Dated 21st January 2013
GOVERNMENT OF INDIA vide Circular No. 2/2013-Customs ,01/01/ 2013 ISSUED BY CBEC: stipulates the following guidelines for Replacement of Fixed Deposit Receipts (FDRs) furnished in respect of provisional Mega or Ultra Mega Power Projects with Bank Guarantees (BGs) .Drawing attention to notification Nos. 12/2012-Customs (S.No.507) and 12/2012-Central Excise (S.No. 337 and 338), both dated 17-03-2012, granting exemption from customs and excise duties for provisional mega and ultra-mega power projects. The circular states that: one of the conditions specified for availing of the said exemption is that the importer/project developer furnishes a security in the form of a Fixed Deposit Receipt (FDR) or Bank Guarantee from a Scheduled Bank for a term of 36 months or more for an amount equal to the duty payable but for this exemption. This condition was amended w.e.f 27-06-2012 when the importer/ project developer was given the option of furnishing either FDR or Bank Guarantee from a Scheduled Bank. The Circular further states that : It has been represented by the Association of Power Producers that the developers should be allowed to secure release of the FDRs submitted by them prior to 27-06-2012 (i.e. date of DoR notifications) and the same should be substituted with Bank Guarantees. The matter .The Circular clarifies that It has been felt that as long as a FDR was furnished as security, the FDR continued to operate as security. If an importer/ developer wishes to replace the FDR by a Bank Guarantee, the Bank Guarantee will operate from the date of replacement. Since under the amended notifications, FDR and Bank Guarantee are considered equally effective securities, it has been decided that there should not be any difficulty in allowing the importer/ project developer to replace the FDR with the Bank Guarantee.
SOURCE: GOVT. OF INDIA, Ministry of Finance