Q. We are pharmaceutical manufacturers. We had imported raw material under the advance authorisation scheme to export the final product to USA. Due to business/trade circumstances the order was cancelled and the raw material is in our factory. How can we dispose it of? There are local buyers who intend to purchase it from us, as it is still saleable and has sufficient expiry date. Please advise us, referring to the relevant section/circular.
Since the export obligation is not fulfilled, you have to regularise in accordance with Para 4.49 of the HBP, which, besides other conditions, involves payment of duty on the raw materials with interest. Thereafter, you can transfer the raw material, other than drugs imported from unregistered sources, to local buyers. Do take special note of sub-para (g) of Para 4.49 that requires you to destroy or re-export drugs imported from unregistered sources with pre-import condition.
Q. This refers to the query regarding DGFT PN 55 dated January 3, 2020 (Chatroom, February 25, 2020), allowing extension in the EO period. The final EO period has been extended, and shipments have been made during this period — i.e., from expiry date of EPCG authorisation to date when request for extension was made. Will shipments made during this period go towards discharge of EO, or is that a matter for the Policy Relaxation Committee (PRC)?
In my opinion, the shipments made within the original or extended EO period can be counted towards discharge of EO, regardless of when you made the application for EO extension.
Q. We obtained advance authorisation for items covered under Appendix 4J of HBP. We did not fulfil the export obligation within the initial EO period of six months, or even within the extended EO period of nine months. The import item was removed from Appendix 4J, 18 months after issuance of advance authorisation. Thereafter, we fulfilled the EO within 24 months. Given this, is there any remedy for regularising and redeeming the authorisation? If the answer is yes, what is the quantum of composition fee for extension?
I do not think removal of the item from Appendix 4J after the expiry of the initial and extended EO periods of your advance authorisation will help you. However, you may try your luck with the PRC.
Q. We want to import some machinery from a foreign party on a temporary lease and, after using it for some time, send it back to the same party. What are the duty implications?
You can import the machinery under the exemption notification 72/2017-Cus dated August 10, 2017. Alternatively, you can import it on payment of full duty, and after use, re-export it under claim of duty drawback under Section 74 of the Customs Act, 1962, read with notification 19/1965-Cus dated February 6, 1965.