Amnesty for Advance Authorization Scheme (AAS) and Export Promotion Capital Goods (EPCG)

Coverage

All variants of authorization issued under AAS and EPCG:

• Under Foreign Trade Policy (FTP) 2009-14 till 31 March 2015
• Under FTP 2004-09 and before,?but limited to Export Obligations (EO) period (original or extended)?was valid beyond 12 August 2013.

Authorizations issued in FTP 2015-20 are excluded from the Amnesty, the intent of the amnesty to benefit extremally old cases.

Detail of the Scheme

As per the Scheme, Regularization can be done by the authorization holder on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation and interest at the rate of 100% of such duties exempted.

However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.

Scheme will be applied on the DGFT Portal through a separate application. The applicant will have to register themselves for the same before 30.06.2023 and payment of the dues will be made before 30.09.2023

If entire EO is in default - Pay customs duty plus interest with the Jurisdictional Customs - Inform Regional Authority of DGFT

If Partial EO is in default - Regional Authority shall examine the case through application field for EODC or request made by the applicant. Accordingly the default shall be communicated for making payment.

After examining the due payments, the RA shall issue EODC.

Cases adjudicated or pending

1. Cases which have already been adjudicated or pending adjudication and where appeal has not been filed :- Firms will produce a copy of this closure letter from the concerned RA, to the Adjudicating Authority.
2. In case an appeal has been filed :- then this closure letter will have to be submitted to the Appellate Authority. Accordingly, the Adjudicating Authority/Appellate Authority will decide on closure of such case/appeal and will inform the same to the Appellant and to the concerned RA.

Other Key Points

1. Cases under investigation or cases adjudicated for/involving fraud, misdeclaration or unauthorized diversion of material and/or capital goods will be excluded from the amnesty.

Neither CENVAT Credit nor Refund, under any provision of law, of any amount shall be allowed on duties paid under this scheme. The applicant shall also give an undertaking that they will not file any application for CENVAT Credit or refund of any duty paid under this scheme before any authority and/or before any court of law.

1. If duty along with applicable interest has already been deposited in full, the case would not be eligible for coverage.

Examples

Our 2 Cents

1. Amnesty should have expended it's scope to authorizations issued in FTP 2015-20 as well.
2. Genuine cases, where the decline in Exports was due to external uncontrollable factors, in such cases, there should have been a relief in respect with interest.
3. Outcome of litigation of Fraud/Misdeclaration/Classification on the payments made through scheme.
4. Recently, in Mahindra Judgement, Bombay High Court held that interest or penalty due to delayed payment of tax cannot be levied in absence of specific provisions. Therefore, no interest and penalty can be levied on the portion of payment pertaining to surcharge, CVD and SAD.

Thus, there are many unsolved questions/mysteries. But, now that's the policy for you!

In case of any doubt/clarification, feel free to reach us at [email protected] or +91 9953357999

Disclaimer: The information, content, data, etc. (Content) provided through this writeup is for general information purposes only and is not intended to be a substitute for specific legal, financial, etc. advice or research. The facts and outcomes may vary in each case with respect to the circumstances.