| Date: |
30-08-1999
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| Notification No: |
Customs Circular No 58/1999
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| Issuing Authority: |
Indian Customs
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| Type: |
Circular
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| File No: |
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| Subject: |
Permission to re-export capital goods imported at concessional/ zero rate of duty under EPCG Scheme
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Permission to re-export capital goods imported at concessional/ zero rate
of duty under EPCG Scheme
Circular No. 58dated 30th August 1999
It has come to
the notice of the Board that capital goods imported & cleared under EPCG
Scheme at concessional/ zero rate of duty were later on permitted re-export by
Customs without recovery of duty on merits. Such re-export was inter-alia
allowed on the ground that the imported machinery was defective/ damaged &
needed replacement.
2. Whereas
there may not be objection to permit import of replacement machinery under EPCG
Scheme with added export obligation etc., the permission granted by Customs for
re-export of the machinery without recovery of customs duty on merits is
incorrect. This is because there is no provision in the EPCG Customs
Notifications, which permits re-export of capital goods, imported under it. In
other words if, for any reason, the EPCG operator wants to re-export the capital
goods imported under EPCG Scheme at concessional/ zero rate of duty, the
importer has to first pay full customs duty on merits on the Capital Goods @ in
force on the date of import. At the time of re-export, he can claim drawback
under Section 74 of Customs Act, 62 read with Notification No. 19/ 65-Cus. dated
6.2.1965.
3. Action
for recovery of customs duty on merits should, therefore, be initiated in all
cases where the re-export of capital goods imported under EPCG Scheme at
concessional/ zero rate of duty has been allowed without payment of duty on
merits and compliance reported to Board.
4. Suitable public
notice for information of the trade & standing orders for the guidance of
staff may be issued.
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