EPCG SCHEME -RIGHT OF BANKER

[Guest]

WE HAVE IMPORTED SOME MACHINERY UNDER EPCG SCHEME, BUT COULD NOT COMPLY WITH EXPORT OBLIGATION. NOW OUR BANKER WOULD LIKE TO SELL THOSE MACHINERY TO RECOVER OUR DUES. WE ALSO WANT TO COME OUT OF THE LIABILITIES. WHETHER THE PURCHASER OF MACHINERY IS LIABLE TO PAY THE CUSTOM DUTY? PLEASE REPLY. (BANK IS SELLING IT UNDER SARFEASI ACT.)

[YAGAY andSUN]

Dear Satish,

I have submitted reply to your query.  Further, please check that in this scenario who would have the first charge on the Machine which had been imported under EPCG Scheme. Also discuss this issue with your Central Excise Superintendent, Customs Department, your counsel and with the concerned DGFT.

Best Regards,

Pradeeep Khatri

 

[r.rajkumar kumar]

yes have to pay the customs plus other duty with interest. .

AI Summary

EPCG obligation: purchaser of imported machinery may be liable to discharge customs and ancillary duties with interest. Import under the EPCG Scheme creates an export obligation; failure to meet it leaves customs and ancillary duty liabilities on the imported machinery. A respondent states that a purchaser of machinery sold by the bank under the SARFAESI Act will have to pay customs and other duties with interest. Parties should determine who has the first charge on the machinery and consult Central Excise, Customs, DGFT and legal counsel to clarify charge priority and mechanisms to regularise EPCG obligations before or upon sale.