Appendix 25 B
Legal
Agreement/Undertaking Format
To
The President of India
acting through the Director General of Foreign Trade (which expression shall be
deemed to include the Joint Director General of Foreign Trade/Deputy Director
General of Foreign Trade) Ministry of Commerce, Udyog
Bhavan, New Delhi - 110 011.
This DEED of Agreement made on
________________ day of ____________ month ___________ year
BETWEEN
__________________________ (full
expanded name of the Importer/Exporter with complete address) hereinafter
referred to as the party which expression shall be deemed to include his/her
heirs, successors, administrators and assignee, if the firm is Sole Propreitory firm/jointly and severely all the Partners
through their legal heirs, successors, administrators, and assignee as well as
the portions where body corporate or not having the control of the affairs of
the said firm, if it is Partnership firm/successors in business and assignee if
firm is limited company.
AND
The President of India (hereinafter
referred to as the Government which expression shall include his successors in
office and assigns).
WHEREAS the party has made an application bearing Reference No. _____________ dated ______ for
an Authorisation for a value of Rs.___________ for import
under the _______________________________ Scheme (fill up the actual Scheme)
(hereinafter referred to as 'Scheme') notified by the Government under the
Foreign Trade Policy, 2004-09 as amended from time to time with an Export
Obligation of Rs._______________ .
AND WHEREAS the Government may
grant an Authorisation to the party for the full
value applied for or for a lesser value as it may be deemed fit and as per the
terms and conditions of the Scheme.
AND WHEREAS one of the terms of
the Authorisation, which may be issued as above, is
that the party is to enter into an agreement/undertaking with the Government on
the terms and conditions appearing hereinafter.
AND WHEREAS the party has
furnished a Legal Agreement in anticipation of the Government issuing Authorisation as above for an amount of the export
obligation imposable as per the Scheme.
AND WHEREAS the party has agreed
to perform the export obligation for the quantity and or to the extent of FOB
value shown in the aforesaid application or as may be fixed by the Government
in the Authorisation/ Sanction/ Approval within the
stipulated period by exporting the goods as required under the Authorisation which may be issued.
AND WHEREAS the party has
agreed:
a) to
perform the export obligations for the quantity and or FOB value within the
period specified in the aforesaid Scheme/Authorisation/Sanction/Approval;
b) to fulfill all the
conditions of _______________ Scheme under which the Authorisation/
Sanction/ Approval may be issued;
c) to fulfill all the
terms and conditions of the Authorisation/ sanction
/approval which may be issued;
d) to fulfill the conditions subject to which the goods may be
cleared by the Customs authorities including conditions imposed under the
relevant Customs notification pertaining to the Scheme;
e) to send a
'Statement of Exports' to the Regional Authority in original, on a
monthly/quarterly/half-yearly basis, within 15 days from the end of the period;
f) to
furnish from a Nationalised / Scheduled bank, in
original, a Bank certificate of exports evidencing the exports/ deemed exports
of goods made in fulfillment of the export obligation(s) and such other
documents as may be demanded by the Regional authorities as evidence for the
exports/ deemed exports made;
g) that in
the event of his default in meeting the aforesaid obligations / conditions, he
shall pay an amount equal to 15% interest per annum on the amount of duty saved
from the date of import of the first consignment till the date of payment.
h) that the
Government may modify the Scheme from time to time.
NOW, THEREFORE THE CONDITIONS OF
THE AGREEMENT ARE AS FOLLOWS:
In anticipation of granting the said Authorisation
by the Government as aforesaid, the party hereby declare(s) and agree(s):
(i) That the party shall comply with all the obligations under the
aforesaid Scheme specified by the Government and the conditions specified in
the Authorisation/Sanction/Approval to be issued for
import/ export and other conditions specified herein above.
(ii) That if
the party fails to fulfil the whole or part of the obligations under the
Scheme, including the terms and conditions stipulated in the Authorisation / Sanction/ Approval/ Scheme or fails to
furnish any information required under the Foreign Trade (Development & Regulation)
Act, 1992, or the Orders made thereunder or the Rules
framed thereunder, on the written demand made by the
Government of the amount, in whole or part, the party shall forthwith without
any demur or protest, pay to the Government the sum demanded.
(iii) That
notwithstanding any right Government may have directly against the party in any
form and notwithstanding any dispute raised by the party in any form, the
Government's written demand to the party shall be final and binding.
(iv) That this
Agreement shall continue and shall not be discharged by any change in the
constitution of the party.
(v) That in
the event of the non-fulfillment of export obligations mentioned in the Authorisation as aforesaid, the party shall on the
instructions of the Government hand over the unutilised
imported goods to any agency as the Government may nominate, for disposal in
any manner. The amount so recovered by sale shall be deposited with the
Government towards the fulfillment of export obligations/ conditions, after
deducting the normal commissions and other expenses incurred by the said
agency. The decision of the agency as to the said amount shall be final and
binding on the party. The Bank Guarantee/ Bond executed with the Customs
authorities, in such an event, shall also be forfeited.
(vi) The party
undertakes to pay simultaneously a sum equivalent to the value of the Authorisation / Sanction/ Approval or to the extent of the
value of the imported goods against the said Authorisation
/ Sanction/ Approval, whichever is higher, by way of liquidated damages to the
Government. The decision of the Government shall be final and binding on the
party.
(vii) That
this Agreement is executed by the party in public interest.
(viii) That the
payment of the amount demanded by the government under this Agreement shall not
affect the liability of the party to any other action, including the initiation
of legal proceedings for confiscation of the imported material and refusal of
further Authorisations, and all other liabilities,
penalties and consequences under the provisions of the Foreign Trade
(Development and Regulation) Act, 1992, and the Orders and Rules made thereunder, that may be decided by the Government.
(ix) That this Agreement shall remain in full force until all the
obligations of the party are fulfilled to the full and final satisfaction of
the Government as specified above and till such satisfaction is communicated to
the party.
(x) That the
party irrevocably undertakes that in the event of his default in meeting the
aforesaid export obligations / conditions, they shall pay the applicable
Customs Duties, 15% interest per annum on the amount of customs duties saved
from the date of import of the first consignment till the date of payment to
meet the shortfall in the export obligations as may be imposed on the Authorisation/ sanction/ approval /scheme. In addition to
the aforesaid the party shall also abide by the conditions imposed by the
relevant Customs notification for the Scheme.
(xi) That the
party irrevocably undertakes that in the event of his default in meeting the
aforesaid export obligation / conditions, they shall execute a Bank Guarantee
for an amount as required by the Government.
(xii) Nothing
in this Agreement shall debar the Government from modifying the said Scheme
from time to time and/or from implementing any such modified Scheme as if it is
in force at the date of this Agreement.
IN WITNESS WHEREOF the party hereto has duly executed this
Agreement on this ______________ day of ______year_______ signed, sealed and
delivered by the party in the presence of:
(Signature)_________________________
___________________________________
(full and expanded description of the
party with residential address)
Witness: _____________________
(Signature)
1. Name ___________________
Residential________________
Address ___________________
2. Name ___________________
Residential________________
Address ___________________
(To be authenticated/affirmed by
1st Class Magistrate/Notary
Public)
Accepted by me on behalf of the
President of India.
( )
Asstt. DGFT/ Foreign Trade Development Officer
Note for Guidance in the
Matter of Executing Bank Guarantee (BG) /
Legal Agreement (LUT)
1. The Bank
Guarantee /Legal Agreement is to be executed and signed by the
importer/exporter (party) and the surety Bank (Guarantor) on a non-judicial
stamp paper of the minimum value of Rs. 15/-, or any amount as may be
prescribed by the concerned State Government under the Indian Stamp Act, 1899
or State Act, as the case may be.
2. Any stamp
duty payable on the B.G./LUT or any document executed thereunder
shall be borne by the party.
3. If the party is a sole proprietary firm, the Bond/Legal Agreement
shall be executed by the Sole Proprietor of the firm, along with his permanent
and complete residential address.
"In such a case the expression "Importer/Exporter"
or "Party" used in the opening paragraph of the Legal Agreement
should include his/her heirs, successors, administrators and assignee".
4. If the
party is a partnership firm, the B.G./LUT shall be executed in the name of the
partnership firm, through the partners to be specified, or the Managing
partner, if so specified in the Partnership Deed, along with the address of the
partner/Managing Partner, and the place where the Registered Office of the
partnership firm is situated.
"In that case, the expression "Importer/Exporter"
or "Party" used in the opening paragraph of the Legal Agreement
should include jointly and severely all the partners, through respective legal
heirs, successors, administrators and assignee as well as the portions where
body corporate or not having the control of the affairs of the said Firm".
5. If the
party is a Limited Company, the B.G./ LUT shall be executed by the Managing
Director or two Directors of the Company, along with the seal of the Company
and also specifying the address of the Registered Office of the Company.
Alternatively the B.G./ LUT shall be executed by a senior
executive of the Company of the rank of General Manager and one of the
Directors of the Company who have been authorised by the board of Directors for
this purpose, along with the seal of the Company and also specifying the
address of the Company. In such cases B.G./ LUT shall be countersigned by the
Company Secretary.
"In that case, the expression "Importer/Exporter"
or "Party" used in opening paragraph of the Legal Agreement should
include its successors in business and assignee".
6. Each page
of the Bond / Legal Agreement is to be signed.
7. The importer/ exporter shall also give a separate declaration alongwith BG/LUT to the effect that in the event of any
change in the Customs Duty based on which the BG/LUT is executed for clearance
of the imported goods, he shall execute supplementary BG/LUT for the remaining
value at the time of clearance of last consignment, failing which he shall be
liable to such action as is considered proper by the Regional/ customs
authority.