Circular No. 81/98 – Customs
Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject : Special Advance Licensing Scheme for manufacturer exporters of Electronic Products -regarding.
Attention is invited to Public Notice No. 41(RE-98)/ 1997-2002 dated 16th September, 1998 of the DGFT announcing a special advance licensing scheme for export of electronic products. The Department of Revenue has issued Notification No. 77/98-Customs, dated 16.10.1998 in order to operationalise the scheme. The Special Advance Licences shall be issued under Para 7.4 (f) of the Exim Policy 1997-2002. The eligible exporters of Electronic Products shall have the option to avail the Special Advance Licensing Scheme as given in Appendix 53 of the Hand Book of Procedures, Vol. I of Exim Policy 1997-2002.
i) Central Excise authorities and,
ii) Electronic & Software Export Promotion Council shall be eligible to avail this scheme.
3. The salient features of the scheme are as follows:
i) Filling of LUT/ Bond/ BG :
(a) Eligible exporters having past exports having past export performance who fulfil the terms & condition laid down in the Department of Revenue Circular No. 71/98-Cus. dated 15.9.98 shall be eligible for issue of Special Advance Licence against LUT/ Bond under this scheme.
(b) New exporters without having any export performance, would also be eligible for Special Advance Licences upto 50% of the average domestic production in the preceding 3 years or upto Rs. 50% lakhs, whichever is higher, subject to execution of Bank Guarantee for the full customs duty payable on imported inputs but for the exemption under this scheme,
ii) Quantity as limitation factor for import :
iii) Utilisation of Inputs :
Inputs imported duty free under the scheme shall only be utilised in the manufacture of the export product.
iv) Import of inputs shall be made prior to the export of resultant product.
v) Transferability / Sale not allowed of imported inputs or special advance licences except of waste/ scrap:
(a) The imported inputs shall not be disposed off or utilised in any manner except for discharge of export obligation. The special advance licences shall be subject to actual user condition & its transfer shall not be allowed.
(b) Waste/scrap arising in the course of processing or manufacture of resultant product as prescribed in the standard input / output norms or as determined by the designated officer of the DOE, shall be allowed without payment of customs duty.
v) Exports :
(a) Period of export obligation :
The export obligation shall be treated as discharged by exporting the resultant products within the period specified in the DEEC from the date of issue of the Special Advance Licence.
(b) Discharge of Export Obligation :
Export obligation shall be treated as discharged only upon the designated officer of the Department of Electronics (DOE) verifying & issuing a certificate certifying utilisation of the imported inputs in the manufacture of the export product.
(c) List of Designated Officers of the Department of Electronics :
A list of designated officers of the Department of Electronics who are competent of issue certificate in terms of (b) above is enclosed as Appendix I to this Circular.
(d) Export Goods to be manufactured out of imported inputs only :
The export goods shall be manufactured only out of the inputs imported free of duty under this scheme.
4. Following procedure may be adopted for implementation of the Special ADvance Licensing Scheme.
4.1 Filing of Shipping Bill for Export :
Exporters working under Special Advance Licensing Scheme shall file a shipping bill for export of dutiable goods (where export duties are leviable) or shipping bill for export of duty free goods (where no export duties are leviable). Each copy of the shipping bill shall contain the following endorsement by the Exporter –
“Shipping Bill for export of electronic products under Special Advance Licensing Scheme” “Exported under DEEC No. ______________ dt. ___________ “
4.2 Declaration on Shipping Bill:
Exports under the scheme shall be accompanied by the following decla-rations to be pasted on the reverse of the Shipping Bill.
“I / we ………………… (name of the exporters) do hereby declare as follows (a) that this shipment is in discharge of export obligation under Special Advance Licence No. ……………. dt. ………………. DEEC No. ……………….. dt. ……….) issued by ……………… (name of licensing authority).
4.3 At the time of exports, a copy of the DEEC (Part 2) shall be obtained from the exporter and kept on record of the Customs House.
4.4 Examination of Export goods :
The export goods shall be examined with reference to the description & technical specifications of the export product given in the shipping bill and also the description & technical specification of imported inputs declared to have been used in the export product. Samples for testing need not be drawn where goods are exported under Central Excise Seal or accompanied by test reports of statutory authorities. Samples for testing should be drawn only when necessary.
4.5 Endorsement of Part F of DEEC Book :
Customs Officers at the port of export, shall endorse the exports in part F of the DEEC. Simultaneously, the fact of endorsement of export on the DEEC shall be recorded on the shipping bill as follows :
“Entered at Sl. No. ……………… of part F of DEEC No. ………………… dt. ………………..
5.1 Registration of Special Advance Licence & Issue of TRA:
Prior to first imports against Special Advance Licence, the licence and DEEC (Imports) shall be registered at the port of registration mentioned on the licence and the DEEC. A copy of the licence and import part of the DEEC book shall also be kept on records of the Customs House of Registration. Where imports are intended from another port, licence holder shall give intimation to port of registration. Port of registration shall than issue a Telegraphic Release Advice to the port of import and shall also keep a copy of TRA in the relevant file. The details of actual imports shall be sent by port of imports of port of registration.
5.2 Maintenance of separate register for Special Advance Licence :
Every Custom House registering DEEC cases shall maintain a separate register for Special Advance Licences. Each Special Advance Licence shall be serially numbered at the time of registration and the serial no. allotted shall be entered on the licence and the DEEC. Against each registered licence, following minimum information shall be kept in the register-
– Name of the Licencee
– DEEC No. & date
– Licensing Authority
– Date of first import
-Date of expiry of export obligation
– Details of TRA issued
– Customs House File No.
– Details of notices issued, if any.
5.3 Imports shall be permitted only of such items conforming to description & quantity given in Part C of the DEEC (Imports).
5.4 Technical Specification & value to be given with B/E & import documents :
At the time of clearance of goods from customs, the manufacturer exporter shall give the details of technical specification & value of the inputs under import along with the B/E & import documents.
5.5 Imports subject to normal checks/examination:
Imports effected under the scheme shall not be cleared under fast track/green channel scheme & would be subjected to normal checks/examination procedure.
5.6 Sourcing of inputs from private bonded warehouses:
The facility of sourcing inputs from private bonded warehouses under para 5.15 of Exim Policy shall be available & for this purpose the provisions of Section 68 of the Customs Act, 1962 shall be applicable except that the clearance of inputs from bond shall be allowed free of duty as well as interest chargeable on duty against special advance licence subject to fulfilment of the terms & conditions mentioned in this Circular and notification No. 77/98- Cus. dated 16.10.1998.
5.7 Debiting of Spl. Advance Licence & DEEC Book:
No clearance shall be allowed under customs notification 77/98 dated 16.10.1998 unless a debit entry has been made in the Special Advance Licence and Pat D of the DEEC (Imports).
6. Restriction on ports:
6.1 Imports and Export, under the scheme shall be permissible only from ports, airports and inland container depots specified in the condition (viii) of the Customs Notification No. 77/98 dated 16.10.1998. Commissioners of Customs have been empowered to permit imports and exports from any port, airport, land customs station or inland container depot, subject to such conditions as may be specified by the Commissioner.
7. Monitoring the utilisation of imported inputs & export obligation :
7.1 The designated officer of the Department of Electronics shall verity the relevance/ usability of the imported inputs in the export product. The designated officer of the Department of Electronics shall also verify the actual utilisation of the imported inputs in the export product as well as the wastage in respect of export products covered under standard input/output norms and where such norm do not exist, the utilisation of the imported inputs shall be as per the determination of designated officer of the Department of Electronics.
7.2 Customs House at the port of registration shall call from the exporter the certificate issued by the designated officer of the DOE along with part 2 of the DEEC (copies to be kept on records), within 30 days of expiry of export obligation.
7.3 The certificate by the designated officer of the DOE shall be accepted by the Customs for logging of the DEEC books and there after by the DGFT for issuance of no objection certificate for discharge of Bank Guarantee / LUT by Customs.
7.4 The manufacturer exporter shall furnish the details of imports and exports made to the designated officer of the Department of Electronics on 6 monthly basis in the proforma annexed as Annexure II ot this Circular for certification by him.
8. Endorsement on the DEEC shall be countersigned by the Assistant Commissioner of Customs.
9. Failure to achieve specified export obligation:
On failure to achieve the specified export obligation, DEEC holder shall be liable to pay Customs duties with interest @24% P.A. The intimation of recovery proceedings shall also be endorsed to the Licensing Authority concerned.
9.1 Recovery of Customs Duty on Inputs which remain unutilised after expiry of EO period
Inputs imported duty free under this scheme and which remain unutilised after the expiry of the export obligation period (including the extension in EO period granted if any) shall be liable to customs duty together with interest at the rate of 24% per annum from the date of clearance thereof.
10. Visit by superintendent Central Excise to ensure maintenance of records by Units:
The Range Superintendent shall visit the unit at least once in months to examine that records as specified in Notification No. 77/98 – Customs date 16.10.1998 are being maintained properly and materials imported under the scheme are entered in he said records.
10.1 Non- maintainance of records to amount contraventions of the Customs Act:
In terms of condition (vi) to Notification No. 77/98-Cus. dated 16.10.1998, the manufacturer exporter availing benefit of this Scheme shall maintain record of imported materials and export product in the proforma annexed to the notification and failure to do so would amount to contravention of Section 111 (O) of the Customs Act.
11. Part H of DEEC to be filled:
DEEC holder seeking discharge of bond/Bank Guarantee shall fill the information in part H of consolidated imports and exports made under the scheme.
Copies of the DGFT Public Notice No. 1 41(RE-98) /1997-2002 dated 16.9.98 and Customs Notification No. 77/98-Cus. dated 16.10.1998 are enclosed.
13. standing Orders/Departmental Orders for the information and Guidance of the field staff and trade/Public notices for the trade may be issued and copies of the same may be forwarded to the Joint Secretary (Drawback).