[TO BE 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. 23 / 2013-Customs
New Delhi, the 18
th April, 2013
G.S.R. 249 (E).— 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 when imported into India against a Post Export EPCG duty credit scrip issued by the Regional
Authority in accordance with paragraph 5.11 under Chapter 5 {Export Promotion Capital Goods (EPCG) Scheme} of
the Foreign Trade Policy which provides for duty remission in proportion to export obligation fulfilled (hereinafter
referred to as the said scrip) from,-
(a) the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act,
1975 (51 of 1975); and
(b) the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act.
2. The exemption under this notification shall be subject to the following conditions, namely:-
(1) that the said scrip is granted against a valid authorisation issued under para 5.22 of the Handbook of Procedures
Volume 1 (hereinafter referred to as the said authorisation) by the Regional Authority to an applicant (hereinafter
referred as the authorisation holder) who opted for the scheme of Post Export EPCG Duty Credit Scrip:
Provided that the applicant is not issued, in the year of issuance of the said authorisation, the duty
credit scrips under Status Holders Incentive Scrip (SHIS) scheme under para 3.16 of the Foreign Trade
Policy. In the case of applicant who is Common Service Provider (herein after referred as CSP), the CSP or
any of its specific users should not be issued, in the year of issuance of the said authorisation, the duty credit
scrips under SHIS. This condition shall not apply where already availed SHIS benefit that is unutilised is
surrendered or where benefits availed under SHIS that is utilised is refunded, with applicable interest, before
issue of the said authorisation. SHIS scrips which are surrendered or benefit refunded or not issued in a
particular year for the reason the said authorisation has been issued in that year shall not be issued in future
years also;
(2) that the said authorisation is not for import under duty exemption but for import of the goods specified in the
Table 1 annexed hereto on full payment of applicable duties in cash;
(3) that the said authorisation is registered at the port of import specified in the said authorisation and the goods,
which are specified in the Table 1 annexed hereto, are imported within eighteen months from the date of issue of the
said authorisation on full payment of applicable duties in cash, and the said authorisation is produced before the
proper officer of customs at the time of clearance of the goods for endorsement of the import particulars and in cases
where the authorisation holder has opted that the Cenvat Credit under Cenvat Credit Rules, 2004 in respect of the
additional duty under section 3 of the Customs Tariff Act , 1975 (51 of 1975) paid (hereinafter referred to as
additional duty of customs) shall not be taken, the proper officer endorses ―Not valid for Cenvat Credit‖ on the bill of
entry:
Provided that the benefit of import of capital goods for creation of modern infrastructure shall be
extended only to such retailers who have a minimum area of 1000 square metres:
Provided further that catalyst for one subsequent charge shall be allowed, under the authorisation in
which plant, machinery or equipment and catalyst for initial charge have been imported, except in cases
where the Regional Authority issues a separate authorisation for catalyst for one subsequent charge after the
plant, machinery or equipment and catalyst for initial charge have already been imported;
(4) ) that the capital goods imported under the said authorisation are installed and put to use, after their import, in the
authorisation holder‘s factory or premises and at the time of registration of the said scrip a certificate, confirming such
installation and use of the goods, from the jurisdictional Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be, which has been issued prior to the date of the first application
filed by the authorisation holder for issuance of duty credit scrip against the said authorisation, is produced before the
Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be:
Provided that if the authorisation holder, including an authorisation holder who is a CSP, is not
registered with the Central Excise or if the authorisation holder is a service provider (other than a CSP), as
the case may be, he may produce the said certificate of installation and usage issued by an independent
Chartered Engineer:
Provided further that in the case of manufacturer authorisation holder and merchant authorisation
holder having supporting manufacturer(s) or vendor(s) or in the case of import of irrigation equipment for use
in contract farming for export of agricultural products or in the case of authorisation holder rendering services,
the capital goods may be installed at the factory or premises of such other person whose name and address
is endorsed on the said authorisation and also on the shipping bills for fulfillment of the export obligation and
the authorisation holder and such other person jointly and severally fulfill the export obligation and all other
conditions. This shall not apply to a CSP:
Provided also that agro units located in Agri Export Zones or service providers in Agri Export Zones
may move the capital goods within the Agri Export Zones under intimation to the jurisdictional Deputy
Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, subject to
the condition that the authorisation holder shall maintain accurate record of such movement;
(5) that where the goods imported under the said authorisation are found defective or unfit for use, they may be re-
exported back to the foreign supplier within three years from the date of payment of duty on the importation thereof
subject to the condition that, –
(a) 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 case may be, to be the same goods which
were imported;
(b) when the re-export of the goods has been made under claim of duty drawback, no duty remission in
the form of duty credit scrip for the duty paid at the time of import on the re-exported goods shall be
allowed;
(c) after any duty remission in the form of duty credit scrip has been claimed in respect of the duty paid
on the goods imported under the said authorisation, no duty drawback shall be allowed when the
goods are re-exported and the export obligation shall also not be re-fixed;
(6) that goods imported under the said authorisation are not disposed of or transferred by sale or lease or any other
manner by the authorisation holder till the date of last export against which the said scrip is issued;
(7) that the total export obligation to be fulfilled is equivalent to eighty five percent. (85%) of six times the amount
which is the sum of applicable duty of customs under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)
paid (hereinafter referred to as basic customs duty), additional duty of customs, Education Cess under section 94 of
the Finance (No.2) Act, 2004 (23 of 2004) paid and Secondary and Higher Education Cess under section 136 of the
Finance Act, 2007 (22 of 2007) paid on goods imported under the said authorisation, on Free On Board basis, which
is to be fulfilled within an export obligation period of six years from the date of issue of the said authorisation:
Provided that additional duty of customs shall not be taken for computation for the purpose of fixation
of export obligation when the Cenvat Credit in respect of additional duty of customs has not been taken:
Provided further that the export obligation shall be 75% of the export obligation specified above when
fulfilled by export of following green technology products, namely, equipment for solar energy decentralised
and grid connected products, bio-mass gassifier, bio-mass or waste boiler, vapour absorption chillers, waste
heat boiler, waste heat recovery units, unfired heat recovery steam generators, wind turbine, solar collector
and parts thereof, water treatment plants, wind mill and wind mill turbine or engine, other generating sets -
wind powered, electrically operated vehicles – motor cars, electrically operated vehicles – lorries and trucks,
electrically operated vehicles – motor cycle and mopeds, and solar cells:
Provided also that for units located in Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, the export obligation shall be 25% of the export
obligation specified above:
Provided also that where a sick unit is notified by the Board for Industrial and Financial
Reconstruction (BIFR) 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 within the time period allowed by the
Regional Authority as per the rehabilitation package prepared by the operating agency and approved by
BIFR or rehabilitation department of State Government. In cases where the time period is not specified in the
rehabilitation package, the export obligation may be fulfilled within the time period allowed by the Regional
Authority which shall not exceed nine years:
Provided also that where the capital goods are imported for technological upgradation as per
conditions specified in Para 5.8 of the Foreign Trade Policy, the export obligation shall be fulfilled within a
period of six years from the date of issue of authorization under the said para:
Provided also that the export obligation shall be 50% of the export obligation specified above in the
case of separate authorisation for spares (including refurbished/reconditioned spares), moulds, dies, jigs,
fixtures, tools and refractory for initial lining, for the existing plant and machinery (imported earlier, under para
5.22 of Handbook of Procedures Volume 1 or otherwise), in which the CIF value of import of the above
spares, etc is limited to 10% of the CIF value of the plant and machinery imported under the authorisation
(para 5.22 of Handbook of Procedures Volume 1) or 10% of the book value of the plant and machinery
imported earlier otherwise than under para 5.22 of Handbook of Procedures Volume 1, as the case may be;
(8) that the duty remission granted as duty credit in the said scrip bears the same proportion to the amount which is
the basic customs duty on the goods imported under the said authorisation which were considered for fixation of
export obligation, as the extent of export obligation fulfilled (over and above the average export obligation) bears to
the total export obligation:
Explanation 1. – For the purpose of condition (8),-
(a) the amount of duty remission shall not include the duty paid, any portion of which has been
rebated, including by way of duty drawback;
(b) the amount of duty remission shall not include the duty paid which are not assessed finally;
(c) extent of export obligation fulfilled shall be the export obligation fulfilled till the last export
included in the said scrip less the export obligations fulfilled that have been counted towards
the previously issued duty credit scrips against the said authorisation;
(d) in condition (c) above, the export obligation fulfilled till the last export included in the said scrip
shall be taken as the total export obligation fulfilled in the following cases –
(i) where the authorisation holder fulfills seventy five percent. (75%) or more of the
export obligation as specified in condition (7) [over and above hundred percent.
(100%) of the average export obligation], within half of the period specified for
export obligation as mentioned in said condition (7), in which case the balance
export obligation shall stand condoned;
(ii) where the Regional Authority regularises shortfall, in the export obligation as
specified in condition (7), not exceeding five per cent. (5%) of such export
obligation, in which case the said shortfall shall be condoned;
(e) the Explanation 2 to this notification relating to ‗Export obligation‘ shall apply severally to each
duty credit scrip, including the said scrip, issued against the said authorisation;
(f) the exports and supplies made within the export obligation period specified in condition (7)
shall count towards fulfillment of export obligation;
(g) for fulfillment of export obligation, the payments against exports/supplies should have been
realised.
(9) that where the first proviso to condition (7) is applied, the Cenvat Credit in respect of additional duty of customs
shall not been taken and at the time of registration of the said scrip a certificate, from the jurisdictional Deputy
Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, to the effect that
Cenvat Credit in respect of additional duty of customs on goods imported under the said authorisation has not been
taken, is produced by the authorisation holder before the Deputy Commissioner of Customs or the Assistant
Commissioner of Customs, as the case may be:
Provided that when the authorisation holder is not registered with Central Excise, he may produce
the said certificate on self-certification basis;
(10) that the duty remission in the said scrip does not relate to duties paid on the imports made under the said
authorisation which have not been installed and put to use;
(11) that the duty remission in the said scrip has not been obtained as a consequence of indigenous sourcing of
capital goods;
(12) that the said scrip is issued, on request of the authorisation holder in form ANF5B for duty remission, by the
Regional Authority specifying the same port of registration as mentioned in the said authorisation and it indicates
details of the said authorisation, total export obligation fixed and its calculation, details of previous duty credit scrips
issued against the said authorisation and the calculation of duty credit;
(13) that the imports under the said authorisation, the exports for fulfilling the export obligations and import of goods
against the said scrip are undertaken through the seaports, airports or through the Inland Container Depots or
through the Land Customs Stations as mentioned in the Table 2 annexed hereto or a Special Economic Zone notified
under section 4 of the Special Economic Zones Act, 2005 (28 of 2005):
Provided that the Commissioner of Customs may, by special order or a public notice and subject to
such conditions as may be specified by him, permit import and export through any other seaport, airport,
inland container depot or through a land customs station within his jurisdiction;
(14) that for the purposes of registration, the said scrip is produced by the authorisation holder at the specified port of
registration before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case
may be, along with –
(a) the said authorisation and the bill(s) of entry under which the imports under the said authorisation were made
on payment of applicable duties in cash;
(b) evidence showing the extent of export obligation fulfilled within the export obligation period;
(c) certificate confirming installation and use as prescribed in condition (4) above;
(d) certificate that Cenvat Credit has not been taken as prescribed in condition (9) above, where applicable;
(e) undertaking from the authorisation holder to the effect that,-
(i) the goods imported under the said authorisation have not been disposed of or transferred by sale or
lease or any other manner till the date of last export against which the said scrip is issued;
(ii) the duty remission in the said scrip does not include the duty paid, any portion of which has been
rebated, including by way of duty drawback; and
(iii) all the conditions have been complied with respect to the duty credit in the said scrip,
and the said Deputy Commissioner or Assistant Commissioner, as the case may be, upon being satisfied, allows the
said scrip to be registered and the Customs authority endorses details of the said scrip and the remark ―Drawback
not available on re-export‖ on the bill(s) of entry, and registers the said scrip;
(15) that the said scrip and goods imported against it shall be freely transferable;
(16) that the said scrip is produced before the proper officer of customs at the time of clearance for debit of the
duties leviable on the goods and the proper officer taking into account the debits already made under this exemption
debits the duties leviable on the goods, but for this exemption;
(17) that the validity of the said scrip shall be eighteen months from the date of issue and the said scrip shall be
valid on the date on which actual debit of duty is made;
(18) that where the importer, under this notification, does not claim exemption from the additional duty of customs
leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) he shall be deemed not to have availed the
benefit under this notification for the purpose of calculation of the said additional duty of customs;
(19) that the benefit under this notification shall not be available to the items listed in Appendix 37B of the Handbook
of Procedures Volume 1;
(20) that the importer shall be entitled to avail of the drawback or Cenvat credit of additional duty leviable under
section 3 of the said Customs Tariff Act against the amount debited in the said scrip.
Explanation 2. – For the purpose of this notification, -
(A) ―Capital goods‖ has the same meaning as assigned to it in Paragraph of 9.12 of the Foreign Trade Policy;
(B) ―Common Service Provider‖ (CSP) means a service provider who is designated or certified as a Common
Service Provider by the Director General of Foreign Trade (DGFT), Department of Commerce or State Industrial
Infrastructural Corporation in a Town of Export Excellence;
(C) ―Export obligation‖,-
(I) means obligation on the authorisation holder to export to a place outside India, goods manufactured or
capable of being manufactured or services rendered by the use of capital goods imported under the said
authorisation and the export obligation shall be over and above the average level of exports achieved by the
authorisation holder in the preceding three licensing years for the same and similar products within the export
obligation period and such average shall be the arithmetic mean of export performance in the last three years
for the same and similar products:
Provided that in case of export of goods relating to handicraft, handlooms, cottage, tiny sector,
agriculture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture, carpet, coir
and jute, the authorisation holder shall not be required to maintain the average level of exports:
Provided also that in case of export of goods relating to aquaculture (including fisheries), the
authorisation holder shall not be required to maintain the average level of exports subject to the condition that
said authorisation has been obtained for goods other than fishing trawlers, boats, ships and other similar
items:
Provided also that the goods, excepting tools, imported under said authorisation by the aforesaid
sectors, shall not be allowed to be transferred for a period of five years from the date of imports even in
cases where export obligation has been fulfilled. Transfer of capital goods would, however, be permitted
within the group companies, after fulfillment of export obligation but before five years from the date of
imports, under intimation to Regional Authority and jurisdictional Central Excise Authority:
Provided also that exports made to such countries as notified by Director General of Foreign Trade,
shall not be counted for fixing the average level of exports:
Provided also that exports against only such shipping bills which mention the authorisation number
and date of the said authorisation shall be counted for the fulfillment of the export obligation;
Provided also that in the case of authorisation issued to a CSP, -
(i) the reference to ‗authorisation holder‘ in this Explanation shall be taken to mean a reference to
‗CSP and specific users whose details are informed prior to export by CSP to the Regional
Authority‘;
(ii) for the exports by users of the common service to be counted towards fulfilment of export
obligation of CSP, the respective shipping bills of the users of common service shall contain the
authorisation details of the CSP and the concerned Regional Authority shall be informed about
the details of the users prior to such export; and
(iii) the exports counted against the authorisation shall not be counted towards fulfillment of other
specific export obligations against all other authorisations issued under Chapter 5 of the Foreign
Trade Policy, including para 5.22 of Handbook of Procedures Volume 1;
(II) shall be fulfilled through physical exports and the export proceeds realised in freely convertible
currency. However the following categories of supplies, shall also be counted towards fulfillment of export
obligation:
(a) deemed exports, namely:
(i) supply of goods against Advance Authorisation/Advance Authorisation for Annual Requirement/ Duty
Free Import Authorisation (DFIA);
(ii) supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or
Electronics Hardware Technology Parks (EHTPs) or Bio-Technology Parks (BTPs);
(iii) supply of goods to projects financed by multilateral or bilateral agencies or Funds as notified by the
Department of Economic Affairs (DEA), the Ministry of Finance (MOF) under International Competitive
Bidding (ICB) in accordance with procedures of those agencies or Funds, where legal agreements
provide for tender evaluation without including customs duty; supply and installation of goods and
equipments (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral
agencies or Funds as notified by DEA, MOF under ICB, in accordance with procedures of those
agencies/Funds, where bids may have been invited and evaluated on the basis of Delivery Duty Paid
(DDP) prices for goods manufactured abroad;
(iv) supply of goods to any project or purpose in respect of which the Ministry of Finance, by a
notification, permits import of such goods at zero customs duty and the supply is made under ICB
procedure;
(v) supply of goods to mega power projects as provided in sub-clause (ii) of clause (f) of para 8.2 of
Foreign Trade Policy;
(vi) supply of goods to nuclear power projects through competitive bidding as provided in clause (j) of
para 8.2 of Foreign Trade Policy;
(b) supply of ITA-1 items to Domestic Tariff Area, provided realisation is in free foreign exchange;
(c) royalty payments received in freely convertible currency and foreign exchange received for Research
and Development (R&D) services; and
(b) payments received in rupee terms for port handling services in terms of chapter 9 of the Foreign Trade
Policy.
(D) ―Foreign Trade Policy‖ means the Foreign Trade Policy, 2009-2014, published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number G.S.R. 1293 (E) of the Government of
India, Ministry of Commerce and Industry, Department of Commerce No.1 (RE – 2012) /2009-2014 dated the 5
th
June, 2012, as amended from time to time;
(E) ―Handbook of Procedures, Volume 1‖ means the Handbook of Procedures Volume 1, 2009-14, published in
the Gazette of India, Extraordinary, Part I, Section 1 vide public notice of the Government of India in the Ministry of
Commerce and Industry, Department of Commerce, No.1 (RE – 2012) /2009-2014 dated the 5
th June, 2012, as
amended from time to time;
(F) ―Manufacture‖ has the same meaning as defined in clause (f) of section 2 of the Central Excise Act, 1944 (1
of 1944);
(G) ―Regional 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 an authorisation
including a duty credit scrip under the said Act;
(H) ―Town of Export Excellence‖ (TEE) means a selected town producing goods of Rs. 750 Crore or more based
on potential of growth in exports. However, for TEE in handloom, handicraft, agriculture and fisheries sector the
threshold limit would be Rs.150 Crore.
Table 1
S. No. Description of goods
1. Capital goods for pre-production, production and post-production.
2. Capital goods in Semi Knocked Down (SKD)/Completely Knocked Down (CKD) conditions to be
assembled into capital goods by the authorisation holder.
3. Spare parts of CIF value upto 10% of the CIF value of goods specified at Serial Nos.1 and 2 as actually
imported and required for maintenance of capital goods so imported, assembled, or manufactured.
4. Spare parts of CIF value upto 10% of the book value of the existing plant and machinery of the
authorisation holder.
Table 2
S.No.
Port, ICD,
LCS
Located at
1. Seaports Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar, Haldia (Haldia Dock
complex of Kolkata port) Kakinada, Kandla, Kattupalli (Tamilnadu), Kolkata, Krishnapatnam,
Ennore (Tamilnadu) and Karaikal (Union territory of Puducherry), Magdalla, Mangalore,
Marmagoa, Muldwarka, Mumbai, Mundhra, Nagapattinam, Nhava Sheva, Okha, Paradeep,
Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar.
2. Airports Ahmedabad, Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi,
Hyderabad, Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai, Nagpur, Rajasansi
(Amritsar), Srinagar, Trivandrum, Varanasi and Visakhapatnam.
3. Inland
Container
Depots
Agra, Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bhatinda,
Bhilwara, Bhiwadi, Bhusawal, Chettipalayam (Tamilnadu), Chheharata (Amritsar),
Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad (Wanjarwadi and Maliwada), Delhi,
Dhannad Rau (District Indore), Dighi (Pune), Durgapur (Export Promotion Industrial Park),
Faridabad, Garhi Harsaru, Gauhati, Guntur, Hyderabad, Irugur Village (Tamilnadu),
Irungattukottai (SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk,
Kanchipuram District, Tamilnadu), Jaipur, Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur,
Kheda (Pithampur, District Dhar), Kota, Kundli, Loni (District Ghaziabad), Ludhiana, Madurai,
Malanpur, Mandideep (District Raisen), Marripalem Village (in Edlapadu Taluk of District
Guntur), Miraj, Moradabad, Nagpur, Nasik, Patli (Gurgaon), Pimpri (Pune), Pitampur
(Indore), Pondicherry, Raipur, Rewari, Rudrapur (Nainital), Salem, Singanalur, Surat,
Surajpur, Talegaon (District Pune), Thudiyalur (Tamilnadu), Tirupur, Tondiarpet (TNPM) in
Chennai, Tuticorin, Udaipur, Vadodara, Varanasi, Veerapandi (Tamilnadu) and Waluj
(Aurangabad).
4. Land
Customs
Stations
Agartala, Amritsar Rail Cargo, Attari Road, Changrabandha, Dawki, Ghojadanga, Hilli,
Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul,
Singhabad and Sutarkhandi.
[F.No.605/10/2013-DBK]
(Rajiv Talwar)
Joint Secretary to the Government of India
