Circular No. 121 dated 23^rd November 1995

Engineering Products Export (Replenishment of Iron & Steel Intermediates) Scheme was notified by Ministry of Commerce on 1st March 1995 and the Department of Revenue had issued Notification No. 10/95-Customs dated the 7th March 1995 to give effect to the said scheme. In view of representations made by the Engineering Products exporters and Iron & Steel producers, the scheme has been revised in consultation with the Ministry of Commerce and certain amendments to Notification No. 10/95-Customs dated the 7th March, 1995 have been made vide Notification No. 157/95-Customs dated the 9th November, 1995 (copy enclosed) for ready reference). The effect of these amendments is that the inputs imported against Value Based Advance Intermediate Licence issued under the scheme will henceforth attract additional duty of Customs. Such additional duty can be claimed as Modvat of duty on any of the inputs used in the manufacture of Iron & Steel Intermediates by the Steel producers have also been withdrawn. The Iron & Steel producers will also now be permitted to import spares required for maintenance of capital goods installed in their factory upto 5% of the value of Advance Intermediate Licence subject to a actual use condition. The Value based Advance Intermediate Licence or the inputs imported against such licence (except spares and consumables) shall be freely transferable after the obligation to supply Iron & Steel Intermediates have been fulfilled and the licence is endorsed by the Licensing Authority to permit transferability. Supply by Iron & Steel producers to the Engineering Products exporters will be on payment of normal excise duty.

2.      The aforesaid changes may please be brought to the note of trade through suitable public Notice and to the field formations through Standing Orders. GPIs of the same may be endorsed to PLACE.

3.      The receipt of this Circular may please be acknowledged.