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

Selling Machinery Post-EPCG: Pay Duties Equal to Import Benefits if No CENVAT Credit Taken, Typically After Three Years A user inquired about the applicability of excise duty on selling machinery imported under an EPCG authorization after fulfilling export obligations and receiving an EODC. An expert clarified that the machinery can be sold after a certain period, typically three years, unless sold to a group company. Another expert noted that all applicable duties must be paid upon sale. It was also explained that if CENVAT credit was not taken but forgone through EPCG, duties equivalent to the benefits enjoyed during import must be paid. The user emphasized that the machinery is being sold after use, seeking further clarification on duty impact.