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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 ..... dictional 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 Authorisation shall be issued with a single port of reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emain 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 quadruplicate. 5.09 Issuance of Advance authorisation for import of inputs Indigenous manufacturer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 account. 5.13 Exemption from maintenance of average export obligation (a) In case of export of goods relating to the following the EPCG authoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 shall automatically allow clearance of such goods without endorsement by RA concerned. The authorization holder shall furnish additional fee to cover excess imports effected, in terms of duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such export products would stand automatically extended for a period equivalent to duration of such ban, without any composition fee. Authorisation holder would not be required to maintain average E.O. as well for the ban period. 5.21 Export Obligation Shortfall RA concerned may condone shortfall upto 5% in specific export obligation. 5.22 Redemption (a) Authorisation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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, 1992, as amended, Orders and Rules made thereunder, provisions of FTP/HBP, Customs Act, 1962, as amended from time to time or any other law in force. 5.27 Clubbing of EPCG authorisations (a) Clubbing of two or more EPCG authorisations issued to the same authorisation holder would be permitted. (b) An application for clubbing can be made to RA concerned in ANF 5C. Clubbing shall only be permitted in case export produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -à-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 regarding non-availing of CENVAT credit will not be required where the unit is not registered with central excise. (h) All provisions of the existing EPCG Scheme shall apply insofar as they are not inconsistent with this scheme. (i) The CG imported under paragraph 5.12 of FTP shall not be disposed of till the date of last export for offsetting EO against such CG. (j) In case of re-export of CG found defective or unfit for use as per the provisions of paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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