'Defective imported capital goods may be re-exported'

Can we export machinery which we import through an EPCG Licence? If yes, what are the procedures and documentation as well as the time span for the same?

As per Para 5.16 of Handbook of Procedures, Vol-1 (HB-1), “capital goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported back to foreign supplier within three years from the date of payment of duty on importation thereof, with permission of RA /Customs Authority. Consequently, EO would be re-fixed.”

As per condition no. 3 of the exemption notifications 103/2009-cus. and 102/2009-cus. both dated 11.09.2009, “where the goods specified in the said Table are found defective or unfit for use, the said goods may be re-exported back to the foreign supplier within three years from the date of payment of duty on the importation thereof: provided that at the time of re-export, the goods are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to be the same as the goods which were imported.”

So, you have to take permission from the Regional Authority who issued the EPCG authorisation. At the time of re-export, you must put all evidences before the customs to establish the identity of the goods and request customs to re-credit the EPCG authorisation. Based on the re-credit, you may ask the licensing authority to revise the export obligation. You must re-export within three years of import.

We imported components for making our export goods and sought clearance under Advance Authorisation. We discovered that the Customs could not allow clearance because, while transmitting the Advanced Authorisation data, individual value restrictions were transmitted and the individual value of the imported component was higher than what was mentioned in the Authorisation. Due to urgency, we decided to pay duty and clear the goods. The component will be used in the manufacture of export goods but we may not need the component of the same specification for another job. There are other components to be imported under the Authorisation. Is there any way to get refund of the duty paid on the component already imported?

Many Advance Authorisation holders have faced similar difficulties. The way to overcome the problem is to approach the Commissioner of Customs and request for filing a manual bill of entry. But, once the duty is paid, it is better to ask for drawback of the duty paid by way of brand rate application, by filing a DEEC cum Drawback shipping bill at the time of exports. Refund would be difficult. For the remaining imports, you may approach the authority who issued the Authorisation to communicate the correct position to the Customs. As per the Foreign Trade Policy, individual value restrictions need not be mentioned.

Can we clear pipes of water treatment plants as replacement under Sr. No. 7 of notification No. 6/2006-C.E., dated 1-3-2006. CBEC Circular 354/34/2008-CE dated 14.03.2008 allows you to do so.