Sale of machinery imported under EPCG-Duty applicability

[Narendra Soni]

Dear Expert

We imported machinery under EPCG authorisation.

Export obligation had already fulfilled and EODC also granted by DGFT.

Bond had also cancelled from Customs.

Now we want to sell it. Can excise duty is applicable on it ??

[Himansu Sekhar]

After certain period you can sell it. But this condition will not be applicable if cleared to a group company. Perhaps the period is three years.

[Sanjay Kumar]

Since export obligation is completed you can sell it with all applicable duties.

[MUKUND THAKKAR]

yes what ever duty elements you enjoying during time of import you need to pay as per capital goods clearance as such.

Rule 3 (5) When the inputs or capital goods, on which CENVAT Credit has been taken, are removed as such, the manufacturer or the service provider is required to pay an amount equal to the credit availed in respect of such inputs or capital goods.

in your case you are not taken credit but forgone the same by way of EPCG authorisation.

[Narendra Soni]

Dear Sir,

The capital goods are not removing as such.

These are removing after use.

Now please suggest your view of duty impact on sale of such machinery imported without payment of duty in EPCG.

AI Summary

Duty applicability on EPCG-imported machinery: sale after fulfilment may attract excise duty or recovery under capital goods rules.
Sale of machinery imported under EPCG after export obligation fulfilment and EODC grant may be permitted but is likely to attract duty or recovery under the capital goods clearance mechanism; transfers to group companies may be treated differently.