DGFT Committee Minutes

MINUTES OF THE POLICY RELAXATION COMMITTEE MEETING NO.03/AM06 HELD ON 5th JULY, 2005

The meet ing was held under t he Chairmanship of DG and t he list of of f icers present in the meeting is given in Annexure-I.
At t he out set it was brought t o t he not ice of t he Chair t hat t he Agenda papers t o be discussed in t he PRC meet ing are not being supplied well in advance and therefore, the Members are not in a position to study the cases t o be discussed. DG direct ed t hat hencef ort h PRC meet ing will be held in the afternoon of every 2nd and 4th Monday of t he mont h and only such cases will be placed bef ore t he Commit t ee where t he Agenda papers are supplied by the relevant divisions by Thursday, preceding the date of the meeting.
The decision t aken in each individual case t aken up f or discussion and decision taken by PRC is detailed below:
Case No. 1. Firms Name M/s. Sterlite Optical Technologies Ltd. File No. 01/81/162/231/AM06/ DES-II Subject: Regularization of delayed exports.

I t was observed t hat basically t wo par amet ers have t o be made t owards fulfillment of export obligation:-
(i) EO should be fulfilled in terms of value of E.O. imposed; and (ii) The quant it y propor t ionat e t o t he import s made should be exported and no imported material should be diverted.
I t was brought t o t he not ice of t he Commit t ee t hat in t erms of value, t he export obligat ion has been f ulf illed whereas t here was a quant it at ive short f all because of t he st if f crash in t he selling price as explained by t he export er. I t was t heref ore, decided t hat export s made bet ween 30th and 48th mont h may be regularized subj ect t o payment of applicable composit ion fee as per existing policy in force.

2

Case No. 2. Firms Name M/s. Thermax Ltd. Pune File No. 01/81/50/358/AM04/DES-II Subject: Condonation of lapse of using the duty free imported items for other export production.

The Commit t ee observed t hat condonat ion of lapse on t he part of t he export er of divert ing t he import ed mat erial f or manuf act ure of goods f or DTA sale def eat s t he basic concept of t he Advance Licensing Scheme and t heref ore no case f or policy relaxat ion is made out. I t was decided t o reject the request.
Case No. 3. Firms Name M/s. Thermax Babcock & Wilcox Ltd., Pune File No. 01/81/50/360/AM04/DES-II Subject: Condonation of lapse of using the duty free imported items for other export production.

The Commit t ee observed t hat condonat ion of lapse on t he part of t he export er of divert ing t he import ed mat erial f or manuf act ure of goods f or DTA sale def eat s t he basic concept of t he Advance Licensing Scheme and t heref ore no case f or policy relaxat ion is made out. I t was decided t o reject the request.
Case No. 4. Firms Name M/s. Engineering Export Promotion Council File No. 01/81/162/57/AM05/DES-II Subject: Conversion of free shipping bills into DEPB shipping bills.

The Committee decided to have the following information first:-
(i) Det ails as t o whet her t he issue had been ref erred t o Dept t of Revenue and whether any response thereof has been received. (ii) The comments of Engineering EP Division of Deptt of Commerce as t o on what premise t hey had f ought t he CVD case wit h t he

3 Govt . of USA and whet her t he decision on t he same was in f avour of t he Govt . of I ndia based upon t he st and t aken t hat benefit of DEPB was not claimed/allowed in these cases. (iii) Whet her t he case had been considered earlier eit her on f ile or in PRC and if so, the details thereof.
I t was decided t hat t he case be brought bef ore t he Commit t ee af t er complet ion of t he act ion as above and af t er all t he det ails as above have been received.
Case No. 5. Firms Name M/s. TIL Ltd. File No. 01/81/50/884/AM03/DES-II Subject: Revalidation of advance licence no. 0210044031 dt. 12.01.03.

The Commit t ee observed t hat ALC had allowed amendment s of norms in t he inst ant case only on 14.6.2005 f or t he licence issued in J anuary 2003 and t here was a genuine case of export er not having been able t o ut ilize t he licence f or t he purpose of import . I t was, t heref ore, decided t o allow revalidat ion f or a period of 3 mont hs wit hout charging any penalt y on t he unut ilized balance of t he licence. The 3 mont hs period will commence f rom the date such endorsement of revalidation is made on the licence.
Case No. 6. Firms Name M/s. Korpan Ltd., Mumbai File No. 01/82/50/1054/AM05/DES-III Subject: Clubbing and redemption of 2 adv. Licence nos. (i) 0310046017 dt.20.7.00 (ii) 0310283524 dt. 28.7.2004.

The Commit t ee agreed t o allow clubbing of t wo advance licences as in t he inst ant case f or regularizat ion purpose subj ect t o t he payment of composit ion f ee applicable as per present policy. I t was f urt her decided t hat no f urt her import s and export s will be allowed against t he subj ect licences so clubbed.

4

Case No. 7. Firms Name M/s. S.B. Packagings Ltd., New Delhi File No. 01/87/162/158/AM05/DES-VIII Subject: Adv. Lic. For intermediate supply no. 3310000576 dt. 5.8.02- condonation of procedural lapse.

The Commit t ee agreed t hat t his was only a procedural lapse on t he part of t he licence holder and decided t o regularize int ermediat e supplies made t o M/ s Nest or Pharmaceut icals Lt d bet ween t he period 12.6.2002 and 30.6.2002 and accept t he same t owards f ulf illment of export obligat ion, a f ormal applicat ion f or advance int ermediat e licence against invalidat ion letter dt.3.6.2002 having been made only on 30.7.2002.
Case No. 8. Firms Name M/s. Window Glass Ltd., Kolkata File No. 18/757/AM-95/EPCG-II Subject: (1) Deletion average EO (2) Inclusion of Plan Glass Sheet as additional export product against the EPCG Licence. (3) Extension of EO Period for regularization.

The Commit t ee observed t hat provision of export ing alt ernat e product t owards f ulf illment of export obligat ion already exist s in t he policy and t heref ore t his issue may not be discussed in PRC. The main issue on which GRC had referred the matter to PRC was about waiver/refixation of average export perf ormance. The Commit t ee f urt her observed t hat t he issue of waiver/ ref ixat ion of average export obligat ion has been discussed at lengt h by DGFT wit h Dept t of Revenue and it has not been f ound f easible t o allow t he same. Theref ore, t here is no merit t o change t his crit erion in t he inst ant case. However, t o pr ovide some relief t o t he export er, it was decided t hat t hey be allowed an ext ension by a period of t wo years t o meet this average export obligation by exporting alternate products.

5

Case No. 9. Firms Name M/s. The Indian Hotels Company Ltd., Mumbai File No. 01/93/180/52/AM06/PCIB Subject: Import of left hand drive Motor car by the Taj Group of Hotel under EPCG scheme.

The Commit t ee agreed t o relax t he policy provision in t he inst ant case and permit t o import Lef t hand dr ive Mot or Car subj ect t o t he condit ion t hat t he same is convert ed int o right hand drive wit hin a period of 6 mont hs t ime f rom t he dat e of such import or subj ect t o waiver of said condit ion by Ministry of Surface Transport by then.
Case No. 10. Firms Name M/s. Shakti Trading Co. File No. 01/94/180/Court case no. 38/Am06/PCI/ Subject: Relaxation of provision in the HBP for issue of duplicate license including transferable license in lieu of post/misplaced.

The Commit t ee agreed t o issue of a duplicat e REP licence in t he inst ant case f or regularizat ion purpose, as t he licence is st at ed t o have been lost / misplaced in t he cust ody of cust oms aut horit ies, as conf irmed by J t .DGFT, Mumbai and in view of t he f act t hat t he said duplicat e licence is permissible in t he exist ing policy. However, t his duplicat e licence will be issued f or t he purpose of regularizat ion of import s already made and no other benefits including premium etc. will be permitted.
Case No. 11. Firms Name M/s Arraycon (I) Ltd., referred by JDG, Ahmedabad File No. 01/94/180/64/AM06/PC-I Subject: Grant of EODC against EPCG Lic.

The Committee observed that Para 5.11 of the Foreign Trade Policy 2004-09 has been int roduced f or prospect ive applicat ion and t here is no int ent ion t o regularize def ault in t he past cases under t his provision. However, in t he inst ant case t he applicant has come up wit h t he problem of not having been

6 able t o go beyond 85% in t erms of f ulf illment of Export Obligat ion because of the destruction of the factory due to fire.
However, t o have t he conf irmat ion about t he claim of f ire by t he applicant , it was decided t o seek t he comment s of our RLA at Ahmedabad who would verif y t he f act s and as t o whet her t he company had act ually suf f ered a loss because of a f ire. The case be brought bef ore t he Commit t ee on receipt of the report from the RLA concerned.
Case No. 12. Firms Name Represented to BOA. File No. 01/92/180/90/AM06/PCII Subject: Inter-unit transfer of raw materials between group of companies in EOPUs

The case was wit hdrawn. I t was f urt her decided t hat t he policy division should t ake up t he mat t er wit h Dept t of Revenue f or a suit able change in the policy.
Case No. 13. Firms Name Request made to BOA File No. 01/92/180/90/AM06/PCII Subject: Grant of Advance DTA sale permission on one time basis.

The concerned Policy division desired t o have a det ailed look int o t he cases t o st udy t he pros and cons of t he same bef ore t he same is discussed in t he PRC. I t was t heref ore, decided t o def er t he case t o relist t he same in t he next PRC meeting.

7

Case No. 14. Firms Name Represented to BOA File No. 01/92/180/65/AM06/PCII Subject: Extension of period of adjustment of advance DTA sale permission

The concerned Policy division desired t o have a det ailed look int o t he cases t o st udy t he pros and cons of t he same bef ore t he same is discussed in t he PRC. I t was t heref ore, decided t o def er t he case t o relist t he same in t he next PRC meeting.
Case No. 15. Firms Name Represented to BOA File No. 01/92/18/90/AM06/PCII Subject: Extension of period of adjustment of advance DTA sale permisson

The concerned Policy division desired t o have a det ailed look int o t he cases t o st udy t he pros and cons of t he same bef ore t he same is discussed in t he PRC. I t was t heref ore, decided t o def er t he case t o relist t he same in t he next PRC meeting.
Case No. 16. Firms Name M/s Khanapur Taluka Co-Operative spinning mills ltd. File No. 01/92/180/66/AM05/PCII Subject: Grant of DTA Sale permission

The Commit t ee af t er reviewing t he earlier decision t aken by t he PRC, decided to relax the policy in the instant case on the premise that this was a co-operat ive unit and had not made any import s in t he past . The relaxation was allowed t o t he ext ent t hat ret rospect ive DTA sale permission f or balance ent it lement of Rs.1290.60 lakhs accrued during t he ent ire period of 1992-2002 is made ef f ect ive f rom 15.10.2002 and t he same will be adj ust ed against DTA sale already made wit hout DTA sale permission and balance of Rs.306.64 lakhs shall be utilized during transitional period.

8 OUTSIDE AGENDA

M/s Ralco Exports, Ludhiana F.No.01/83/50/191/AM04/DES-IV
The minutes in the instant case may be deemed to have been modified to the ext ent t hat Policy Circular No.17 ref erred t o in t he said minut es may be read as Policy Circular No.17 dt .10.10.2003 .
The meeting ended with vote of thanks to the Chair.

---

Annexure-I

LIST OF PARTICIPANTS

Ms. Seema Bahuguna, Addl.DGFT 2. Shri Surat Singh, Addl. DGFT 3. Shri S.K.Prasad, Addl. DGFT 4. Shri Vipin Saxena, EC 5. Dr(Ms.) Pratima Dikshit, Jt.DGFT 6. Shri Anil Bamba, Jt. DGFT 7. Shri P.C.Tripathi, Jt. DGFT 8. Shri A.K.Singh, Jt. DGFT 9. Shri S.B.S. Reddy, Jt. DGFT 10. Shri Raj Kamal, Jt. DGFT 11. Shri Ashutosh Jindal, Jt.DGFT 12. Shri P.K.Santra, Dy. DGFT 13. Smt. Kiran Sehgal, Dy. DGFT 14. Shri M.K.Parimoo, Dy.DGFT