Removalof goods to 100% eou against epcg invalidation letter

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Krishnakumar (Querist)
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25 July 2015 Dear Sir,

We have received Invalidation letter (issued by DGFT) in our name for
supplying capital goods in local market.

Please Let us know procedure for removal of dutiable goods in localmarket without payment of duty against EPCG Authorisation
(Invalidation letter).

Is there C.Ex. Notification for this?

Regards,
R.Krishnakumar

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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30 July 2015 KINDLY NOT Supplies against EPCG Invalidation letter would be on payment of duty as is done in regular course of business. You need to mention on the phase of Invoice "" Supplies against EPCG Invalidation / Authorisation No............"DT....." Further process would be that either of BUYER OR SUPPLIER has to claim TED (Terminal Excise Duty) Refund from the office of jurisdictional DGFT for which procedure as specified under Chapter 5 of FTP 2015-20 is to be followed.

Please see & Read Custom Notification No. 16/2015-Customs dated 01.04.2015, hence the goods are exempt from Import Duties.

Further no Central Excise Notification exists for Excise Duty Exemption in respect of supplies under EPCG with invalidation letter, exception being in case of supplies under International bidding competitive agreements.

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Krishnakumar

Krishnakumar (Querist)
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31 July 2015 Dear Sir,

Thank you very much for your detailed explanation

Regards,
R.Krishnakumar

Krishnakumar

Krishnakumar (Querist)
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23 September 2015 Dear sir,
As per you the supplies against EPCG Invalidation letter would be on payment of duty and it should be done in regular course of business.

I Kindly request you to read the Policy Circular No.16 ( RE-2012/2009-14) dated 15th March 2013 and give me your valuable reply.

Thanks in advance.

With Regards,
R.Krishnakumar

Krishnakumar

Krishnakumar (Querist)
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23 September 2015 Dear Sir,

Policy Circular No.16 ( RE-2012/2009-14) dated 15th March 2013 issued by DGFT
With Regards,
R.Krishnakumar

Krishnakumar

Krishnakumar (Querist)
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26 October 2015 Dear Sir,

Waiting for your valuable reply

With Regards,
R.Krishnakumar

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2025 Thank you for your detailed follow-up regarding removal of goods to a 100% EOU against EPCG invalidation letter, and your reference to Policy Circular No. 16 _____ dated 15.03.2013.

Let’s clarify the correct procedure, including references to relevant circulars and notifications.

✅ Background

You are:

A domestic supplier,
Supplying capital goods to a 100% EOU,
Under an EPCG authorization, against an invalidation letter issued by DGFT to the EOU/importer.
⚖️ Policy Circular No. 16 dated 15.03.2013 – Key Points

This DGFT circular clarifies that:

Domestic supply of capital goods by an indigenous manufacturer against an EPCG authorization with an invalidation letter shall be treated at par with deemed exports, and eligible for terminal excise duty (TED) refund, provided no excise exemption notification exists.
In short:

Supplies are to be made on payment of excise duty.
There is no central excise exemption for such transactions (unless under specific cases like international bidding).
The buyer (EOU) or supplier can claim TED refund from DGFT.
❌ No Excise Exemption Notification Exists (except for specific cases)

You're correct in saying that:

There is no Central Excise exemption notification specifically for supplies under EPCG invalidation letter in a normal domestic scenario.
Relevant Notification 16/2015-Customs (which you referenced) is for imports under EPCG, not for local supply of capital goods.

✅ Procedure for Removal of Goods

1. Invoice Preparation
Raise Rule 11 Central Excise Invoice.
Indicate on invoice:
"Supply against EPCG Invalidation Letter No. __________ dated ________"
Charge excise duty as applicable.
2. Payment of Excise Duty
Pay duty as per your usual central excise liability cycle.
Reflect it in ER-1 or ER-3 return (as applicable).
3. Documentation
Keep a copy of:
Invalidation letter.
EPCG authorization of buyer.
Proof of delivery to EOU.
4. Claim of TED Refund
Either you or the EOU (as per commercial terms) may file TED refund application with DGFT.
Refer to Chapter 5 of FTP 2015–20 and Appendix 5B of the HBP for TED refund documentation requirements.

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