Regarding Incorporation of a new provision as paragraph 4.7A in the HBP. v1 to allow access to duty free inputs based on actuals, for pharmaceutical products manufactured through Non-Infringing process
Public Notice No. 29/2009-2014 (RE- 2010), The 14th February, 2011
Subject:-Incorporation of a new provision as paragraph 4.7A in the HBP. v1 to allow access to duty free inputs based on actuals, for pharmaceutical products manufactured through Non-Infringing process- regarding.
I. Background for the amendment:
Advance authorisation scheme allows access to duty free inputs required to manufacture the export product. Inputs and its quantities are allowed either as per Standard Input Output Norms (SION) or adhoc norms, based on average consumption data of the relevant industry.
There are certain manufacturing processes covered under Process Patents. Therefore, benefit of SION or Adhoc norms for such products (which are still under Process Patent, but product patent of which has expired) cannot be availed by manufacturer, other than the Patent holder. Such manufacturer, who wish to manufacture and export the product through a Non-infringing (NI) Process may require inputs and input quantities, other than that prescribed as per existing norms (SION or adhoc norms). Hence it has been decided to:
a) Incorporate a new provision as paragraph 4.7A (as stated below) within the scope of advance authorisation scheme to allow this facility to pharmaceutical sector subject to fulfillment of certain specified conditions.
b) Prescribe a new Advance Authorisation Application Form as ANF 4 J for such products.
c) Specify a format of Chartered Engineer (Chemical) Certificate in Appendix 32 C. This certificate shall be based on verification and authentication of the input combination required for pharmaceutical products manufactured through NI process.
d) Incorporate a new format for the Consumption Details of the inputs used, to be verified and certified by the Jurisdictional Central Excise Official in Appendix 23A for these pharma products in lieu of Appendix 23 for other products.
e) Amend the Guidelines for applicants attached to the ANF 4 F (i.e. “Application Form for Redemption / No Bond Certificate against Advance Authorisation”) to specify additional documents required for such pharmaceutical products.
II Accordingly, in exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14, the following amendments are being made in the Handbook of Procedures, Vol. 1, 2009-2014 (RE- 2010):
A new paragraph shall be added as Paragraph 4.7A, after the existing paragraph 4.7.6 of HBP, v1:
4.7A. Advance authorisation for Pharma products under Non-Infringing (NI) process.
Provision: RA may issue advance authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process. A manufacturer exporter can avail the benefit of this provision even if the Standard Input Output Norm (SION) or the adhoc norm (under self declared basis in terms of paragraph 4.7 of the HBP, v1) for the said product is available. “Input combination permitted under NI process, as approved by the concerned agency of the regulated markets”, shall be exporter specific and country specific and shall be available only when the exports are destined for the same country.
Application & Processing: An application for grant of an advance authorisation under this provision shall be made in ANF 4 J along with the documents prescribed therein, to RA concerned. Each and every application for advance authorisation in ANF 4 J shall be accompanied with the required documents stated therein.
Input combination permitted under NI process for manufacturing the product shall be certified by the Chartered Engineer (Chemical) in the format given in Appendix 32C, after due verification of the details of each input and its quantity as given in Abbreviated New Drug Application (ANDA) / Drug Master File (DMF) of the applicant. RA shall cross verify the requirement of inputs as per the Chartered Engineer certificate submitted along with the application to that shown in the application and issue the authorisation accordingly. RA shall not forward such application to NC and the inputs and export product so allowed by RA, shall be treated as input combinations permitted under NI Process.
Redemption of Authorisation: Provisions contained in paragraph 4.28 of HBP v1, 2009-14, except sub-paragraph (v), shall be applicable. RA shall compare the details of Appendix-23A, duly verified and certified by the jurisdictional Excise Authority, with that of the inputs made/allowed in the authorisation, before allowing redemption or Bond-waiver against individual advance authorization issued for pharmaceutical product(s) manufactured through NI process. In this verification process, in case, it is found that the Authorisation holder has consumed lesser quantity of inputs than imported, Authorisation holder shall be liable to pay customs duty on unutilized imported material, alongwith interest thereon as notified, or effect additional export within the EO period. However, for the customs duty component, the authorisation holder has also the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB.
Maintenance of Proper Accounts: Every advance authorisation holder shall maintain a true and proper account of consumption and utilization of duty free imported / domestically procured inputs against each authorisation as prescribed in Appendix 23A. This record in Appendix 23A format, duly verified and certified by the jurisdictional Excise Authority, shall be submitted to the concerned RA at the time of filing application for redemption / bond waiver. RA shall compare the details of Appendix-23A, with that of the inputs allowed in the authorisation, before allowing redemption or bond waiver against individual authorization. Such records shall be preserved for a period of at least three years from the date of redemption.
2. A new Aayaat Niryaat form namely, ANF 4J related to Application form for “Advance Authorisation / Advance Release Order (ARO) / Invalidation letter for Pharmaceutical Product, manufactured through Non-Infringing (NI) process” stands added, as appended to this Public Notice, as Annexure I.
3. A new Appendix, namely, Appendix 32C related to “Format of Chartered Engineer (Chemical) certificate for Pharmaceutical products manufactured through NI process” stands added, as appended to this Public Notice, as Annexure II.
4. A new Appendix i.e., Appendix 23A related to “consumption and stocks of duty free material allowed under Advance authorization for Pharmaceutical product manufactured through NI process” along with the Central Excise certificate on consumption introduced, as appended to this Public Notice, as Annexure III.
5. “Guidelines for applicants” in Aayaat Niryaat form (ANF 4F) related to “Application Form for Redemption / No Bond Certificate (Bond waiver certificate) against Advance Authorisation* stands replaced by the amended Guidelines as at Annexure IV appended to this Public Notice.
III. The effect of this Public Notice:
It has been stated in the “Background for the amendment” at Sl. No. I above.
(Anup K. Pujari)
Director General of Foreign Trade
(F. No. 01/94/180/AA/NI process/AM11/PC-4)
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