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Acceptance of installation certificate under EPCG Scheme by the RAs, wherein installation certificate is submitted beyond 18 months, without penalty

Circular No.ES/161/2018-19                                                                                                             August 16, 2018

LAST OPPORTUNITY  & IMMEDIATE ATTENTION

To: Members of the Council

Sub.: Acceptance of installation certificate under EPCG Scheme by the RAs, wherein installation certificate is submitted beyond 18 months, without penalty

Dear Member,

We are glad to inform you that the O/o DGFT has issued Public Notice No.30/2015-2020 dated 14th  August, 2018 granting one time relaxation in procedure in respect of acceptance of installation certificate under the EPCG Scheme.

As you are aware, as per the EPCG Scheme, the authorization holders are required to submit the installation certificate showing installation of the capital goods to the Regional Authority (RA) within the prescribed time period.

It has been observed that submission of installation certificate to the RAs was not within the Prescribed limit. The Office of DGFT has pointed out various reasons by Members of Trade for non submission of the Certificates which include delay in installation of the machinery, delay in issuance of installation certificate etc.

In this regard the EPCG Committee was receiving requests for condonation of time period of submission of installation certificate to the Regional authorities. Some of such requests for condonation were considered by the EPCG Committee on payment of composition fee of Rs.5,000/-

As a facilitative measure, the O/o DGFT had earlier issued Public Notice No.37/2015-20 dated 25th October, 2017 by permitting one time relaxation for condonation of time period upto 31st March, 2018 condoning the delay in submission of installation certificate on payment of penalty of Rs.5000/- per authorization (provided the installation has happened within the period of 18 months). Further, the benefit of said Public Notice was extended upto 30th September, 2018 vide Public Notice No. 0l/2015-20 dated 26th April, 2018.

The O/o DGFT has now been receiving representations from members of Trade for accepting the submission of installation certificate without insisting on penalty, if the installation has happened within the specified time prescribed. The contention or argument in the representations is that as per understanding of the members of Trade regarding para 5.3.1 of HBP (2009-14), there was no time limit for submission of the installation certificate and the time limit was only for the installation of machinery. It was also pointed out that in the past, some RAs have been accepting the installation certificate even at the time of redemption. Therefore, members of Trade have requested O/o DGFT not to impose any penalty for these authorizations.

DGFT has now considered the issue since the submission of installation certificate is an important aspect of monitoring of the EPCG Scheme which cannot be postponed till the completion of the EO period.

Considering the representations of Members of Trade and to facilitate the ease of doing business for the purpose, O/o DGFT has decided to allow the following facility -

  • To permit the RAs to accept the installation certificate without insisting for penalty in respect of authorization issued upto 31st March, 2015 as long as the installation has happened within I8 months from the date of import, provided the EPCG authorization is not under any investigation/ adjudicated by RA/ customs authority/ any other investigative agency.
  • This relaxation will be available upto 31st March, 2019.
  • No refund of the penalty already paid under the Public Notice No.37/2015-20 dated 25th October, 2017.
  • The other terms and conditions in the Public Notice No.37/2015-20 dated 25th October, 2017 and Public Notice No.01/2015-20 dated 26th April, 2018 consistent with the Public Notice No. 30/2015-20 dated 14th August, 2018 will continue to be applicable.

Members may kindly make a note of the above and avail the opportunity granted by DGFT on one time relaxation in procedure in respect of acceptance of installation certificate under the EPCG Scheme.  .

Thanking you,

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR

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