We have imported certain capital goods under the Export Promotion Capital Goods (EPCG) scheme two years back under the 3 per cent EPCG scheme. Due to changes in market conditions, we cannot fulfil the export obligation to the extent of eight times the duty saved. An EOU wants to buy the capital goods. Is there any way to sell the imported capital goods without paying duty to Customs? In accordance with Para 2.43 of the Handbook of Procedures, Vol. 1, you may approach the Regional Authority (RA) who issued the EPCG authorisation with a request to allow the transfer of the imported capital goods to the EOU. Since the EOU can anyway import the capital goods without duty payment, there is no reason not to allow transfer of capital goods. The RA may put a condition that the EOU must export eight times the duty saved within the period allowed for fulfilment of export obligation. However, Para 2.43 only says that for transfer of goods imported under Actual User condition, you may approach the Regional Authority. So, it is left to the discretion of the concerned authority. A local party has placed orders for certain goods from a foreign party, who in turn, has asked us to supply our goods to the local party. The local party will pay the foreign party in foreign exchange, and we will be paid in foreign exchange by the foreign party.
Can we get any export incentives? Since your goods are not exported, you will not get export incentives. Moreover, even the local party will have to get RBI approval, as they want to remit foreign exchange but will not be able to produce any bill of entry to the authorised dealer.
Our supplier has, by mistake, paid excise duty at 12 per cent and we had taken Cenvat Credit of the same on the basis of invoice received. Now, our Central Excise authorities say that Credit of excess duty cannot be taken. We have paid the supplier as per the invoice and he has not claimed refund from the department. Are we required to take Credit only as per the statutory duty rate? In the cases of Swaraj Automotive Ltd. [2002 (139) ELT 509 (P&H)] and Ranbaxy Laboratories Ltd. [2006 (203) ELT 213 (P&H)], besides many other judgments, it has been held that even if duty has been paid in excess of the amount held to be finally payable, unless the excess has been refunded, the assessee could claim Cenvat Credit. So, you can take Credit of the actual duty paid as per the invoice and you need not reduce the Credit as per the statutory duty rate. as the case may be.
Our foreign buyer wants Credit of 18 months. Do we need any approval for that? Yes. You have to apply to RBI through your bank for approval.