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 a licence  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 a licence  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 Licence, 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 import licence 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  Licence/   Sanction/  Approval  within  the stipulated  period  by exporting the goods as required under  the licence 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/Licence/Sanction/Approval;

 

b)    to  fulfill all the conditions of _______________  Scheme under which the Licence/Sanction/Approval may be issued;

 

c)     to  fulfill all the terms and conditions of the  licence/ sanction 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  Licensing 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 licensing 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  Licence  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  Licence/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  Licence / 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 licence 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 Import Licence  / Sanction/  Approval or to the extent of the  value of  the imported goods against the said Licence  / 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  licences, 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  licence/ sanction/  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 licensing/ customs authority.