Sale of machinery imported under 0% epcg scheme
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 December 2013
In previous year (2012-13) we have purchased imported machine from China under Zero EPCG Scheme.
We are going to sale-out the such machine now in domestic market.
As per lincence condition we have completed Export Obligation and applied for redemption.
In response to that we have received Licence Redemption Letter from DGFT, as well as Cancelled Bond from Customs which was executed in Customs while lincence registered at customs.
Considering to the above facts please guide us about that Central Excise Duty should be applicable against the said transaction or not.
We are going to sale-out the such machine now in domestic market.
As per lincence condition we have completed Export Obligation and applied for redemption.
In response to that we have received Licence Redemption Letter from DGFT, as well as Cancelled Bond from Customs which was executed in Customs while lincence registered at customs.
Considering to the above facts please guide us about that Central Excise Duty should be applicable against the said transaction or not.
24 December 2013
No need to pay excise duty at the time of sale of goods if you have fullfiled the export obligation.
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 December 2013
Can you suggest us reference notification under CE/Customs act.
22 July 2025
Here’s a concise explanation based on your situation with the EPCG scheme:
---
### Sale of machinery imported under 0% EPCG scheme — Excise duty applicability
**Key points:**
* Under the **EPCG (Export Promotion Capital Goods) scheme**, capital goods are imported at **zero Customs duty** subject to export obligation.
* You mentioned you have:
* Completed the **export obligation** fully.
* Received **Licence Redemption Letter** from DGFT.
* Got the **Cancelled Bond** from Customs.
---
### What this means for Excise duty on domestic sale:
* Since export obligation is fulfilled and the licence is redeemed, **no excise duty is payable on the sale of such machinery** in the domestic market.
* The bond cancellation means Customs acknowledges that the obligation is discharged and no duty is recoverable.
* Hence, you can sell the machine domestically without excise duty liability.
---
### Reference for your case:
* **Central Excise Notification No. 74/94-CE** (or its amendments) covers EPCG scheme and duty exemption on import.
* **DGFT Handbook of Procedures (Vol 1)** — details EPCG conditions and export obligation.
* Circulars from **DGFT** and **Customs** on redemption and bond cancellation also support this.
---
### Suggested Action:
* Keep all documents ready: export obligation proof, redemption letter, and cancelled bond.
* Maintain proper records in case of audit.
* No excise duty needs to be paid on sale, but disclose the transaction properly.
---
If you want, I can help you draft a detailed note with relevant clauses and notification references for your file. Would you like that?
---
### Sale of machinery imported under 0% EPCG scheme — Excise duty applicability
**Key points:**
* Under the **EPCG (Export Promotion Capital Goods) scheme**, capital goods are imported at **zero Customs duty** subject to export obligation.
* You mentioned you have:
* Completed the **export obligation** fully.
* Received **Licence Redemption Letter** from DGFT.
* Got the **Cancelled Bond** from Customs.
---
### What this means for Excise duty on domestic sale:
* Since export obligation is fulfilled and the licence is redeemed, **no excise duty is payable on the sale of such machinery** in the domestic market.
* The bond cancellation means Customs acknowledges that the obligation is discharged and no duty is recoverable.
* Hence, you can sell the machine domestically without excise duty liability.
---
### Reference for your case:
* **Central Excise Notification No. 74/94-CE** (or its amendments) covers EPCG scheme and duty exemption on import.
* **DGFT Handbook of Procedures (Vol 1)** — details EPCG conditions and export obligation.
* Circulars from **DGFT** and **Customs** on redemption and bond cancellation also support this.
---
### Suggested Action:
* Keep all documents ready: export obligation proof, redemption letter, and cancelled bond.
* Maintain proper records in case of audit.
* No excise duty needs to be paid on sale, but disclose the transaction properly.
---
If you want, I can help you draft a detailed note with relevant clauses and notification references for your file. Would you like that?
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