SEZ Units - Excise Duty Free Procurement from DTA Units
(This Notification has been Rescind vide NOTIFICATION NO. 59/2003-CE, DT. 22/07/2003)
This Notification supersedes Notification No. 41/2000-CE, dated the 26th May, 2000
Notification No.52/2000-CE
Dated the 19th October, 2000
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944, (1 of 1944), read with sub-section (3) of section 3 of Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 41/2000-CE, dated the 26th May, 2000 [G.S.R. 500 (E), dated the 26th May, 2000], except as respects things done or omitted to be done before such supersession, hereby exempts excisable goods (hereinafter referred to as the said goods) specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), when brought by a unit (hereinafter referred to as the Zone) from factory of manufacture or warehouse situated in other parts of India, 1[for the purposes of setting up of units or 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) from the whole of the duty of excise leviable thereon under section 3 of the said Central Excise Act, and the additional duty of excise leviable thereon under section 3 of the said Additional Duties of Excise (Goods of Special Importance) Act, subject to the following conditions, namely:-
(1) The said unit has been authorised by the Development Commissioner to establish the unit in the Zone for the said purpose.
(2) The said goods are brought directly into the unit from the factory of manufacture or warehouse.
(3) The said unit executes a bond in the form specified by the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs, binding itself -
(i) to bring the said goods into the said unit in the Zone and to use them for the said purpose;
(ii) to dispose of the said goods or the services, articles produced, manufactured, processed and packaged in the said unit in the Zone 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 2[NFE (Net Foreign Exchange Earning) as provided in paragraph 7.4] 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 3[NFE] 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 3[NFE] bears to the positive 3[NFE] to be achieved along with interest at the rate of 4[fifteen per cent.] per annum on the said duty to be paid on demand from the date of 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 4[fifteen per cent.] per annum on the said duty from the date of importation or procurement of the said unutilized goods till the payment of such duty.
(4) The said unit shall maintain proper account, in 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 and 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 Central Excise or Customs or Deputy Commissioner of Central Excise or Customs in the proforma prescribed in Appendix 16H of the Handbook of Procedures, Vol. I.
5[(5) the unit follows the procedure contained in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, with the modification that a certificate in Form CT-3 annexed to this notification as Annexure-III shall be used by the Central Excise officer in charge of the user industry in place of an application in the Form at Annexure-I provided in the said rules.]
(6) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or 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 Software Technology Park or Electronics Hardware 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
6[(b) Omitted]
(ii) permit the said goods or 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, jobwork or any other process necessary for manufacture of final product and to be returned to the unit thereafter or remove the same without payment of duty under bond for export from job-worker's premises:
7[Provided that in case of export from jobworker's premises, such job worker shall be Central Excise registrant under rule 9 of the Central Excise Rules, 2002]
Provided further that waste or scrap or remnants generated during such process at the job-worker's premises shall be either returned to the unit in the Zone or shall be cleared on payment of duty as if the said waste or scrap or remnants have been procured by the said unit;
(iii) permit removal of moulds, jigs, tool, fixtures, tackles, instruments, hangers, patterns, drawings without payment of duty to the premises of the sub-contractors subject to the condition that the such goods shall be brought back to the said unit on completion of the jobwork within the stipulated period as specified by the Assistant Commissioner of Customs or Central Excise or Deputy Commissioner of Customs or Central Excise:
Provided that this condition shall not apply to the said unit if such unit is engaged in gem and jewellery.
8[(iv) permit the said goods or goods manufactured, produced, processed, partially processed or packaged in the said unit to be taken to another unit in the same zone without payment of duty for the purposes of manufacture and export therefrom, subject to maintenance of proper accounts by the both receiving and supplying units.
(v) permit the goods manufactured, produced or packaged in the unit or capital goods produced by the unit to be transferred or supplied to another unit in Export Processing Zone or Special Economic Zone or Electronic Hardware Technology Park or Software Technology Park or hundred per cent. export oriented unit for the purposes of manufacture and export therefrom or for use within the unit.]
(7) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or 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.
(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 9[quantity in weight as that of contained in] 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 eighty days from the date of their export shall be re-imported within a period of forty-five days from the expiry of such period from the date of expiry;
(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 or Deputy Commissioner of Central Excise or Customs as the case may be;
(viii) to send scrap, dust or sweepings of gold arising in the manufacturing process in it's 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.
(8) Subject to the satisfaction of the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or 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 such 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, diamonds, precious stones ands 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 procured 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 said unit engaged in the development of software; and
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 fulfilment of the said positive 10[NFE] 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, scrap and remnants) are not excisable, excise duty equal in amount to that leviable on the inputs obtained 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 the services shall be allowed to be rendered by the said unit in the Domestic Tariff Area subject to achievement of positive 11[NFE] as stipulated in the Export and Import Policy.
Provided also that the finished goods (including by products, rejects, waste, scrap and remnants), may be cleared to the warehouse appointed or registered under the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 26/98-CE (NT), dated the 15th July, 1998 or to the warehouse authorized to carry on manufacturing process and other operations under section 65 of the Customs Act, 1962 (52 of 1962) and under the Manufacture and Other Operations in Warehouse Regulations, 1966, without payment of duty.
(Above third provision has been inserted vide Ntf. No. 29/2001-CE, dated 18/05/2001)
16[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 on payment of applicable duty subject to achievement of Net Foreign exchange Earning cumulatively:
Provided that no duty shall be levied on the said goods if such clearance is against Advance License or special duty free entitlement as per the provision of 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 provisions contained in this notification, the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or 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 said goods for being taken outside the Zone, to any other place in India in cordance 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 said 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 procurement and at the rate 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.
12[6. Nothing contained in this notification shall be applicable to a service providing unit which does not export services out of India.]
15[7. Without prejudice to other provisions of this notification, where the Assistant Commissioner or Deputy Commissioner of Central Excise is satisfied that the unit, which has been permitted by the concerned State Electricity Board in this behalf, has been permitted by Development Commissioner to sell into Domestic Tariff Area (DTA) or transfer to other hundred per cent. export oriented undertaking or units in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone, the surplus power generated in its diesel generating sets or captive power plant subject to fulfilment of such conditions as may be specified by the Assistant Commissioner or Deputy Commissioner of Central Excise on this behalf, the Assistant Commissioner or Deputy Commissioner of Central Excise may allow the unit-
(i) to sell such surplus power in Domestic Tariff Area on payment of an amount equal to the duty leviable on consumables and raw materials but for the exemption of duty thereon, used for generation of each unit of power so sold in the Domestic Tariff Area on the basis of norms approved by the Board of Approvals appointed by the notification of the Government of India in the Ministry of Commerce and Industry, Department of Commerce, number 14/1/2001-EPZ dated 7th August, 2001;
(ii) to transfer such surplus power to other hundred per cent. export oriented undertaking or unit in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone without payment of duty:
Provided that both supplying and receiving unit shall maintain account for the quantity of consumables and raw materials used in generation of each unit of power so transferred as quantified on the basis of norms approved by the said Board of Approval, for the purpose of calculation of Net Foreign Exchange earning as a Percentage of Export.]
Explanation. - For the purpose of this notification -
13[(a) "Export and Import Policy" means the Export and Import Policy, 2002-2007, published by the Government of India in the Ministry of Commerce and Industry vide notification No.1/2002-07, dated 31st March, 2002, 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;
14[(e) "Handbook of Procedures, Volume I" means the Handbook of Procedures, Volume I, 2002-2007, published by the Government of India in the Ministry of Commerce and Industry vide Public Notice No.1/2002-07 dated 31st March, 2002, as amended from time to time,]
(f) "Special Economic Zone" means the Special Economic Zone as notified by the Government of India in the Ministry of Commerce and Industry;
(g) "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.
F. No. 305/66/2000-FTT
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Notes :
1. For the words "for the purposes of manufacture of goods", the words "for the purposes of setting up of units or for the purposes of manufacture of goods" has been substituted vide Notification No. 38/2002 dated 13/8/2002
2. For the letters, brackets, words and figures "NFEP (Net Foreign Exchange Earning as a Percentage of Exports) as provided in paragraph 9.32", the letters, brackets, words and figures "NFE (Net Foreign Exchange Earning) as provided in paragraph 7.4" has been substituted vide Notification No. 35/2002 dated 24/6/2002
3. For the expression 'NFEP', the expression 'NFE' has been substituted vide Notification No. Supra
4. For the figures "24%", the words "fifteen per cent." has been substituted vide Notification No. Supra
5. Has been substituted vide Notification No. Supra
6. Has been Omitted vide Notification No. Supra
7. Has been substituted vide Notification No. Supra
8. Has been added vide Notification No. Supra
9. For the words "purity and quantity in weight as that of", the words "quantity in weight as that of contained in" has been substituted vide Notification No. Supra
10. For the expression "NFEP", the expression "NFE" has been substituted vide Notification No. Supra
11. For the expression "NFEP", the expression "NFE" has been substituted vide Notification No. Supra
12. Has been added vide Notification No. Supra
13. Has been substituted vide Notification No. Supra
14. Has been substituted vide Notification No. Supra
15. Has been inserted vide Notification No. 36/2002-Central Excise, Dated 25/06/2002
16. Has been substituted vide Notification No.59/2002-CE, Dated 10/12/2002
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