REGD. NO. D.L.-33004/93

The Gazette of IndiaEXTRAORDINARY

PART II—Section 3—Sub-section (i)

PUBLISHED BY AUTHORITY

No. 459] NEW DELHI, THURSDAY, DECEMBER 30, 1993/PAUSA 9,1915

(1)2980GI/93

2 THE GAZETTE OF INDIA' EXTRAORDINARY |PARF II—SEC. 3(i)]

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4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]

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MINISTRY OF COMMERCE

(Directorate General of Foreign Trade)

NOTIFICATION

New Delhi, the 30th December, 1993

G-S.R. 791(E).—In exercise of the powersconferred by section 19 of the Foreign Trade(Development and Regulation) Act, 1992 (22 of1992), the Central Government hereby makes thefollowing rules, namely :—

1. Short title and commencement.—(1) Theserules may be called the Foreign Trade (Regula-tion) Rules, 1993.

(2) They shall come into force on the date oftheir publication in the Official Gazette.

2. Definitions.—In these rules unless the con-text otherwise requires,—

(a) "Act" means the Foreign Trade (Deve-lopment and Regulation) Act, 1992(22 of 1922);

(b) "charitable purpose" includes relief o\the poor, education, medical relief, andthe advancement ot any other object olgeneral public utility;

(c) "importer" or "exporter" means aperson who imports or exports goodsand holds a valid Importer-exporterCode Number granted under section 7;

(d) "licensing authority" means an authorityauthorised by the Director Generalunder sub-section (2) of section 9 togrant or renew a licence under theserules;

(e) "Policy" means the export and importPolicy formulated and announced bythe Central Government under sec-tion 5;

(f) "schedule" means a Schedule appendedto these rules;

(g) "section" means a section of the Act;

(h) "special licence" means a licence grant-ed under sub-section (2) of section 8;

(i) "value" has the meaning assigned to itin clause (41) of section 2 of theCustoms Act, 1962 (52 of 1962);

(j) words and expression used in these rulesand not defined but defined in the Actshall have the meanings respectivelyassigned to them in the Act.

3. Grant of special licence.—(1) Where theImporter-exporter Code Number granted to anyperson has been suspended or cancelled undersub-section (1) of section 8, the Director Generalmay, having regard to the following factors,grant to him a special licence, namely :—

(1) that the denial of a special licence islikely to affect the foreign trade ofIndia adversely; or

(2) that the suspension or cancellation ofthe Importer-exporter Code Number islikely to lead to non-fulfilment of anyobligation by India under any inter-national agreement;

(2) The special licence granted to any personunder sub-rule (1) shall be non-transferable.

4. Application for grant of licence.—A personmay make an application for the grant of alicence to import or export goods in accordancewith the provisions of the Policy or an Ordermade unler section 3.

5. Fee.—(1) Every application lor a licenceto import shall be accompanied by the fee speci-fied in the Schedule.

(2) The mode of deposit of fee shall be asspecified in the Schedule.

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(3) No fee shall be payable in respect of anyapplication made by :

(a) the Central Government, a State Gov-ernment or any department or anyoffice of the Government;

(b) any local authority for the bona-fideimport of goods required by it forofficial use;

(c) any institution set up for educational,charitable or missionary purposes, forthe import of goods required for itsuse;

(d) an applicant for the impart of anygoods (other than a vehicle) if theimport of the goods is for his personaluse which is not connected with tradeor manufacture.

(4) The fee once received will not be refundedexcept in the following circumstances, namely :—

(i) where the fee has been deposited inexcess of the specified scale of fee; or

(ii) where the fee has been deposited but noapplication has been made; or

(Hi) where the fee has been deposited in errorbut the applicant is exempt from pay-ment of fee.

6. Conditions of licence.—(1) lit shall bedeemed to be a condition of every licence forexport that :—

(i) no person shall transfer or acquire bytransfer any licence issued by the licens-ing authority except in accordance withthe provisions of the Policy;

(ii) the goods for the export of which thelicence is granted shall be the propertyof the licensee at the time of the export.

(2) The licensing authority may issue alicence for import subject to one or more of thefollowing conditions, namely :—

(a) that the goods covered by the licenceshall not be disposed of except in accor-dance with the provisions of the Policyor in the manner specified by thelicensing authority in the licence;

(b) that the applicant for a licence shallexecute a bond for complying with theterms and conditions of the licence.

(3) It shall be deemed to be a condition ofevery licence for import that :—

(a) no person shall transfer or acquire bytransfer any licence issued by the licens-ing authority except in accordance withthe provisions of the Policy;

(b) the goods for the import of which alicence is granted shall be the propertyof the licensee at the time of importand upto the time of clearance throughcustoms;

(c) the goods for the import of which alicence is granted shall be new goods,unless otherwise stated in the licence:

(d) the goods covered by the licencefor import shall not be exported withoutthe written permission of the DirectorGeneral.

(4) Any person importing goods from theUnited States of America in accordance with theterms of the Indo-US Memorandum of Under-standing on Technology Transfer shall alsocomply with all the conditions and assurancesspecified in the Import Certificate issued in termsof such Memorandum, and such other assurancesgiven by the person importing those goods to theGovernment of the United States of Americathrough the Government of India.

7. Refusal of licence.^—(1) The DirectorGeneral or the licensing authority may for reasonsto be recorded in writing, refuse to grant orrenew a licence if—

(a) the applicant has contravened anv lawrelating to customs or foreignexchange;

(b) the application for the licence does notsubstantially conform to any provisionof these rules;

(c) the application or any document usedin support thereof contains any falseor fraudulent or misleading statement;

(d) it has been decided by the Central Gov-ernment to canalise the export or importof goods and distribution thereof, asthe case may be, through special orspecialised agencies;

(e) any action against the applicant is forthe time being pending under the Actor rules and Orders made thereunder;

(f) the applicant is or was a managingpartner in a partnership firm, or isor was a Director of a private limitedcompany, having controlling interestagainst which any action is for the timebeing pending under the Act or rulesand Ortfers made thereunder;

(g) the applicant fails to pay any penaltyimposed on him under the Act;

(h) the applicant has tampered with nlicence;

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(i) the applicant or any agent or employeeof the applicant with his consent hasbeen a party to any corrupt or fraudu-lent practice for the purposes of obtain-ing any other licence;

y) the applicant is not eligible for a licencein accordance with any provision of thePolicy;

(k) the applicant fails to produce any docu-ment called for by the Director Generalor the licensing authority;

U) in the case of a licence for import, noforeign exchange is available for thepurpose;

(m) the application has been signed by aperson other than a person duly autho-rised by the applicant under the pro-visions of the Policy;

(n) the applicant has attempted to obtain orhas obtained cash compensatory support,duty drawback, cash assistance bene-fits allowed to Registered Exporters orany other similar benefits from theCentral Government or any agencyauthorised by the Central Governmentin relation to exports made by him onthe basis of any false, fraudulent ormisleading statement or any documentwhich is false or fabricated or tamper-ed with.

(2) The refusal of a licence under sub-rule(l)shall be without prejudice to any other actionthat may be taken against an applicant by thelicensing authority under the Act.

8. Amendment of licence.—The licensingauthority may of its own motion or on an applica-tion by the licensee, amend any licence in suchmanner as may be necessary or to rectify anyerror or omission in the licence.

9- Suspension of a licence.—(1) The DirectorGeneral or the licensing authority may by order inwriting, suspend the operation of a licencegranted to—

(a) any person, if an order of detentionhas been made against such personunder the provisions of the Conserva-tion of Foreign Exchange and Preven-tion of Smuggling Activities Act, 1974(52 of 1974); or

(b) a partnership firm or a private limitedcompany, if the person referred to inclause (a) is a partner or a whole timedirector or managing director, as thecase may be, of such firm or com-pany :

Provided that the order of suspension shall. cease to have effect in respect of the aforesaid

person or, as the case may be, the partnershipfirm or company, when the order of detentionmade against such person,—

(i) being an order of detention to which theprovisions of section 9 of the Conser-vation of Foreign Exchange and Preven-tion of Smuggling Activities Act, 1974(.52 of 1974) do not apply, has beenrevoked on the report of AdvisoryBoard under section 8 of that Act orbefore receipt of the report of theAdvisory Board or before making areference to the Advisory Board; or

(ii) being an order of detention to which theprovisions of section 9 erf the Conser-vation of Foreign Exchange and Pre-vention of Smuggling Activities Act,1974 (52 of 1974) apply, has beenrevoked on the report of the AdvisoryBo'ard under section 8 read with sub-section (2) of section 9 of that Act orbefore receipt of such report;

(iii) has been set aside by a court of compe-tent jurisdiction.

(2) The Director General or the licensingauthority may by an order in writing suspend theoperation of any licence granted under theserules, where proceedings for cancellation of suchlicence has been initiated under rule 10.

10. Cancellation of a licence.—The DirectorGeneral or the licensing authority may by anorder in writing cancel any licence granted underthese rules if—

(a) the licence has been obtained by fraud,suppression of facts or misrepresenta-tion; or

(b) the licensee has committed a breach ofany of the conditions of the licence; or

<c) the licensee has tampered with thelicence in any manner; or

(d) the licensee has contravened any lawrelating to customs or foreign exchangeor the rules and regulations relatingthereto.

11. Declaration as to value and quality ofimported goods.—On the importation into, orexporation out of, any customs ports ofany goods, whether liable to duty ornot. the owner of such goods shallin the Bill of Entry or the Shipping Bill or anyother documents prescribed under the CustomsAct 1962. state the value, quality and des-cription of such goods to the best of his know-ledge and belief and in case of exportation of

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gO*)<Js3 certily that the quality aini.spc^ncation ol the goods as stated inthose documentts. are in aceoidance wituthe terms ot the export contract enteredinto, With the buyer or consignee in pursuance orwhich the goods arc being exported and shallsubiscribe a declaration oi the truth of such state-ment at the foot of such Bill of Entry or ShippingBill or any other documents.

12. Declaration as to Importer-expoiter CodeNumber.—On the importation into or ex-portation out of any Customs port of any goodsthe importer or exporter shall in the Bill of Entryor Shipping Bill or, as the case may be, in anyother documents prescribed by rules made underthe Act or the Customs Act, 1962 (52 of 1962),state the Importer-exporter Code Number allottedto %\\m by the competent authority.

13. Utilisation of imported goods.—(1) No per-«yn shall use any imported goods allotted to himby ilie State Trading Corporation of India or anyother agency recognised by the Central Govern-ment in a manner and for the purpose, otherwise

than as declared by him in his application forsuch allotment or in anv document submitted bvhim in support of such application.

(2) No person shall dispose of any goodsimported by him against a licence except inaccordance with the terms and conditions of suchlicence.

14. Prohibition regarding making, signing ofany declaration, statement or documents:—(1) No person shall make, sign or use or causeto be made signed or used anv declaration, state-ment or document for the purposes of obtaininga licence or importing any goods knowing orhaving reason to believe that such declaration,statement or document is false in any materialparticular.

(2) No person shall employ am' corrupt orIraudulent practice for the purposes of obtainingany licence or importing or exporting any goods.

15. Power to cntetr prenrses and inspect, searchand seize goods, documents, things and conveyan-ces.-—CD Any person authorised by the CentralGovernment under sub-section (1) of section 10(hereinafter called the authorised psrson) may,at any reasonable time enter any premises inwhich—

(i) any imported goods or materials whichare liable to confiscation under the pro-visions of the Act; or

(ii) anv books of accounts or documents orthings which, in his opinion, will beuseful for, or relevant to any proceed-ings under the Act,

are suspected to have been kept or concealed andmay inspect such goads, materials, books oi."accounts, documents or tning> and may take suchnotes or extracts therefrom as he may think fit.

(2) If the authored person has reasons tobelieve that—

(i) any imparted goods or materials liableto confiscation under the Act; or

(ii) any books of accounts or documents orthings which, in his opinion, will beuseiul for, or relevant to, any proceed-ings under the Act,

aie secreted in any premises he may enter intoand search such premises for such goods, mate-rials, books of accounts, documents or things,

(3) (a) If the authorised person has reasoato believe that any imported goods ormaterials are liable to confiscationUiider the Act. he may seize suchgoods or materials together with thepackage, covering or receptacle, ifany, in which such goods or materialsare found to have been mixed with anyother goods or materials :

Provided that where it is not practi-cable to seize any such goods ormaterials, the authorised person mayserve on the owner of the goods ormaterials an order that he shall notremove, part with or otherwise dealwith the goods or materia's except withth<* previous permission of the autho-rised person.

(b) Where any goods or materials are seiz-ed under clause (a) and no notice inrespect thereof is given within sixmonths of the seizure of the goods ormaterials, the goods or materials shallbe returned to the person from whosepossession thev were seized '

Provided that the aforesaid period ofsix months may, on sufficient causebeing shown, be extended by the Direc-tor General for a further period notexceeding six months.

(c) The authorised person may seize anybooks of accounts or documents orthings which in bis opinion, will beuseful for, or relevant to, any pro-ceedings under the Act

(d) The person from whose custody anydocuments are seized under this sub-rule, shall be entitled to make copiesthereof or take extracts therefrom inthe presence of the authorise* oerson.

2980 Gl[93—2.

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(,e) If any person legally entitled u> thebooks ot account or other documentsor things seized under this sub-ruleobjects, for any reason, ta the reten-tion by the authorised person of thebooks of account or the documents orthings, he may move an applicationto the Central Government statingtherein the reasons for such objection,request for the return of the books oraccount or documents or things.

(t) On receipt of the application underclause (e), the Central Governmentmay, after giving the applicant anopportunity of being heard, pass suchorder as it may think lit.

(g^ Where any document is pioduced orfurnished by any person or has beenseized from the custody or control ofany person under the Act or has beenreceived from any place outside Indiain the course of the investigation forany contravention referred to in sec-tion 11 by any person and such docu-ment is tendered in evidence against theperson by whom it is produced or fromwham it was seized or against suchperson or any other person who isjointly proceeded against, the Adjudi-cating Authority, shall, notwithstand-ing anything to the contrary containedin any other law for the time being inforce.—

(i) presume, unless the contrary is pro-ved, that the signature and every otherpart of such document which pur-ports tcr be in the handwriting of anyparticular person of which the Adju-dicating Authority may reasonablyassume to have been signed by or tobe in the handwriting of any parti-cular person, is under the person'shandwriting, and in the case of adocument executed or attested, itwas executed or attested by theperson by whom it purports to havebeen so executed or attested;

(ii) admit the document in evidencenotwithstanding that it is not dulystamped, if such document is other-wise admissible in evidence,

(4) The authorised Derson, mav, if hs hasreason to suspect that any conveyance or animalis being or is about to be used for the transporta-tion of any imported goods or material which areliable to confiscation under the Act, and that bvsuch transportation anv provision of the Act hasb?en, is bHng or is about to be contravened at

any time, stop such conveyance or animal or inthe case of aircraft compel it to land, and—

(a) rummage and search the convcyau<^ ,»iany part thereof;

(b) examine and search any goods or o,Se-rial in the conveyance or on theanimal;

(c) if it becomes necessary to stop anyconveyance or animal, he may use alllawful means for stopping it amiwhere such means fail, the convtymeeor animal may be fired upon,

and where he is satisfied that it is necessai ^ soto do to prevent the contravention of any pro-vision of the Act or of the rules and orders irrulothereunder or the Policy or condition of .-nylicence, he may seize such conveyance oranimal.. ,

Explanation—Any reference in tiiis nth uia conveyance shall, unless the context other-wise requires, be construed as includ-nf» ,'ireference to an aircraft, vehicle or vessel1

16. Settlement.— (1) The Adjudicating AiTho-rity may determine the amount of settlement to bepaid by the person to whom a notice has beenissued and who has opted for settlement and runadmitted the contravention specified in the notice,in the following cases, namely :—

(i) where it is of the opinion that the con-travention of any provision of theAct or these rules or the Policy b>>been made without mensrea or wfthoutwilful mistake or without suppression olfacts, or without any collusion, orwithout fraud and forgery, or withoutan intent to cause loss of foreign -ex-change; or

(ii) where the person importing the goodshas not met the requirements of theactual user conditions as specified inthe Policy and has not misutilised thesaid imported goods; or

(iii) where the person importing the goodshas not fulfilled the export obligationand has not mis-utilised the snidimported goods,

(2) Where a person has opted for settlementunder sub-rule (1), the settlement made bv theAdjudicating Authority shall be final.

17. Confiscation and redemption.—(1) anvimported goods or materials in respect of which—

(a) any condition of the licence, or letterof authority under which they were

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imported, relating to their utilisation ordistribution; or

{b) any condition, relating to their utilisa-tion or distribution, subject to whichthey were received from or through, anagency recognised by the Central Gov-ernment; or

(c) any condition imposed under the Policywith regard to the sale or disposal ofsuch goods or materials;

ha& been, is being, or is attempted to be, con-travened, shall together with miy package,covering or receptacle in which suchfloods are found, be liable to be confiscated byfhe Adjudicating Authority, and where suchgoods or materials are so mixed with anyother goods or materials that they cannot bereadily separated, such other goods or materials"hall also be liable to be so confiscated :

Provided that where it is established to thesatisfaction of the Adjudicating Authority that;my goods or materials which are liable to confis-cation under this rule, had been imported forpersonal use, and not for any trade or industry,such goods, or materials shall not be ordered tohe confiscated.

(2) The Adjudicating Authority may permitihe redemption of the confiscated goods or mate-rials upon payment of redemption charges equi-valent to the market value of such goods ormaterials.

18- Confiscation of conveyance.—(H Anyconveyance or animal which has been, is being,or is attempted to be used, for the transport ofany goods or materials that are imported andwhich are liable to confiscation under rule 17,••hall be liable to be confiscated by the Adiudicat-mg Authority unless the owner at the conveyanceor animal proves that it was, is being;, or isabout to be so used without the knowledge orconnivance of the owner himself, his agent, ifnny, and the person in-charge of the conveyanceor animal and that each of them had taken allreasonable precautions against such use.

(2) The Adjudicating Authority shall permitredemption of the confiscated conveyance oranimal used for the transport of goods or nasspn-qers for hire upon payment of redemptioncharges equivalent to the market value of suchconveyance or animal.

[File No. 21|11|92-LS1

DR. P. L. SANJEEV REDDY, Director GeneralForeign Trade and Ex-Officio Addl. Secy.

SCHEDUlF

(Sec rule 5)

Thcfolloviilngfri-shallbiilcvlableii) respect of tlicjpplica-tion for an Import licence i-tc.

SCALE OF FEE

SI. Particulars Amount of FeeNo.

1

l

?

3,

4

f.

6

i

E.

2 3

. Where the value of good1! Rupees two hundredspecified in application doesnot exceed Rupees fiftythousand.

Where the value of the Rupees two pei thousand orgoods specified In the app- part thereof subject to a minl-licatjon exceed1 Rupees fifty mum of rupees two hundredthousand but does not ex-ceed Rupee s One crore.

. Where the value of the Rupees two per thousand orKoods specified in the app- part thereof subject to aI!cation exceed** rupei s ont maxlmim of Rs. one lakh and

crore fifty thousand

. Application fui tfianiof ft ipi^s v> hundredduplicate licence

. In case where import 11- Rugpees two hundredcenco and other correspon-dence are required by SpeedPost.

Application for issue of an Ru peed two hundredTdcnt ty CarJ.

Applimticn forissueof Rupe sone hundredduplicate Identity Card inthe event of loss of originalCard.

Extension of the period of Rupees iwo hundredshipment of an Import] icencc

Application for grant of Rifpccs one thousand per S?litsplit-up licences. up licence

Note.—Theamountof fee payable shall be rupee* tw > handred in respect of an application for import I icince by a 9 mi lcSCactual user or a rsgistered oxportor, for ths import of ra^materials, components and spares where the value of the sojdi

'""pwifled In tha apilicat on d^ss not Jxc;ad njpaes two hkhs .

" Printed by the Manager, Govt. of India Press, Rin« Road, M ^ ^ J f . ^ " ' 1 ' ° ° M

end PubUihed by the Controller of Publications, Delhi-110054, 1994