THE CUSTOMS TARIFF ACT 1975 (Notification)
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Notification No. 77/98-Cus., dated 16th October, 1998

Exemption to materials imported against a Special Advance Licence with actual user condition.

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India, against a Special Advance Licence with Actual User Condition in terms of para 7.4 of the Export and Import Policy 1997-2002 notified by the Government of India in the Ministry of Commerce vide Public Notice No. 41 (RE-98)/1997-2002, dated the 16th September, 1998 (hereinafter referred to as the said licence), from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty leviable thereon under sub-sections (1), (3) and (5) of section 3 of the said Customs Tariff Act, subject to the following conditions, namely.-

(i) that the materials imported are covered by the said licence and an Actual User Duty Exemption Entitlement Certificate (hereinafter referred to as the said certificate), issued by the Licensing Authority in the form specified in the Schedule annexed to this notification, in respect of quantity and description;

Provided that the value and details of the technical specifications of the materials shall be submitted by the importer to the Assistant Commissioner of Customs or Deputy Commissioner of Customs having jurisdiction in the Bill of Entry and Part "D" of the said certificate at the time of clearance;

(ii) that materials imported are required in export of the resultant electronic products made of the materials and the import of the materials is made prior to the export;

(iii) that the resultant electronic products shall be manufactured only out of the materials imported under this notification.

(iv) that the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs having jurisdiction binding himself to pay on demand an amount equal to the duty leviable, but for the exemption, on the imported materials in respect of which the conditions specified in this notification have not been complied with, together with interest at the rate of fifteen per cent per annum from the date of clearance of the said materials;

(v) that the said licence and Part I of the said certificate are produced before the proper officer of customs at the time of clearance for debit;

(vi) that the importer shall maintain the record of imported materials and the export products in the format as specified in the Annexure to this notification;

(vii) the Designated Officer of the Department of Electronics (hereinafter referred to as the said officer) verifies the relevance/ use ability of the imported materials in the export product as well as the quantity of such materials required for the manufacture of such export product. The said officer shall also verify the actual utilisation of the imported materials in the export product as well as the wastage in respect of export product in terms of the standard input output norms as specified in Volume II of the Hand Book of Procedure of the Export and Import Policy 1997-2002 (hereinafter referred to as the Hand Book):

Provided that where such standard input output norms are not specified in the Hand Book for an export product, the said officer shall determine and verify the relevance/use ability of the imported materials as well as the quantity of such materials required for the manufacture of such export product. The said officer shall also verify the actual utilisation of the imported materials in such export product as well as the wastage as is determined by him to be reasonable.

(viii) that the imports and exports are undertaken through the sea ports at Mumbai, Calcutta, Cochin, Magdalla, Kakinada, Kandla, Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam , Dahej, Nagapattinam , Okha, Mundhra , Jamnagar and Muldwarka or through any of the airports at Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Calcutta, Coimbatore, Delhi, Hyderabad, Jaipur, Madras, Srinagar, Trivandrum, Varanasi, Nagpur and Cochin or through any of the Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur and Varanasi, Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Daulatabad (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy (Andhra Pradesh), Salem, Malanpur, Singanallur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi , Madurai , Bhilwada, Pondichery, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata (Amritsar), Karur, Miraj , Rewari , Bhusawal , Jamshedpur , Surajpur and Dadri or through the Land Customs Station at Ranaghat,Singhabad, Raxaul, Jogbani, Nautanva(Sonauli), Petrapole and Mahadipur.

Provided that the Commissioner of Customs, may by Special Order and subject to such conditions as may be specified by him, permit import and export through any other Sea port, Airport, or Inland Container Depot or through the Land Customs Station;

(ix) that the sourcing of the imported materials from private bonded warehouses set up under para 5.15 of the Export and Import Policy 1997-2002 would be allowed;

(x) that the export obligation is discharged within the period specified in the said certificate or within such extended period as may be granted by the Licensing Authority by exporting resultant products manufactured in India which are specified in Part "E" of the said certificate (hereinafter referred to as resultant products):

(xi) that the importer produces certificate from the said officer to the effect that the imported materials have been actually utilised in the manufacture of resultant products and the said certificate is produced as evidence of discharge of export obligation to the Assistant Commissioner of Customs or Deputy Commissioner of Customs having jurisdiction within a period of thirty days of the expiry of period allowed for fulfilment of export obligation, or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs, may allow;

(xii) that the imported materials shall not be disposed of or utilised in any manner except for utilisation in discharge of export obligation;

Provided that disposal of waste shall be allowed upto the limits specified in the standard input out-put norms mentioned in the said hand book without payment of customs duty.

Provided further that disposal of waste arising in respect of resultant product not mentioned in the standard input output norms in the said hand book shall be allowed without payment of Customs duty subject to verification by the said officer.

Provided also that imported materials which remain unutilised after the expiry of the export obligation period, shall be liable to customs duty but for the exemption contained in this notification, together with interest at the rate of twenty four per cent per annum from the date of clearance of the materials.

(xiii) that the importer is registered with both the Central Excise Officer deputed for this purpose and the Electronics and Software Export Promotion Council.

2. In a case of default in export obligation, when the duty on goods is paid to regularise the default, the amount of interest paid by the importer shall not exceed the amount of duty if such regularisation has been dealt in terms of Public Notice of the Government of India in the Ministry of Commerce No. 22 (RE-2013)/2009-2014 dated the 12th August, 2013.

Explanation. - In this notification, -

(i) "Licensing Authority" means the Director General of Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant a licence under the said Act;

(ii) "materials" means -

(a) raw materials, components, intermediates, consumables, computer software and parts required for manufacture of resultant product specified in Part E of the said certificate.

(b) mandatory spares within a value limit of ten per cent of the value of said licence which are required to be exported along with the resultant product; and

THE SCHEDULE

ACTUAL USER DUTY EXEMPTION ENTITLEMENT CERTIFICATE

Part 1

(IMPORT) (This consists of ................... pages)

Sl. No..................... (IMP) Date of issue ....................

Port of Registration ........................

Issued to.................................................................

........................................................................................... (name and full address of

............................................................................................ the licencee)

Materials imported against licence No....... dated........ issued by.......... to the above licencee and covered by the list of materials specified in list (a) of Part "C" of this certificate would be eligible for exemption from customs duties subject to the conditions specified in the notification of the Government of India, Ministry of Finance, Department of Revenue No .... Customs, dated the ......1998.

The importer shall discharge the export obligation in terms of the said notification within ....... months from the date of issue of licence.

A Bond with security/surety in terms of the said notification, shall be executed before clearance of the goods from the Customs.

Actual User Duty Exemption Entitlement Certificate

	Signature
	Seal of licensing authority
	Date

PART - A

Names and addresses of the factories where the resultant products for export are manufactured.

PART -B

Names and addresses of factories where the ancillaries to the resultant products for export are manufactured.

PART-C

List of materials of import

(a) Materials to be imported under this certificate

Sl. No.	Description of item of Import	Quantity	Sr. No. of the resultant products in Part E
1	2	3	4

(b) Other Imported Materials to be used in export certificate

Sl. No.	Description	Quantity
1	2	3

PART-D

Particulars of import of materials

Sl. No.	No. of the materials in part-C	Bill of Entry No. date and Customs House of Import	Description technical specifications and	Quantity and net weight
1	2	3	4	5

CIF Value	Duty Leviable but for exemption		Signature of the Customs Officer with Name, Designation & Seal.
Heading No. of the First Schedule to the Customs Tariff . Act,1975 and Heading No. in the Schedule to the Central Excise Tariff Act, 1985 for levy of Additional Duty	Rate of Duty	Amount of Duty
6	7	8	9

(Part E & F figure in the Export Part of this DEEC)

PART -G

Duties Paid on Materials in Respect of which the Conditions of said Notification are not complied with

Sl.No.	Sl. No. in part D under which the import of the materials has been entered	Description, Quantity and value of Materials on which duty paid	Rate of Duty leviable (i) Basic (ii) Auxiliary (iii) Additional
1	2	3	4

Amount of (i) Duty (ii) Interest	Particulars of duty paying documents	Signature of the Customs Officer
5	6	7

Actual User Duty Exemption Entitlement Certificate

PART 2

(EXPORT)

(This consists of........................ Pages)

Sl.No............(Exp) Date of issue ..........

Port of Registration ..............................

Issued to .................................................

........................................................................................... (name and full address of

.................................................................................................................... the licencee)

Materials imported against Licence No..........dated......... issued by...... to the above licencee and covered by the list of materials specified in list (a) of Part "C of this certificate would be eligible for exemption from customs duties subject to the conditions specified in the notification of the Government of India, Ministry of Finance, Department of Revenue No.............Customs, dated the ......... 1998.

The licencee shall discharge the export obligation in terms of the said notification within ........... months from the date of issue of licence.

A Bond with surety/security in terms of the said notification, shall be executed before clearances of the goods from the customs.

	Signature
	Seal of licensing authority
	Date

PART - A

Name and address of the factories where the resultant products for export are manufactured.

PART-B

Name and address of factories where the ancillaries to the resultant products for export are manufactured.

(Parts C and D figure in the Imports Part of this DEEC)

PART -E

Resultant products

Sl. No.	Description of item of Import	Quantity	Sr. No. of the resultant products in Part E
1	2	3	4

PART- F

Particulars of exports

Sl. No.	Sl. No. of the resultant product in part E	Name of the Customs House of Shipment	Shipping Bill No. & Date	Name of the vessel and outward entry of the vessel
1	2	3	4	5

Quantity	Net weight of the export product	Description and technical specification as per the Shipping Bill	FOB value in Rs./US$	Signature of Customs Officer with name, designation and seal & remarks if any
6	7	8	9	10

PART -H

Statement of Imports and Exports Made

Details of Imports Made

Sl. No. -	Sl. No. of partC	Description	Quantity Imported	C.I.F. Value In Rs. In Equivalent US$
1	2	3	4	5

Details of Exports Made

Sl. No. -	Sl. No. of part E	Description	Quantity Exported	C.I.F. Value In Rs. In Equivalent US$
1	2	3	4	5

1. I/We hereby declare that information given in this statement is correct.

2. I/We hereby declare that no benefit under Rule 12(l)(b) of Rule 13(l)(b) of Central Excise Rules, 1944 has been availed in respect of exports made under this DEEC.

	Signature .................................................
	Name of the signatory ............................
	Designation .............................................
	Full Address ............................................

Certificate by Chartered Accountant/Cost Accountant

I have examined that applicant firm's actual imports and exports as given above and find them as correct.

	Signature.................................................
	Seal ..........................................................
	Membership No. ....................................

Certificate of the said officer (Designated Officer of the Department of Electronics)

I have verified the relevance/use ability of the imported materials in the export product as well as the quantity required as given above and certify that the imported materials have been utilised in the export product given in Part F of the said certificate (Duty-Exemption Entitlement Certificate)

	Signature......................
	Name and designation....
	and Seal........................

ANNEXURE

Account of materials imported for use in the manufacture of export products/resultant products

Sl.No.	Date	Description of imported materials received	Quantity received	Particulars of GP 1/AR1/ Other approved document, Bill of Entry No. and date	Name and Address of the manufacturer/importer/stock-yard/ Private Bonded Warehouse from whom the imported materials received
1	2	3	4	5

Range and Division/Custom House from whose jurisdiction the imported materials received	Issued for use in or in relation to the manufacture of export product/ resultant product	Description of the export product/ resultant product
Chit No. and date	Quantity	Description of the export product/ resultant product
7	8	9	10

Name of the Custom House of export	Shipping Bill No. and date	Re-export of defective imported materials, if any on payment of duty	Balance Quantity in stock
Shipping Bill and date	Quantity No		Balance Quantity in stock
11	12	13	14	15

Central Excise Officer's Initials	Remarks
16	17

Notification No. 77/98-Cus., dated 16-10-1998 corrected by Corrigendum F. No. 605/70/98-DBK, dated 21-10-1998 and as amended by Notification No. 51/99-Cus., dated 29-4-1999 and No. 121/99-Cus., dated 4-11-1999, 120/2000 dated 15-09-2000 and Notfn.No.30/2001 dated 12.03.2001, 122/01 dated 3/12/2001, 113/02 dated 16/10/2002, 125/02 dated 12/11/2002, 84/03 dated 27/5/2003, 97/03 dated 25/6/2003 and 63/04 dated 14/5/2004) No. 46/2013-Customs dated September 26, 2013.