Onetime condonation of time period in respect of obtaining block-wise extension

Dated 13th November, 2017 | Copy of | JT. DGFT Mumbai Trade Notice No.4 | 

Sub: 1. Onetime condonation of time period in respect of obtaining block-wise extension in Export Obligation period under EPCG Scheme,
2. Onetime condonation of time period in respect of obtaining extension in Export Obligation period under EPCG Scheme and
3. Acceptance of installation certificate under EPCG Scheme by the RAs wherein installation certificate is submitted beyond 18 months ... reg.

Attention of Trade & Industry is invited to Public Notice No.35/2015-20, Public Notice No.36/ 2015-20 and Public Notice No.37/2015-20 all dated 24.10.2017 relating to EPCG Scheme.
1. The EPCG authorization holders, while maintaining the average export obligation, fulfil the specific export obligation over the prescribed block period as applicable.
2. Para 5.14 (c) of the Handbook of Procedures 2015-2020 states as under:-
“Where EO of the first block is not fulfilled in terms of the above proportions, except in cases where the EO prescribed for first block is extended by the Regional Authority subject to payment of composition fee of 2% on duty saved amount proportionate to unfulfilled portion of EO pertaining to the block, the Authorization holder shall, within 3 months from the expiry of the block, pay duties of customs (along with applicable interest as notified by DOR) proportionate to duty saved amount on total unfulfilled EO of the first block”.
3. The Para 5.14 (d) of the Handbook of Procedures 2015-20 specifies the governance of the relevant provisions for block-wise Export Obligation in respect of EPCG authorizations issued between 1st April 2002 and 18.04.2013.
4. In view of the time limit of 3 months prescribed in the relevant provisions, during which time the EPCG authorization holder was required to obtain the block extension in Export obligation from the RA on payment of composition fee, the RAs concerned are unable to consider such requests wherein submissions are made after 3 months. Many times such requests are for regularization of exports already made. A large number of requests for condonation of this period of non-submission within the prescribed time period for obtaining block period extension are received in the DGFT Hqrs. This has caused hardship and delay in closure of EPCG authorizations.
5. The EPCG authorization holders were required to approach RA within the prescribed period for obtaining the requisite extension on payment of composition fee or should have paid the proportionate duty to the Customs to regularize the block-wise EO period. Therefore, as a onetime measure in relaxation of procedure, it has been decided that the RAs concerned may consider the requests for block-wise Export Obligation period extension for the requests already submitted but submitted beyond the time on payment of additional composition fee of Rs. 5000/- in addition to payment of regular composition fee as applicable. The RA may also consider the requests that may be received upto 31.03.2018 under this facility. This shall be subject to the condition that the case is otherwise in order and submission of installation certificate for the capital goods imported to the RA concerned. This facility is for EPCG authorizations issued from 1st September, 2004.
6. This facility would not be available in respect of the following cases:-
i. Where the issue is under investigation/adjudicated by RA/customs authority/any other investigating agency.
ii. Where the EPCG committee has rejected such extension requests.
7. As per Para 5.17 (a) of the Hand book of Procedures 2015-2020 “extension in Export Obligation Period of EPCG authorization issued prior to Notification of FTP 2015-20 shall be governed by relevant provisions of HBP Vol 1 applicable on the date of issue of authorization”.
8. As per Para 5.17 (c) of the Hand Book of Procedures 2015-20 “request for extension in Export Obligation Period shall be made to RA within 75 days from the date of expiry of original EO Period”.

9. Where the requests for extension in Export Obligation Period (EOP) are received beyond the prescribed time period, the RAs are not able to consider such requests. Many a times, such requests are for regularization of exports already done. A large number of requests for condonation of this period of non-submission within the prescribed time period for obtaining extension in EO Period are received in the DGFT for relaxation. This has caused hardship and delay in closure of the EPCG authorizations. Hence, as a onetime measure in relaxation of procedures, it has been decided that the RAs may consider requests for obtaining extension in Export Obligation period, where requests are received as per the prescribed procedure but have not been considered due to the non-submission within the prescribed period, on payment of additional composition fee of Rs.5000/- per authorization. Under the facility RAs may also consider the requests that may be received upto 31.03.2018. The EOP extension would be granted as per the relevant provisions of HBP applicable on the date of issue of authorization in continuation of the original/extended expiry period, and would be subject to fulfilment of all other relevant conditions of the FTP and HBP.
10. This facility would not be available in the following cases:-
i. Where the EPCG authorization is under Investigation/adjudicated by RA/Customs Authority/any other investigating agency.
ii. Where the EPCG Committee has rejected such extension requests.
iii. The EPCG authorizations issued prior to 1st September 2004.
iv. Where the installation certificate has not been submitted.
11. The EPCG authorization holders are required to submit the installation certificate showing installation of the imported capital goods to the RA within prescribed time period.
12. Para 5.04 of the Handbook of Procedures 2015-20 regarding certificate of installation of capital goods stated is as under:-
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 authorization 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 authorization 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.
13. Where the exporter is unable to submit the installation certificate within this prescribed time limit, the RA is not able to accept such certificates. Such requests for condonation are received in DGFT Hqrs., which causes hardship and delay.
14. It has been decided that in relaxation of the procedure as onetime condonation, the RAs concerned may accept the installation certificate submitted beyond the time limit on payment of penalty of Rs.5000/- per authorization to RA, subject to the following:
i. The capital goods have been installed within the period of 18 months from the date of Imports but the installation certificate has been submitted to RA beyond 18 months from the date of import.
ii. The authorization holder submits to RA bonafide reasons for delay in submission of installation certificate.
iii. The installation certificate is submitted to RA on or before 31.03.2018.
iv. The EPCG authorization is not under investigation/adjudicated by RA/Customs authority/any other investigating agency.

Sd/-
(Dr. Sonia Sethi)
Additional Director General of Foreign Trade

Issued by:
Office of the Additional Director General of Foreign Trade
Mumbai