Policy Division

Policy Circular No 27(RE-2005)/2004-2009 Dated: 05-10-2005

Subject: DFCE under EXIM Policy (2003-04), clarification regarding nexus with product group.

Attention is invited to the Policy relating to DFCE under EXIM Policy (2003-04).

2. In terms of Para 3.7.2.1 (vi) of EXIM Policy (2002-07) issued on 31.03.2003, as amended. Representations were received from Trade & Industry to clarify the scope and meaning of nexus with product group, as contained in Para 3.2.6A (II) of the Handbook of Procedures Vol. I as amended.

3. It has been decided that; besides Capital Goods having the capability to produce any of the goods covered in the respective Product Groups and Office equipments; the following shall be within the scope of ‘nexus with product group’:

a. With respect to Product Group at Sr. No. 1 to 10 of the Appendix 17D, any input listed in the relevant product group category of the SION Book.

b. With respect to Gems and Jewelry Sector falling under Miscellaneous Product Group, import permissibility will be as allowed under Chapter 4A of the Policy/Handbook of Procedures Vol. 1, for the sector.

4. Where the export products are not specifically falling under product group categories 1 to 10 of SION Book, cue can be taken from ITC HS to classify them. However the import list has to be in accordance with the product group categories 1 to 10 of SION Book. In cases where still any doubt remains, Zonal Office is empowered to decide on the classification.

5. It has also been decided that in case the applicant so desires the Zonal Office can endorse the import list on duty free credit entitlement certificate.

6. However, in case the import item is fuel, it shall be mandatory to adhere to the limitation as per the general note in the SION Book.

This issues with the approval of DGFT

Sd/-

A K Singh

Joint DGFT

Trade and Industry

All Licensing Authorities

All Customs Authorities

(F. No: 01/94/180/Pol Form/AM04/ PC-IV)