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Consequences in case of default in EPCG Scheme ??

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)

17 December 2010

Dear Members !

What are the consequences in case the export could not b made by the person who takes the benefit of EPCG Scheme?

Need detailed information..

thanks

adarsh @ agrimatrix.in

shayvidz @ gmail.com

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13 Replies

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 17 December 2010

HI,

AS PER CURRENT FOREIGN TRADE POLICY 2010-2011, EPCG LICENCE CAN BE ISSUED BY THE OFFICE OF DGFT, IN TERMS OF PARA 5.1 AND 5.2 OF THE FOREIGN TRADE POLICY ISSUED WEF 23.08.2010 , BY THE MINISTRY OF COMMERCE OF INDIA,

AS PER HANDBOOK OF PROCEDURE PARA 5.17 OF 2010-2011

IN CASE OF FAILURE TO EXPORT OBLIGATION OR ANY OTHER CONDITION OF AUTHORIZATION , AUTHORIZATION HOLDER SHALL BE LIABLE FOR ACTION UNDER FOREIGN TRADE (D&R) ACT, 1992, ORDERS AND RULES MADE THEREUNDER , PROVISION ON FOREIGN TRADE POLICY AND CUSTOM ACT, 1962.

FOR MORE INFORMATION CAN BE SEEN PARA 5.5OF FTP. AND PARA 5.7 TO 5.9 OF HANDBOOK OF PROCEDURE 2010-11.

FOR MORE INFO GO TO:-

https://dgftcom.nic.in/

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CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 17 December 2010

Originally posted by : RAMESH KUMAR VERMA
	HI, AS PER CURRENT FOREIGN TRADE POLICY 2010-2011, EPCG LICENCE CAN BE ISSUED BY THE OFFICE OF DGFT, IN TERMS OF PARA 5.1 AND 5.2 OF THE FOREIGN TRADE POLICY ISSUED WEF 23.08.2010 , BY THE MINISTRY OF COMMERCE OF INDIA, AS PER HANDBOOK OF PROCEDURE PARA 5.17 OF 2010-2011 IN CASE OF FAILURE TO EXPORT OBLIGATION OR ANY OTHER CONDITION OF AUTHORIZATION , AUTHORIZATION HOLDER SHALL BE LIABLE FOR ACTION UNDER FOREIGN TRADE (D&R) ACT, 1992, ORDERS AND RULES MADE THEREUNDER , PROVISION ON FOREIGN TRADE POLICY AND CUSTOM ACT, 1962. FOR MORE INFORMATION CAN BE SEEN PARA 5.5OF FTP. AND PARA 5.7 TO 5.9 OF HANDBOOK OF PROCEDURE 2010-11. FOR MORE INFO GO TO:- https://dgftcom.nic.in/

Thanks alot for ur quick reply Mr. Ramesh..

But I want to know that on practical front what are the Penal Actions (as mentioned in PARA 5.17) that can be taken by the department ?

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 18 December 2010

BOND/ BANK GUARANTEE WHICH IS UNDER CUSTODY OF ( CUSTOM AN BANK ) WILL BE REVOKE BY CUSTOM AND WE HIGHLIGHT ED THE DEL LIST OF THE DGFT AND NONE DGFT CAN ISSUE US EPCG LICENCE.

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 18 December 2010

so you mean to say that executed bond will be realised by department & therafter, no further EPCG licence can be issued to that importer in future..

no other liability arises? like interest, penalty etc.?

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 20 December 2010

dear sir,

please refer to para 5.14 of foreign trade policy ,2002-07

"In case, EPCG licence holder fails to fulfil prescribed export obligation, he shall pay duties of Customs plus 15% interest per annum to the Customs autohrty"

LINK IS :- https://dgftcom.nic.in/exim/2000/procedures/bchap-5.htm

and also para 5.5.2 of the ftp 2010-11, verify its.

Regards,

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RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 20 December 2010

PLEASE NOTED ALSO , NOT FULFILLMENT OF EXPORT OBLIGATION, DGFT ISSUE NOTICE U/S 14 FOR ACTION UNDER SECTION 11(2) OF FTDR , ACT, 1992 WILL APPLY.

THEREAFTER ISSUED THE SHOW CAUSE NOTICE TO THE PARTY AND IF WE WILL NOT SUBMIT ANY DOCX. REGARDING THE CAPTION SUBJECT WITH IN 15 DAYS. (U/S 13 OF FTDR, 1992)

IT FTDR, ACT, 1992, IS SAID THAT THE BENEFIT ACCURING UNDER EXIM POLICY SHOULD NOT BE STOPED. U/S 11 (2) FTDR ACT, 1992

REGARDS,

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RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 20 December 2010

PLEASE ALSO REFER TO PATH :-

/experts/consequences-in-case-of-default-in-epcg-scheme--543050.asp

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 20 December 2010

PLEASE ALSO READ THE :-

CUS NTF NO. 49/2000 DATE 27/04/2000

CUSTOM NOTIFICATION NO.49/2000 dated 27-04-2000. The importer under EPCG scheme is required to execute the Bank Guarantee and Legal Undertaking (15%)

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 23 December 2010

Originally posted by : RAMESH KUMAR VERMA
	dear sir, please refer to para 5.14 of foreign trade policy ,2002-07 "In case, EPCG licence holder fails to fulfil prescribed export obligation, he shall pay duties of Customs plus 15% interest per annum to the Customs autohrty" LINK IS :- https://dgftcom.nic.in/exim/2000/procedures/bchap-5.htm and also para 5.5.2 of the ftp 2010-11, verify its. Regards,

Many Many Thanks for your support Mr. Verma... !

Para 5.5.2 of FTP 2010-11 is about Indigenous Sourcing of Capital goods

Para 5.8.3 of FTP 2010-11 says

Where export obligation of any particular block of years is not fulfilled in terms of the above proportions, except in such cases where the export obligation prescribed for a particular block of years is extended by the Regional Authority subject to payment of composition fee of 2% on duty saved amount equal to unfulfilled portion of EO, such Authorization holder shall, within 3 months from the expiry of the block of years, pay duties of customs (alongwith applicable interest as notified by DOR) of an amount equal to that proportion of the duty leviable on the goods which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation.

Where can I get the notificaton by DOR regrding Interest amount ?

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 23 December 2010

Originally posted by : RAMESH KUMAR VERMA
	PLEASE NOTED ALSO , NOT FULFILLMENT OF EXPORT OBLIGATION, DGFT ISSUE NOTICE U/S 14 FOR ACTION UNDER SECTION 11(2) OF FTDR , ACT, 1992 WILL APPLY. THEREAFTER ISSUED THE SHOW CAUSE NOTICE TO THE PARTY AND IF WE WILL NOT SUBMIT ANY DOCX. REGARDING THE CAPTION SUBJECT WITH IN 15 DAYS. (U/S 13 OF FTDR, 1992) IT FTDR, ACT, 1992, IS SAID THAT THE BENEFIT ACCURING UNDER EXIM POLICY SHOULD NOT BE STOPED. U/S 11 (2) FTDR ACT, 1992 REGARDS,

Dear Mr. Ramesh.. !

I am a beginner in the field of customs & export procedure.

So, can u please summarise pointwise all the consequences of every acts, rules, etc applicable in case of default ?

Your efforts is really appreciable.. thanks alot..

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RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 23 December 2010

SIR,

PLEASE FIND ENCLOSED HEREWITH THE ATTACHED PDF FILE OF FOREIGN TRADE POLICY 2010-2011 , U R REQUEST TO PLEASE HAVE YOU ANY QUERY IN FUTURE REMAIN, I AM AVAILABLE FOR CA CLUB INDIA.

THX FOR APPRECIATE.

Attached File : 10 foreign trade policy 2010 2011.pdf downloaded: 200 times

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 24 December 2010

Originally posted by : RAMESH KUMAR VERMA
	SIR, PLEASE FIND ENCLOSED HEREWITH THE ATTACHED PDF FILE OF FOREIGN TRADE POLICY 2010-2011 , U R REQUEST TO PLEASE HAVE YOU ANY QUERY IN FUTURE REMAIN, I AM AVAILABLE FOR CA CLUB INDIA. THX FOR APPRECIATE.

Dear Mr. Verma... !

I have already the Complete FTP. I need all the consequences in relevant acts, rules, regulations etc. in summarised form & not in bookies language. I need the info on practical front.