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G.S.R.
804(E).-In exercise of the powers conferred by sub-section
(1) of section 25 of the Customs Act, 1962 (52 of 1962),
the Central Government being satisfied that it is necessary
in the public interest so to do and in super session
of the notification of the Government of India in the
Ministry of Finance ( Department of Revenue) No. 79/2000-Customs,
dated the 26th May,2000[ G.S.R. 499(E), dated the 26th
May, 2000], except as respects things done or omitted
to be done before such super session, hereby exempts
all goods other than those prohibited under the Export
and Import Policy (hereinafter referred to as the said
goods), falling under the First Schedule to the Customs
Tariff Act, 1975 ( 51 of 1975) , when imported into
India or procured from a Public Warehouse or a Private
Warehouse appointed or licensed, as the case may be,
under section 57 or section 58 of the said Customs Act
for the purposes of manufacture of goods, services,
production, processing, assembling, trading, repair,
reconditioning, re-engineering, packaging or in connection
therewith and export thereof ( hereinafter referred
to as the said purpose) by a unit ( hereinafter referred
to as the said unit) within a Special Economic Zone
(hereinafter referred to as the Zone ) as notified by
the Government of India in the Ministry of Commerce
and Industry, from the whole of the duty of customs
leviable thereon which is specified in the said First
Schedule and from the whole of the additional duty leviable
thereon under section 3 of the said Customs Tariff Act,
subject to the following conditions, namely:-
1.
The importer has been authorised by the Development
Commissioner to establish the said unit in the Zone
for the said purpose.
2.
The importer executes a bond in the form specified by
the Assistant Commissioner of Customs or Deputy Commissioner
of Customs, binding himself –
(i)
To bring the said goods into the said unit in the
Zone and use them for the said purpose;
(ii)
To dispose of the said goods or services, the
articles produced, manufactured, processed and packaged
in the said unit or the waste, scrap and remnants
arising out of such production, manufacture, processing
or packaging in the manner as provided in the Export
and Import Policy and in this notification;
(iii)
To achieve positive NFEP ( Net Foreign Exchange Earning
as a Percentage of Exports) as provided in paragraph
9.32 of the Export and Import Policy read with the
provisions of Handbook of Procedure, Vol. I and to
comply with the conditions stipulated in this notification,
the relevant provisions of Export and Import Policy
and the relevant provisions of Handbook of Procedures,
Vol. I and to pay on demand, -
(a)
In case of failure to achieve the said positive NFEP,
the duty equal in amount to the portion of the duty
leviable on the said goods but for the exemption contained
in this notification and the duty so payable shall bear
the same proportion as the unachieved portion of NFEP
bears to the positive NEFP to be achieved along with
interest at the rate of 24% per annum on the said duty
to be paid on demand from the date of importation or
procurement of the said goods till the payment of such
duty.
(b)
In case of failure to utilise the said goods for the
said purpose within the period of five years, an amount
equal to the duty as leviable on the said unutilized
goods along with interest at the rate of 24% per annum
on the said duty from the date of importation or procurement
of the said unutilized goods till the payment of such
duty.
3.
The said unit shall maintain proper account, in the
format convenient to it and financial year-wise, of
all foreign exchange inflow by way of exports and other
receipts, all foreign exchange outflow on account of
imports, payment of dividend, royalty, fees, similar
other accounts, consumption, utilisation of the said
goods and sale of goods produced, manufactured, processed,
packaged, services rendered including waste, scrap and
remnants arising out of such production, manufacture,
processing or packaging in the Domestic Tariff Area
and shall submit regularly quarterly statement and monthly
statement in case of gem and jewellery, to the Assistant
Commissioner of Customs or Deputy Commissioner of Customs
in the proforma prescribed in Appendix 16H of the Handbook
of Procedures, Vol. I .
4. The Assistant Commissioner of Customs or Deputy
Commissioner of Customs may, subject to such conditions
and limitations as may be imposed by him and subject
to the provisions of the Export and Import Policy –
(i) Permit the said goods or goods manufactured,
produced, processed, partially processed or packaged
in the said unit to be taken to any other unit in
another Special Economic Zone or to Export Oriented
Undertaking or Export Processing Zone or Electronic
Hardware Technology Park or Software Technology
Park units temporarily without payment of duty -
(a) For repairs, processing, testing or display
and to be returned to the said unit thereafter,
or
(b)
For the purpose of manufacture and export there
from, subject to maintenance of proper accounts
by both the receiving and supplying unit;
(ii)
Permit the said goods or goods partially processed
or packaged in the said unit to be taken outside the
Zone without payment of duty for the purpose of test,
repairs, replacement, calibration, refining, processing,
display, job-work or any other process necessary for
manufacture of final product and to be returned to
the unit there after or remove the same without payment
of duty under bond for export from job-worker’s
premises:
Provided
that in case of export from the job-worker’s
premises, such job-worker shall be Central Excise
registrant under rule 174 of the Central Excise Rules,
1944:
Provided
further that waste or scrap or remnants generated
during such process at the job-worker’s premises
shall be either returned to the said unit in the Zone
or shall be cleared on payment of duty as if the said
waste or scrap or remnants have been imported by the
said unit;
(iii)
Permit removal of moulds, jigs, tool, fixtures,
tackles, instruments, hangers, patterns and drawings
without payment of duty to the premises of the sub-contractors
subject to the condition that such goods shall be
brought back to the said unit on completion of the
job-work within the stipulated period as specified
by the Assistant Commissioner of Customs or Deputy
Commissioner of Customs:
Provided
that this condition shall not apply to the said unit
if such unit is engaged in gem and jewellery.
5.The
Assistant Commissioner of Customs or Deputy Commissioner
of Customs may, subject to such conditions and limitations
as may be imposed by him and subject to the provisions
of Export and Import Policy, permit the said unit engaged
in gem and jewellery in the Zone
(i)
To take out gold, silver or platinum for job-work
in the Domestic Tariff Area and to bring back the
jewellery finished or semi-finished, including studded
jewellery containing quantity and purity equal to
the gold, silver , platinum taken out within the period
of thirty days from the date of such taking out:
Provided that no diamonds, precious stones or semi-precious
stones shall be allowed to be taken out of the Zone;
(ii)
To receive plain gold or plain silver or plain platinum
jewellery from any place in India against exchange
of gold or silver or platinum of the same purity and
quantity in weight as that of the said gold or silver
or platinum jewellery, as the case may be:
Provided
that in case of activities mentioned at (i) and (ii)
above in this condition, the Domestic Tariff Area
unit supplying such jewellery against exchange of
gold or silver or platinum or after jobwork shall
not be entitled for deemed export benefits and the
said unit in the Zone shall not be eligible for wastage
or manufacturing loss against such jewellery;
(iii) To take out items of gem and jewellery
temporarily into Domestic Tariff Area without payment
of duty for the purpose of display and to be returned
thereafter;
(iv) For personal carriage of gold jewellery
or silver jewellery or platinum jewellery or precious
stones or semi-precious stones or beads and articles
as samples upto US$ 1,00,000/- for export promotion
tours and temporary display or sale abroad subject
to the condition that the exporter would bring back
such jewellery, precious stones or semi-precious stones
or beads and articles or the sale proceeds within
a period of forty-five days from the date of departure
through normal banking channel;
(v)
To export Jewellery including branded jewellery for
display and sale in the permitted shops set up abroad,
or in the showroom of its distributors or agents:
Provided
that items not sold abroad within a period of one
hundred and eighty days from the date of their export
shall be re-imported within a period of forty-five
days from the date of expiry of such period;
(vi)
To remove parts and tools of machines temporarily
into Domestic Tariff Area without payment of duty
for the purpose of repairs and return thereof after
such repairs;
(vii)
To remove moulds, tools, patterns and drawing to the
premises of the sub-contractors for jobwork without
payment of duty and to be returned to the unit thereafter
within the period specified in this behalf by the
Assistant Commissioner of Customs or Deputy Commissioner
of Customs, as the case may be;
(viii)
To
send scrap, dust or sweepings of gold arising in the
manufacturing process in its unit to the Government
Mint or Private Mint for conversion into standard
gold bars and to be returned to the said unit thereafter
or to clear such scrap, dust or sweeping to the Domestic
Tariff Area on payment of duty on the gold content
in the said scrap, dust or sweepings.
6.
Subject
to the satisfaction of the Assistant Commissioner of
Customs or Deputy Commissioner of Customs, duty shall
not be leviable in respect of–
(i)
The said goods (including capital goods) or goods
manufactured, processed or packaged in the said unit,
if such goods are destroyed within the Zone or outside
the Zone , when it is not possible or permissible
to destroy the same within the Zone;
(ii)
The
scrap or waste material or remnants arising in the
course of production, manufacture, processing or packaging,
if such scrap or waste material or remnants are destroyed
within the Zone or destroyed outside the Zone when
it is not possible to destroy the same within the
Zone:
Provided
that this condition shall not apply in the case of gold,
silver, platinum, diamond, precious stones and semi-precious
stones.
2.
Notwithstanding anything contained in paragraph 1, in
a case where the said unit is engaged in the development
of software, the exemption contained therein shall also
apply to goods imported by such units for training and
for development and testing of software for export and
for providing consultancy services for development of
software "on site" abroad:
Provided
that the conditions stipulated in this notification
are complied with by the unit engaged in the development
of software;
Explanation.
- The consultancy fees received by the said unit in
convertible foreign currency for consultancy services
for development of software ‘on site’ abroad
shall be deemed to be exports for the purpose of fulfillment
of positive NFEP under this notification.
3.
Notwithstanding anything contained in this notification,
the said unit (other than a trading unit) shall be allowed
to clear in accordance with the Export and Import Policy,
the finished goods including by-products and services,
manufactured or produced out of the said goods (including
rejects, waste, scrap and remnants arising in the course
of production, manufacture, processing or packaging
of such articles and re-usable containers, cones, bobbins)
into Domestic Tariff Area on payment of duty:
Provided
that where such finished goods (including rejects, waste
and scrap and remnants) are not excisable, customs duty
equal in amount to that leviable on the inputs imported
under this notification and used for the purpose of
manufacture of such finished goods, which would have
been paid but for the exemption under this notification
shall be payable at the time of clearance of such finished
goods:
Provided
further that services shall be allowed to be rendered
by the said unit in the Domestic Tariff Area subject
to achievement of the said positive NFEP as stipulated
in the Export and Import Policy.
4.
Notwithstanding anything contained in this notification,
the said unit engaged in trading shall be allowed to
clear the said goods in the Domestic Tariff Area without
payment of duty, if such clearance is against Advance
Licence or special duty free entitlement as per the
provisions of the Export and Import Policy or to other
Special Economic Zone or Export Oriented Undertaking
or Export Processing Zone or Electronic Hardware Technology
Park or Software Technology Park units.
5.
Without prejudice to any other provision contained in
this notification, the Assistant Commissioner of Customs
or Deputy Commissioner of Customs may, subject to such
conditions and limitations as he may deem fit to impose
under the circumstances of the case for the proper safeguard
of revenue interest and also subject to such permission
of the Development Commissioner of the Zone, wherever
it is specially required under the Export and Import
Policy, allow the said unit in the Zone to clear any
of the said goods for being taken outside the Zone,
to any other place in India in accordance with the Export
and Import Policy:
Provided
that -
a.
Such clearance of capital goods, may be allowed
on payment of duty on the depreciated value thereof
and at the rate in force on the date of payment
of such duty,
Explanation.
- The depreciation shall be allowed for the period
from the date of commencement of commercial production
of the unit or where such goods have been received
after such commencement, from the date such goods
have come into use for commercial production to
the date of payment of duty;
b.
Such clearance of goods(including empty cones, bobbins,
containers, suitable for repeated use) other than
those specified in clause (a) may be allowed on
payment of duty on the value at the time of import
and at rates in force on the date of payment of
such duty;
c.
Such
clearance of used packing materials, such as cardboard
boxes, polyethylene bags of a kind unsuitable for
repeated use, without payment of any duty.
6.
Notwithstanding anything contained in paragraph 1, the
exemption contained therein shall also apply to silver,
gold and platinum falling under heading No. 71.06, 71.08
and 71.10 respectively, of the First Schedule to the
said Customs Tariff Act imported by the nominated agencies
for being supplied to the gem and jewellery units in
the Zone under the scheme for export of gold jewellery
and articles as specified in the Export and Import Policy,
read with Chapter 8 of the Handbook of Procedures, Vol.
I:
Provided
that where silver or gold or platinum is imported
on behalf of the said unit engaged in gem and jewellery,
the exemption shall apply only if-
a.
The
procedure as may be specified by the Assistant Commissioner
of Customs or Deputy Commissioner of Customs is
followed by such jewellery unit; and
b.
the
conditions stipulated in paragraph 1 are complied
with by such jewellery unit.
Provided
further that in the event of the unit engaged in gem
and jewellery unit to whom the silver, gold and platinum
has been supplied, fails to export the jewellery made
out of such silver or gold or platinum within the
time specified in the Export and Import Policy under
the respective scheme, the nominated agencies shall
deposit duty on the quantity of the silver, gold or
platinum as the case may be, not contained in the
jewellery exported at the rate of duty leviable on
the silver or gold or platinum as provided in the
notification of the Government of India in the Ministry
of Finance No. 80/97–Customs, dated the 21st
October, 1997 within seven days of the expiry of the
period within which the said jewellery manufactured
out of the said silver or gold or platinum was required
to be exported.
Explanation.-
For the purpose of this notification -
(a)
"Export and Import Policy " means the Export
and Import Policy, 1997- 2002, published by the Government
of India in the Ministry of Commerce vide notification
No.1(RE-99)/1997-2002, dated 31st March, 2000, as amended
from time to time;
(b)
"Export Oriented Unit" means a Hundred Percent
Export Oriented Unit as approved by the Board of Approvals
appointed by the notification of the Government of India
in the Ministry of Industry, Department of Industrial
Policy and Promotion or the Development Commissioner
concerned;
(c)
"Export Processing Zone" means the Export
Processing Zone as notified by the notification of the
Government of India in the Ministry of Finance (Department
of Revenue) under section 3 of the Central Excise Act,
1944 ( 1 of 1944);
(d)
" Electronic Hardware Technology Park (EHTP) unit
" means a unit established under and in accordance
with the Electronic Hardware Technology Park (EHTP)
Scheme notified by the Government of India in the Ministry
of Commerce, vide notification No. 5( RE-95)/ 92-97
, dated 30th April, 1995 and approved by the Inter-Ministerial
Standing Committee appointed by notification of the
Government of India in the Ministry of Industry (Department
of Industrial Development), No. S.O. 117(E), dated the
22nd February, 1993;
(e)
"Handbook of Procedures, Vol. I" means the
Handbook of Procedures, Vol. I, 1997- 2002 published
by the Government of India, Ministry of Commerce vide
Public Notice No. (RE-2000)/ 1997-2002 dated the 31st
March, 2000;
(f)
"Nominated Agencies" means the Metals and
Minerals Trading Corporation Limited (MMTC), the Handicraft
and Handloom Export Corporation, the State Trading Corporation
(STC), the Projects and Equipment of India Limited and
any agency authorised by the Reserve Bank of India;
(g).
"Special Economic Zone" means the Special
Economic Zone as notified by the Government of India
in the Ministry of Commerce and Industry ;
(h)
" Software Technology Parks (STP) Unit" means
a unit established under and in accordance with Software
Technology Parks(STP) Scheme notified by the Government
of India in the Ministry of Commerce vide notification
No. 4 (RE-95) / 92-95, dated 30th April, 1995 and approved
by the Inter-Ministerial Standing Committee appointed
by the notification of the Government of India in the
Ministry of Industry, Department of Industrial Development,
No. S.O.117(E), dated the 22nd February, 1993.
(RAJENDRA
SINGH)
Under Secretary to the Government of India
F.
No. 305/66/2000-FTT
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