1
st
April,2003
Notification No. 55 / 2003 - Customs
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 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 (51of 1975) as is in excess of the amount calculated at the rate of five percent ad- valorem and from the whole
of the additional duty and special additional duty leviable thereon respectively under sections 3 and 3A of the said Customs
Tariff Act.
2. The exemption under this notification shall be subject to the following conditions namely:-
(1)
that the goods imported are covered by a valid licence issued under the Export Promotion Capital Goods (EPCG) Scheme
in terms of Chapter 5 of the Export and Import Policy permitting import of goods at the rate of five percent duty and the said
licence is produced for debit by the proper officer of customs at the time of clearance:
Provided that for import of spare parts specified at Sr.No.4 of the said Table, the validity period of the licence shall be
deemed to be the period permitted for fulfilment of the export obligation in full;
(2)
that the importer executes a bond in such form and for such sum and with such surety or security as may be specified by the
Deputy Commissioner of Customs or Assistant Commissioner of Customs binding himself to fulfil export obligation on FOB
basis equivalent to eight times the duty saved on the goods imported as may be specified on the licence, or for such higher
sum as may be fixed by the Licensing Authority, within a period of eight years from the date of issue of licence, in the
following proportions, namely:-
S.No.Period from the date of issue of licenceProportion of total export obligation
(1) (2) (3)
1.
2.
3.
4.
Block of 1
st
and 2
nd
year
Block of 3
rd
and 4
th
year
Block of 5
th
and 6
th
year
Block of 7
th
and 8
th
year
Nil
15%
35%
50%
Provided that where the duty saved is not less than Rs.100 crores, or where the licence is issued to units in the agri export zone
as may be notified by the licensing authority, the export obligation shall be fulfilled with a period of twelve years from the date of
issue of licence in the following proportions, namely:-
S.NO.Period from the date of licenceProportion of total export obligation
(1) (2) (3)
1.
2.
3.
4.
Block of 1
st
, 2
nd
,3
rd
,4
th
and 5
th
year
Block of 6
th
,7
th
and 8
th
year
Block of 9
th
and 10
th
year
Block of 11
th
and 12
th
year
Nil
15%
35%
50%
Provided further that where a sick unit is notified by the Board for Industrial and Financial Reconstruction or where a
rehabilitation scheme is announced by the concerned State Government in respect of sick unit for its revival, the export
obligation may be fulfilled in terms of Paragraphs 5.5.1 of the Export and Import Policy.
Provided also that export obligation of a particular block may be set off against the excess exports made in the said preceding
block(s);
(3)
that the importer produces within 30days from the expiry of each block from the date of issue of licence or within such
extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs may allow, evidence to
the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs showing the extent of
export obligation fulfilled , and where the export obligation of any particular block is not fulfilled in terms of the preceding
condition, the importer shall within three months from the expiry of the said block pay duties of customs of an equal amount
equal to that portion of duties 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 15 %
per annum from the date of clearance of the goods;
(4)
that the capital goods imported, assembled or manufactured are installed in the importer's factory or premises and a
certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise or
an 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 Deputy Commissioner of Customs or Assistant Commissioner of Customs may allow:
Provided that in the case of ,-
(i) manufacturer exporter and merchant exporter having supporting manufacturer (s) or vendor(s);
(ii) import of irrigation equipment for use in contract farming for export of agricultural products; and
(iii) importer rendering services;
the capital goods may be installed at the factory or premises of such other person whose name and address are endorsed
on the licence referred to in condition (1) and where the bond for full difference of duty, if necessary, in terms of condition (2)
, with a bank guarantee is executed by the importer and such other person binding themselves jointly and severally to fulfil
the export obligation and all other conditions of this notification and to pay duty with interest at the rate of 15% per annum in
case of default;
(5)
that the imports and exports are undertaken through sea ports at Mumbai, Kolkata, Cochin, Magdalla, Kakinada, Kandla,
Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra,
Nagapattinam and Okha or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata,
Coimbatore, Delhi, Hyderabad, Jaipur, Madras, Srinagar, Trivandrum, Varanasi, Nagpur and Cochin or through any of the
Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderbaad, Jaipur,
Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik,
Rudrapur (Nainital), Dighi (Pune), Vadodara, Dauladtabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy
(Andhra Pradesh), Salem, Malanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara,
Pondicherry and Garhi Harsaru or through the Land Customs Station at Ranaghat , Singhabad and Raxaul:
(6)
notwithstanding anything contained in condition (3) above, where the Licensing Authority grants extension of block - wise
period for any block(s) or overall period of fulfillment of export obligation upto a period of two years or regularization of
shortfall in export obligation, not exceeding five percent of such export obligation, the said block-wise period or overall
period of export obligation shall be extended/ condoned by the Deputy Commissioner of Customs or Assistant
Commissioner of Customs, as the case may be:
Provided that where the duty saved is not less than Rs.100 crores and in respect of sick units as specified in the second
proviso to condition (2) above, extension of overall period of export obligation shall not be allowed.
3. Where the goods specified in the said Table are found defective or unfit for use, the said goods may be re-exported back to
the foreign supplier within 3 years from the date of payment of duty on the importation thereof:
Provided that at the time of re-export the goods are identified to the satisfaction of the Deputy Commissioner of Customs or
Assistant Commissioner of Customs as the goods which were imported.
Table
S.NO.Description of goods
(1)(2)
1.
Capital goods for pre production, production and post production including second hand capital goods upto 10 years
old.
2.Capital goods in SKD/CKD conditions 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 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.
5Spares for the existing plant and machinery of the licence holder.
Explanation - In this notification,-
(1)
"Capital Goods" has the same meaning as assigned to
it in Paragraph 9.10 of the Export and Import Policy;
(2)
"Export and Import Policy" means the Export and Import
Policy 2002-2007 published vide notification of the
Government of India in the Ministry of Commerce and
Industry, No.1/2003 dated the 31
st
March, 2003 as
amended from time to time;
(3)
"Licensing Authority" means the Director General of
Foreign Trade appointed under section 6 of the Foreign
Trade (Development and Regulation) Act,1992 (22 of
1992) or an officer authorised by him to grant a licence
under the said Act;
(4) "export obligation", -
(i)
in relation to importers other than those rendering
services, means exports, to a place outside India, of
products manufactured with the use of capital goods
imported, assembled or manufactured in terms or this
notification:
Provided
that export
obligation
may also be
fulfilled by ,-
(a)
export of same products capable or being manufactured
with the use of said capital goods; or
(b)
export of same product manufactured in different units of
the licence holder; or
(c)
through third party exports made by an exporter or
manufacturer on behalf of the licence holder by exporting
the same product and in such cases, inter-alia the
Shipping bills shall indicate name of both the third party
and the licence holder; or
(d)
making supplies of same product in terms of sub-
paragraphs (a) (b) (d) (e) (f) (g) (h) (i) and (j) of
paragraph 8.2 of the Export and Import Policy;
(ii)
in relation to importers rendering services, means,
receiving payments in freely convertible foreign currency
for services rendered through the use of capital goods.
Provided that in respect of units holding license both as manufacturer exporter and service provider, the export obligation may
be fulfilled either by export of products specified in clause (i) or by receiving payments in freely convertible foreign currency for
services rendered through the use of such capital goods.
Alok Jha
Under Secretary to the Government of India
F.NO.605/1/2003-DBK
