Public Notice 138/2002

Public Notices

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE

OFFICE OF THE COMMISSIONER OF CUSTOMS
P.B.NO. 5400, CENTRAL REVENUES BUILDING, QUEENS ROAD
BANGALORE - 1

PUBLIC NOTICE: 138/2002

DT: 19/09/2002

Attention of the Trade/100 % EOUs/STP/EHTP Units is invited to this Commissionerate's Public Notice 104/2001 Dt.17/10/2001. Since October 2001, CBE&C has considered the representations received from the trade & industry as well as the feed back received from field formations and has provided certain procedural modifications in the context of the functioning of EOUs and the units under the EPZ/SEZ/EHTP/STP schemes. Based on the Circulars issued by the Board, the aforesaid Public Notice is amended/modified as under. For ease of reference, the relevant Paragraphs of Public Notice 104/2001 dated 17.10.2001 and other Public Notices issued thereafter have been indicated wherever necessary.

Temporary Removal of Laptop/Desktops by EOUs :

Consequent to issue of Board's letter 305/79/2000/FTT (Pt) Dated 01/11/2001 (Circular No. 59/2001) Laptops/Desktop computers so imported/procured indigenously duty free not exceeding two in numbers, are allowed to be taken outside the bonded premises of EOUs/EPZ/EHTP/SEZ units engaged in the activities other than the activity of development of software, temporarily, for use by their authorized employees, subject to the conditions and procedures envisaged in Board's circular 17/98 CUS dated 16/03/98. This Board's circular 59/2001 has been further amended by circular No. 84/2001 CUS dated 21/12/2001 (Para 2), which permits temporary removal of laptops, more than two in number, provided, permission is obtained from Assistant/Deputy Commissioner of Customs, in deserving cases subject to following the procedure and conditions stipulated in Board's circular 17/98 CUS dated 16/03/98 and Circular No. 62/2001 dated 12.11.01.
(Para 32(4) of Public Notice 104/2001 & Public Notice 138/01 dated 13.12.01 refers )

Charging of duty in respect of clearance of goods procured by EOUs/EPZ/SEZ/EHTP/STP, from indigenous sources, on which deemed export benefits were availed:

Goods procured from indigenous sources without payment of duty for the purpose of manufacture of goods for export, are allowed to be transferred back to the DTA, only for the purpose of replacement, if the deemed export benefits have been availed. If such goods are sold or transferred to DTA, other than for the purpose of replacement, then the deemed export benefits availed by the supplier shall have to be deposited by way of TR6 challan in authorized branches of State Bank of India, under the head of account 1453-Forign Trade and Export Promotion, minor head -102.
(Board Circular 74/2001 CUS dated 04/12/2001 & Circular No. 85/2001 dt. 21/12/2001 as circulated by this Commissionerate Public Notices 128/2001 dt. 05.12.01 and 11/2002 dt 07.01.2002 respectively refers.

Interest on Warehoused Goods:

It is clarified that the restrictive interest free period of thirty days shall be applicable to goods warehoused prior to 01/06/2001 but only after expiry of 30 days or 01/06/2001, whichever is later.
(Boards Circular No. F.No.473/12/2001 JC dated 7-6-2001 refers).

Co-relation on Import Consignment with Corresponding Export Consignment:

It has been represented that the EOUs and units EPZ/EHTP/STP/SEZ using homogenous raw materials find it difficult to co-relate every import consignment with the corresponding export consignment. The matter has been considered and it has been decided that in respect of homogenous goods the "First-In-First-Out" arrangement may be adopted. Under this procedure a consignment which has been received first may be deemed to have been utilized first. This procedure is applicable only to EOUs and EPZ/EHTP/STP/SEZ using homogenous goods. However accounts have to be maintained by the units as hitherto.
(Board's Circular No. 84/2001 Cus dated 21/12/2001 refers).

Delegation of Powers - Issue of Procurement Certificates:

As per para 3(i) of Board's circular No. 84/2001 dated 21/12/2001, Board has delegated the power to the jurisdictional Superintendent of Customs or Central Excise, except for the units in textile and chemicals sectors, issuance of procurement certificates for clearing duty free goods, under the relevant exemption notifications, at the Port of Import /Airport etc.,
( Para 14 of P.N. 104/2001 dt. 17.10.2001 refers).

Issue of Pre-authenticated CT-3's

The Board vide Circular Nos. 24/91-CX-8, dated 01/07/91 & 352/68/97-CX dated 11.11.97, has allowed issuance of pre-authenticated CT-3 Form Booklet to EOUs for obtaining raw materials free of duty as and when required without seeking permission from Central Excise Authorities every time. In order to further relax this procedure, it has been decided that henceforth pre-authenticated CT-3 to the EOUs except for those in textile and chemical sector may be issued by jurisdictional Range Officer instead of Assistant/Deputy Commissioner. In respect of EOUs in textile and chemical sector, CT-3 would continue to be issued by jurisdictional Assistant/Deputy Commissioner of Customs or Central Excise .
(Board's Circular 84/2001 Cus dated 21.12.2001 refers).

Removal of Capital Goods in to DTA for Repairs:

It has been brought to the notice of the Board that the EOUs are facing difficulties in obtaining permission of the Assistant / Deputy Commissioner for removal of capital goods in to DTA for repairs and return thereof. This is stated to be so for those EOUs which are situated at a distance from the office of Jurisdictional Assistant/Deputy Commissioner. Considering the problems being faced by the units it has been decided that henceforth capital goods may be allowed to be removed by the EOUs/EPZ/EHTP/SEZ units in to DTA for repairs and return thereof under the permission of the jurisdictional Range Officer/Superintendent of Customs or Central Excise. In all such cases, post facto approval shall be obtained from the Jurisdictional Assistant/Deputy Commissioner by the Range Officers/Superintendents.
(Board's Circular No.84/2001 dated 21/12/2001 refers).

Procurement of fuels, Oils and Lubricants for Captive Power Plant/Boiler etc :

Assistant/Deputy Commissioners of Customs have been directed to give one time permission to the EOUs, after assessing the requirement of the unit, on the basis of the consumption during the previous year. This approval would be valid for 1 year and there after fresh approvals have to be obtained. In case of new units the approval has to be obtained for each quarter. This arrangement is not applicable to EOUs in agriculture and aquaculture sector. Similarly, the requirement of furnace oil for the Boilers shall be given on annual basis based on the recommendations of the Development Commissioner. In respect of new units the approval should be quarterly instead of annually.
(Board's Circular 84/2001 Cus dated 21/12/2001 refers).

Warehousing License :

The License for private bonded warehouse and the in-bond manufacturing sanction order, under the provision of section 58 & 65 of the Customs Act, 1962, respectively would be valid for a period of 5 years. However in case of fraud, gross misconduct, suppression of facts etc., action will be taken for cancellation of license as per the law.

(Board's Circular No. 84/2001 Cus dated 21/12/2001 & Para 10 of P.N 104/201 dt 10.2001 refer).

10.

Discontinuance of Overtime fee for the customs officers

CBEC vide Circular No. 5/2002 Cus dated 17/01/2002 has dispensed with the practice of collection of overtime fee for the customs officers posted at the gates of the docks for supervision of the movement of cargo. The working hours are prescribed as 24 hours a day, 7 days a week and 365 days a year.
( Para 47 of P.N 104/2001 dt. 17.10.2001 refers).

11.

Sharing of Diesel Generating Sets/Captive Power Plants, Central Air Conditioning Equipments, Networking Equipments etc. of a STP unit by other units of the same owner under Software Technology Park Scheme.

The Government has amended Notfn. 140/91 Cus. Dated 22.10.1991 so as to provide that items viz. diesel generating sets/captive power plants, central air-conditioning equipments, uninterrupted power supply system, networking equipments data transfer protocol equipments, EPABX, FAX, Photocopier equipments and security system imported/procured by a unit under STP scheme may be allowed to be utilized by other STP units belonging to the same owner. This facility is, in fact limited to STP units owned by the same owner and located in the same compound or nearby/adjacent premises. Further, the equipments/systems etc., would not be allowed to be taken out of the bonded premises of the unit which has imported or procured the same, duty free, for the purpose of export.

12.

Valuation of Waste and Scrap:

The Imported waste and Scrap sought to be sold/cleared to other DTA Units or to other EOU/EPZ/SEZ Units arisen due to segregation of Imported Materials for manufacture of plastic agglomerates, at a stage prior to their being used in the production process cannot be treated as plastic waste and scrap generated out of the production process. As such valuation of such waste and scrap will have to be done on the CIF value at the time of Import in terms of Board's Circular No.62/01 dated 12.11.01.

13.

Concessional duty to Goods sold in DTA:

The benefit of concessional duty has also been extended to goods sold in DTA by the Unit using Imported as well as indigenously procured Raw Materials provided the Unit is able to satisfy the Jurisdictional authorities, beyond doubt, by way of maintaining separate Raw Material as well as finished goods register ( batch wise) - One for final product manufactured out of indigenously procured Raw Material and the other for final product manufactured out of Imported Raw Materials.
(Board's Circular No.85/2001 dated21.12.01 refers).

14.

Procedures for Gem & Jewellery Units:

i) The holders of Diamond Imprest License, besides Import of rough Diamond,are
also allowed to Import semi processed Diamonds, half cut Diamonds and broken Diamonds along with cut and polished Diamond under DIL. However the facility to Import cut and polished Diamonds is given only to status holders and actual users.

ii) The authorised officers/ agencies of Jem and Jewellery Exporters with a Track
record of at least three years and having an annual average turn over of Rs.5 Crores and above have been allowed to export cut and polished Diamond and re import the same after certification or grading.

iii) The Replenishment License issued under, and in accordance with Para 8.2,8.37,
8.10,8.13 (a) of the Exim Policy 2002-07, read with Paragraph 8.26 of the Hand Book of Procedures has been done away with.
( Board's Circular 37/2002 Cus. Dated 28.6.02 and No.64/2002 Cus. Dated 25.6.02 refers).

iv) One more Item i.e. Cut and Polished Diamond has also been included in the category of goods allowed to be taken over through personal carriage for the
purpose specified in Para 46 (ii) above.

v) The permission to carry Gems and Jewellery Export parcels in baggage from all EOU/STP/SEZ by the foreign bound passengers has been extended to Hyderabad and Jaipur Air Ports.
(Board's Circular 37/02 dated 28.6.02 refers).

vi) The benefit of duty free import of Raw pearls, natural and cultured and precious or semi precious stones (other than rough Diamonds unset and uncut allowed under Notification No.60/2002 Cus. Dated 7.6.02 is also extended when Imported against REP License and GEM Replenishment License issued under Para 8.2,

8.38 of Cus. Policy 1997-2002 and whose validity has not expired in terms Transitional arrangement made under Para 1.2 of the Exim policy.
(Board's Circular No.49/2002 Cus. dated 9.8.2002 refers. Para 46 of P.N104/2001 dt. 17.10.2001 also refers).

15.

After Para 40 of P.N.No.104/2001 dated 17.10.2001 the following para shall be inserted.

Para 40 (A): The EOU's in Agriculture and Horticulture sectors have been allowed "Contract Farming". Now the EOU's in Agriculture and Horticulture are allowed to import/procure duty free, the goods specified in Appendix 14 B of the Hand Book of Procedures and take out the same to the fields of Contract farmers for production or in connection therewith and bring back the produce for exports.
(Board's Circular No. 38/02 Cus dated 01.07.2002 and Para 45 of P.N 104/2001 dt. 17.10.2001 refers).

16.

In the Para 43, 43(2), and 43 (2) (A) the word, "Input raw material" is deleted in terms of Board's Circular 38/2002 Cus Dated 1.7.2002 and Notification 64/2002 Cus dated 24.06.2002 since the Inter Unit Transfer of Input or raw material is done away with in the EXIM Policy 2002-07.

17.

The Provision for setting up of trading units under EOU/EPZ Scheme has been deleted in terms of Para 6.1 of EXIM Policy 2002-07. ( Para 51 of P.N 104/2001 dt. 17. 10.2001 stands modified).

18.

Restrictions on movement of Raw materials:

Para 6.15 of Hand Book of Procedures 2002-07 restricts Sub-contracting of imported or domestically procured raw materials as it is. However, Ministry of Commerce, in consultation with CBE & C has however issued the following guidelines for sub-contracting of imported/ domestically procured raw material:

(i) In case an EOU wants to send the imported or domestically procured raw material as it is, i.e without subjecting to any processing in the unit, for job work in Domestic Tariff Area (DTA), then the unit would be required to furnish 100% Bank Guarantee to cover the duty foregone on such duty free material being taken out for job work. The Bank Guarantee shall be required to be furnished to the jurisdictional Range Officer of Central Excise or the Jurisdictional Superintendent of Customs, as the case may be. However, status holder EOU's having unblemished track record shall be exempt from the requirement of furnishing Bank Guarantee.

(ii) In case an EOU wants to remove the semi-processed goods for job work in DTA for carrying out further process(es), then it would be required to furnish Bank Gurantee equivalent to 50 % of the duty payable on the goods being taken out for job work. However, in case the unit has furnished a Bank Guarantee as security along with B-17 bond, and the same is sufficient to cover the duty payable on such goods being taken out, then no fresh or additional Bank Guarantee would be insisted upon. But, in cases, where only surety is given at the time of execution of B-17 bond or the security given along with B-17 bond is not sufficient to cover the duty payable on such goods being taken out for job work in DTA, then the unit would be required to furnish Bank Guarantee equal to 50 % of the duty payable on goods being sent for job work. Status holder EOUs having unblemished track record shall be exempt from the requirement of furnishing Bank Guarantee.

(iii) An EOU sending out goods for job work in DTA, shall be required to give an intimation to the jurisdictional Bond Officer and a sample of the goods being sent out for job work would be drawn and retained in the Range Office. On receipt of the goods in the unit after job work, the Bond Officer would establish the identity of goods so returned with reference to the sample retained by him at the time of removal. He would also retain a sample of the processed goods so returned for the purpose of record. On expiry of six months, both the samples would be returned to the unit after taking due acknowledgement from the unit.

(iv) In all cases of job-work in DTA, the goods sent for job work shall be required to be returned to the unit within a period of 30 days from the date of removal. Further extension of time would be considered by the Jurisdictional Assistant/Deputy Commissioner only in deserving cases. In case of non-receipt of goods within the stipulated period, the Range Officer would take appropriate measures to recover duty, such as, encashment of the Bank Guarantee given at the time of removal of goods into DTA for job-work.

(v) The Range Officer in charge of EOU would carry out checks to verify the premises of job-worker, processing capacity of the job worker, existence of facility for carrying out the declared processes in the job-worker's premises. Such verification should necessarily be carried out within a period of one month form the date of granting permission for job-work. The verification may be carried out either by visiting the premises of the job worker or by sending letters/FAX/E-mail to the jurisdictional Range Officer of job-worker premises and getting confirmation in writing.
(vi) The requirements prescribed in the Handbook of Procedures (Vol-I) such as job worker being a Central Excise Registrant; compulsory carrying out of first processing in the unit before sending the goods for job-work and; forwarding the sample to the Range Officer in charge of job-worker, shall not be applicable henceforth.

(vii) The above mentioned conditions shall also apply mutatis mutandis to units located in Export Processing Zones, Special Economic Zones and to the STP and EHTP units. However, in case the job-work is done through another unit in the same EPZ/SEZ the above condition will not apply.

	Attested
	(AMITAB HAJELA)
	Additional Commissioner of Customs
	Bangalore

Sd/-
(A.P.SUDHIR)
COMMISSIONER OF CUSTOMS
BANGALORE