Spares imported under Zero Duty EPCG Scheme - Installation certificate thereof

[vinay wakde]

We have imported spares under zero duty Export Promotion of Capital Goods (EPCG) scheme. As per the Customs Notification No. 64/2008 – Customs dated 09.05.2008, the installation certificate for spares is required to be produced to Customs authorities within a period of three years from the date of importation. We have installed some spares after lapse of three years from the date of importation. The Excise authority is asking us to pay appropriate duty on these spares. Kindly advice whether we have to pay duty or any other alternative to save the duty?

Regards,

VINAY

[Mahir S]

Installation certificate for spares needs to obtain within three years from the date of Importation. By any means if the installation is taking time, this needs to intimate to the Excise Authority with reasons and after completion one has to take the Installation Certificate.

[YAGAY andSUN]

Dear Vinay,

Please check para 5.04 (b) [Certificate of Installation of Capital Goods] of the HBP. Vol-1 2015-2020 in this connection.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[vinay wakde]

The spares were received by us under zero duty EPCG scheme and the same are not installed within three years period from the date of importation. In the matter, kindly let us know whether all duty involved at relevant period, such as Customs duty (7.5%) + CVD (10%)+ Education cess (2%)+ SHE Cess (1%) + Edu Cess on Custom duty (2%) + SHE Cess on Custom duty (1%) + Special Additional duty (4%) shall be recovered from us by the Excise authority for non complying the condition of installation or only portion of CVD + SAD shall be recovered from us.

Is there any legal case law, notification or circular for recovery of duty?

Your valuable advice immensely help us to settle the matter.

Regards,

VINAY

[CSSANJAY MALHOTRA]

Dear Mr. Vinay,

Excise Authority has not right to demand Import Duties as the same falls under either the jurisdiction of DGFT or Customs.

DGFT is the final authority to issue demand notice for any non compliance to EPCG Licences.

Please make application to the EPCG Committee at DGFT Delhi for condonation of delay in consumption of spares beyond 3 years. The same will be accepted there. Please do enclose the Proof of Export Obligation completion against the EPCG Licence issues, if the same has been done, it will be an added advantage for you to get the delay condoned.

Any issues or concerns, please revert.

AI Summary

EPCG installation certificate requirement: late installation may be condoned by DGFT, excise cannot demand import duties. Spares imported under the Zero Duty EPCG scheme must have an installation certificate within three years of import; if installation occurs later, the importer should intimate delay, obtain the installation certificate on completion and apply to the EPCG committee for condonation, submitting proof of export obligation discharge; excise authorities do not have authority to demand import duties for EPCG non compliance.