Spares imported under Zero Duty EPCG Scheme - Installation certificate thereof - Customs - Import - Export - Customs - SEZ

[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. However, some of the spares are installed after lapse of three years for which the Excise authority is asking us to pay appropriate duty on these spares.

In the matter, kindly let us know whether all duty involved therein 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%)] is required to bepaid for non compliance of the condition or only portion of CVD + SAD to be paid. Is there any case law, notification or circular for recovery of duty?

Your valuable advice for above query immensely help us to settle the matter.

[Vishal Kulkarni]

Dear Mr. Wakde,

You are required to pay entire Customs duty ( BCD+CVD+CVD Cesses + BCD Cesses+ SAD) deferred while importing spares duty free along with interest towards the said non compliance. However, you are eligible to avail CENVAT Credit on CVD,CVD Cesses and SAD which will reduce your financial impact considerably.

Also, you can explore an option to approach DGFT, redressal committee in Delhi to condonation of delay in submission of installation certificate as per provision of FTP. Based on said condonation, you may argue with Excise authorities to delay the condonation as substantial provisions of FTP and notification are complied with.

Regards, Vishal Kulkarni

[YAGAY and SUN]

Please seek condonation of delay from EPCG Committee in this regard.

[vinay wakde]

Thanks for your valuable advice in the matter,

With best regards,

VINAY

AI Summary

EPCG installation certificate non compliance may necessitate payment of full customs duties with interest, subject to condonation.
Delayed filing of the EPCG installation certificate can compel payment of the full deferred customs duties (BCD, CVD, related cesses and SAD) with interest for non compliance, although CENVAT credit on CVD, CVD cesses and SAD may be availed; relief may be sought by applying for condonation of delay to the DGFT/EPCG Committee under FTP provisions.