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Option to close cases of default in Export Obligation (EO) - Notification No. 46/2013-Customs dated 26.9.2013
October, 11th 2013
                                                                     Circular No. 40/2013-Customs
                                         Government of India
                            Ministry of Finance, Department of Revenue
                                Central Board of Excise & Customs
                                          Drawback Division
                                                            New Delhi, dated the 9th October , 2013
Chief Commissioners of Customs / Customs (Prev) (All),
Chief Commissioners of Central Excise & Customs (All)
Directors General of CBEC / Chief Commissioner (AR), CESTAT (All)
Commissioners of Customs / Customs (Prev)/ Customs & Central Excise (All)
Commissioners of Customs (Appeals)/ Customs & Central Excise (Appeals) (All)


     Subject: Option to close cases of default in Export Obligation (EO) - Notification
                          No. 46/2013-Customs dated 26.9.2013

        The Ministry has issued Notification No. 46/2013-Customs dated 26.9.2013 to amend 36
Customs notifications pertaining to Advance License/DEEC/ Advance Authorization/DFIA/ EPCG
relating to the Policy periods from 1992-1997 to 2004-2009. This is to implement the Public Notice
No. 22 (RE-2013)/2009-2014 dated 12.8.13 notified by DGFT that has provided a procedure, under
category of regularization of bona fide defaults, in which all pending cases of the default in meeting
EO may be regularized by the authorization holder on payment of applicable customs duty,
corresponding to the shortfall in export obligation, along with interest on such customs duty, but the
interest to be so paid, under this option, shall not exceed the amount of customs duty payable for
the default. The authorization holder choosing to avail this procedure must complete the process of
payment on or before 31.3.2014.

2.      The amendments made by the Notification No. 46/2013-Customs provide that in a case of
default in export obligation, when the duty on the goods is paid to regularize the default, the
amount of interest paid by the importer shall not exceed the amount of duty if such regularization
has been dealt in terms of said Public Notice of DGFT. No other change is involved.

3.      It may be noted that the cases where export obligation period is yet to be over, are not
covered under the Option. Also, normally no refund is envisaged to arise on account of choosing
the Option. However, there may be cases of calculation mistakes to be dealt on merits. Also, the
DGFT PN No. 22 (RE-2013)/2009-2014 dated 12.8.13 specifies that necessary procedures would
be indicated separately.

4.       The Commissioners are to ensure that the cases under the Option are monitored and
tracked from the initial stages of exporter approaching for paying the duty, etc. so that there is
efficient handling and the subsequent actions, for expeditious closure of these older cases of bona
fide EO default, take place seamlessly, if infringement of other conditions is not involved. Suitable
mechanism for this should be put in place and closely supervised by the Commissioners.
5. Each Chief Commissioner of Customs / Customs (Prev) / Central Excise & Customs shall provide by 3rd of the succeeding month (beginning with report for October 2013 and ending with report for March 2014) a report to the office of Chief Commissioner of Customs Delhi Zone enabling Delhi Customs Zone to prepare and provide a Zone-wise, all-India monthly report to the Board by 5th of every month in the following format: All-India report on Option to close cases of default in EO upto MM/YYYY Oct 2013 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Total upto the month Interest exempted Interest exempted Interest paid Interest paid No. of cases No. of cases Zone Name Duty paid Duty paid Sr 1 2 and so on Sum Note ­ Every report to contain the previous months' figures 6. This Circular may be brought to the notice of all concerned by way of issuance of standing order/instruction/trade notice. Difficulties faced, if any, may please immediately be brought to the notice of the Board. Yours faithfully, (Rajesh Kumar Agarwal) OSD (Drawback) Telefax:23367563/ Email:
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