DGFT Committee Minutes

MINUTES OF 6th MEETING OF EPCG COMMITTEE HELD UNDER THE CHAIRMANSHIP OF SHRI SATYAN SHARDA, ADDITIONAL DIRECTOR GENERAL OF FOREIGN TRADE AT 11.00 AM ON 09.08.2019 IN COMMITTEE ROOM NO.11, H WING, UDYOG BHAWAN, NEW DELHI.

I. Following officers attended the meeting:

i. Shri A.K.Mishra, A.I.A., Ministry of Steel ii. Shri Vaibhav Bhatnagar, OSD, Department of Revenue
iii. Shri Rajbir Sharma, Joint Director General of Foreign Trade, DGFT
iv. Shri Randheep Thakur, Deputy Director General of Foreign Trade, DGFT

II. Minutes of the last Meeting held on 26.07.2019 were confirmed.

III. The Committee deliberated upon all the cases and following decisions were taken:

Sl. No. Firm’s Name and Numbers EPCG Authorisation No.
Subject Decision of the Committee
1. M/s. Gold Plus Glass Industry Limited, New Delhi

01/60/162/254 /AM20/PRC i.0530147044
dated
01.09.2008 ii.0530146074 dated 02.05.2008 iii.0530146202 dated 23.05.2008 iv.0530146540 dated
30.06.2008 v.0530146692 dated 16.07.2008 vi.0530146782 dated 30.07.2008 vii.0530146894 dated
13.08.2008 viii.0530156887 dated 08.11.2011 ix.0530148062 dated
24.12.2008 x.0530149401 dated
15.07.2009 xi.0530147813 dated
24.11.2008 Extending the time period for meeting the EO and waiver of the composition fee.

The request of the party is for extension in EOP and waiver of payment of composition fee required for extension.

The Committee noted that as per provisions of HBP, the extension in export obligation period is subject to payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation for each year of extension or an enhancement in export obligation imposed to the extent of 10% of total export
obligation imposed under authorization for each year of extension, as the case may be, at the choice of the exporter.

The Committee noted that the party has stated that they are the Float Glass manufacturer based
in Roorkee and the facility of 1160 tons per
day was set with huge investment. The plant
was imported against EPCG licences against
which they are liable to fulfill export obligations as since production they have been
struggling to sustain in this on-going
economic scenario. The Company went into CDR due to volatility in fuel prices which adversely affected the Company's financial scenario. However, Company had made an exit from the CDR within the span of 4 years (though

xii.0530146047 dated
30.04.2008 xiii.0530151405 dated 02.03.2010 the CDR original plan was for 10 years), with
the clear intent to expand the operations with
the second float line. The Company is in the process of redeeming the EPCG Licences but needs extended time beyond what is permitted in the Policy to meet the complete obligation and also without payment of the composition fee.

The Committee deliberated upon the request and decided to reject it as there is no merit in the reasons given by the party for extended time beyond what is permitted in the Policy to meet the complete obligation and also without payment of the composition fee. 2. M/s. Nithya Packaging Pvt Ltd, Puducherry

01/60/162/241 /AM20/PRC 2530000242
dated
26.05.2011 Consideration of export of alternate goods for fulfillment of export obligation
The Committee noted that the export obligation period of subject EPCG authorisation has expired and the party has not made any export in the export obligation period till date.

The Committee deliberated upon the case and decided to reject it as there is no merit in the request.
3. M/s. Taj Karnataka Hotels and Resorts Limited., New Delhi

01/60/162/270 /AM20/PRC 0530147829
dated 26.11.2008 Waiver of annual average or reductions of annual average for the period 2008-09
The request of the party is for waiver of annual average owing to lesser footfall of foreign tourists after the terrorist attack on 26.11.2008 in
Mumbai.

decided to reject it as there is no merit in the grounds cited by the party.
4. M/s. Adyar Gate Hotels Ltd., Chennai

01/60/162/230 /AM20/PRC i.0430009396
dated
01.12.2011
ii.0430009405 dated
13.01.2011. Waiver of annual average performance condition The request of the party is for waiver of annual average as they could not maintain annual average owing to increased room supply and decline in tourist arrival due to travel advisory.

decided to reject it as the party has there is no merit in the grounds cited by the party. 5. M/s. Gee Pee Electrospark Private Limited., Secunderabad

01/60/162/210 /AM20/PRC 0930005520
dated 02.02.2010
Request to condone the shortfall in annual average EO against EPCG Authorization. The request of the party is for condonation of shortfall of maintenance of annual average as they could not maintain annual average owing to political agitation during formation of State of Telangana, high fixation of average EO etc.

decided to reject it as there is no merit in the

request. 6. M/s. D.H. Fashions, Amritsar

01/60/162/245 /AM20/PRC 1230000761
dated
21.04.2011 Relaxation from mentioning EPCG holder’s name in 3rd party S/Bills where EPCG Authorisation No. & date is endorsed/ mentioned, for redemption of EPCG license
The Committee noted that the request of the party is for condonation of procedural lapse of non- mentioning of name of EPCG authorisation holder in third party shipping Bills dated prior to 01.04.2015 in which EPCG authorisation number and date is mentioned.

decided to defer the case for further examination. 7. M/s. Modern Automotives Ltd, CLA New Delhi

01/60/162/233 /AM20/PRC 0530142016
dated 22.09.2006 Regularization of export made beyond the 2nd extended period under EPCG license
The Committee noted that the party has not fulfilled EO in spite of obtaining first and second extension in EOP till 22.09.2018. The party has now sought extension in EOP beyond first and second extension in EOP already granted to fulfil EO.

decided to reject it as there is no merit in the request. 8. M/s. Malik International , Haryana

01/60/162/271 /AM20/PRC i.0530132857
dated
20.05.2002
ii.0530133002 dated
20.06.2002 Considering the fulfillment of EO against EPCG authorization The request of the party is for counting of exports for fulfillment of annual average EO in US $ instead of INR. The party has submitted that they have not been able to fulfill Annual Average EO in INR due to fall in value of US$ in terms of rupee since 2002, when EPCG authorisations were obtained. However, they had fulfilled Average EO in foreign currency i.e. in US$.

The Committee observed that Annual Average Export Obligation is calculated on the basis of total FOB Value of exports/services rendered for the same/similar product/services in the preceding three years in Rupees. The valuation of Rupee is based on market determined exchange rate system which is subject to market fluctuations.
There is no provision in FTP/HBP to link fluctuation in international value of Rupee with fulfillment of Annual Average Export Obligation.

decided to reject it as there is no merit in the request.

M/s. Sarralle Equipment India Pvt Ltd., Kolkata

01/60/162/239 /AM20/PRC 0230001576
dated
15.06.2006

1. Request for extension of EOP.

Relaxation from submission of installation certificate issued by central excise officer and acceptance of installation certificate issued by the Chartered Engineer. 3. Considering the free shipping bills towards fulfillment of export obligation. 4. Relaxation from submission of e-BRC and acceptance of bank statement against EPCG License The Committee noted that the party has not fulfilled EO in spite of expiry of export obligation period on 15.06.2014. The case has been adjudicated vide Order in original dated 17.01.2018. The appeal against the Order-in- Original dated 17.01.2018 has also been rejected vide Order-in-Appeal dated 29.01.2019. The Office of Additional DGFT, Kolkata vide letter dated 20.03.2019 has asked to deposit penalty amount and custom duty as per the Order-in-Original dated 17.01.2018.

decided to reject it as the case has already been adjudicated with advice to comply with the Order-in-Original dated 17.01.2018. 10. M/s. Arunachala Gounder Textile Mills Pvt Ltd, Tamil Nadu

01/36/218/133 /AM- 19/EPCG-I i.3230015050
dated 15.06.2010 ii.3230015911 dated 24.11.2010 iii.323001685 1 dated
08.06.2011 Review of the decision of EPCG Committee meeting held on 03.01.2019 regarding refixation of Annual Average EO due to decline in exports. The Committee observed that the request was rejected in the EPCG Committee meeting held on 03.01.2019.

Earlier, the party vide their letter dated 16.09.2018 requested for re-fixation of the annual average EO stating that they have obtained the subject EPCG authorisations having Annual Average EO fixed for AM11 and AM12 based
on the past three years export performance which is consolidated of all exports made in different ITCHSCodes 55101210, 55103010, 52052790, 52052690, 55101110, 52062300, 52051310. However, they could not export over and above the average export declared as per past export performance because their company started facing declining export performance since 2010-11 onwards by more than 30 %. This situation was not deliberated by company as the overall international market was sluggish.

The request was taken up in EPCG Committee meeting held on 03.01.2019 and was rejected on the ground that any business is prone to

international fluctuations in demand and this reason was found to be devoid of any merit.

Now, in their request for review the party has requested to fix Annual Average for the product exported towards specific EO.

The Committee heard the representation of the party who appeared for the PH.

The Committee noted that Annual Average has been fixed based on their export turnover certified by the Chartered Account during AM08, AM09 and AM10. The items allowed in the EPCG authorisation for export are yarn in different forms bearing different ITC(HS) codes which are falling under the category of same and similar products in terms of para 5.04(b) of FTP stipulating that the export obligation under the scheme shall be, over and above, the average level of exports achieved by the applicant in the preceding three licensing years for the same and similar products within the overall EO period including extended EO period.

decided to maintain the decision of rejection of request taken in its meeting held on 03.01.2019 as the reasons for review also are devoid of any merit. 11. M/s. Honda Motorcycle and Scooter India Pvt Ltd., Delhi

01/36/218/76/ AM- 17/EPCG-I i.0530165422
dated
17.07.2015 ii.0530166698 dated
07.01.2016 i. Permission for scrapping of machines. ii. Waiver from submission of installation certificate of Capital goods. The Committee observed that the request of the party has been taken up in its meetings held on 29.08.2018 and 29.03.2019.

The Committee noted that while unpacking the capital goods imported under EPCG authorisation No.0530165422 dated 17.07.2015, one machine was found in damaged condition beyond repairs and during the transit the capital goods imported against authorisation No.0530166698 dated 07.01.2016, these were damaged due to fire and as per survey report, these machines are also beyond repair. The party has claimed insurance
against the damaged goods and requested for
permission to scrap the same. The party has submitted that they will fulfill EO within the EOP against the damaged machines of both the

authorizations.

The matter was considered in the EPCG Committee Meeting held on 29.08.2018 and it was decided to allow waiver in submission of installation certificate subject to the party obtaining verification report from Jurisdictional Custom Authority and necessary evidence of the capital goods having been damaged beyond repair, to RA.

Subsequently, the party vide letter dated 16.01.2019, stated that they have sent letter to customs and CGST/Central Excise for inspection of damage machines imported under subject EPCG authorizations. Despite the follow-ups they are unable to get the inspection done till date. They have received reply letters from Ahmedabad customs and CGST/Central Excise in this regards wherein both department are asking to get it done from other department.

The request was taken up in EPCG Committee meeting held on 29.03.2019 it was decided to allow acceptance of installation certificate from Chartered Engineer, subject to intimation to
the Jurisdictional Customs Authority and further subject to payment of Rs. 5000/- against the Authorisation.

Now, the party, vide letter dated 28.05.2019, has stated that instead of asking them to produce a chartered engineer report to the effect that the imported machines were damaged beyond repair, the EPCG Committee has asked them to produce an installation certificate from chartered engineer, which is not possible since the machines are already damaged beyond repair and hence, could not be installed. Therefore, the party has requested for carrying out the suitable modification in the language of the subject decision by removing the condition of producing the installation certificate by chartered engineer and replacing it with valuation report by chartered engineer confirming the damage beyond repair.

decided to recommend to DG for relaxation under Para 2.58 of FTP 2015-20 to allow submission of valuation report by chartered engineer confirming the damage beyond repair instead of installation certificate from Chartered Engineer, subject to submission of 100% Bank Guarantee till the export obligation is fulfilled against the Authorisations. This has the approval of DG. 12. M/s. Biogenomics Limited, Puducherry

01/36/218/129 /AM- 18/EPCG-I i.0330028617
dated 08.02.2011 ii.0330034037 dated
22.10.2012 i. Extension of block-wise EOP, extension in EOP and, ii. Additional of alternate services. The Committee noted that the original export product as per the EPCG authorisations is Bio Technological Therapeutics (Human Insulin) and the party has requested for addition of alternate service for fulfilment of export obligation the period for which has since been expired. The Committee further noted that the party has not made any exports in the stipulated EOP.

decided to reject it as there is no merit in the request. 13. M/s. Baramati Agro Limited, Pimpali

01/36/218/215 /AM- 19/EPCG-I 0330031855
dated 13.02.2012 Request for acceptance of installation certificate issued by Chartered Engineer instead of Central excise and regularization of shifting of capital goods. The party has requested for acceptance of installation certificate issued by Chartered Engineer instead of Central excise and regularisation of shifting of capital goods.
The Committee noted that RA, Mumbai vide deficiency letter dated 07.04.2015 has requested the party to submit installation certificate certified by Central excise authority and also stated that the installation address shown on chartered engineer certificate does not tally with authorisation. The installation address mentioned in the subject EPCG authorisation is shown as (i). at Post, Shetphaigade, Indapur, Pune, Maharashtra-413102 and (ii). at Post Pimpli, baramati, Pune, Maharashtra-413102 while the address of installation of capital goods shown in the installation certificate is S.No.204/45/6, Suryagaon Raste Pimpalkhute Road Taluuka Yeola, Pin – 413012.
The Committee decided to recommend to DG for relaxation under Para 2.58 of FTP 2015-20

to :

(a) allow acceptance of installation certificate from Chartered Engineer instead of Central Excise, subject to verification by Jurisdictional GST authority, subject to payment of Rs.5000/- against the Authorisation.

(b) to grant ex-post facto approval regarding shifting of capital goods from (i). AT Post, Shetphaigade, Indapur, Pune, Maharashtra- 413102 and (ii). AT Post Pimpli, Baramati, Pune, Maharashtra-413102 to S.No.204/45/6, Suryagaon Raste Pimpalkhute Road Taluuka Yeola, Pin – 413012, subject to the condition that new address is mentioned in the IEC and RCMC. The party will give intimation to Jurisdictional Customs Authority about the new address and deposit composition fee of Rs.5000/- to RA. Further, RA to verify that no ECA/DRI/ Customs action against the party is pending. This has the approval of DG. 14. M/s. Solapur Tarun Bharat Media Limited., Pune

01/37/218/82/ AM- 19/EPCG-II 3130009119
dated 22.12.2015
Request for addition of export products. The request of the party is for allowing addition of export products in respect of EPCG licence issued for export of “Branded and decorative Handmade Paper box (handicraft articles) of paper mache (memo Box) HS code 4817 3090.

The Committee observed that the case was taken up in EPCG Committee meeting held on 27.09.2018 and deferred for calling a factual report from RA.

Now, RA, Pune, vide email dated 25.06.2019, has forwarded a copy of party’s application dated 03.08.2018 addressed to EPCG Committee and stated that their office has received an application for addition of export items.

noted that the request is not for any relaxation of the procedure and thus decided to remand the case back to RA who shall decide the request on the basis of applicable policy provisions on merit. 15. M/s. Swati Pushpam Pvt Ltd, 0930001546
dated
17.06.2005 Request for review of the decision taken The Committee observed that the request was examined by the EPCG Committee in its meeting held on 12.07.2018 which, after deliberating

Hyderabad

01/37/218/04/ AM- 18/EPCG-II in EPCG Committee meeting held on 12.07.2018 regarding extension in EOP for eight years in terms of provisions of

Para 5.5.1 of

FTP 2004-09. upon the case, had decided to reject it as the above provision has been deleted in the FTP (RE:2017)/2015-20 released on 05.12.2017.

The Committee heard the representative of the party who appeared for the PH. The representative of the party submitted that extension of EOP is very much essential for the existence of their MSME unit which is conceptually meant for exports. They are having full support of their Telangana State Government who has also recommended their case. decided to reject the request for EOP extension as the party has not made any exports since the date of issuance of the licence and also failed to bring out new facts or circumstances that warrant review of the earlier decision. 16. M/s. P.Vasudevan Webcot, Enalkulam

01/37/218/235 /AM- 19/EPCG-II i.1030002859
dated
19.05.2015 ii.1030003451 dated
28.12.2017 Request for permission to take over the EPCG obligation by M/s. Dynamic Techno Medicals Pvt Ltd,-Regarding. The Committee observed that case was taken up in EPCG Committee meeting held on 12.07.2019 and it was decided to defer it for calling the representative for PH.

The Committee heard the representative of the party who appeared for the PH.

The Committee requested the representative of the party to clarify response on RA, Cochin’s letter dated 13.11.2018 requesting them to submit documentary proof from the Registrar of Companies towards taking over of company by M/s. Dynamic Techno Medicals (P) Ltd, Aluva and to confirm whether IEC and RCMC of M/s. Dynamic Techno Medicals (P) Ltd, Aluva has been modified with necessary changes.

In response representative of the party stated that they have provided requisite clarifications after modifying the IEC and RCMC with necessary changes and stated that it is only a business purchase of a proprietary concern and hence no statutory filing with Registrar of companies is required. However, the representative of the party could not clarify the status of IEC of M/s.P. Vasudevan Webcot, Erunakulam after taking over.

decided to defer the matter to examine it on file. 17. M/s. Chandak Woollens Pvt Ltd, Bikaner(Raj)

01/36/218/100 /AM- 17/EPCG-I 1330001544
dated
12.03.2007 Review of the decision taken in EPCG Committee meeting held on 01.11.2018 and requested for extension in EOP from the date of endorsement. The Committee observed that the case was placed in EPCG Committee meeting held on 01.11.2018 and it was decided to remand the case back to RA to examine the request on the basis of nexus certificate and subject to the condition that the export product is manufactured by the use of the same capital goods.

Earlier, the party vide letter dated 24.06.2016 had requested for extension of EOP for 02 years in respect of EPCG authorization No. 1330001544 dated 12.03.2007 and correction in export item as “Tufted Carpets” instead of “woolen carpets” as it was wrongly mentioned. The subject EPCG authorisation has been issued for import of “Second Hand Woolen Carpet Textile Machine for Carpet Tufting along with Accessories”.

The Committee heard the representation of the party who appeared for the PH. The representative of the party stated that RA, Jaipur has amended the export product and granted extension of EOP for two years endorsed on 01.02.2019, which is valid upto 31.03.2017 from the date of expiry. RA, Jaipur should have granted extension from the date of endorsement and not from the date of original EOP period. EOP extension is granted to them only after a period of 2 years and 7 months and 6 days.

decided to defer it for further examination on file. 18 to 24 Withdrawn for taking up in the next meeting as the Chairman of the Committee had to leave during the meeting due to exigency of work related to Review of FTP 2015-20. 25. M/s. Divy Bhoj Sansthaan , New Delhi

01/36/218/237 /AM- 19/EPCG-I i.0530157213 dated 16.12.2011 ii.0530157577 dated 07.02.2012 Request for transfer of EPCG authorizations. The Committee observed that the case was deferred in the EPCG Committee meeting held on 14.06.2019 due to non-appearance of the representative of the party for hearing. The case was again taken up in EPCG Committee meeting held on 12.07.2019 and the matter was deferred to examine it further by calling the party for personal hearing.

The Committee heard the representative of the party who appeared for the PH.

The representative of the party submitted that break up of partnership and their failure to get into international market has made them realise that they are unable to continue the operation and, therefore, fulfilling the EO is out of their control. They have now entered into slump sale agreement with M/s. An Products and Machines Pvt Ltd, who has agreed to fulfil the EO. The representative of the party further informed that only assets of M/s. Divy Bhoj Sansthaan, New Delhi installed at their factory site at village Goal Jamala, Nalagarh, Solan, Himachal Pradesh have been transferred to M/s. An products and Machines Pvt Ltd for fulfillment of EO in respect of subject EPCG authorisation.

decided to reject it as the capital goods imported under EPCG Scheme are subject to actual user condition till EO is complete. 26 to 38 Withdrawn for taking up in the next meeting as the Chairman of the Committee had to leave during the meeting due to exigency of work related to Review of FTP 2015-20.

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