Replacement of Fixed Deposit Receipts (FDRs) furnished in respect of provisional Mega or Ultra Mega Power Projects with Bank Guarantees (BGs) - reg. - Customs - 02/2013

Circular No. 2/2013-Customs F.No.354/94/2011 -TRU Government of India Ministry of Finance (Department of Revenue) Tax Research Unit ***** New Delhi, dated 1st January, 2013 To, All Chief Commissioners of Customs. All Chief Commissioners of Customs Central Excise. All Chief Commissioners of Central Excise. Sub: Replacement of Fixed Deposit Receipts (FDRs) furnished in respect of provisional Mega or Ultra Mega Power Projects with Bank Guarantees (BGs) - reg. Sir / Madam, I am directed to invite your attention to notification Nos. 12/2012-Customs (S.No.507) and 12/2012-Central Excise (S.No. 337 and 338), both dated 17-03-2012 , granting exemption from customs and excise duties for provisional mega and ultra-mega power projects. One of the conditions specified for availing of the said exemption is that the importer/project developer furnishes a security in the form of a Fixed Deposit Receipt (FDR) or Bank Guarantee from a Scheduled Bank for a term of 36 months or more for an amount equal to the duty payable but for this exemption. This condition was amended w.e.f 27-06-2012 when the importer/ project developer was given the option of furnishing either FDR or Bank Guarantee from a Scheduled Bank. 2. It has been represented by the Association of Power Producers that the developers should be allowed to secure release of the FDRs submitted by them prior to 27-06-2012 (i.e. date of DoR notifications) and the same should be substituted with Bank Guarantees. The matter has been examined by the Ministry. It has been felt that as long as a FDR was furnished as security, the FDR continued to operate as security. If an importer/ developer wishes to replace the FDR by a Bank Guarantee, the Bank Guarantee will operate from the date of replacement. Since under the amended notifications, FDR and Bank Guarantee are considered equally effective securities, it has been decided that there should not be any difficulty in allowing the importer/ project developer to replace the FDR with the Bank Guarantee. 3. It is requested that action may be taken accordingly to deal with such requests. 4. Difficulties, if any, faced in the implementation of the instructions may be brought to the notice of the Ministry at an early date. Yours faithfully, (P.K.Mohanty) Joint Secretary (TRU) Telephone: 011 23092687