[PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II SECTION 3, SUB-SECTION (I)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

Notification No. 110/95-Cus., dated 5-6-1995

EPCG Scheme – import – concessional rates of duty

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods as specified in the Table annexed hereto from so much of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of 15% ad valorem and whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, subject to the following conditions, namely :-

(1) The goods imported are covered by a valid licence issued on or after 1st May, 1995 under the Export Promotion Capital Goods (E.P.C.G) Scheme in terms of Export and Import Policy (hereinafter referred to as the said policy) permitting import on payment of duty of customs at the rate of 15% and the said licence is produced for debit by the proper officer of the customs at the time of clearance;

Provided that for the import of spare parts, the validity period of the licence shall be deemed to be the period permitted for fulfilment of the export obligation in full.

(2) Omitted.

(3) The importer executes a bond in such form and for such sum and with such surety or security as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs binding himself to fulfil export obligation equivalent to four times the CIF value of the goods imported, or for such higher sum as may be fixed by the Licensing Authority, within a period of five years from the date of issue of the said licence in the following proportions :-

S. No. Period from the date of issue of licence. Proportion of total export obligation.
1
2.
3.
4.
5.
1st year
2nd year
3rd year
4th year
5th year
NIL
10%
20%
30%
40%

Provided that export obligation of a particular year may be set off by the excess exports made in the preceding years.

(4) The importer produces within thirty days of the expiry of each year from the date of issue of licence from 2nd year or within such extended period as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow, evidence to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs showing the extent of export obligation fulfilled, and where export obligation of any particular year is not fulfilled in terms of the preceding condition, the importer shall within three months from the expiry of the said year pay an amount equal to that portion of the duty leviable on the goods but for the exemption contained herein which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation together with interest at the rate of 24% per annum from the date of clearance of the goods.

(5) The importer shall, if he fails to discharge a minimum of 25% of the export obligation prescribed for any particular year, for three consecutive years, be liable to pay forthwith the whole of the duty of customs leviable on the goods imported but for the exemption contained in this notification together with interest at the rate of 24% per annum from the date of clearance of the goods.

(6) The capital goods imported, assembled or manufactured are installed in the importer”s factory or premises and a certificate from the jurisdictional2 Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or independent Chartered Engineer, as the case may be, is produced confirming installation and use of capital goods in the importer”s factory or premises, within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow.

(7) Notwithstanding anything contained in conditions (3) and (4), where the Licensing Authority grants an extension of yearwise period or overall period of fulfilment of export obligation or regularisation of shortfall, in export obligation, not exceeding 5% of such export obligation, the said yearwise period or overall period of export obligation may be extended and the said shortfall in export obligation be condoned by the Assistant Commissioner of Customs or Deputy Commissioner of Customs:

Provided that extension of yearwise period of export obligation shall not be allowed more than once and more than a period of one year within a period of five years.

TABLE

S.No. Description of goods
(1) (2)
1. Capital goods.
2. Capital goods in SKD/CKD condition to be assembled into capital goods by the importer.
3. Components of capital goods required for assembly or manufacture of capital goods by the importer.
4. Spare parts not exceeding 20% of the value of goods specified at Serial Nos. 1, 2 and 3 as actually imported and required for maintenance of capital goods so imported, assembled or manufactured.

Explanation. – In this notification, –

(i) “Capital goods” means any plant, machinery, equipment and accessories required for –

(a) manufacture or production of other goods, including packaging machinery and equipments, refractories, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge, and equipment and instruments for testing, research and development, quality and pollution control;

(b) use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry and sericulture;

(c) rendering services;

(ii) “Export and Import Policy” means the Export and Import Policy 1st April, 1992-31 March, 1997 (Revised edition : March 1995) published vide notification of the Government of India in the Ministry of Commerce No. 1 (RE-95)/92-97, dated the 31st March, 1995;

(iii) “Licensing Authority” means the Director General, Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant a licence under the said Act;

(iv) Omitted.

(v) “export obligation”, in relation to importers other than those rendering services, means export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification, or making of supplies of such products in terms of clauses (a), (c), (e), (f) and (i) of paragraph 121 of the Export and Import Policy and para 10.2(g) of the Export and Import Policy 1997-2002 corrected up to 13-4-1998 and, in relation to importers rendering services, means receiving payments in freely convertible foreign currency for services rendered through the use of such capital goods.

Notification No. 110/95-Cus., dated 5-6-1995 as amended by Notifications No. 131/95-Cus., dated 25-8-1995;
No. 46/95-Cus., dated 19-9-1995; No. 154/95-Cus., dated 27-10-1995; No. 31/96-Cus., dated 17-6-1996;
No. 69/96-Cus., dated 10-9-1996; No. 95/96-Cns., dated 19-12-1996; No. 8/98-Cus., dated 23-4-1998;
No. 42/98-Cus., dated 30-6-1998; No. 75/98-Cus., dated 9-10-1998 and No. 56/99-Cus., dated 11-5-1999.

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