Bh FT(D&R) ACT AND RULES 43.1 Scheme of FT(D&R) Act As per preamble of the FT(D&R) Act, the Foreign Trade (Development and Regulation) Act[FT(D&R) Act]is designed to develop and regulate foreign trade by facilitating imports into India and augmenting exports from India; and for matters connected therewith, Foreign Trade (Regulation), Rules 1993 have been framed under the FT(D&R)[Link] rules have been amended [Link]. 17-4-2015. The major changes are as follows. (@) Import and export will cover not only goods but also services and technology (b) Wh term ‘license’ is used the words ‘certificate, scrip or any instrument bestowing fi or fiscal benefits’ has been added (c) Penal provisions and provisi and seizure have been made stringent. er the ancial ions relating to search Foreign Trade Policy is announced fromtime to time under the Act. The Act is designed to authorise Central Government to formulate Export Import policy and change the policy as per changing situations. Authority is granted by Act to Government to imple- ment the policy. Provisions of FTDR Act are in addition to other laws - Section 18A of FTDR Act (inserted wef. 27-8-2010), clarifies that provisions of FTDR Act are in addition to, and not in derogation of provisions of any other law in force. 43.1-1 Power to make provisions relating to import and exports Central Government has been authorised to m: regulation of foreign trade by facilitating impor of FTDR Act] Central Government can prohibit, restrict and regulate exports and imports of g00¢s and services, in all or specified cases and subject to exemptions. Central Government has to issue order by publishing the same in Official Gaverte Restriction of import o° export of services or technology under FTDR Act applies only if service or technology provider is availing benefit under Foreign Trade Policy or dealing in specified servie® or technologies [section 3(2) of FTDR Act] All goods to which such order applies are deemed t which has been prohibited under section 11 of Cu, of that Act (regarding punishment etc.) are applica ‘ake provisions for development and rts and increasing exports [section 3(1) f ‘0 be goods the import or export a ‘stoms Act, 1962 and all prov ble [section 3(3) of FT(D&R) A“ a 2 Regulation may include prohibition also-UOIv. Asian Food Industries(2006) 13SCC5” BSLa sees sees sees Sexe gece eee EEE 585 SCHEME OF FT(D&R) ACT Para 43.1 In Parisons Agrotech v. UOI(2015) 9 SCC 657 = 132 SCL 190 = 61 [Link] 285 = 323 ELT 3 (SC), it has been held that Central Government has wide powers under section 5 read with section 3 of FT(DR) Act in prohibiting, restricting or otherwise regulating import or export of goods. Import and exports are free unless restricted - No permit or license is necessary for import or export of goods and there is no prohibition on imports or export except as specified in FTDR Act or Rules or under any other law, rule, regulation or notification [section 3(4) of FT(D&R) Act inserted w.e.f. 27-8-2010]. Import and Export - These terms are defined in section 2(¢) of FTDR Act. The definition covers import and export of both goods and services or technology. Exporter means a person who exports or intends to export and holds an IEC number, unless otherwise specially exempted - para 9.21 of FTP 2015-2020. Service and service supplier - The term ‘service’ is defined in section 2(j) of FTDR Act. The term ‘service supplier’ is defined in section 2(k) of FTDR Act. Specified goods or services or technology - This term is defined in section 2()) of FTDR Act. The term ‘technology’ is defined in section 2(m) of FTDR Act. The definition is mainly to cover following - (a) Goods, services or technology relevant to India as a Nuclear Weapon State, or national security of India (b) Goods, services or technology relevant to India for furtherance of it policy or international obligation under interna- tional obligation relating to weapons of mass destruction. Foreign Trade Policy - Section 5 of FT(D&R) Act authorises Central Government to formulate and announce Foreign Trade Policy (earlier termed as Export and Import Policy upto 27-8-2010) and also amend the same from time to time, by notification in Official Gazette. In respect of SEZ, the Foreign Trade Policy shall apply subject to exceptions, modifi- cations or adaptations as may be notified - proviso to section 5 of FTDR Act inserted wef, 27-8-2010. FTP means Foreign Trade Policy which specifies policy for exports and imports under section 5 of FT(D&R) Act - para 9.24 of FTP 2015-2020. Import/Export Code Number - Every importer and exporter must obtain a ‘Importer Exporter Code Number’ (IEC) (provisions discussed in another chapter] Import/Export Licence (Authorisation) - Application for licence for import or export has to be made to DGFT. Application fees are payable as prescribed. [section 8(1) of FI(D&R) Act]. ‘Licence’ includes licence, certificate, scrip or any instrument bestowing financial or fiscal benefits - section 9(1) of FTDR Act. 43.1-2 Meaning of import and export “Import” and “Export” means — (in relation to goods, bringing into, or taking out of, India any goods by land, sea or air (1) in relation to services or technology, — (i) supplying, services or technology— (A) from the territory of another country into the territory of India; (B) in the territory of another country to an Indian service consumer; (© by a service supplier of another country, through commercial presence in India; (D) by a service supplier of another country, through presence of their natural persons in India; (ii) supplying, services or technology— (A) from India into the territory of any other country; (B) in India toi. 585 the service consumer of any other country; (©) by a service supplier of India, thr, commercial presence in the territory of any other country; (D) by a service . f Suppli of India, through presence of Indian natural persons in the territory of any gy," country : Para 43.1 FT(D&R) ACT AND RULES Provided that ‘import’ and “export” in relation to the goods, services and technoloy, regarding Special Economic Zone or between two Special Economic Zones shal 5, governed in accordance with the provisions contained in the Special Economic Zones Act, 2005 (28 of 2005) [section 2(e) of FTDR Act]. 7 43.1-3 Meaning of service, service supplier and technology “Services” means service of any description which is made available to potential user, and includes all the tradable services specified under the General Agreement on Trade in Services entered into amongst India and other countries who are party to the said Agreement, provided that, this definition shall not apply to the domain of taxation section 2(j) of FTDR Act. “Service supplier” means any person who supplies a service and who intends to take benefit under the foreign trade policy - section 2(k) of FTDR Act. “Technology” means any information (including information embodied in software) other than information in the public domain, that is capable of being used in— (i) the development, production or use of any goods or software (ii) the development of, or the carrying out of, an industrial or commercial activity or the provision of service of any kind. Explanation—For the purpose of this clause— (a) when technology is described wholly or partly by reference to the uses to which it (or the goods to which it relates) may be put, it shall include services which are provided or used, or which are capable of being used in the development, production or use of such technology or goods (b) ‘publi: domain shall have the same meaning as assigned to it in clause (i) of section 4 of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawiul Activities) Act, 2005 (21 of 2005) - section 2(m) of FTDR Act. 43.1-4 Specified goods or services or technology “Specified goods or services or technology” means the goods or services or technolos’ the export, import, transfer, re-transfer, transit and transshipment of whichis prohibited orrestricted because of imposition of conditions on the grounds of their being pertine™ or relevant to India asa Nuclear Weapon State, or to the national security of Inda.0") the furtherance of its foreign policy or its international obligations under any bilate"™» multilateral or international treaty, covenant, convention or arrangement relating ‘ weapons of mass destruction or their means of delivery to which India is a pat’ be its agreement with a foreign country under the foreign trade policy formulate am notified under section 5 of the Act - section 2()) of FTDR Act. Section 14A(1) of FTDR Act, states that in regard to of export of specified goods se"V"" and technology, provisions of Weapons of Mass destruction and their Delivery SYS" (Prohibition of Unlawful Activities) Act, 2005 will apply. ool Section 14Cof FTDR Act makes provisions for‘catch-all controls’ in respect of suché' a in connec Section 14B of FTDR Act empowers Central Government to make rules in Cony with impose controls in relation to transfer of specified goods, services and tee odome eee eet eee ee eee 587 DIRECTOR GENERAL OF FOREIGN TRADE Para 43.2 Section 14D of FTDR Act empowers DGFT to suspend or cancel any license to import or export specified goods, services and technology, after giving opportunity of personal hearing. section 14E of FTDR Act make provisions for imposition of penalty and punishments. 43.1-5 Imposing quantitative restrictions to protect domestic industry Central Government can impose quantitative restrictions to protect domestic industry in case of possible serious injury to them - section 9A of FTDR Act [Powers are there under Customs Act, to impose protective duty, but no powers under Customs Act to impose quantitative restrictions]. Safeguard Measures (Quantitative Restrictions) Rules, 2012 make provisions for making investigations under section 9A, imposing safeguard quantitative restrictions, duration of such restrictions, review etc. List of Developing Countries has been notified vide Notification No. GSR 59(E), dated 31-1-2013. The list is same as notified by Department of Revenue. 43.1-6 Exemptions from restrictions under FT(D&R) Act Imports by Central or State Government, statutory corporations, transshipments, bag- gage imported as per baggage rules, goods in transit, goods imported by UN or Ford Foundation, import for exhibition etc. are exempted from import restrictions contained inFT(D&R) Act. Similarly, exports by Central/State Governments, goodsas ships stores, goods in transit etc. are exempted from restrictions vide Foreign Trade (Regulation) Rules, 1993 (Exemption Order) dated 30-12-1993 43.2 Director General of Foreign Trade (DGFT) Central Government can appoint Director General of Foreign Trade (DGFT) and other officers like Additional Director, Joint Director, Deputy Director, Assistant Director, Ex- port Commissioner etc. The DGFT advise Central Government in formulating Foreign Trade Policy and he will be responsible for carrying out that policy. He can exercise specified powers under the Act [section 6 of FT(D&R) Act]. Powers/functions of DGFT - Powers and functions of DGFT are : (a) issuing Importer/ Exporter Code Number, and suspending or cancelling the same for contravention of Customs Act, Central Excise Act, FERA, FT(D&R) etc. (b) issuing, suspension or cancel- lation of licence for import or export (c) Search premises and inspection and seizure of goods, documents, conveyances etc. (d) Impose penalty for contravention of Act, rules or Foreign Trade Policy. Limits of powers to various grades of officers like Additional Director, Dy. Director etc. have been prescribed by notified orders under the Act. Search and Seizure - Person authorised by Central Government can enter any premises, search and seize goods, documents, things and conveyances. [section 10 of FT(D&R) Act and Rule 15 Foreign Trade (Regulation) Rules, 1993]. Goods and material seized shall be returned if no notice is issued within six months. This period can be extended by Director General by further six months [Rule 15(3) Foreign Trade (Regulation) Rules, 1993] DGFT, Additional DGFT, Joint DGFT, Deputy/Assistant DGFT have been authorised U/s 10 of the FT(D&R) Act to enter into premises, search and seizure of documents, things and conveyances vide Notification No. SO 1057(B), dated 31-12-1993,ON Para 43.3 FT(D&R) ACT AND RULES 5g 43.3 Penalty and Adjudication under FT(D&R) Export or Import in violation of provisions of the Act, Rules or Policy is a Penalty upto five times the value of goods can be imposed, with minimum % 10,000. [section 11(2) of FT(D&R) Act). Validity of the penalty provisions has been upheld in Sarafi Fine Clothing y, VOI(29 47 60 GST 28 = 78 [Link] 105 (Guj HC DB). ) Making signing or using any false or forged declaration, statement or document to DGrr or any officer authorised by him is also offense. Penalty upto five times the value goods can be imposed, with minimum penalty of ® 10,000. [section 11(3)of FT(D&R) Act D Offence Penalty oy The contravening goods and conveyance carrying the goods are liable to Confiscation [section 11(8) of FT(D&R) Act and Rule 17(1) of Foreign Trade (Regulation) Rules, 1993) The goods and conveyances confiscated can be released by paying redemption charges equal to market value of such goods or conveyance [section 11(9) of FT(D&R) Act and rule 17(2) of Foreign Trade (Regulation) Rules, 1993]. Confiscation of conveyance - Conveyance will not be confiscated if its owner proves that the conveyance was used without his knowledge or he took reasonable Precautions against its misuse [Rule 18(1) of Foreign Trade (Regulation) Rules, 1993]. Confiscated conveyance can be redeemed on payment of redemption charges equivalent to market value of such conveyance [Rule 18(2) of Foreign Trade (Regulation) Rules, 1993] Recovery of penalty - Penalty imposed can be recovered by any of modes specified in section 11(5) of FT(D&R) Act. Further, IEC code can be suspended till penalty is paid [section 11(7) of FT(D&R) Act]. Settlement of cases (compounding) - Section 14(4) of FT(D&R) Act, makes provision for settlement of cases by adjudicating authority, if the person to him notice of con- travention has been issued, admits the contravention. This is compounding of offenses. Adjudicating authority - Penalty and confiscation can be ordered by ‘Adjudicating Au- thority’. Limits of powers of Joint Director, Assistant Director etc. can be specified by Central Government by issuing a notification [section 13 of FT(D&R) Act]. Punishment of fine and imprisonment can be imposed in addition to penalty and confiscation [sec- tion 12 of FT(D&R) Act]. Notice is required to be given to the person in writing. Opportunity of personal hearing should be given [section 14 of FT(D&R) Act]. Powers of other officers to impose penalty and confiscate goods are as follows, based on value of goods or services or technology * Additional DGFT - without limit * Joint DGFT - value upto Rs 25 crores * Deputy DGFT - value upto Rs 10 crores * Assistant DGFT 5 crores * Development Commissioner, SEZ - without limit in case of FOU and units in SEZ ° Designated Officer, Department of Electronics and IT - without limit a respect of units in STPs and EHTPs) - MC&I(DC) Notification No. 53/2015-20 date 31-12-2020 [earlier No. 20 (RE-2013)/2009-14 dated 13-6-2013]. Appeals against order - Appeal against the order of DGFT for refusing or suspending or cancelling Code Number or Licence or imposing penalty can be filed within 45 day with prescribed authority. Appeal can be filed only on payment of penalty impr unless Appellate Authority dispense with such pre-deposit [section 15 of FT(D&R) Ac i Appeal against order of Assistant/Deputy/Joint DGFT lies with Additional DGFT. Apr against order of Additional DGFT, Development Commissioner of SEZ and Design™ «a- 589 PENALTY AND ADJUDICATION UNDER FT(D&R) Para 43.3 officer, Department of Electronics and IT lies with DGFT aided by one Additional DGFT - Notification No. 101 (RE-2013)/2009-14 dated 5-12-2014. 7 Jurisdiction of Appellate Authorities at zonal/regional offices have been specified vide DGFT O&M Instruction No. 1/2022 dated 4-2-2022. Appeal can be filed by department also against decision by designated adjudicating/ appellate authority - para 9.05 of FTP 2015-2020. Appeal under section 15(1) of FT(D&R) Act can be filed against any order. Hence, writ js not required to be filed - Motherson Sumi Electric Wires v. UOI(2015) 319 ELT 441 (Del HC). In contrary view, in Alstom India v. UOI(2015) 319 ELT 434 (Del HC), it was held that since appeal can be filed only against order of cost and penalty, in other cases, writ petition is maintainable. Powers of adjudicating and appellate authority - Adjudicating and Appellate Authority have all powers of Civil Court for (a) summoning and enforcing attendance of witnesses (J) requiring production of documents or calling for public record from any court or office (c) receiving evidence by affidavits (d) Issuing Commission for examination of witnesses and documents [section 17 of FT(D&R) Act}. Review by Central Government - Central Government can call and examine any records and pass orders in respect of any decision or order made by Director General of For- eign Trade (DGFT) or any officer subordinate to him. The show cause notice should be issued within two years and opportunity of personal hearing should be given [section 16 of the Act]. Settlement i.e. compounding - A person can admit the contravention and pay amount for settlement [section 11(4) of FT(D&R) Act] (This is termed as ‘compounding of offense). Person can opt for settlement by admitting contravention in following circumstances : (a) Contravention was without wilful mist ake or without any collusion, fraud or without intention to cause loss of foreign exchange (5) Person importing has not mis-utilised the imported goods, but condition of ‘Actual User’ or ‘Export Obligation’ have not been satisfied. In such cases, Adjudicating Authority can order settlement by determining the amount payable by the person. Settlement Order of Adjudicating Authority is final [rule 16 of Foreign Trade (Regulation) Rules, 1993). Settlement Commission can settle cases for regularisation of export obligation - Settlement commission (constituted under Central Excise Act) can settle cases of regularisation of export obligation default by paying customs duty and interest. Such settlement will also be a settlement under Foreign Trade (Development and Regulation) Act - section 11B of FTDR Act. 43.3-1 Online Adjudication, Appeal, Review proceedings under FT(D&R) Act As per DGFT Trade Notice No. 44/2015-2020 dated 1-3-2021, an online module for Adjudication, Appeal, Review proceedings under FTDRA has been implemented with effect from 27-2-2021. The details are as follows. General procedure for adjudication, appeal and review - Show Cause Notice for violations of provisions of FT(D&R) Act. Notices for Personal hearing (PH) will be issued online to the Noticees to submit their case in the PH or through written submissions which will also be in the online module, PH will be conducted through Video conferencing (VC) or through physical hearings at the time and place indicated in the notice. Exporters shall submit documents online on DGFT website: [Link] > login with valid credentials > Services > Enforcement cum Adjudication proceedings.OO’! Para 43.3 FTYDAR) ACT AND RULES . Regulation) Act, 1992 (FFDR] and Rules thereunder against companies against), proceedings have been instituted in the National Company Law Tribunal (NCL) unde, the Insolvency and Bankruptey Code As per the circular, unless there are specific directions by the National Company ,., ‘Tribunal (NCLT) prohibiting proceedings under the FT(D&R) Act/Rules, the Adjud, eating Authority can proceed under the FT (D&R) Act/Rules. However, the liquid,i,, shall be added as one of the respondent along with the parties.[ hapter PROCEDURES UNDER FOREIGN TRADE POLICY 44.1 e-Governance of foreign trade Trade facility is priority of Government for cutting down transaction cost and time, thereby rendering Indian exports more competitive - para 1.06 of FTP 2015-2020. DGFT delivers most of its services on a transparent and efficient EDI (Electronic Data Interchange) platform using tools like online filing of applications, message exchange with community partners, digital signatures and electronic payment of applications. Application status is available online. Export imported related information including Acts, policy and procedures are available on DGFT portal - [Link] - para 1.04 of HBP 2015-2020. Online filing of applications - Application for IEC/e-IEC code and various authorisations is to be made electronically on 24 x 7 basis. Fees are paid electronically and application is signed electronically. Authorisations and scrips are issued by RA - para 1.16 of FTP 2015-2020. Application shall be digitally signed with Class-II digital signature. Approved digital signature issuing authorities are given in para 1.06 of HBP 2015-2020. Application for exports from EDI and non-ED! ports - Application can be filed from EDI (Electronic Data Interchange) and Non-EDI ports. If application is made from EDI (Electronic Data Interchange) ports, hard copy of application, EDI shipping bills, ee BRC and RCMC is not required - para 1.09 HBP 2015-2020. In EDI shipping bills, manual feeding of shipping bill details is not allowed to applicants in the online software. Hence, RA need not cross verify EDI shipping bill details - para 1.10 HBP 2015-2020. In case of EDI (Electronic Data Interchange) ports, manual feeding of shipping bills is not allowed. Benefits will be granted by RA without cross verification - para of 1.11 HBP 2015-2020. In case of non-EDI ports, after filing application, hard copy shall be submitted to RA with requisite documents. Authorisation/scrip shall be issued on basis of hard copies of documents - para 1.08 HBP 2015-2020. If hard copies were already submitted, these will not be called. 593Para 44.1 PROCEDURES UNDER FOREIGN TRADE POLICY 94 Hard copies of exporter's profile will not be called for, once these are uploadey 1.14 of FTP 2015-2020 and para 1.11 of HBP 2015-2020. Pa ED! (Electronic Data Interchange) procedure for claiming benefits under thirg Party Ports - The process will be initiated by first party who will link shipping bills anq'r/% | Then he authorize third party to claim export benefits - para ~~ of HBP 2015.29," Online communication by DGFT - Processing of applications will be online, No con, nication shall be issued by DGFT in manual mode - para 1.05 HBP 2015-299, °"™u EDI help desk - EDI help desk is available. For assistance, an e-mail may be son,_ dgftedi@[Link] or toll free No. 1 800 111550. Help desk facility is also available at fot al offices - para 1.17 of HBP 2015-2020. se of email for queries is encouraged. Contact email id is given in para 1.18 of Hpp 2015-2020. Online complaint registration and monitoring - Online complaint registration and me, itoring system is available on DGFT website. Email may be sent to dgft@nicin - ian 1.10 of FTP 2015-2020. . Other initiatives for e-governance - Following other ini tives have been made . (a Online ministerial consultation (b) Facility to upload certificates of CA/CMAVCS wd digital signature (c) Electronic data exchange (d) Message exchange with communi, partners like customs, banks and Export Promotion Councils (e) third party AP]. paras 1.17 to 1.22 of FTP 2015-2020. e-Certificate Management System - E-Certificate Management system has been introduced on DGFT website for I-Card, Free Sale and Commerce Certificate, End-User Certificate and Status Holder Certificate. All such certificates will be issue electronically with oR Code and UDIN (Unique Document Identification Number) for electronic verification - Dy DGFT Trade Notice No. 41/2020-21 dated 15-2-2021. Issue of Certificate of Origin (Non-Preferential) digitally - Certificate of Origin (Non-Pref. erential) [CoO(NP)] will be processed through Common Digital Platform (CDP). Fees of Rs. 200 are payable. Scrutiny may be done at later stage. The procedure is mandatory wef. 1-4-2021 - Jt. DGFT Trade Notice No. 42/2020-21 dated 19-2-2021 [fee increased from Rs. 100 to Rs.200w.e£.30-4-2021]- Para 2.108(c)(iv) of HBP amended on 27-5-2021 Electronic platform for making application for preferential as well as non-preferential Certificate of Origin should be submitted through common digital platform (https: [Link]/[Link]). Class III digital certificate is required. One time registration should be made ~ Dy DGFT Trade Notice 48/2020-21 dated 25-3-2021. Application for policy relaxation - Application to policy relaxation committee should be made through online e-PRC system only - Addl DGFT Trade Notice No. 38/2020-2! dated 15-1-2021. 44.1-1 Exporter Importer Profile Exporter importer profile has been created to upload various documents. Once uplest ed, it will not be necessary to submit these documents to RA repeatedly - para 1.140 FTP 2015-2020 and paras 1.11 and 2.15(b) of HBP 2015-2020, The profile is in form ANF-1 given in HBP 2015-2020. Changes should be informe! immediately and at least once in a year, Exporter - Exporter means a person who exports or indents to export and holds an IEC number, unless otherwise specially exempted - para 9.21 of FTP 2015-2020. ra ss595 ISSUE OF AUTHORISATION BY DGFT Para 44.2 Importer - Importer means a person who i inte aber dnlese ah eriee ‘0 imports or intends to Import and holds an IEC pecially exempted - para 9.26 of FTP 2015-2020. 44.1-2 Online transmission of shipping bills and authorisations between customs and DGFT Customs clearances are often based on authorisations issued by DGFT. Similarly, details of exports of individual exporters are to be obtained by DGFT from customs for calculation of fulfilment of export obligations etc. A system has been introduced by which shipping bills (of customs) and Authorisations (issued by DGFT under DES or EPCG scheme) will be transmitted from DGFT to customs and vice versa online - MF(DR) circular No. 3/2009-Cus, dated 20-1-2009 - Iso CC, Mumbai PN 9, dated 31-3-2009. see also CC, Mumbai PN No. 8/2009, 44.2 Issue of authorisation by DGFT DGFT issues ‘authorisation’ for import/export [earlier, it was termed as ‘license ] As per para 9.07 of FTP 2015-2010, ‘Authorisation’ means a permission as included in section 2(g) of Foreign Trade (Development and Regulation) Act, 1992 [FT(D&R] to import or export as per provisions of Foreign Trade Policy (FTP). Licensing year - Licensing year means period beginning on the Ist April'of a year and ending on the 31st March of the following year - para 9.29 of FTP 2015-2020. Authorisation is not a right - Authorisation is not a right. DGFT or RA can refuse the same as per provisions of FT(D&R) Act and Rules - para 2.14 of FTP 2015-2020. Person claiming authorisation is not ‘consumer’ - Person claiming authorisation is not a consumer. State is not service provider in respect of these incentives. Consumer Disputes Redressal Commission cannot entertain complaint under claim arising out of licence (now authorisation) governed by Exim Policy (now Foreign Trade Policy) - Secretary, Ministry of Commerce v. Vinod & Co. (2019) 367 ELT 881 (SC). 44.2-1 Procedures for application, fees etc. Handbook of Procedures (HBP) gives procedures for issue of authorisation. Objective of ‘Handbook of Procedures’ is to lay down simple and transparent procedures for easy compliance and administration. The Handbook contains provisions and procedures in respect of various heads under Foreign Trade Policy. Effling of application forms - Electronic filing of application is required. All communi- cation by DGFT will be through e-mail. No manual communication will be made by DGFT - Para 1.05 of HBP 2015-2020. Application fees payable - Application fees is payable at prescribed rates in Appendix 2K of HBP 2015-2020 - para 2.12 of FTP 2015-2020. Fees are payable through Electronic Fund Transfer (EFT). Online payment facility through banks and credit/debit cards is available - Jt DGFT Trade Notice No. 7/2015, dated 9-7-2015. Fees can be paid by demand draft - amendment to Appendix 2K vide DGFT public Notice No. 6/2015-2020, dated 16-4-2015. Aayat-Niryat form - Aayat Niryat Forms ANF | to ANF 8A have been designed and no- tified for various purposes in HBP 2015-2020.Para 44.2 PROCEDURES UNDER FOREIGN TRADE POLICY 596 Interviews with officers of DGFT - Officers can grant interviews to authorised represen, tatives of importer/exporter. Interviews can be sought by e-mail also - para 2,19} of HBP 2015-2020. Identity cards for collections of authorization: and other documents - To facilitate collection, of Authorisation and other documents from offices of DGFT and Regional Authority Identity cards will be issued to authorised employees (not more than three) of impor. ers and exporters. Application for identity card should be made in prescribed form ANF-2B given in HBP 2015-2020. Identity card will be given in form given in Appendix 2W of HBP 2015-2020. Identity card can be on letter head of company, countersigneq by concerned RA - para 2.100 of HBP 2015-2020. Communication to be signed by authorized signatory - Communication to DGFT/RA should be signed by authorized signatory of importer/exporter - para 2.102 of HBp 2015-2020. Certificate of realisation of export proceeds - BRC or FIRC- In case of imports made un- der export obligation, the importer is required to issue certificate from Bank regarding export realisation. The certificate should be in prescribed form. System of e-BRC (Electronic Bank Realisation Certificate) has been introduced. Details of realization of export proceeds is obtained directly from Banks through secured electronic mode. RBI has also developed comprehensive IT bases system called Export Data processing and monitoring System (EDPMS) - para 1.12 of FTP 2015-2020. Incase of domestic supplies, Bank certificate should be in form given in prescribed form, In case of export by post, exporter shall submit BRC, postal receipt and invoice duty attested by customs - para 2.70 of HBP 2015-2020. Where RBI has permitted direct negotiation of documents (ie. not through authorized dealer), exporter should submit - (a) Copy of RBI permission (b) Copy of FIRC (Foreign Exchange Inward Remittance Certificate) as per form 10H of Income Tax (c) Statement giving details of shipping bills/invoices against which FIRC was issued - para 2.71 of HBP 2015-2020. Policy of conversion of currencies in e-BRCs has been specified in para 1.15 of HBP 2015-2020. Normally, rates notified by CBI&C every month will be adopted. Offsetting of export proceeds - If RBI has permitted offsetting of export proceeds against import payables/equity investment/loan repayment etc., certificate for offsetting export proceeds should in prescribed form given in Appendix 2L of HBP 2015-2020, along with RBI permission. The certificate should be duly certified by CA/Cost Accountant - para 2.89 of HBP 2015-2020. Export benefits available when export proceeds not realised but claim settled by insurance - Provisions for processing of claims where exporter gets payment through insurance agencies (and not through banks) towards realization of export proceeds has been specified in paras 1.16 and 2.85 of HBP 2015-2020. However, drawback scheme is governed by Customs Act and Drawback Rules. Hence, drawback is not payable when export proceeds not realised even if claim is settled by ECGC or realisation is waived by RBI - MF(DR) circular No. 7/2010-Cus, dated 23-3- 2010 [Really, if claim is settled by insurance company or ECGC, it should be taken as ‘payment received’. Moreover, even HBP is gazetted and has equal statutory force}. Export realisation certificate not required if write off allowed - If RBI or authorized dealer allows write off of export proceeds (but not self write off), and certificate for Foreig"> 597 ISSUE OF AUTHORISATION BY DGFT Para 44.2 ission of India is pr ed, certific: MNP oa caret roduced, certificate of export realization is not required - para 2.87 nt can be ante Sia eee in cash from foreign travellers in India - Forcign travellers, whil India, can make payment in foreign exchange in India while making purchases across the counter. As per RBI guidelines, this foreign exchange should be surrendered to authorised persons (usually Banks) in India, Such foreign exchange will be considered as earning in foreign exchange and the service provider will be eligible to claim benefit under EPCG or SFIS scheme on such foreign exchange received in India - DGFT Policy circular No. 27/2009-14, dated 25-3-2010. Loss of original shipping bill or BRC - If there is loss of EP coy ipping bil i ! ; or BRC py of shipping bill or orig- inal a claim of duty credit scrip or EPCG credit can be eiipaty on submission of duplicate copy, application fee and indemnity bond as specified - para 2.33 of HBP Claim against loss of copy of shipping bill can be made within six months from date of shipping bill and not thereafter - para 2.34 of HBP 2015-2020. Incase of loss of documents relating to Advance Authorisation/ been prescribed in para 4.52 of HBP 2015-2020. mitted to another authority - If original document was Certified copy if original was subi submitted to another authority or different RA its copy certified by that authority shall be submitted - para 2.35 of HBP 2015-2020. Late fee - If application is filed after last date for submission but within six months from last date, application will be considered on payment of late cut @ 2% on entitlement. For delay between 6 months and one year, late cut will be 5% For delay beyond one year from prescribed date ‘of submission but not later than two years, jet cut will be 10% - para 9.02 of HBP 2015-2020. Supplementary claim - Supplementary claim may also be considered after imposing a cut @ 2% on entitlement, Supplementary claim for MEIS for which rates have been enhances with retrospective effect will be allowed without 2% cut. Supplementary claim for scrips under chapter 3 of FIP 2015-20 (duty credit scrips) for any other reason will not be allows - para 9.03 of HBP 2015-20 amended wef, 28-6-2018 amended on 5-8-2019. Supplementary claims under chapter 3 (duty cre claim for scrips under chapter 3 of FTP 2015-20 @ “para 9.03 of HBP 2015-20 amended wel 28-6-2018. Furnishing of information by importer/exporter - Every exporter/importer is bound to fe or ec ed of DGFT. Failure to supply informa- tion will eall for penal action - para 9.04 of HBP 2015-2020. Time bound disposal of applications - Para 9.10 of HBP 2015-2020 gives time bound schedule for disposing off application, it ‘application is complete in all respects and is accompanied by prescribed documents. IEC/e-IEC number is to be given in two working days and Authorisations should be issued within three working days. Input output norms (SION) should be fixed in 120 working days. Refund of DBK/, fixation of duty rate of drawback should be in 30 marking dag pers 910 of HEP 2015-2000, Incase of EOU, time bound schedule has been given in para 6.41 of HBP 2015-2020. Cases of undue delays should be reported in writing. Similar time bound schedule has been given in respe DFIA, procedure has dit scrips) not allowed - Supplementary luty credit scrips) will not be allowed ct of EOU, /STP/EHTP/BTP. eee~< TRADE POLICY Para 44,2 PROCEDURES UNDER FOREIGN 503 applications in respect of SEZ have been g 33, dated 20-8-2009. PCCifieg Time bound schedule for disposal of vide MC&I (DC) SEZ Instruction No. Incomplete application -If there are defects or application is incomplete, it willber sje and rejection email will be sent, This ean be reopened on rectifying the deficiencie ted ane Telection ema ct within 90 days, application will be deemed to have hee! withdrawn - para 2.08 of HBP 2015-2020. a! Consumption register - Importer is required to maintain a register of consumption materials imported under authorisation. Separate register should beimported in rest of items under Actual + condition. In respect of particular schemes, the register sh i be maintained for specified period. The record should be in form Appendix-4H for thre year period or period prescribed in the scheme - para 9.06 of HBP Vol 1 2015-2029 .<° ‘Amended on 9-11-2015 [It was appendix 4G upto 9-11-2015], as Date of reckoning of shipment in respect of imports and exports - Date of reckoning of shipment of imports and exports will be reckoned as provided in paras 9.11 and 9,12 of HBP 2015-2020 - para 2.17 of HBP 2015-2020. : Broadly, in case of imports, it is date of bill of lading it is date of bill of lading in case of export by sea an‘ in case of air. This date is relevant to determine whether authorization was valid in case of date of import. Similarly, export obligation period must be valid on date of export - para 2.18 of HBP 2015-2020. The duty credit scrip should be valid on the date on which actual debit of duty is made - para 2.19 of HBP 2015-2020. Verification of membership details if certificate is issued by CA - If a certificate is issued by CA, validity of the certificate can be verified on [Link] on ICAI website - DGFT policy circular No. 23/2009-14, dated 9-2-2010. Certification by CA/Cost Accountant - Under FTP, wherever certification by a Chartered Accountant is required, the certificate can be signed by Cost Accountant also - DGFT Public Notice No. 22(RE-2012)(2009-14), dated 11-10-2012. or airway bill. In case of ex d date mentioned in shipping bij 44.2-2 Import/Export Code Number Every importer and exporter must obtain a TEC) from DGFT (Director General of Foreign applying in prescribed form (section 7 of FT(D&R) Act). However, in case of import or export of services or technology, IEC/e-TEC number is required only if service or technology provider is availing benefit under Foreign Trade Policy or dealing in specified services or technologies [proviso to section 7 of FIDR Act inserted [Link]. 7-8-2010]. Import and export without IEC/e-IEC number is not permitted, unless specifically exempted [para 2.05(II) of FTP 2015-20}. Income Tax PAN as IEC number for DGFT - DGFT has decide as IEC number. If the taxable person is registered under GST, tl ber should be quoted (which contains PAN as part of GSTIN number). For residuary categories, UIN issued by GSTN and authenticated by DGFT will be used. For others, common number will be notified by DGFT - DGFT TN 9/2018 dated 12- -2017. ‘Importer Exporter Code Number’ (IEC/e- Trade) or officer authorised by him, by d to use income tax PAN hen his GSTIN num ooMae 599 ISSUE OF AUTHORISATION BY DGFT Para 44.2 case of others, alpha numeric number has been issued vide Public Noti ts Public Notice No. 9/2015- 20, dated 29-6-2017 and specified in para 2.07(b) of HBP 201s 2010. meade These numbers are for Central Government, State Government, diph i . 7 » , diplomatic personnel, baggage, imports for personal use, import from 2 i ie ehariable Oreeniienonseis port from/export to Myanmar/Bhutan/China, farlier, IEC/e-IEC a 10 digit number was allotted t i Bair a 2.050) of FTP 2015-20, ed to a person. Now, PAN or UIN will be Application for e-IEC number or its updation - Application for e-IEC number and its updation has to be made to DGFT online as per procedure specified in HBP 2015-2020 - para 2.05(c) of FTP 2015-2020 as amended on 12-2-2021. No Hees ae payable if updation is done during April-June - DGFT PN 49/2015/20 dated 31-3-2021. All IECs which have not been updated after 1-1-2015 will be de-activated [Link]. 6-10- 2021. They can re-activate online - Dy DGFT New Delhi Trade Notice 18/2021-22 dated 20-9-2021. Profile of importer/exporter should be given in form ANF-1 of HBP 2015-2020. Application should be filed online with (i) cancelled cheque and ({i) Address proof. IEC umber will be generated online and post-verification will be done online by RA - para 2.08 of HBP 2015-20 amended on 8-8-2018. Detailed procedure, policies and forms have been specified in Jt DGFT Trade Notice No. 23/2018 dated 8-8-2018. In further Trade Notice No. 39/2018-19 dated 12-12-2018, it has been clarified that application should be in name of firm (and not in name of applicant who will be in- dividual). However, mobile number and email ID of applicant should be submitted for verification by OTP. In case of proprietary firm, address proof of proprietor like ‘Aadhaar, Voter ID or passport or electricity bill or telephone bill (landline or mobile) is sufficient. In case of partnership firm, company ete. address proof may be electricity/ telephone bill, bank certificate in form ANF 3(A)(i) or sale/lease/rent deed (relevant pages indicating seller, buyer and address details. ‘A number allotted to a company is valid for all its offices, branches and units. DGFT has decided to use PAN number issued by Income Tax authorities for control purposes. IEC/e-IEC number should be issued within two working days if application is complete with requirement documents. DGFT has decided to use PAN number issued by Income Tax authorities for control purposes. Only one IEC per PAN - There will be one IEC/e-IEC against sing] HBP 2015-2020 and para 2.05(II1) of FTP 2015-2020. Mandatory Online application for e-IEC number - Online application in form ANF 2A is mandatory for obtaining Import Export Code (IEC/e-IEC), w. f. 1-1-2015. The form is on DGFT’s website. Attachments should be scanned and attached in ‘pdf’ format. Submitting physical documents is not required. Decision will be communicated within two working days by concerned Regional Authority - DGFT Public Notice No. 76 (RE- 2013)/2009-14 dated 27-11-2014. Application must be digitally signed and uploaded online - para 2.05(1)(d) of FTP 2015-20. an be rectified by filing application again online. le PAN - Para 2.12 of Deficiencies pointed out c:oo ~\ 609 Modification of e-IEC - Application for modification of e-IEC can be filed with cong, RA - Para 2.14 of HBP 2015-2020. ere If there is change of branch office/HO registered office in its TEC, request shou made to new RA. The new RA shall make amendments on basis of documents fae be rate ill inform earlier RA who has initially issued the 1EE. Thereafter, new Rant allow applicant to carry out necessary functions and apply for eligible benefits _\ Will 514A of HBP 2015-2020 amended w.e, 5-2-2018. Para Physical verification of units applying for e-IEC - RLAS are required to carry out ph cal inspection of 10% of total e-IECs issued during & specific period on random |h! eeeaee crease of undelivered IEC, 100% inspection should be carried out. Ph; ass eerttece should be carried out and people working at the same address show! eu\fied . Zonal Jt DGFT TN 5/AM.11 dated 31-8-2010 [257 ELT E15} be Authority to issue IEC/e-IEC Code - Officers of rank of Assistant DGFT and Aaa st authorised to issue IEC/e-IEC code number in their respective territor, janisdictions, Assistant DGFT and above at Headquarters have jurisdiction througha India - Order No. SO 1061(E), dated 31-12-1993 issued by DGFT. out Certificate of IEC/e-IEC number will be given by DGFT in form ANF 2(A)(I) - Pag 2.09 of HBP 2015-2020. eJEC - Import Export Code (IEC/e-IEC) is issued online. Digitally signed e-IEC will be normally issued and e-mailed within two working days - para 1.11 of FTP 2015-2029, Updation of details in e-IEC every year - The details in e-IEC are to be updated every year during April-June. If not done, IEC will be de-activated. It can be re-activated by the importer /exporter. - para 2.05(d) and 2.05(¢) of FTP 2015-2020 inserted on 12-2-2021, No fees are payable if updation is done during April-June - DGFT PN 49/2015/20 dated 31-3-2021. Scrutiny and deactivation of ‘e-IEC - IEC may be flagged for scrutiny. TEC holder should clear risks flagged by the system. Otherwise, IEC will be deactivated - para 2.05(f) of FTP 2015-2020 inserted on 12-2-2021. Declaration of IEC/e-IEC number on import/export documents - TEC/e-IEC number will be declared on Bill of Entry, Shipping Bill and other documents relating to customs [Rule 13 Foreign Trade (Regulation) Rules, 1993]. Application for JEC/e-IEC number has to be made to DGFT in prescribed form with specified documents, with prescribed fees. | Exemption from provision of obtaining IEC/e-IEC number -IEC/e-TEC numberisnotrequired in following cases (a) Central Government agencies, undertakings owned and controlled by Central Government for defence and security purposes () State Government for security purposes State Governments (¢) persons importing or exporting goods for personal use and not for trade or manufacture or agriculture (d) when import/expor to/from Nepal/Myanmar is less than % 25,000 per single consignment - para. 2.07(a) o HBP 2015.2020 and Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993 amended on 20-2-2018. 1 Permanent IEC numbers have been allocated to (i) Ministries/department of Centr’ Government (ii) Ministries /department of State Government (iii) Diplomatic person 0. (iv) Baggage for personal use (iv) Ford foundation ete. - para 2.07(b) of HBP 2015-20 i In Mahesh Kedia v. CC2002 (141) ELT 736 (CEGAT), it was held that import of me equipment by a doctor for treatment of his patients and when he is not trading in &' the import is for ‘personal use’ and IEC number is not necessary. Para 44.2 PROCEDURES UNDER FOREIGN TRADE POLICY above> wot IMPORT/EXPORT AUTHORISATION Para 44.3 ber after ie |e eae : Hirpitateth of nee to pm - After conversion of EOU to DTA, the a 7 rocedure to transfer fil jurisdicti ing RA, ope procedure prestbed in paraa of ABP USINO. arson of DTAtO EOU- If DTA unit converts : : : (0 EOU, the IEC/e-IEC alot i continue to be valid - DGFT Policy Circular No. preterit 11-8-2008. Ce et eRe areca ed - In case of Merger/amalgamation/ inher ae eats e-IEC based on new PAN may be availed. Obligations under TBC, od IEC sh keto PAN/IEC of ne enti After inking of obgatons 5 ate . us ter 200 as surrendered - para 2.14(d) and 2.14(¢) of HBP IEC number is only procedural requirement not a penal provision - In Laser Sis shtv. CCE Fog (110) ELT 935 = 28 RLT 569 (CEGAT) it was held that obtaining EC code number ia ee! ined flowed without code number is not illegal. Confiscation of goods ied - followed in CC v. Shipping & Trading Associ of goa v. Shipping & Trading Associates 2001(128) surender of IEC/e-IEC number - IEC/e-IEC number can be surrendered if the holder +h to operate the IEC/e-IEC number. The issuing authority will immediately does not wis cancel IEC and inform electronically to DGFT and customs (para2.1 3 of HBP 2015-2020). Cancellation or suspension of IEC/e-IEC number - The IEC/e-IEC Code number can be suspended or cancelled by DGFTif a theperson has contravened provisions of Customs det Excise Act, FEMA, FT(D&R) or any other economic offence under any other law ‘as may be specified by Central Government (6) Person is ‘engaged in export or import ina manner gravely prejudicial to trade relations with other country or injurious to interests of other exporters/importers or has brought to the credit of goods of India or ©) ifa person imports or exports specified goods or services or technologies in con- travention of the provisions of FTDR Act or Rules. The DGFT has to issue notice and give reasonable opportunity of making representation, before suspending for a period br eancelling the Code Number [section 8(1) of FT(D&R) Act}. Aperson whose code number is cancelled cannot import or export except with a ‘spe- cial licence’ granted to him [section 8(2) of FI(D&R) Act], Special licence in such case can be granted as per provisions of rule 3 of Foreign Trade (Regulation) Rules, 1993. Suspension of IEC/e-IEC number if penalty not paid - DGFT can impose penalty for of- fences under section 11 of FT(D& R) Act. If the penalty is not paid, IEC/e-IEC number can be suspended [section 11(7) of FT(D&R) ‘Act inserted wef. 27-8-2010}. 44.3 Import/Export Authorisation authorisation) for import or export hastobemade to DGFT. ection 8(1) of FT(D&R) Act} unt bestowing financial or Application for licence (now Application fees are payable as prescribed. [s ‘Licence’ includes licence, certificate, scrip or any instrume fiscal benefits - section 9 of FI(D&R) Act. Licence can be granted or refused. Refusal can be only by {section 8(2) of FT(D&R) Act}. Licence can be suspended or cance! of being heard. yy recording reasons in writing sled by giving notice and giving him opportunity appeal against such order 804 Para 44.4 PROCEDURES UNDER FOREIGN TRADE POLICY 44.4-1 Authorisation obtained on basis of forged ee Se to ATM Trnternational v. CC (2008) 232 Eton Sitificates and ‘ioe tra Pecan B scrips on basis of forged bank realisat i stern, scrips to buyers. Il was holt that penalty is imposable even if no penalty ig 7° th, fi isation is im on buyer of scrip. It also held that if DEPB authorisation is cancelled, jt oped retrospectively to include both utilised and unuti ilised scrips. aley In Friends Trading Company v. CC2006 (202) ELT 611 are (2011) 267 ELT 57 DEPB authorisation was obtained on basis of forged realisation certificates, Dep"), transferred and transferee cleared goods on basis of DEPP. Later, the DEPB qui, sation was cancelled ab initio. It was held that duty is payable by the transferee. confirmed in Friends Trading Company v. CC(2010) 254 ELT 652 and 267 LET 33 pe ‘Woollen Mills v. CCE (2011) 263 ELT 136 GH HC DB) - followed in Sharman Y i 36 (CESTay). Apar Ltd. v. CC (2012) 276 ELT 534 (CESTAT) Dow Agrosciences India vy. cc.) C (2 283 ELT 524 (CESTAT) * CCE v. Kedia Overseas (2015) 51 GST 317 = 57 taxmans ee 96 (CESTAT). No penalty if license was CC(2010) 259 ELT 247 (CESTAT 2 v. valid on date of imports but cancelled later -In Binani Comey order), DEPB Authorisation obtained on tran. was valid on date of imports but waslater cancelled for misrepresentation by transfero, It was held that the cancellation is non estas the Authorisation stood fully utilised ang subsequent cancellation does not effect imports already made on the Authorisation relying on Hico Enterprises [Link] (2005) 189 ELT 135 (CESTAT Large Bench) and the, that departmental appeal was dismissed by SC by speaking order - 228 ELT 161 (SQ, 44.4-2 Duty liability of the person who had obtained authorisation or scrip by misstatemeni or suppression or collusion A person may obtain any instrument (like import authorisation or duty credit scrip or such similar instrument) from DGFT under FTDR Act [Foreign Trade (Development and Regulation) Act, 1992] by means of collusion, wilful misstatement or suppression of facts. Later, he may transfer the instrument to another person. The transferee may clear the goods without payment of customs duty on basis of such instrument. In such case, the transferee is ‘importer’ and becomes liable for payment of customs duty under section 28 of the Customs Act. This is really unjust. Hence, it has been provided thal, the transferor (who has obtained such instrument) shall also be liable to pay customs duty on the goods which were imported on basis of such instrument - section 28AAA(|) of Customs Act inserted w.e.f. 28th May, 2012. He is also liable to pay interest at rales fixed under section 28AA of the Customs Act from date of utilisation of such instr ment - section 28AAA(2) of Customs Act. The proper officer of customs shall issue notice to him and after granting him pets hearing, shall determine the duty recoverable - section 28AAA(3) of Customs Act serted [Link], 28-5-2012]. If the demand has been confirmed on the importer (transferee) under section 28 of ht Customs Act, demand for recovery of customs duty and interest shall not be made ot the transferor - section 28AAA(4) of Customs Act. Thus, the customs department S take action against transferor or transferee and not both. onal {in 44.4-3 No credit from forged authorisation In JCI India v. CC2003 (151) ELT 336 (CEGAT), the importer had procured from market. These were verified and endorsed by customs authorities. H the licenses were found to be forged. It was held that a fake document is DEPBlice™ owever t cab initio’ it609 BOND WITH GUARANTEE FOR IMPORT UNDER AUTHORISATION Para 44.5 and illegal. Official action on such document cannot sanctify or make it lawful. Such document creates no right or benefit in law. tnappeal, in ICI Ltd. v. CC2005 (184) ELT 339 (Cal HC), it was held that no credit can be derived from forged DEPB license (now authorisation), even if the license (now au- thorisation) was procured from open market bona fide for value, without knowledge of forgery and even if it was endorsed by customs authorities. A forged license is non est and hence void. However, if there was no collusion or fraud of innocent purchaser of DEPB authorisation, penalty may not be imposable on him- importer’s appeal dismissed $C- 187 ELT A31 same view in Matsushita Air-Conditioning India P Ltd. In re(2007) SIS ELT 473 (Sett Comm) * Kaishk Steel Industries Lid. In re (2007) 213 ELT 452 (Sett Comm) * CC¥. Anand Plateyard (2008) 224 ELT 601 (CESTAT SMB) * Sharman Woollen ills v. CCE (2011) 263 ELT 136 (CESTAT). If the importer had no knowledge that DEPB authorisation is fake, he is not guilty of suppression or wilful misstatement. Hence, extended period of limitation is not appli- cable - DCW Lid. v. CC (2009) 241 ELT 421 (CESTAT). Buyer of forged authorisation liable - In CCv. Aafloat Textiles (2009) 2 SCC 18 = 235 ELT 587 (SC), it was held that buyer of license (now authorisation) should be cautious while buying license, as risk is his (if itis found to be forged), on the principle of ‘cave- at emptor ie. buyer be aware - brought to notice of trade vide CC, Nhava Sheva PN 45/2009 dated 24-7-2009. In Rajashri Packers Ltd. v. CC 2006 (202) ELT 469 (CESTAT), it was held that buyer of forged DEPB scrip is liable to pay duty, even if he had obtained the license bona fide. A forged scrip is void ab initio. 44.5 Bond with guarantee for import under authorisation Importer importing under an authorisation is required to execute a bond with guaran- tee or LUT (Letter of Undertaking) with customs, when he has obligation like export obligation, The condition shall be endorsed by RA on authorisation - para 2.35(a) of FTP 2015-2020 and para 2.29a) of HBP 2015-2020. In case of indigenous sourcing, bond/bank guarantee/LUT is to be given to Regional Authority. The guarantee/BG shall be given as per customs notification No. 58/2004 dated 31-10-2004, The condition shall be endorsed by RA on authorisation If BG/LUT was already executed with customs, then BG/LUT with RA is not required. In such case, the LUT/bank guarantee will be released only after receipt of NOC for RA- para 2,35(b) of FTP 2015-2020 and para 2.29(b) of HBP 2015-2020. Importer will have to execute a bond. The bond will be backed by a bank guarantee or cash security or surety. If a person stands surety, bank or chartered accountant shall certify that he is solvent. In case of PSU, all categories of status holders recognised under FTP, manufacturer exporters registered with central excise having export/duty payment exceeding Ru- Pees one crore [including payment through Cenvat credit, as per MF(DR) circular No. 30/2007-Cus dated 21-8-2007]and all other exporters who have export turnover (physical exports) of & 5 crores in current or preceding financial year and having a good track tecord of three years of exports, no surety or bank guarantee is required. They can give either LUT (Letter of Undertaking) or ‘corporate guarantee’ from a group company. Common bond for various export promotion schemes - Authorisation holders can execute common bond for imports under three specified schemes ie. Advance Authorisation,pose eeeeegaeeeeeeee cca Pai ‘ ‘ ra 44.5 PROCEDURES UNDER FOREIGN TRADE POLICY 619 DFIA and EPCG. Facility will be available financial year wise. Form and procedure ja, cen prescribed in MF(DR) circular No. 11(A)/2011-Cus dated 25-2-2011 - para 134 of FTP 2015-2020. Corporate guarantee - A status holder or PSU can submit corporate guarantee jn of Bank guarantee/LUT. In case of group company, if one company is status holder, it can give corporate guarantee to another company - para 2.30 of HBP 2015-2020," Bank guarantee for advance authorisation/DFIA - Requirements of bank/cash guaran, tee for advance authorisation/DFIA are revise leoaes performance or duty payment, combined export performance of all units of a many. facturer exporter under a single IE-code shall be considered, provided all the units are registered with Central Excise and fulfil other criteria [MF(DR) circular No. 17/2009-Cys dated 25-5-2009 as amended by MF(DR) circular Nos. 32/2009-Cus dated 25-1 1-209), 8/2013-Cus dated 4-3-2013 and 15/2014-Cus dated 18-12-2014. Considering the effect of GST, the revised norms for exemption of bank guarantee are as follows - MF(DR) circular No. 31/2019-Cus dated 13-9-2019. rt turnover of % 5 crores of goods in current or preceding financial years of exports Nil Nil Nil M Hiey (@) All exporters who have an expo! exported physically or of services year and having good track record for three () Public Sector Undertakings (c) All categories of status holders recognised under FTP (@ (i) Manufacturer exporters/service providers registered with GST authorities, who has been exporting during the previous two financial years and have minimum export of % one crore or more, during preceding financial year [words in italics inserted w.e-f. 13-9-2019. They have to produce certificate of export performance or payment of duty/GST from concerned Export Promotion Coun- cil. If he is not member of EPC, certificate of practicing CA who is registered with GST may be submitted. CA should indicate his GSTIN in the certificate] (€) Manufacturer exporter/service provider registered with GST authorities, who has paid GST of one crore or more, during preceding financial year [words in italics inserted w.e.f. 13-9-2019. They have to produce certificate of export performance or pay- ment of duty/GST from concerned Export Promotion Council. If he is not member of EPC, certificate of practicing CA who is registered with GST may be submitted. CA should indicate his GSTIN in the certificate] () @ Manufacturer exporters not covered under above (ii) units in AEZ (Agri Export Zones) and (iii) established service providers who have free foreign exchange earnings of = 50 lakhs or more during the preceding financial year and have a clean track record (g) Service providers in the port handling sector who are appointed as custodians by the jurisdictional Customs/Central Excise Autho- rities (only for imports of CG under EPCG) (h) Others Nil Nil 15% 25% | 100%611 BOND WITH GU, JARANTI EE FOR IMPORT UNDER AUTHORISATION Ps vara 44.5 Bond without security i it security is acceptable for i vance authorisation /EP table for import of \CGscheme-MF(DRycireulse Ne > sans holders under ad- . -Cus dated 22-3-2005. Exemption to EOU units fror m bank gui years and exports m ank guarantee - EOU Units in exi yeni ety along rsmore than fivecoresarenot ues for more than 3 $4/2004-Cus dated 13-10-2008 ite) ake unblesaahe anae Dacca 10-2004. para 612d) of FIP 20152020, a Concessional bank gui theconditions for MI = Aone oa if importer was penalized in last three 0 th ee 25tsbank guarantee that teimporter Seana oeh importers and — chia ssl a last three years. It is very “Nftcult find : , IBC ave to give 100% ich i ee orania a been clarified that lower bank ereuee cate ett Fan re CBIRC a Reape of Customs is satisfied that there ‘sno isk to Ce ciealr eae ‘us dated 18-12-2014 [highly discretionary and Exemption from bank guarantee even when penalty im nature - As per earlier circular, exemption from tak Imp sed eevotavalablel ‘Tine importer Was penalised under Customs Act, Central Excise Act TEMA or FIDR Since uch assessees are very few, itis now provided that in the importer will be eligible for exemption from bank guarantee even if penalty was imposed for offenses which are of technical nature. They will be tligible even if show cause notice was issued under excise, service tax or customs provisions for offenses for suppression of facts, wilful misstatement, fraud etc, if the show cause notice is not adjudicated. However, if the spumand has been confirmed, the relaxation will not be available. Importer should sub- om or an offense alleging suppression, fraud etc. has bec confirmed mit affidavit wl against him - Para 6.12 of FTP - MF(DR) circular No. '6/2011-Cus dated 18-1-2011 as amended by Circular No. 8/2013-Cus dated 4-3-2013. ‘The relaxation applies to EOU units also - MF(DR) circular No. 36/2011-Cus dated lepartment routinely alleges 178-2011 (Even then, very few may be eligible since d a period beyond one yeat)- suppression of fact when demand is for EPCG not to include interest i EPCG need not to ~ Bond and bank guarant : include inter i ses only in case of ‘default. However, assessee 8 bound tin cé de a condition that interest and to pay interes! tio erest 2 other charges will be payable in cau ‘of non-compliance of conditions ‘of notifications - MF(DR) circular No. 4/2009-Cus dated 28-1-2009. is iti ligation, even if there is Interest is payable as per conditions of bond as contractual ol no orevision for levy of interest under FT(D&R) Act - Fal "DGFT (2015) 49 GST 434 - 53 [Link] 213 (Mad HC). eo case of advance authoriza al - The for reguierisone ee regularisation. Then, he car suo motu either by cash or Protorisation Holder should apply to RA for i Je and pay the same al customs duty Pen 1 pevillthen produce duty Interest calculate the differenti : ‘nterest burden} [toreduce interest Durderr ycustoms duty payee ‘and then Industries V. through duty credit scrip t eh ims be paid inc om ee ns ula tal o73015-Cus dated 142015, incentive schemes - Ifapplica- other freely tran hem: icant er 3 of FTP is filed RA will issue redempuo jank Guarantee LUT Ort ‘able incentive S¢ i freely transferable fe ton for ee Bank Realisation Certificate), aPP' ‘es under chapt shall execute Bsvw 2§ UNDER FOREIGN TRADE POLICY a fication No. 58/2 This facility is a on we. i. 1000 OR ort? besubynited ity ’ hs fr te of issue of the scrip. y y i Sales Goin e of iaity of BG/LUT should ee at tea ct 24 months Seperate shou oe eet to be filed for different schet ecords s ae is required to be filed Ve I be made on rips ed without BRC - DGFT Pua and proper endorsement shall Circular No. 7(RE-2008)/ 2004-09 dated 30-3-2 Bank guarantee to be executed by Banklimporterlexporter on Coe aes Paper - Bay guarantee/Legalagreement should beexecuted by Bar (guaran ae importer/exportes on a non-judicial stamp. of value as per State Stamp Vat - jote 1 to para 2.4 amended wef. 12-11-2012. Submission of bond - In case of be executed with customs, as Per rel ‘Authority shall endorse foll applicable, to be ¢ bank guarantee/LUT should Cacular No, 58/2004-Cus dated 21-1 Form of bond and other conditions are given dated 21-10-2004. Time bound disposal of ceptance of BG/LUT should inserted with retrospective e! Para 44.7 PROCEDURE 004-Cus - para 2.20A of yy, P in prescribed form as per customs noti Vol. 1 2009-14. ble for applicatic ym customs, LUT/bank guarantee sh; toms circular. In such case, Regio; all Theense/authorisation - BG/LUT nuthorities’. In case of indigenous cou be submitted to Regional Authority (RA) as per custo ce (0-2004 - para 2.29 of HBP 2015-2020. : in MF(DR) circular No. 58/2004-Cus clearance fro! levant cus! jon on the applications for acceptance of BG/LUT- Applications for ac. be disposed of in three working days - para 9.10 of HBP ffect from 1-4-2015. grieved by decision for personal hearing to DGFT if im- Jaxation Committee, if the review e Committee - Notification 44.6 Personal hearing if ag Importers/exporters may make a specific request porter/exporter is aggrieved by decision of Policy Rel application before the Committee has not been accepted by th No. 8 dated 2-4-2013. otion Councils as Registering Authorities exporters, set up with objective 10 il is responsible for promotion of 2 ified in Appendix 2T of 44.7 Export Prom Export Promotion Counc d develop Indian exports. ils are organisations of Each counci promote an particular group of products/projects/services as spec (Appendices and Aayat Niryat Forms) - para 2.55 of FTP 2015-2020. authorities only if they Export Promotion Councils can continue to act as registering fulfil criteria as specified in para 2.92 of HBP 2015-2020. [The crit terms of elected heads and abiding by instructions from Central DGFT is authorized to issue instructions to the EPC a i ds - er 3015-2020, e and Commodity Boards Various Export Promotion Councils have been set up to promote and develop exP™ of the country. These EPCs (Export Promotion Councils) are expected to monitor 2 id encourage exports and to assist and guide the exporters. Their main aim is t project india’s image abroad as a reliable supplier of high quality goods and services. Each Council is responsible for promoti i 5 like Er ach © | promotion of a particular group or oducts like gineering Export Promotion Council, Apparel Export Preaeuon Council, Ge™ and eria relates to e-voting | Government] para2.99 encourage >» et I)— 613 EXPORT PROMOTION COUNCILS AS REC ERING AUTHORITIES Py aS ara 44.7 Jewellery Export Promotion Coun registered as Companies or repiste Some Agencies like Coffee Bi x h oard, Tea Board.‘ as Export Promotion Cou cils. ©a Board, Tobacco Board etc. are a fears ele on Councils. Theseare autonomous profesional bd oe se mn ae ewe area professional bodies. Government Exporters of main forest produce i ; can register with SHE : List of EPCs and Commodity Boards and Hf volireeekae in Appendix 2T of HBP Vol 1 2015-2020, Export Promotion Council for EOU EOU and SEZ units [EPCES il etc. These Councils ar profit organisations tera Is are non-profit organisation: \ldresses/telephone numbers are given and SEZ units - Export Promotion Co ouncil (EPC) fe OU an SED units [EPCES) promotes exports of EOU and SEZ. The BPC for BOU para 6.34(14) of HBP 2015-20 as amended Seana etd hed Aenea CMC for EHTP/STPIBTP unit to be granted by Development Commissioner - RCMC for EHTP/STP/BTP will be granted by Devel e is pols 202s amnenledan Seana: Development Commissioner - para 6.34(14) of HBP Services Export Promotion Council - Services Export Prom ci n & ‘port Promotion Council has b stablished at 705, Bhikaji Cama Bhawan, Bhikaji C: oa hi , Bhikaji Cama Place, New Delhi - 110 066. 44.7-1 RCMC Exporter has to obtain Registration Cum Membership Certificate (RCMC) from Export Promotion Council or Commodity Board, Membership of EPC is compulsory, if an exporter intends to get export incentives or obtains authorization to import/export items, except restricted items (not clear what is meant). In other cases, membership is optional - para 2.56 of FTP 2015-2020. Application for RCMC should be done electronically only ~ Dy DGFT Trade Notice No. 36/2021-22 dated 25-2-2022. RCMC means certificate of registration and membership granted by an Export Promo- tion Council /Commodity Board/Development Authority or other competent authority as prescribed in FTP or Handbook of Procedures - para 9.46 of FTP 2015-2020. Certificate of Registration as exporter of spices (CRES) RCMC is valid from the Ist April of licensing year and is valid for five years - para 2.95 of HBP 2015-2020. In view of COVID-19 pandemic (Corona virus), RCMC will continue to be valid till 30-9-2020, even if it has expired on or before 31-3-2020 - DGFT Trade Notice No. 60/2019-20 dated 31-3-2020. Application form for RCMC is given in form ANF-2C given in HBP 2015-2020 - para 2.93 of HBP 2015-2020. Application for registration shall be made on basis of main line of business - para 2.94 of HBP 2015-2020. export product is not cover ss is not identified should regis ed under any EPC or Commodity Board 1 with FIEO (Federation: Exporters whos 1 or whole main line of busine of Indian Export Organisation). Form of RCMC is given in Appendix 2R of HBP - par ‘42.93 of HBP 2015-2020. — i;ee INDER FOREIGN TRADE POLICY Para 44,7 PROCEDURES U! a Change in business of RCMC member should be intimated to registering authority Para 2.96 of HBP 2015-2020, The ROMC holder can be de-registered for violation 2D. Apnea ea he niet giving notice and his representation ~ para 2.97 01 TT) oo isp 2015-2020, ie before DGFT against order of de registration - P'