ALC
Circular No. 3 Dated
: 5.9.2001
Subject : Issue
of Advance
Licences on self-declaration basis as per Paragraph
7.5 of
Handbook of Procedures, Volume 1 (R.E. March 2001) – Clarification reg.
Sir,
Attention
is invited to paragraph 7.5 of Handbook of Procedures, Volume 1, as amended,
which provides for issuance of advance licences, where SION are not fixed, based
on self-declaration and undertaking by the applicants for final adjustment of
items with quantities as per norms fixed by ALC subsequently
within a period of 6 months from the date of issue of licence.
For smooth functioning of fixation of norms and proper implementation of
decisions of ALC, the following procedure/guidelines may be adopted:-
(i)
In order to ensure that the norms are fixed by ALC within the period of
six months from the date of issue of licences on self-declaration basis and also
to enable exporters in getting their cases closed at the earliest, all
licensing authorities are requested to adhere to the time schedule as
specified in paragraph 7.5 (iv) of Handbook of Procedures as amended and those
given in the SALC circular No. 1 and 3 dated 28th June 1999 and 13th
August 1999 respectively in forwarding the application and also for further
action as per the decision of the ALC conveyed to them.
(ii)
To facilitate linking of the cases of paragraph 7.5 of Handbook of
Procedures and implementation of decisions of ALC, all licensing authorities are
hereby advised to adopt common section code 24 for easy identification both at
the regional level and also in the Headuqarters office of the DGFT.
In the Headquarters office of DGFT all applications under paragraph 7.5
of HBP shall be given the file category of 50 as per the existing practice being
followed at present in this regard.
(iii)
Difficulties have been expressed in closure of DEEC Book where Ad hoc
norms have been fixed by the ALC on content basis or subject to accountability
of imported material in the export product.
In this regard it is clarified that Input Output Norms are generally
fixed by ALC by giving the absolute quantities of inputs vis-à-vis the quantity
of exports. However,
it is not always possible to give the absolute quantity of inputs on account of
various reasons and in such cases the norms are fixed on content basis or in
terms of wastage subject to accountability of imported inputs in the export
product. As
the norms are fixed by ALC, after issue of advance licences on self-declaration
with the description of export product as applied by the firm,
and also often exports are made prior to fixation of norms by the ALC,
exporters face difficulty in closure of their cases as some times export product
descriptions are modified by ALC to ensure accountability of imported inputs in
export product.
In this regard it is clarified that since the rationale behind modifying
the export product description subsequently by the ALC is to ensure
accountability of imported inputs in the export product, such cases
can also be closed based on the Customs Laboratory Test Report of the
products exported, if it gives full details of constituents of the export
products so as to ensure accountability of imported inputs in the export
product. In
other cases where Customs Laboratory Report of the product exported are not
available, the cases can be closed based on the declaration given in the
Shipping Documents/Shipping Bills of the exempted materials
with quantities used for the manufacture of the product exported as the
Customs are expected to check/verify the correctness of the declaration given by
the exporters in the shipping documents/shipping bills. The shipments having
been allowed by Customs after their assessment along with the declaration of
exporters in the Shipping documents/shipping bills the same can be
accepted for discharge and closure of DEEC Books.
(iv)
Further, while considering para 7.5 cases by the ALC, ad hoc norms are
also fixed by ALC which are valid only for a particular firm upto a specified
period. Subsequent
advance licences based on these ad hoc norms can also be issued by the Licensing
Authority to the same firm up to the specified period and copy of the
application in such cases need not be sent to ALC for fixation of norms.
Also, such cases should not be opened under Section Code No. 24.
For extending the validity of ad hoc norms, the firm may be
advised to approach the ALC well in advance along with application in
Appendix 11A with latest set of production and consumption data and other
details as per existing procedure.
In this regard the instructions contained in SALC circular No.
3/1999-2002 dated 13.8.1999 may be referred to.
(v)
It has also been observed that often the firms after obtaining the
advance licences on self-declaration basis make the full imports of the inputs
given in the licences as per self-declaration without waiting for the final
fixation of norms by the ALC. In many cases, in situation like the one described
above, many
firms have made requests for enhancement of the quantity of exports in
proportion to the excess quantity imported as against the norms fixed by ALC.
In the light of the general policy available under paragraph 7.21 of the
Handbook of Procedures for pro-rata enhancement of the quantity of imports and
also the exports in the advance licences already granted to the firm, it is
clarified that such requests may be considered by the Licensing
Authorities as per the provisions contained under paragraph 7.21 of the Handbook
of Procedures without referring the matter to the ALC so long the request for
pro-rata enhancement in the quantity of export is as per the norms fixed by the
ALC against the corresponding Para 7.5 application of the applicant.
In all cases where excess imports have been made as explained above and
where the requests for pro-rata enhancement in the export quantity is not made,
the cases may be regularised by payment of Customs duty and interest as
per the provisions contained under paragraph 7.5 of HBP.
2.
This may be brought to the notice of all concerned for strict compliance.
The instructions contained in the SALC circular No. 1/1999-2002 dated 28th
June, 1999 and SALC circular No. 3/1999-2002 dated 13th August, 1999
are also reiterated for strict compliance.
5. This issues with the approval of the DGFT.