is continuous over consecutive years, the base year for calculation of eligibility and calculation of reduction in average export obligation will be taken as the year after which the exports have shown continuous decline. (b) The sectors /product groups for which this relaxation is to be allowed shall be conveyed by the DGFT to all the RAs within seven months of the end of the previous financial year, and the RAs shall re-fix the annual average EO for previous year accordingly for exporters in that sector / product group. 5.20 Automatic EO extension in the event of ban on export product Whenever a ban/restriction is imposed on export of any product, export obligation period in respect of EPCG authorisations already issued prior to imposition of ban on su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted under EPCG Scheme (a) Capital Goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported to foreign supplier within three years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority. Consequently, EO would be re-fixed. (b) Capital Goods imported and found defective or otherwise unfit for use may be exported, and Capital Goods in replacement thereof be imported under EPCG scheme. In such cases, while allowing export, the Customs shall credit the duty benefit availed which can be debited again at the time of import of such replaced Capital Goods. 1 [(c). Capital Goods imported under EPCG Scheme, may be re-exported for repairs abroad within three years from the date of clearance by Customs of such goods, with permission of RA/Customs Authority. The duty component on the expenditure incurred on the repairs as well as the insurance and the freight, both ways shall be taken into account for re-fixation of the EO.] 5.26 Penal Action In case of failure to fulfil export obligation or any other condition of authorisation, authorisation holder shall be liable for action under FT (D R) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed within the specified EOP. Only for first such request, proof of actual duty payments on Capital Goods (including proof of duty in respect of CENVAT availed or otherwise), nexus and installation certificate(s) of Capital Goods shall be submitted alongwith proof of fulfilment of EO alongwith proof of maintenance of Average EO. Subsequently, only proof of fulfilment of specific EO (alongwith proof of maintenance of Average EO) additionally completed vis- -vis specific EO fixed {as in c(iii) above} may be submitted, unless there have been any changes in documents / proofs submitted earlier. (e) RA shall issue freely transferable duty credit scrip(s) equivalent to proportionate EO fulfilled. (f) The computation of freely transferable Duty Credit Scrip(s) will be based on basic Customs duty amount paid. (g) Where the exporter has obtained post-export EPCG authorisation declaring that he shall not avail CENVAT Credit, the Export Obligation shall be fixed with reference to the basic Customs duty paid. In such cases Duty Credit Scrip will be issued based on the certificate from Central Excise regarding non-availment of CENVAT credit. Such certificate from central excise r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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