Subject NOT available

click here for IIIF manifest

REGISTERED No. D.(D)-72

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 102] NEW DELHI, THURSDAY, OCTOBER 28, 1976/KARTIKA 6, 1898

Separate paging is given to this Part in order that it may be filed

as a separate compilation

MINISTRY OF COMMERCE

PUBLIC NOTICE

Import I TRADE CONTROL

New Delhi, the 28th October 1976

Subject—Terms and conditions applicable to import Licences issued under the West

German Capital Goods Credit of DM 30 million for 1975-76.

No. 107-ITC(PN)/76.—The terms and conditions governing the issuance of import licences under the West German Capital Goods Credit of DM 30 million for 1975-76 as given in Appendix to this Public Notice are notified for information.

APPENDIX

condutions attached to import licences issued under the Wat German Capital Goods

Credit of DM 30 million jot 1975-76

Section 1.—General Conditions

1 (j).—These conditions will apply to such cases of import by public and private sector undertakings as have been specifically approved by the Capital Goods Commutes of the Government of India for financing under the West German Capital Goods of DM 30 Million for 1975-76.

(1561)

1 (ii).—Where the value of allocation aproved by the Capital Goods Committee exceeds the rupee equivalent of DM 1 million [the rupee equivalent being determined at" the exchange rate notified by the Department of Revenue (Customs)] under Section 15 of the Customs Act, 1962), the prior concurrence of the West German authorities [Kreditan- stalt fur Wiedraufbau (KFW)] to the allocation is obligatory, and this would be obtained by the Department of Economic Affairs on the basis of the project data to be supplied by the Indian importer in the form at Annexurc-I, Till such concurrence from the West German authorities is communicated to the Licensing authorities (CCIkE) by the Depart- ment of Economic Affairs, no import licence can be issued In favour of the Indian importer.

1 (iij).—The licence shall bear the supercription "DM 30 million West German Capi- tal Goods Credit for 1975-76." The licence code for the first and second suffix will be "S/GN". These will also be repeated in the CCI&E's letter forwarding the import licence.

] (jv),—No remittance of foreign exchange will be permitted against the import licence, except bank charges which may be remitted through normal banking channel, Payments towards Indian agent's commission, if any, should be made in Indian rupees t" the agents in India. Such payments however will form part of the licence value and will therefore be charged to the licence.

1 (v).—The goods and related services to be procured under this import licence ran be Imported front the Federal Republic of Germany including the Land Beiltn or any other country. The overseas supplier is, therefore, free to procure material, etc. from a third country, if found necessary, for the execution of the contract.

1 (vi).—The minimum value for which an import licence can be issued under this Credit is the rupee equivalent of DM 30,000 (rupee equivalent being calculated at the rate of exchange notified by the Department of Revenue (Customs) which rate of exchange ihould be indicated in the import licence as per para 2 of the Public Notice No. 78-ITC(PN)/74 dated 6th June, 1974 issued by the Chief Controller of Imports and Exports.)

1 (vii).—The import licence will be issued on CIF basis with an initial validity of 24 months or the last date of shipment as indicated in para 2(xii) below, whichever is less subject however to the condition that the import licence will have a minimum validity of 12 months from the date of issue.

1 (viii).—Firm orders (meaning thereby Purchase Order by the Indian Licensee on ihe foreign supplier supported by order confirmation from the latter or purchase contract duly signed by both the Indian importer and the foreign supplier) must be finalised within a period of 4 months from the date of issue of the import licence [vide para I (is) bclowj. Orders on Indian Agents of overseas suppliers and/or order confirmation by such Indian Agents are not acceptable.

1 (ix).—If firm orders, as explained in para I (viii) above, cannot be finalised within the time limit of four months, the licensee should submit to the Chief Controller of Imports and Exports (CCI&E), or other licensing authorities, as the case may be, a propo- sal seeking an extension in the ordering period along with justification nnd explanation as to why ordering could not be completed within the validity period. Such requests for extension in the ordering period will be considered on merits by the licensing authorities who may grant extension upto a further maximum period of 4 months. If, however, extension is sought beyond 8 months from the date of issue of the import licence, such proposals will invariably be referred by the licensing authorities to the Department of Economic Affairs (WE-I Section), Ministry of Finance, North Block, New Delhi who will consider such extension on the merits of each case and convey its decisions, to the licens- ing authorities for communication to the licensee. Only on production by the licensee iif such letters of the licensing authorities sanctioning extension, wil the authorised in foreign exchange and departmental authorities permit the facility of bank guarantee:- Jeiters of authority for the establishment of letter of credit, acceptance of deposits of rupee equivalent, etc.

I (x^.—It will he in Mi- fntrreit nf the licensee to ensure that firm order is com- pleted within the stipul"¹*"'! time limit for ordering. In cases where this cannot be done the licensee should, of his own, approach the licensing authorities for a suitable extension in the period of ordering. The authorised dealers in foreign exchange/departmental authorities concerned will exercise necessary checks to ensure that t ne licensee complies •with the requirements of placing orders within 4 months.

1563

1 (xi),—In cases where firm orders have not been placed for the full value of the licence during the initial validity period of the licence, it will be necessary for the licensee to obtain the permission of the licensing authorities in the manner as explained in para I (ix) above before placing orders against such unordered balance value of the licence.

Section 2.—Special points to be kept In view while concluding purchase contracts.

2 (i).—-The contract price should invariably be expressed in the currency of the coun- try in which the foreign supplier is situated. The contract price should be firm and final and no provision for any escalation would be permitted. If any commission is payable to an Indian Agent of the foreign supplier it must be distinctly shown in the contract as a" item of cost payable in Indian Rupees in India and the net amount payable to the foreign supplier in foreign currency should therefore be shown exclusive of such Indian Agent's commission. For the purpose of calculating the value in foreign exchange upto which purchase orders can be placed against the import licence, thc value of the import licence should be computed at the rate of exchange notified by thc Department of Revenue (Cus- toms) under Section 15 of the Customs Act 1962 and indicated in the import licence as per para 2 of the Publice Notice No. 78-ITC(PN)/74 dated 6th Juno, 1974 issued by the Chief Controller of Imports and Exports.

2 (ii).—Supply orders should be placed either on C1F or on CSiF basis in the case of

private sector Importers. In the case of public sector importers the orders should be placed

only on C&F basis,

2 (Hi).—It should clearly be understood that thc purchase contracts under the import licence should be placed after obtaining comparable bids from overman supplier¹!. In this connection it may be noted that thc Indian importer is free to import from any country of hi" choice, as approved by the Capital Goods Committee of the Government of India.

2 (iv).—Minimum value of eligible contract.—Provided that the aggregate value of purchase contracts under an import licence is not less than DM 30,000 (in the caw of purchases made wholly from the Federal Republic of Germany) or equivalent of DM 30,000 (in the case of purchases made wholly or partly irom countries other than the Federal Republic of Germany), it is permissible for the importer to enter into indi- vidual purchase contracts for a value of less than DM 30,000 or equivalent of DM 30,000. This is however subject to the condition prescribed in para 2(xiii) below in respect of purchase contracts under an import licence the value of which does not exceed the rupee equivalent of DM 1 million.

2 (v).—The purchase contract under the import licence is required to be specifically approved by the Government of India and the Kreditanstalt fur Wiederaufbau (KFW) (the West German Bank Development Loan Corporation through which the West German Capital Goods Credit of DM 30 Million has been made available) & therefore should incorporate a specific clause to this effect in the purchase contract.

(b) In the case of contracts entered into against an import licence whose value is the mpec equivalent of DM 1 million or less [calculated at thc exchange rate notified by the Department of Revenue (Customs)], the approval of the contracts will not be specifically intimiifed to the importer. Once the Ministry of Finance, Department of Economic Affairs have forwarded the contract documents to the KFW under intimation to the importer, he may proceed as if the contract has been approved by the KFW also unless the KFW raise any objection subsequently in which event the importer will be informed suitably.

(c) In the case of contracts entered into against an import licence whose value (3 for an amount exceeding the rupec equivalent of DM I million [calculated at the rate of exchange notified by the Department of Revenue (Customs)], thc approval of the KFW will be first obtained by the Government of India, Ministry of Finance, Department of Econo- mic Affairs and specifically communicated to the Tndian importer and until then the con- tracts should be treated as provisional. For this purpose 3 copies of the purchase contract alone with a certificate (in triplicate) that orders have been placed after obtaining compar- able bids from foreign suppliers are required to be sent by the Indian Importer to the Mnistry of Finance, Department of Economic Affairs (WE-I Section, Room No. 270, North Block) within a fortnight from the date of conclusion of the purchase contract.

2 (vi).—Where contract is placed on CIF basis and accordingly the foreign supplier takes out the marine insurance, the foreign supplier should arrange to take out insurance in a freely convertible currency and obtain an undertaking from the insurance company concerned that payment if any arising out of insurance claims, would be made directly in DM to KFW (Ac/No. 50409100 with Deutsche Bundesbank, Frankfurt/Main).

2 (vii).—Where contracts arc placed on C&F basis, the maiim insurance should be trtken out with an Indian insurance company and the premium thould accordingly be paid in In-liin Rupees. However the Indian importer should obtain the following undertaking from iIf Indian hv'trance company and furnish it (in triplicate 1 to the Department of Economic Affairs, Minify of Finance (WE-I Section) along with the contract documents: — '"We shall make remittance in foreign currency to the overseas suppliers for any replacement that may be necessitated by loss or damage to goods''.

2 (viii).--As the contracts are required to be placed either on CIF basis or on C&F hasii as per para 2(ii) above, the foreign supplier.! should be marie responsible to pay thu freight ehirges in foreign currency, even where Indian ships are us^d- In no circumstances the fi eight charges should be paid in Indian rupees.

2 (ix).—Payments to foreign suppliers against the licence will be made by mean* of

a 'Speual' letter of credit, as explained In Section III below and no remittance facility mil

he permitted against the import licence for this purpose.

2 (x).—As regards transportation of goods purchased against the import/licence, the part> icsponsible for arranging shipment of the goods under the purchase contract will he dec to choose the carriers. Shipment can be made from the counlrv in which suppliers are treated or from a third country.

2 (xi). For contracts whose value exceeds DM 1 million in the case of purchases from the Federal Republic of Germany including land Berlin or, in the case of purehanBi from other countries, for contracts the DM equivalent of whose value exceeds DM 1 mil- lion, the purchase contracts should provide for furnishing of performance guarantee by the foreign supplier in regard to the performance of the goods supplied (in the case of othi-r contracts, namely for contracts whose value is less than the limit indicated above, the Indian importer is tree to decide the question whether or not hc "c e ds a performance giMiantcc from the foieign supplier). The form of the performance guarantee can how- ever be settled by the Indian importer with the foreign supplier by mutual consent. It should however, be ensured by the Indian importer that paymenU if any, due to him from the foreign supplier arising from the performance guanntce stipulations should oa made direct to Kieditanstalt fur Wiedcraufbau (Acct. No. 50409100 with Deutsche Bundesbank, Frankfurt/Main).

i (xii) —Payments, to the foreign suppliers under the Import licence should be com- pleted bv 'the 378. A suitable provision should tlvrefore be made in tie purchase orders/contracts to ensure completion of shipments and payments by 30-6-7S. In case it is anticipated that payments cannot be completed by th'it date, a request tor extension with adequate justification must be made to the Department^ of Economic Affairs

1 (xiii) In the case of import licences whose value does not exceed the rupee equi- valent of DM 1 million, the purchase contracts arc required to be Mjhmitted by the Indian importer to the Department of Economic Affairs in a single lot. Subm.ss.on of contracts piecemeal will not be entertained. Tn this connection the min.mum value for eligible contracts explained in para 2 (iv) above should be kept in view. Section 3—Payment to forelun suppliers—"Special" Letter of Credit Procedure.

3 (]) .—Request foi issue of letter of authority.—Within a fortnight of conclusion of purchase contracts with foreign suppliers against an import licence whose value does not exceed rupee equivalent of DM 1 million Fat the rate of exchange notified by the Depart- ment of Revenue (Customs) or within a fortnight from the dale of communication of tho Government of India (vide para 2(v) (c) above) conveying the approv.il of KFW to tho contracts placed against an import licence whose value exceed the rupee equivalent of DM 1 million [at the rate of exchange notified by the Department of Revenue (Customs) 1, as the case may be, the licensee should submit the following document* to the Ministry of T-mancc, Department of Economic Affaiis, WE-T Section, Noiih Block. New Delhi with (he lequest for the issue of Letter of Authority for opening an irrevocable letter of credit in fflvour of the foreign supplier concerned.

fa) In respect of contracts mainst import licence whose value does not exceed the

rupee equivalent of DM 1 million.

i<65

tivcly or photo copies thereof. Attested copies or Ih; o i j .n tl . ^ .i <_" the Indian Agents and confirmed by such agent-* arc not a cvp,jbk\

OR

Three copies of the purchase contract duly signed by both the Indian importei and the foreign supplier or photo copies the-cuf. Attested topics or the orders placed on the Indian Agents and confirmed by such Agents are not acceptable.

(ii) A request (in duplicate) for issue of Letter of Authority in the form pres- cribed in Annexure-II.

(iii) A Bank Guarantee in the prescribed form as in Annexure- -III from an Indian Bank authorised to deal in foreign exchange, (.not applicable in the case of Public Sector importers).

(iv) In the case of C&F contract, three copies of the undertaking from the Indian insurance company vide para 2(vii) abov".

(v) A certificate in triplicate vide para 2(iiii) above ihat orders have been placed

(b) In respect of contracts again*/ Import licence yvhme value exceeds tht rupee

equivalent of DM 1 million.

In addition to the contract documents furnished earlier [in respect of which KFW's approval will have been obtained by the Ministry of Finance, Department of Economic Affairs vide para 2(v) (c) above], the fol'ow- ing documents should be submitted:—

(i) A request (in duplicate) for the issue of Letter of Authority in Ihi form prescribed in Annexure-II.

(ii) A Bank Guarantee in the prescribed form as in Annexure- -III from nn Indian bank authorised to deal in foreign exchange, (not applicable ia the case of Public Sector imports) and

(iii) In the case of C&F contract, three copies of the undertaking from ihe Ind'an Insurance Company vide para 2(vii) above.

3 (ii).—It is clarified that in the case of public sector importers, no bank guarantee is lciiimcd,

3 (iii).—Opening of Latter of Credit,—Letter of Credit can be opened on the strength of the Letter of Authority on any one of thc following 5 German banks designated for this purpose:—

(i) The Bayerische Vereinsbank, Munich, (ii) The Commerzbank A.G., Frankfurt, (iii) The Deutsche Bank, A. G. Hamburg, (iv) The Dresdner Bank A. G., Jungfomstief, Hamburg, (v) Berliner Handles Gasell-schaft Frankfurter Bank.

The importers (both in the public sector and private sectors) and their bankers should specifically indicate the Bank selected by them out of thc five banks mentioned in para 3 (iii) above.

3 (iv).—Failure to make the request for issue of letter of authority within a fortnight (a) from the date of placement of firm orders in the case of orders against an import licence whose value is the rupee equivalent of DM 1 rnillion or kss or (b) from the date of communication of approval of contract by the Ministry of Finance, Department of Economic Affairs in the case of contracts' against an import licence whose value exceeds the rupee equivalent of DM 1 million, as the case may be, may e>e deemed to be a viola- tion of the Import Control Regulations.

3 (v).—Bank Guarantee.—'amount for which it should he executed.—The Bank Guarantee', Where ntWssury, should be for Sn amount representing the rupee equivalent of the aniount in fdreigti exchange f<4r which the Letter of Authority is sought plus 1 per cent of lhat amount towards incidental and commitment charges and in addition interest and other charges as mentioned in Annexure—V. The prevailing rale of conversion shall be at ihe exchange rate notified by the Department of Revenue (Customs) under Section 15

°J, C""°l™/ic'' 1 9 62 ""d ind^ted in the import licence as per para 2 of Public Notice

No. 7K-lIC(FN)/74 dated 6-6-74. This rate in meant only for purpose of arriving at the.

value of bank guarantee to be furnished by the importer. For purposes of making rupee

deposits into Government account towards the foreign exchange cost of Imports made under

the licence the rupee equivalent will have to be worked out at the composite rate for the

DM. amounts spent by the German Bank in arranging payments to the foreign supplier

i.e. either in DM if the foreign supplier is situated in West Germany (including Land

Berlin) or the DM amount for effecting payment in the currency of any other country in

which the foreign supplier is located, in terms of the Public Notice No \5-ITC(PN)/72

dated 28-1-1972 and Public Notice No. 108-/TC(PiV)/72 dated 21-7-72 and 48-/rC(/W)/76

dated 17-1-76 as amended from time to time. Any change in thii regard will be notified

as and when necessary.

3 (vi).—Issue of Letter of Authority.—If the documents specified in para 3(i) above are found to be in order, the Ministry of Finance (Controller of Aid Accounts & Audit) Department of Economic Affairs, U.C.O. Bank Building, Parliament Street, New Delhi will issue a letter of authority to the German Bank concerned (as in Annexure—IV) authorising payment upto the specified amount to the foreign suppliers on the basis of a "special" letter of credit to be opened by the importer's bank in India on the nominated German Bank. A copy of such authorisation will be sent to Indian Licensee. The original Letter of Authority along with a copy thereof will be sent to the concerned Indian bank authorised to open the Letter of Credit, asking it to submit the original Letter of Authority to the German Bank concerned alongwith Letter of Credit opened by it. (Such a direc- tion will be as in Annexure—V). A copy of this communication will also be addressed to the importer.

No Bank in India should provide facilities to the licensee for establishing a Letter of Credit unless a Letter of Authority as explained in this para has been received by such a Bank directly from the Controller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance.

3 (yn).—The "special'' Letter of Credit on the German Bank should be opened within

thirty days from the date of the issue of Letter of Authority under intimation to the Con-

troller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance,

U.C.O. Bank Building, Parliament Street, New Delhi. Otherwise the Letter of Authority

already issued will be deemed to be no longer valid.

3(viii).—The payments to the foreign suppliers will be made by the German Bank concerned on collection of requisite documents and statements. Even where the foreign supplier is situated in a country other than the Federal Republic of Germany (including Land Berlin) the negotiation and payment of documents would be done by the German Bank concerned. The German bank concerned will obtain reimbursement of the DM amounts from the West German authorities. In the case of supplies by countries other than the Federal Republic of Germany, the German Bank will obtain reimbursement from the West Germany authorities of the amounts in DM spent by it to make the pay- ments to the overseas suppliers in the currency of the country in which they are located.

3 (ix).—Incidental bank charges incurred by the both for payment in the Federal Republic of Germany as well as for arranging the payment in third country wherever applicable will be remitted by the concerned bank in India to the German Bank through the normal banking channel without affecting the Government of India's account.

Section 4—Responsibility for Rupee Deposits Into Government Account.

4 (i)._The original shipping documents should invariably be forwarded by the German Bank concerned, both in the case of imports from West Germany including Land Berlin and other countries, to the concerned bank in India who should, within 10 days of thei receipt of the documents, release these negotiable set of documents to the licensee but only after ensuring that the rupee equivalent of DM amount paid to the German supplier or the DM amount spent in arranging the payment to the supplier in third country by the German bank concerned plus 1 per cent thereof towards incidental and commitment charges, together with interest charges on the above aggregate amount as indicated enclosed for the period from the date of payment to the foreign supplier to the date of deposit of the rupee equivalent into the Government Account (both days inclusive). In terms of Public Notice No. 46-ITC(PN)/76 dated the 16th June, 1976, the interest charges are to be calculated as under the rate of deposits made into the Government Account on or after 15th June, 1976 (as per slip attached).

1567

(i) where deposits are made within 30 days after from the 9% per annum date of payment to the supplier.

(ii) where rupee deposits are made more than 30 days after

the date of payment to the supplier.

(a) for the first 30 days 9%pcr annum (b) for period in excess of 30 days. 15% per annum The exchange rate to be adopted for computing the rupee equivalent of the foreign cur- rency payments made to the foreign supplier will be the composite rate of exchange as laid down in CCT&E's Public Notice No. 18-lTC(PN)/76 dated 17-1-76 or as may be notified by the Government from lime to time through Public Notices of the CC1&E or through the Exchange Control Circulars of the Reserve Bank of India. // will be the res ponsibility of the Indian Bank concerned to ensure that the amounts due are correctly deposited into Government Account before the original shipping documents are handed over to the importers. The licensee should also ensure that the amounts due are correctly deposited into Government Account before taking delivery of the documents from their bankers.

4 (ii).—The deposits envisaged in para 4(i) above may be made in cash either at the Reserve Bank of India, New Delhi or the State Bank of India, Tis Hazari, Delhi, or if this is not feasible, the amounts may bo remitted by means of a demand draft drawn on and in favour of the Agent, State Bank of India, Tis Hazari, De)hi-6 for credit to Government account as contemplated in Public Notice No. 233-ITC(PN)/68, dated the 24th October. 1968 as amended vide Public Notice No. 74-lTC(PN)/74 dated 31st May, 1974 and Public Notice No. 132-1TC(PN)/71 dated the 5th October, 1971. The Head of Account to be credited is : "K-Deposits and Advances—b—Deposits not bearing interest—843-Civil Depo- sits—Deposits for purchases etc. abroad—Direct Payment Procedure Deposits for cost of supplies and equipment obtained under the West German Capital Goods Credit VII for 1975-76 (DM 30 Milion, Credit)".

4 (iii).—Remittance will be made in the Challan form prescribed in Public Notice No. 74-lTC(PN)/74 dated the 31st May, 1974.

4 (iv).—One copy of the Challan from the Reserve Bank of Tndia, New Delhi or the State Bank of Tndia, Tis Hazazri, Deihi-6 or intimation regarding the submission of Demand Draft to the State Bank of India, Tis Hazari, Delhi-6 should be sent by the Indian Bank, which has issued the guarantee to the Controller of Aid Acounts & Audit, Department of Econmic Affairs, Ministry of Finance, U.C.O. Bank Building, Parliament Street, New Delhi-1 along with a forwarding letter, giving full details of the Advice Notes received from the concerned nominated Gorman Bank.

4 (v).—Tt will be obligatory for the importers to make the requisite rupee deposits through authorised dealers only and also to get the exchange control copy of the licence endorsed by them, as required in Public Notice No. 184-ITC(PN)/68, dated the 30th August, 1968. They should also fill in the requisite "S" forms as prescribed by the Reserve Bank of India.

4 (vi).—After the imports under a licence are completed and the importers/bankers have deposited into Government account all the amounts due, details of the imports received and of rupee deposits made should be furnished to the Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Building, New Delhi-1 in the proforma prescribed as Annexure—VI to enable the Ministry of Finance to verify and arrange for release of the bank guarantee furnished by the importers, wherever necessary.

Section 5—Alternation In the contract.

Any material alternation in the contracts pertaining to the list of goods, terms or schedule of payment, value of goods, etc. will require the prior approval of the Ministry of Finance and the KFW authorities, whether it results in earlier payments, or in postponement of payments.

Such alteration(s) should be promptly intimated by the importers to the Department of Fconomic Affairs, Ministry of Finance, New Delhi, (WE-I Section, North Block) for secur- ing the approval of the Government of India/KFW in the same manner as explained in para 2(v) above. Section 6—Reporting

A quarterly report commencing from the date of Issue of the licence should be furnished in duplicate as in Annexure—VII to the Ministry of Finance, Department of Economic

Affairs (Wfc-I Section Room No. 270, North Block), New Delhi showing progress of ordering, dehveiy of goods, payments to foreign suppliers, etc. and should be continued till al! shipments and payments under the contract have been completed. la the case of allocaT lion exceeding the rupee equivalent of DM 1 million (at ihe exchange rate notified by the Department of Revenue (Customs) the licensee should, in addition to the above mentioned quLirt^rly reports, submit a half-yearly report on special event, if any, on the progress of the project and on adherence to the time—schedule for completion of project. Annual Rcpoit (2 copies) of the Indian importing company will also required to be furnished for at least three years until completion of the project.

Setfion 7—Miscellaneous Provisions

7 (i).—The licensee should apprise Ihe supplier of any special provisions in the import JiiNMKe which may affect the suppliers in carrying out the transactions.

¹ 7 (ii).—Disputes.—It should be understood that the Government of India will not undertake any responsibility for disputes if any that may arise between the Indian importer and the foicign supplier.

7 (iii).-—Compliume nith Instruction:,.—The licensee shall promptly comply with any ^directions, instructions or ordeis issued by the Government of India from time to time regaiding any and all matters arising from or pertaining to the import licence and for meet- ing all obligations under the DM 30 million Capital Goods Agreement with the KFW authorities.

7 (iv).—Breach or Violation).—Any breach or violation of conditions set forth in the above clauses will result in appropriate action under the Imports and Exports (Control) Act.

7(v).—Lht of Annexurev.—

Annexure—I—Project data form.

Annexure—11—Form of Request for issue of Letter of Authority.

Annexure—III—Form of Bank Guarantee.

Annexure—IV—Form of Letter of Authority.

Annexure—V—Letter of Instructions forwarding the Letter of Authority,

Annexure—VI—Form of report of rupee depo3its-t"m-applieution for release "f Bank Guarantee.

Annexure—VII—Form for submitting quarterly report.

ANNhXURE 1

PROJECT DATA FORM

KREITANSALT FUR WIEDERAUFBAU

6, Frankfurt/Main, Federal Republic of Germany

Palmengartcnsrasse 5—9

Application for Foreign Exchange from German Capital Goods Loan

PROIECT DATA

(1) Applicant (Firm)

(a) Registered Office (address incl. State)

(b) Public Sector or private sector undertaking

(c) Business Line/Branch of industry

(d) Partners of Company

(e) Foreign Collaboration Agreement

(2) Typ" of capital goods to We financed.

(3) Choice of capital goods based on

(•4) Suppliers (name and address)

(5) *-'Vort description of the whole (woject (for which such capital goods are required)

1569

(6) Local and foreign exchange cost of the whole Project, with following break-down of figures

—land and buildings —Mac'nincry and equipment

—Operating Funds —Miscellaneous.

(7j Local and foreign financial sources for the whole, project (Quantitative statement concerning means of financing. It should be confirmed that Rupee—financing is se- cured and that foreign exchange requirements not covered by this application Hi© met).

(8) Letter of Intent for Industrial Licence received.

(9) Annual reports with balance sheets and profit and loss accounts for Ihe last two years. If available forecast of cash-flow and profitability.

(10) Capacity:

l'ii) Average utilization of existing capacity during (he last two years, (b) In case of und:r-utilization, please give main reasons.

(11) Sales (last two years). (12) Market poiilion of the products to be manufactured (If possible figures showing past and expected development).

(13) Employment :

(a) Present number of employees. (b) Additional employment after completion of project.

(14) Source of raw mateiial supplies. (15) Time-table for the execution of the project.

ANNI-XURK—11

REQUEST FOR ISSUE OF LETTER OF AUTHORITY

To,

1 be Controller of Aid Accounts & Audits, Ministry of Finance, Department of Economic Affair!, U.C.O. Bank Building, Parliament Street, New Delhi-1.

SUII.IECT —Import of _ _ ^ ^ _ _ _ _ _ ^ ^ _ ^ ^_ from under West German Capital Goods Credit for 1975-76 (DM 30 million Credit).

Sir,

In connection with the import of

from

.

under the above mentioned West German Capital Goods Credit, wo furnish t'ne following particulars to enable you to issue the authority for opening a letter of credit througk on the Baycrische Vereinsbank, Munich, or Com- merzbank A.G., Frankfurt or Deutsche Bank¹, A.G., Hamburg or the Dresdner Bank A.G., Jringfcrnstief, Hamburg or the Frankfurter Bank, Frankfurt/AM Main.

(a) Name and Address of the Importer :

(i) Whether a public or private sector undertaking, (ii) Category of industry to which it belongs, (iii) The State in which it is located.

(b) Number, date and value of licence, (Photostat copy of the licence should be attached).

(c) Value in foreign currency and Hate of t'ne order placed and accepted by the suppliers, indicatinn payment terms viz.. (c.i.f. or c&f) (In no Case, Letter of Authority should be applied for f.o.b. value only).

(d) A certificate in duplicate that firm orders (with Suppliers order confirmation) have been placed within a period of 4 months from the date of import licence. If orders have been placed after the stipulated period of 4 month), a copy

of CCI&E's letter/Ministry of Finance's letter authorising extension of time for placing firm orders as the case may be, should be attached.

(e) A certificate in triplicate that firm orders 'nave been placed after obtaining com- parable bids from overseas suppliers and that the lowest technically suitable offer has been accepted. Ijn case it is not possible to obtain comparable bids, e.g. proprietory item, full justification therefore should be furnished.

(0 Short description of the goods to be imported.

(g) Net foreign currency amount for which Letter of Authority is required (exclud- ing Agency commission).

(h) Name and address of the suppliers and the foreign currency amount payable for such supplies, (to be expressed in t'ne currency of the country in which the supplier is located).

(i) In case the supplier happens to be located In a country other than West Germany, the name of the supplier's bank to whom the amount is to be remitted by the German designated bank should be indicated.

(j) Expected date of completion of delivery.

(k) A schedule showing probable dates on which payments under the contract will fall due.

(I) In the case of import licence upto a value which is equivalent to DM 1 million, a certificate that all the contracts 'against the import licence have been placed and that no further contract will be placed.

The Letter of Credit will be opened through

(Name and address of the Indian scheduled bank, authorised to deal in foreign exchange) and the Bank Guarantee No. —• dated lor Rs. furnished by the above mentioned bank and which has been duly adjudicated by the Collector of Stamps, in accordance with Section 31 of the Stamps Act, 1899 is attached.

Yours faithfully,

(Licensee)

Copy forwarded to Bank, for information.

ANNEXURE—III

GUARANTEE BOND

President of India,

by

In considefation of the President of Tndia (hereinafter called the Government) having agreed to arrange for payment in (mention the appropriate amount in foreign currency) (here- for the import of dated inafter called the 'importer') against the licence No. issued under the terms and conditions of West German Capital Goods Credit for 1975-76 and in pursuance of import in favour of fne importer against the above mentioned agreement, We _. Bant, at the request of the importer hereby undertake to arrange to deposit the amount of the disbursements made by the (Name of the German Bank) nominated by the importer converted at the prevailing rate of exchange calculated as per instructions issued by the Government in the matter from time to time plus 1 per cent thereon within 10 days of the receipt of advice of payments, for credit to the Government account, in t'ne manner and against the appropriate Heads of Account as indicated by Government of India, under the. said credit together with interest thereon at the rates of 9 per cent per annum for the first 30 days and at 15 per cent per annum for the period in excess thereof re- ckoned from the date of payment to the foreign supplier to the date of deposit of rupee equivalent for credit into the Government account. The negotiable set of import docu- ments received from the GeTman B'ank will be released to fhe importer only after the rupee deposits contemplated above have been made.

1 We the

B a nk a l s° undertake to indemnify and keep

indemnified the Government against any default in payment by the importer of any sum

i57i

that may be due and payable from time to time by the importer to the Government at such place and in such manner as the Government may from time to time direct, such sums not exceeding Rs. or any part thereof, for the time being due and payable by the importer, together with interest t'nere upon at the rate of 9 per cent per annum for the first 30 days and at J5 per cent per annum for the period in excess thereof, reckoned from the date of payment to the foreign supplier. The decision of the Gov- ernment as to any default in the said payment by the importer, or on his part and in regard to the amount payable to the Government by us Bank shall bo final and binding on us Bank.

3. We Bank, further agree that in case of increase in the value of imports or decrease in the value of unfulfilled deliveries under the contract as a result of change in the composite rate of exchange, the amount of this guarantee bond will be adjusted as on the date when the change takes place, in proportion to this change.

4 We Bank further agree that the guarantee 'nerein contain- ed shall remain in full force and effect during the period that would be taken for the perform'ance of the said Agreement/contract and that it shall continue to be enforceab.o till all the dues to the Government under, or by virtue of this guarantee have been fully paid and its claims satisfied or discharged.

5. The guarantee herein contained shall not be affected by any change in the constitu- tion of the importer or the B a nk and the Government shall have the fullest liberty without affecting the guarantee to postpone for any time and from time to time any of the powers excrcisable by it against the importer and the Bank shall not be released from its liability under this guarantee by any exercise of the Government of the liberty with reference to the matters aforesaid or by reason of time being given to the Importer or any °*er forebearancc act or omission on the part of the Government or any indulgence by t hc G ^ n r n e nt to the Importer or by any other matter or thing whatsoever which under the law relating to sureties shall, but tor this provision, have t'nc effect of so releasing the Bank from its such liability.

, w Bank lastly undertake not to revoke this guarantee

during its currency, except with previous consent of the Government, in writing.

7 Our liability under this guarantee is restricted Id R'-

(ph'¹* interest and other charges, not expected to exceed 1 per cent of the guarantee amount> and it will remain in force till the day of * (month) 197 . Unless claims under the guarantee are made in writing within 6 months ot this date and unless a suit or action to enforce t'nese claims is commenced within another six . , all Government rights under this guaran- HiontfiB thereafter i.e. upto tos shall be forfeited and we shall be relieved and discharged from all liability there- under.

Date the day of

for B a n l c-

Accepted for and on behalf of the President of Tndia, by Shri (Name- and designation).

Signature

Signature

•This date shall be arrived at by adding one month to the date upto which the Letter

of Authority is required to be kept valid.

N o r a s - ( 1) The value of the stamped paper in which this guarantee i" ^ be executed is to be adjudicated by the Collector of Stamps under Section 31 of the Indian Stamps Act.

(2) T" value ot tke Bant Guarantee vM* par.. !I and 7 rtovs . Ml to

date of issue of the Import Licence.

ANNEXURE—IV

LETTER OF AUTHORITY NO, -

GOVERNMENT OF INDIA.

MINISTRY OF FINANCE

Department of Economic Affairs

New Delhi, the 197

T",

(Name and Address of the German Bank)

Dear Sirs,

SUBJECT.—Procedure for payments to overseas suppliers through the Letter of Credit

Cover Deposit Account with you under DM 30 million Capital Goods Credit

for 1975-76 (AL-7565559) from the Federal Republic of Germany,

In accordance wilh the terms and conditions of the abovo procedure, agreed upon through letter Nos. dated the addressed to your Bank by the Chief Accounting Officer, High Commission of India, London we hereby authorise you to spend such an amount in DM as may be found necessary to (applicable in pay (the amount in foreign currency concerned) to

(nnmc of the supplier)

for covering the import of

the case of third country suppliers) or to pay an amount of DM to applicable in the case of West German supplier), as the case may be, under the letter of credit to be opened by against contract entered into by

2. After each payment, the shipping and oi'ner documents (negotiable) may be forward- ed direct to and a payment advice alonfiwith one set of documents (non-negotiable) sent to the undersigned for information.

3. Your banking charges under the above letter of credit will be settled directly with by remittance you by the from India.

4. This authority will remain valid upto 197

Yours faithfully, Accounts Officer.

ANNEXURE—V

SUBJECT.—Import under West German DM 30 Million Capital Goods Credit for 1975-76

Issue of Letter of Authority for opening Letter of Credit Import Licence

No.

dated

Dear Sirs,

With reference to letter No. dated the

from the in which they have requested permission for opening a letter of credit through your Bank under the West German DM 30 million Capital Goods Credit for 1975-76, I am to enclose the Department of Economic Affairs Letter of Authority No.

dated the

(with one spare copy)

to the foreign authorising them to arrange payment upto tupplier. This Letter of Authority should be sent by you to the alongwith the letter of credit spent by you.

2. You are Viereby authorised to open the letter of credit for an 'amount not ex- eeeding_ within¹ a period of thirty days from the date of this letter, under intimation, to this Department. In terriia of para 10, Section VII of the Exchange Control Manual, you are required to ensuYo that the date of expiry of the Letter of Credit i" not later than, 45 days, after the final date for shipments stated in the relative import licence or the date indicated in the Letter of Authority which ever is earlier. Before opening the Letter of Credit, it may please be ensured that the importer is in powesiii

3. You are requested to arrange to deposit the rupee equivalents of the amounts in Deutsche Mark spent by (name of the German Bank) to effect payments in D.M. to the suppliers in the Federal Republic of Germany including Land Berlin or in other foreign currency to the foreign supplier in other countries plus 1 per cent towards incidential and

1573

Commitment Charges in terms of the Guarantee furnished by you, within 10 days of (he . The rupee equivalents of the receipt of documents from the amount disbursed to the foreign suppliers will have to be calculated by 'applying the pre- vailing rate of conversion as instructed in Public Notice No. 15-ITC(PN)/72 dated 28th January, 1972 and Public Notice No. 108-[TC(PN)/72 dated 21st July, 1972 and 48-1TC (PN)/76 dated 17th January, 1976 until further notice. This rate if subject to revision if and when the IMF parity rate of exchange undergoes change. Interest at the rate of 9 per cent per annum for IVie first 30 days and at 15 per cent per annum for the period in excess thereof reckoned from the date of payment to I'ne suppliers and the date on which the rupee equivalents are deposited (both days inclusive) is also required to be deposited into Government account. It will be your responsibility to arrange for the deposit of these amounts, before the shipping documents are handed over to the importers.

4. These amounts should be deposited either with the Reserve Bank of India, New Delhi or the State Bank of India, Tis Hazari, Delhi or remitted by means of a demand draft obtained by you from any branch of the State Bank of Tndra or its subsidiaries (Drawer) drawn on and made payable to the Slate Bank of India, Tis Hazari, Branch, Delhi-6 (Drawee and Payee). In this conned ion, your attention is also invited to the provisions of the Public Notice N o. 233-lTC(PN)/68 dated the 24th Odober, 1968 as amended by Public Notice No. 74-lTC(PN)/74 dated 31st May, 1974 and No. 132-ITC ( P N ) / 71 dated the 5th October, 1971, The head of account to be credited is: "K— Deports and Advances—b—DcpQsits not bearing interest—843—Civil Deposits—Deposits for pur- chases etc. abroad under Direct Payment Procedure Deposits for cost of supplies and equip- ment obtained under the West German Capital Goods Credit VII for 1975-76 ( DM 30 million Credit)".

5. One copy of the challan in original, in cases where the rupee equivalents are cre- dited in cash at the Reserve Bank of India, New Delhi or the State Bank of India, Delhi should be sent by you to the address given below, alongwith a forwarding letter giving full det'ails of t'ne Advice Notes received from the ominatinft German Bank.

The Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, U.C.O. Bank Building, Parliament Street, New Delhi.

Ill cases where the rupee equivalents arc remitted by means of demand drafls as laid down in the Public Notice dated the 24th October, 1968 mentioned above, intimations thereof should be sent to the address given above. In all cases, full particulars of the rupee equivalents deposited alongwith the amount of interest paid and the period for which interest has been calculated should be furnished to this Department.

6. A payment clause to the effect that the insurance claim, if any, received from the foreign Insurance Company a n d / or claims, if any, arising out of Bank Guarantee rcljlivc 10 performance guarantee should be remitted by the Insurance Company a n d / or the Bank giving the guarantee in DM direct to K FW (Account No. 504:09100 with Deutsche Bundesbank, Frankfurt/Main> under advice to the Controller of Aid Accounts and Audit, Ministry of Finance, Department of Economic Affairs, New Delhi, may be inserted in the Letter of Credit to be opened by you.

Yours faithfully, Accounts Officer.

Copy forwarded to M / s.

with a copv of for information, vv;th the Letter of Authority No. reference to their letter quoted above.

Accounts Officer.

/tfNNEXUHE VI

PROFORMA

1. Name and full address of the importer/licensee on whose behalf the Bank Gua- rantee was furnished.

2. The import licence number and date and Value.

3. Number, date and amount of the guarantee furnished.

4. Particulars of the Letter of Authority for Opening Letter of Credit obtained from the Ministry of Finance.

(a) Number and date of the Letter of Authority. (b) Amount of the Letter of Authority (in foreign currency).

5. Particulars of Impojtls effected and rupee deposits m'ade.

(a) Name of suppliers. (b) Amount (in foreign "currency) actually paid to t'ne supplier(a) mentioned ht (a) above.

(c) Date of payment to the supplier by the nominated German Bank. (d) Amount of rupee deposit:—

(i) Rupee equivalent of"foreign currency amount paid to the supplier @ 1 unit of foreign exchange = Rs.

(ii) Interest paid. (iii) Period foJ¹ which the interest has been calculated from

to

(iv) Total deposit made. (v) Date and place of deposit. (vi) Number and date of the Treasury Challan (to be enclosed).

If the Treasury Ch'allan has already been sent, reference to the letter number and date with which it was sent may be quoted.

(vii) If t'ne rupee deposit mentioned in (d) (iv) above was made by mean? of Demand draft, the number, date and amount of the draft and particulars of your letter with which it was sent to, the Accountant General, Central Revenues, to be indicated.

6. Amount utilised and balance unutilised (in foreign currency) against each Letter sf Authority:—

7. A certificate that the balance indicated in 6 above, has not been utilised and no shipment has been made thereof, 'and the same may be treated as lapsed.

(Authorised signaturing

ANNEtfURE—VII

PR0FOR.MA

Name of company

Value of contract (foreign, currency)

No. date & value of L L. (Rs.)

Category of industry

Value of L- C.

Address of Com- pany

Amount of allo- . cation CRs.)

Private sector/ public sector

Amount paidag- ain&t the LC (foreign can ncy)

2

t

3

6

9 3

4

7

5

NOTE.— In respect of allocation exceeding t*ie rupie equivalent of DM I million, if the rat; of Lxchange notified by tht D ptt. of I^evenu; (Customs), the licensee wil] by required to submit in addition half yearly report on special eventj if any, on tbt progress of the project and n ad- hercnee to t'ie time-&ciie d ub for completion of project. Annual Reports (2 copies) will be also required for atleast three years untill com- Pktionof the picket.

A. S. GILL,

Chief Controller of Imports & Exports.

1 5 7 5

1577

1579

1581

1583

1585

1587

1589

*r

1591

I59J

1595