The Foreign Trade (Development and Regulation) Act, 1992

Foreign Trade (Regulation) Rules, 1993

The Foreign Trade (Development and Regulation) Act, 1992

Official text

MINISTRY OF COMMERCE

(Directorate General of Foreign Trade)

NOTIFICATION

New Delhi, the 30th December, 1993

G-S.R. 791(E).—In exercise of the powers

conferred by section 19 of the Foreign Trade

(Development and Regulation) Act, 1992 (22 of

1992), the Central Government hereby makes the

following rules, namely :—

1. Short title and commencement.—(1) These

rules may be called the Foreign Trade (Regula

tion) Rules, 1993.

(2) They shall come into force on the date of

their 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 of

the poor, education, medical relief, and

the advancement of any other object of

general public utility;

person who imports or exports goods

and holds a valid Importer-exporter

Code Number granted under section 7;

(d) "licensing authority" means an authority

authorised by the Director General

under sub-section (2) of section 9 to

grant or renew a licence under these

rules;

(e) "Policy" means the export and import

Policy formulated and announced by

the Central Government under sec

tion 5;

(f) "schedule" means a Schedule appended

to 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 it

in clause (41) of section 2 of the

Customs Act, 1962 (52 of 1962);

(j) words and expression used in these rules

and not defined but defined in the Act

shall have the meanings respectively

assigned to them in the Act.

3. Grant of special licence.—(1) Where the

Importer-exporter Code Number granted to any

person has been suspended or cancelled under

sub-section (1) of section 8, the Director General

may, having regard to the following factors,

grant to him a special licence, namely :—

(1) that the denial of a special licence is

likely to affect the foreign trade of

India adversely; or

(2) that the suspension or cancellation of

the Importer-exporter Code Number is

likely to lead to non-fulfilment of any

obligation by India under any inter

national agreement;

(2) The special licence granted to any person

under sub-rule (1) shall be non-transferable.

4. Application for grant of licence.—A person

may make an application for the grant of a

licence to import or export goods in accordance

with the provisions of the Policy or an Order

made unler section 3.

5. Fee.—(1) Every application lor a licence

to import shall be accompanied by the fee speci

fied in the Schedule.

(2) The mode of deposit of fee shall be as

specified in the Schedule.

[«TTT II—TO 3(i)] Sfp-n TT 'JlWfl : Wfl'IWI 7

(3) No fee shall be payable in respect of any

application made by :

(a) the Central Government, a State Gov

ernment or any department or any

office of the Government;

(b) any local authority for the bona-fide

import of goods required by it for

official use;

charitable or missionary purposes, for

the import of goods required for its

use;

(d) an applicant for the impart of any

goods (other than a vehicle) if the

import of the goods is for his personal

use which is not connected with trade

or manufacture.

(4) The fee once received will not be refunded

except in the following circumstances, namely :—

(i) where the fee has been deposited in

excess of the specified scale of fee; or

(ii) where the fee has been deposited but no

application has been made; or

(iii) where the fee has been deposited in error

but the applicant is exempt from pay

ment of fee.

6. Conditions of licence.—(1) lit shall be

deemed to be a condition of every licence for

export that :—

(i) no person shall transfer or acquire by

transfer any licence issued by the licens

ing authority except in accordance with

the provisions of the Policy;

(ii) the goods for the export of which the

licence is granted shall be the property

of the licensee at the time of the export.

(2) The licensing authority may issue a

licence for import subject to one or more of the

following conditions, namely :—

(a) that the goods covered by the licence

shall not be disposed of except in accor

dance with the provisions of the Policy

or in the manner specified by the

licensing authority in the licence;

(b) that the applicant for a licence shall

execute a bond for complying with the

terms and conditions of the licence.

(3) It shall be deemed to be a condition of

every licence for import that :—

(a) no person shall transfer or acquire by

transfer any licence issued by the licens

ing authority except in accordance with

the provisions of the Policy;

(b) the goods for the import of which a

licence is granted shall be the property

of the licensee at the time of import

and upto the time of clearance through

customs;

licence is granted shall be new goods,

unless otherwise stated in the licence:

(d) the goods covered by the licence

for import shall not be exported without

the written permission of the Director

General.

(4) Any person importing goods from the

United States of America in accordance with the

terms of the Indo-US Memorandum of Under

standing on Technology Transfer shall also

comply with all the conditions and assurances

specified in the Import Certificate issued in terms

of such Memorandum, and such other assurances

given by the person importing those goods to the

Government of the United States of America

through the Government of India.

7. Refusal of licence.!—(1) The Director

General or the licensing authoritv may for reasons

to be recorded in writing, refuse to grant or

renew a licence if—

(a) the applicant has contravened any law

relating to customs or foreign

exchange;

(b) the application for the licence does not

substantially conform to any provision

of these rules;

in support thereof contains any false

or fraudulent or misleading statement;

(d) it has been decided by the Central Gov

ernment to canalise the export or import

of goods and distribution thereof, as

the case may be, through special or

specialised agencies;

(e) any action against the applicant is for

the time being pending under the Act

or rules and Orders made thereunder;

(f) the applicant is or was a managing

partner in a partnership firm, or is

or was a Director of a private limited

company, having controlling interest

against which any action is for the time

being pending under the Act or rules

and Ortfers made thereunder;

(g) the applicant fails to pay any penalty

imposed on him under the Act;

(h) the applicant has tampered

licence;

with n

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

(i) the applicant or any agent or employee

of the applicant with his consent has

been 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 licence

m accordance with any provision of the

Policy;

(k) the applicant fails to produce any docu

ment called for by the Director General

or the licensing authority;

(1) in the case of a licence for import, no

foreign exchange is available for the

purpose;

(m) the application has been signed by a

person other than a person duly autho

rised by the applicant under the pro

visions of the Policy;

(n) the applicant has attempted to obtain or

has obtained cash compensatory support,

duty drawback, cash assistance bene

fits allowed to Registered Exporters or

any other similar benefits from the

Central Government or any agency

authorised by the Central Government

in relation to exports made by him on

the basis of any false, fraudulent or

misleading statement or any document

which 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 action

that may be taken against an applicant by the

licensing authority under the Act.

8. Amendment of licence.—The licensing

authority may of its own motion or on an applica

tion by the licensee, amend any licence in such

manner as may be necessary or to rectify any

error or omission in the licence.

9- Suspension of a licence.—(1) The Director

General or the licensing authority may by order in

writing, suspend the operation of a licence

granted to—

(a) any person, if an order of detention

has been made against such person

under 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 limited

company, if the person referred to in

clause (a) is a partner or a whole time

director or managing director, as the

case 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 partnership

firm or company, when the order of detention

made against such person,—

(i) being an order of detention to which the

provisions 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 been

revoked on the report of Advisory

Board under section 8 of that Act or

before receipt of the report of the

Advisory Board or before making a

reference to the Advisory Board; or

(ii) being an order of detention to which the

provisions of section 9 of the Conser

vation of Foreign Exchange and Pre

vention of Smuggling Activities Act,

1974 (52 of 1974) apply, has been

revoked on the report of the Advisory

Board under section 8 read with sub

section (2) of section 9 of that Act or

before receipt of such report;

(iii) has been set aside by a court of compe

tent jurisdiction.

(2) The Director General or the licensing

authority may by an order in writing suspend the

operation of any licence granted under these

rules, where proceedings for cancellation of such

licence has been initiated under rule 10.

10. Cancellation of a licence.—The Director

General or the licensing authority may by an

order in writing cancel any licence granted under

these rules if—

(a) the licence has been obtained by fraud,

suppression of facts or misrepresenta

tion; or

(b) the licensee has committed a breach of

any of the conditions of the licence; or

^c) the licensee has tampered with the

licence in any manner; or

(d) the licensee has contravened any law

relating to customs or foreign exchange

or the rules and regulations relating

thereto.

11. Declaration as to value and quality of

imported goods.—On the importation into, or

exporation out of, any customs ports of

any goods, whether liable to duty or

not. the owner of such goods shall

in the Bill of Entry or the Shipping Bill or any

other documents prescribed under the Customs

Act 1962. state the value, qualitv and des

cription of such goods to the best of his know

ledge and belief and in case of exportation of

I*TM n—«»* 3(1)] TRtf w D̂NW : *mrtirw y

good4^ certtfy that the quality ami

.spc^ncation ol the goods as stated in

those documentts. are in accoi dance witu

the terms ot the export contract entered

inlo„ With the buyer or consignee in pursuance or

which the goods arc being exported and shall

subscribe a declaration or the truth of such state

ment at the foot of such Bill of Entry or Shipping

Hill or any other documents.

12. Declaration as to Importer-expoiter Code

Number.—On the importation into or ex

portation out of any Customs port of any goods

the importer or exporter shall in the Bill of Entry

or Shipping Bill or, as the case may be, in any

other documents prescribed by rules made under

die Act or the Customs Act, 1962 (52 of 1962),

state the Importer-exporter Code Number allotted

to l̂iin by the competent authority.

13. Utilisation of imported goods.—(1) No per-

sitt\ shall use any imported goods allotted to him

by the State Trading Corporation of India or any

other agency recognised by the Central Govern

ment in a manner and for the purpose, otherwise

than as declared by him in his application for

such allotment or in anv document submitted bv

him in support of such application.

(2) No person shall dispose of any goods

imported by him against a licence except in

accordance with the terms and conditions of such

licence.

14. Prohibition regarding making, signing of

any declaration, statement or documents:—

(1) No person shall make, sign or use or cause

to be made signed or used anv declaration, state

ment or document for the purposes of obtaining

a licence or importing any goods knowing or

having reason to believe that such declaration,

statement or document is false in any material

particular.

(2) No person shall employ am' corrupt or

Iraudulent practice for the purposes of obtaining

any licence or importing or exporting any goods.

15. Power to cntetr prenrses and inspect, search.

and seize goods, documents, things and conveyan

ces.-—CD Any person authorised by the Central

Government under sub-section (1) of section 10

(hereinafter called the authorised psrson) may,

at any reasonable time enter any premises in

which—

(i) any imported goods or materials which

are liable to confiscation under the pro

visions of the Act; or

(ii) any books of accounts or documents or

things which, in his opinion, will be

useful for, or relevant to any proceed

ings under the Act,

I9S0 Gl[93—2.

are suspected to have been kept or concealed and

may inspect such goods, materials, books of

accounts, document, or tnings and may take such

notes or extracts therefrom as he may think fit.

(2) If the authorised person has reasons to

believe that—

(i) any imparted goods or materials liable

to confiscation under the Act; or

(ii) any books of accounts or documents or

things which, in his opinion, will be

useiul for, or relevant to, any proceed

ing!* under the Act,

are secreted in any premises he may enter into

and search such premises for such goods, mate

rials, books of accounts, documents or things,

(3) (a) If the authorised person has reasoa

to believe that any imported goods or

materials are liable to confiscation

titider the Act. he may seize such

goods or materials together with the

package, covering or receptacle, if

any, in which such goods or materials

are found to have been mixed with any

other goods or materials :

Provided that where it is not practi

cable to seize any such goods or

materials, the authorised person may

serve on the owner of the goods or

materials an order that he shall not

remove, part with or otherwise deal

with the goods or materia's except with

trip previous permission of the autho

rised person.

(b) Where any goods or materials are seiz

ed under clause (a) and no notice in

respect thereof is given within six

months of the seizure of the goods or

materials, the goods or materials shall

be returned to the person from whose

possession thev were seized '

Provided that the aforesaid period of

six months may, on sufficient cause

being shown, be extended by the Direc

tor General for a further period not

exceeding six months.

books of accounts or documents or

things which in his opinion, will be

useful for, or relevant to, any pro

ceedings under the Act

(d) The person from whose custody any

documents are seized under this sub-

rule, shall be entitled to make copies

thereof or take extracts therefrom in

the presence of the aurhorisc4 oerson.

10 THE GAZETTE OJ- JNDIA : EXIRAORDINARv. | PARI 11—SLL V)\

(,e) If any person legally entitled u> the

books ot account or other documents

or things seized under this sub-rule

objects, far any reason, ta the reten

tion by the authorised person of the

books of account or the documents or

things, he may move an application

to the Central Government stating

therein the reasons for such objection,

request for the return of the books or

account or documents or things.

(t) On receipt of the application under

clause (,e), the Central Government

may, after giving the applicant an

opportunity of being heard, pass such

order as it may think lit.

(g,' Where any document is pioduced or

furnished by any person or has been

seized from the custody or control of

any person under the Act or has been

received from any place outside India

in the course of the investigation for

any contravention referred to in sec

tion 11 by any person and such docu

ment is tendered in evidence against the

person by whom it is produced or from

whom it was seized or against such

person or any other person who is

jointly proceeded against, the Adjudi

cating Authority, shall, notwithstand

ing anything to the contrary contained

in any other law for the time being in

force.—

(i) presume, unless the contrary is pro

ved, that the signature and every other

part of such document which pur

ports to be in the handwriting of any

particular person of which the Adju

dicating Authority may reasonably

assume to have been signed by or to

be in the handwriting of any parti

cular person, is under the person's

handwriting, and in the case of a

document executed or attested, it

was executed or attested by the

person by whom it purports to have

been so executed or attested;

(ii) admit the document in evidence

notwithstanding that it is not duly

stamped, if such document is other

wise admissible in evidence,

(4) The authorised Derson, mav, if lis has

reason to suspect that any conveyance or animal

is being or is about to be used for the transporta

tion of any imported goods or material which are

liable to confiscation under the Act, and that bv

such transportation anv provision of the Act has

b?en, is being or is about to be contravened at

any time, stop such conveyance or animal or m

the case of aircraft compel it to land, and—

(a) rummage and search the convcyau<^ ,»i

any part thereof;

(b) examine and search any goods or o,Se

rial in the conveyance or on the

animal;

conveyance or animal, he may use all

lawful means for stopping it ami

where such means fail, the convtymee

or animal may be fired upon,

and where he is satisfied that it is necessai^ so

to do to prevent the contravention of any pro

vision of the Act or of the rules and orders irrulo

thereunder or the Policy or condition of -ny

licence, he may seize such conveyance or

animal..

Explanation—Any reference in tiiis jule ui

a conveyance shall, unless the context other

wise requires, be construed as includ-nf» a

reference to an aircraft, vehicle or vessel

16. Settlement.— (1) The Adjudicating Autho

rity may determine the amount of settlement to be

paid by the person to whom a notice has been

issued and who has opted for settlement and run

admitted 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 the

Act or these rules or the Policy t>s

been made without mensrea or wfthout

wilful mistake or without suppression ol

facts, or without any collusion, or

without fraud and forgery, or without

an intent to cause loss of foreign >ex-

change; or

(ii) where the person importln^ the goods

has not met the requirements of the

actual user conditions as specified in

the Policy and has not misutilised the

said imported goods; or

(iii) where the person importing the Roods

has not fulfilled the export obligation

and has not mis-utilised the said

imported goods,

(2) Where a person has opted for settlement

under sub-rule (1), the settlement made bv the

Adjudicating Authority shall be final.

17. Confiscation and redemption.—(1) anv

imported goods or materials in respect of which—

(a) any condition of the licence, or letter

of authority under which they were

[*rw It—mis j (j j] ^m u

Imported, relating to their utilisation or

distribution; or

(b) any condition, relating to their utilisa

tion or distribution, subject to which

they were received from or through, an

agency recognised by the Central Gov

ernment; or

with regard to the sale or disposal of

such goods or materials;

ha& been, is being, or is attempted to be, con

travened, shall together with miy package,

covering or receptacle in which such

floods are found, be liable to be confiscated by

fhe Adjudicating Authority, and where such

goods or materials are so mixed with any

other goods or materials that they cannot be

readily separated, such other goods or materials

"hall also be liable to be so confiscated :

Provided that where it is established to the

satisfaction of the Adjudicating Authority that

;my goods or materials which are liable to confis

cation under this rule, had been imported for

personal use, and not for any trade or industry,

such goods, or materials shall not be ordered to

he confiscated.

(2) The Adjudicating Authority may permit

ihe redemption of the confiscated goods or mate

rials upon payment of redemption charges equi

valent to the market value of such goods or

materials.

18. Confiscation of conveyance.—(H Any

conveyance or animal which has been, is being,

or is attempted to be used, for the transport of

any goods or materials that are imported and

which are liable to confiscation under rule 17,

shall be liable to be confiscated by the Adjudicat

ing Authority unless the owner of the conveyance

or animal proves that it was, is being;, or is

about to be so used without the knowledge or

connivance of the owner himself, his agent, if

nny, and the person in-charge of the conveyance

or animal and that each of them had taken all

reasonable precautions against such use.

(2) The Adjudicating Authority shall permit

redemption of the confiscated conveyance or

animal used for the transport of goods or nasspn-

qers for hire upon payment of redemption

charges equivalent to the market value of such

conveyance or animal.

[File No. 21|11192-LS1

DR. P. L. SANJEEV REDDY, Director General

Foreign Trade and Ex-Officio Addl. Secy.

•T̂ rra' . swrtti'fTr

SCHEDUlF

(Sec rule 5)

Th(.*followlng]fTshallbulcvlab!cii) inspect of tlicjpplica-

tion for an Import licence i-tc.

SCALE OF FEE

SI. Particulars Amount of Fee

No.

1 2 3

1. Where the value of good1. Rupees two hundred

specified in application does

not exceed Rupees, fifty

thousand.

? Where the value of the Rupees two pet thousand or

goods specified In the app- part thereof subject to a minl-

licatjon exceed1 Rupees fifty mum of rupees two hundred

thousand but does not ex

ceed Rupee s One crore.

3. Where the value of the Rupees two per thousand or

Koods specified in the app- pari thereof subject to a

location exceeds rupet s one maxlmim of Rs. one lakh and

crore fifty thousand

4. Application fur gianiof R ipi^s v> hundred

duplicate licence

f. In case whereimport li- Rupees two hundred

cenco and other correspon

dence are required by Speed

Post.

6 Application for issue of an Rupecbtwo hundred

Tdcnt ty Carj.

"'. Applimticn forissueof Rupe sone hundred

duplicate Identity Card in

the event of loss of original

Card.

E. Extension of the period of Rupees Uvo hundred

shipment of an Import

] icencc

9, Application for grant of Rtfpces one thousand per S?lit

split-up licences. up licence

Note.—Theamountof fee payable shall be rupees tw > huad

red in respect of an application for import I icince by a 3 mi l

caic"actual user or a rsgistered exporter, for the import of ra^

materials, components and spares where the value of the gojdi

"rvjcifled Hi th^ apilicat on d^ss n^t Jxc;ad njpaes two hkhi .

Printed by the Manager, Govt, of India Press, Rin« Road, MayaJPuri New DdhM 10064

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