Minutes of the 79th meeting of the. Board of Approval for SEZ held on 18 September 2017 to consider setting up of Special Economic Zones and other miscellaneous proposals - SEZ - Minutes of the 79th meeting of the SEZ

Minutes of the 79th meeting of the Board of Approval for SEZ held on 18th September, 2017 The Seventy Ninth (79th) meeting of the Board of Approval (BoA) for Special Economic Zones (SEZs) was held on 18th September, 2017 under the Chairpersonship of Ms. Rita Teaotia, Secretary, Department of Commerce, at 11.30 A.M. in Room No. 141, Udyog Bhawan, New Delhi. The list of participants is Annexed (Annexure-I). Item No. 79.1: Requests for extension of validity of formal approvals (01 proposal) (i) Request of M/S. Newfound Properties Leasing Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Trans Thane, Creek, MIDC District Thane beyond 30.06.2017. The Board, after deliberations, approved extension of the validity of the formal approval up to 30th June, 2018. This is the final extension and no further extension will be considered. Item No. 79.2 Requests for extension of LOA beyond 3rd Year onward (2 proposals) (i) Request of M/S. CHL Ltd. in the Noida SEZ for extension of Letter of Permission (LOP) beyond 28/04/2017 upto 28/04/2018. The Board, after deliberations, rejected the proposal as the track record and details of proposal did not reflect financial credibility. (ii) Request of M/S. JBF Petrochemicals Limited, a unit in Mangalore (Multi Product) SEZ at Mangalore, Bangalore for extension of LOP beyond 15th September, 2017. The Board, after deliberations, approved extension of the validity of the LOP up to 15th September, 2018. Item No. 79.3 Requests for co-developer (4 proposals) (i) Request of M/S. Muthoot Infopark Private Limited, Kochi for Co-developer status in the Infopark SEZ (Phase Il) for construction of IT/ITES Building, Business Incubation Centers, IT Business Centers, Food Court, Parking facility, ATMs, Conference Hall and other Infrastructure/facilities over an area of 9.37 acres in above IT/ITES SEZ. The Board, after deliberations, approved the proposal of M/S. Muthoot Infopark Pvt. Ltd. for construction of IT/ITES Building, Business Incubation Centers, IT Business Centers, Food Court, Parking facility, ATMs, Conference Hall and other Infrastructure/facilities over an area of 9.37 acres in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period does not exceed 30 years (Renewable). (ii) Request of M/S. Manyata Promoters Private Limited, Bangalore for codeveloper status in the Embassy Property Developments Private Limited (EPDPL) SEZ for development, conversion of bare shell buildings into warm shell buildings and to lease the built up space of the above IT/ITES SEZ. The Board, after deliberations, approved the proposal of M/S. Manyata Promoters Private Limited for development, conversion of bare shell buildings into warm shell buildings and to lease the built up space of the above IT/ITES SEZ in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period does not exceed 30 years (Renewable). (iii) Request of M/S. Embassy Services Private Limited, Bangalore for co-developer status in the Embassy Property Developments Private Limited (EPDPL) SEZ for Operation and Maintenance of Buildings and other Infrastructure/facilities in the above IT/ITES SEZ. The Board, after deliberations, approved the proposal of M/S. Embassy Services Private Limited for operation and maintenance of Buildings and other Infrastructure/facilities in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period does not exceed 30 years (Renewable). (iv) Request of M/S. MN Industrial Parks Private Limited for co-developer status in M/S. Brandix India Apparel City Pvt. Ltd. SEZ. The Board, after deliberations, approved the proposal of M/S. MN Industrial Parks Private Limited for providing design, engineering, development, commissioning and all incidental activities on the agreed land along with the operation and maintenance of the present infrastructure facilities and proposed development activities as agreed in the CoDeveloper agreement, in accordance with the co-developer agreement entered into with the developer, subject to standard terms and conditions as per SEZ Act and Rules provided that the lease period does not exceed 30 years (Renewable). Item No. 79.4 : Change of Shareholding Pattern Cases (2 proposals) Addl DGEP, Dept. of Revenue observed that in cases of Change in Shareholding pattern, it was decided in the 74th BoA meeting held on 07.01.2017 that suitable provisions will be brought in SEZ Rules to allow such changes. However, so far the same was not completed and the proposals are being considered. On the issue, it was decided that amendment to SEZ Rules will be pursued vigorously and no such proposal would be considered by the BoA after this meeting till the amended Rules are notified. Thereafter the following proposals were considered. (i) Request of M/S. Diamond Nation, Plot No.106, 107, 148, 149 Unit No.406 on Plot 248 a unit in Surat SEZ, for transfer of shares exceeding 50% to another entity. The Board, after deliberations, approved the proposal for transfer of shares exceeding 50% to another entity subject to following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered unit entity; ii) Fulfilment of all eligibility criteria applicable to unit, including security clearances etc., by the altered unit entity and its constituents; iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961. vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The unit shall furnish details of PAN and jurisdictional assessing officer of the unit to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. (ii) Request of M/S. Surgimedik Healthcare, Plot No. 223 a unit in Surat SEZ, for change of Constitution from Proprietorship to Partnership firm and transfer of shares exceeding 50% to another entity. The Board, after deliberations, approved the proposal for change of Constitution from Proprietorship to Partnership firm and transfer of shares exceeding 50% to another entity subject to following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered unit entity; ii) Fulfilment of all eligibility criteria applicable to unit, including security clearances etc., by the altered unit entity and its constituents; iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer m ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961 . vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The unit shall furnish details of PAN and jurisdictional assessing officer of the unit to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. Item No. 79.5 : Miscellaneous Cases (7 proposals) (i) Request of M/S. Zafin Infra Private Limited, co-developer in the sector specific SEZ for IT[ITES being developed by M/S. Electronics Technology Parks SEZ Ill-Kerala at Attipra Village, Thiruvananthapuram for cancellation of co-developer status. The Board, after deliberations, approved the proposal of M/S. Zafin Infra Private Limited for cancellation of co-developer status subject to the co-developer furnishing the certificate from Specified Officer that co-developer has not availed financial benefits. (ii) Proposal of M/s. Kings Canyon SEZ Pvt. Ltd., Co-developer of IT/ITES SEZ of M/S. ASF Insignia SEZ Pvt. Ltd. at Village Gwal Pahari, Gurgaon (Haryana) for change of shareholding pattern of the company. The Board, after deliberations, approved the request for change of shareholding pattern of the company, subject to the following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered co-developer entity; ii) Fulfilment of all eligibility criteria applicable to co-developer, including ecurity clearances by the altered co-developerentityand its constituents iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961 . vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The co-developer shall furnish details of PAN and jurisdictional assessing officer of the co-developer to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. (iii) Proposal of M/s. Grand Canyon SEZ Pvt. Ltd., Co-developer of IT/ITES SEZ of M/S. ASF Insignia SEZ Pvt. Ltd. at Village Gwal Pahari, Gurgaon (Haryana) for change of shareholding pattern of the company - regarding. The Board, after deliberations, approved the request for change of shareholding pattern of the company, subject to the following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered co-developer entity; ii) Fulfilment of all eligibility criteria applicable to co-developer, including security clearances etc., by the altered co-developer entity and its constituents; iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961 . vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The co-developer shall furnish details of PAN and jurisdictional assessing officer of the co-developer to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. (iv) Proposal of M/S. ASF Insignia SEZ Pvt. Ltd., Developer of IT/ITES SEZ at Village Gwal Pahari, Gurgaon (Haryana) - Proposal for change of shareholding pattern of the company - regarding. The Board, after deliberations, approved the request for change of shareholding pattern of the company, subject to the following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered developer entity; ii) Fulfilment of all eligibility criteria applicable to developer, including security clearances etc., by the altered developer entity and its c nstituents; iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961 . vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The developer shall furnish details of PAN and jurisdictional assessing officer of the developer to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. (v) Request of M/S Manyata Promoters Pvt. Ltd. developer of Manyata Embassy Business Park SEZ for change in shareholding pattern. The Board, after deliberations, approved the request for change in shareholding pattern, subject to the following conditions:- i) Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered developer entity; ii) Fulfilment of all eligibility criteria applicable to developer, including security clearances etc., by the altered developer entity and its constituents; iii) Applicability of and compliance with all Revenue / Company Affairs /SEBI etc. rules which regulate issues like capital gains, equity change, transfer, taxability etc. iv) Full financial details relating to change in equity/merger, demerger, amalgamation or transfer in ownership etc. shall be furnished immediately to Member (IT), CBDT, Department of Revenue and to the jurisdictional Authority. v) The Assessing Officer shall have the right to assess the taxability of the gain/loss arising out of the transfer of equity or merger, demerger, amalgamation, transfer and ownerships etc. as may be applicable and eligibility for deduction under relevant sections of the Income Tax Act, 1961 . vi) The applicant shall comply with relevant State Government laws, including those relating to lease of land, as applicable. vii) The developer shall furnish details of PAN and jurisdictional assessing officer ofthedeveloper to CBDT. viii) Meanwhile, the proposal for amendment in SEZ Rules may also be taken up by the SEZ division to bring clarity on such transactions. (vi) (a) Request of M/S. Platinum Holdings Pvt. Ltd. (Chennai) Developer of Sector Specific SEZ for IT/ITES at Abu Garden, OMR Road, Navalur, Chennai, Thiruvallur District, Tamil Nadu for Revocation of cancellation of formal approval. (b) Request of M/S. Platinum Holding Pvt. Ltd for further extension of the validity period of formal approval, granted for setting up of IT/ITES,SEZ at Navalur, Chennai beyond 05.05.2016. (c) Request of M/S. Platinum Holding Pvt Ltd., a unit in Navalur SEZ, for transfer of shares exceeding 50% to another entity. The Board, after deliberations, deferred the above three proposals of M/S. Platinum Holdings Pvt. Ltd. (Chennai) with direction that DC MEPZ should send a reasoned and logical proposal with justification. (vii) Further extension of the validity period of formal approval, granted for setting up of eight SEZs by M/S. Navi Mumbai SEZ Pvt. Ltd. as under:- S. No. SEZ Name LoA validity date 1. M/s. Navi Mumbai SEZ Pvt. Ltd(Dronagiri) 29.01.2016 2. M/S. Navi Mumbai IT/ITES-A (Kalamboli) 25.01.2016 3. M/S. Navi Mumbai SEZ Pvt. Ltd (multi services) , Kalamboli 25.01.2016 4. M/s. Navi Mumbai SEZ Pvt. Ltd (Gems Jewellery), Ulwe 26.02.2016 5. M/s Navi Mumbai SEZ Pvt. Ltd. (multi services, Ulwe) 26.02.2016 6. MA. Navi Mumbai SEZ Pvt. Ltd (IT/ITES A, Ulwe) 24.10.2016 7. MA. Navi Mumbai IT/ITES-B (Ulwe) 24.10.2016 8. Ml's. Navi Mumbai SEZ Pvt. Ltd (IT/ITES C, Ulwe) 21.11.2016 The Board took note of CIDCO letter dated 16.09.2017 that the State Government of Maharashtra (UDD) and NSMEZ were the in process of resolving certain operational and regulatory issues. CIDCO has informed that the matter was referred to Advocate General of State on 06.10.2016 for legal advice on issues which may be resolved within a period of four months. The representative of the Government of Maharashtra present in the meeting stated that the Government of Maharashtra was seeking extension of three more months for resolving the issues. The Board, after deliberations, approved extension of validity of formal approval for setting up of above eight SEZs by Navi Mumbai SEZ Pvt. Ltd. (NMSEZ) for further period of three months beyond 18.9.2017. Item no. 79.6 Appeals before BOA (3 Appeals). (i) Appeal of M/S. Sampan Tradex Pvt. Ltd. requesting for setting up of new unit in NSEZ against order dated 18.07.2017 passed by UAC, NSEZ. The Appellant appeared before the Board on 18.9.2017 and stated that he was a trader and was getting his goods manufactured by giving work to job workers and then making exports. He informed that this work starts late in the day and continues till late in the night. He also stated that the team from Noida SEZ had visited his premises at around 10.30 in the morning when the work had not commenced and therefore, no workers were present when the team from NSEZ had visited the site. The explanation offered by the Appellant was not found acceptable in view of the site inspection carried out by the Officers of NSEZ. The Board, therefore, rejected the Appeal. (ii) Appeal of M/S. Shri Lal Mahal Ltd. (SLML), a unit in NSEZ against order dated 23.05.2017 passed by UAC, NSEZ. The Board noted that the Approval Committee had cancelled the LOA of the unit under Section 16(1) of the SEZ Act. It was also noted that the Approval Committee had afforded a reasonable opportunity of being heard to the Unit as revealed from the fact that the representative of the unit appeared in the Approval Committee meeting held on 3.5.17. It was also noted that Sh. Rajesh Gupta, Authorized representative of the company appeared before the Approval Committee and had stated and also submitted in writing that the company was of the view that if an explanation is given to Show Cause Notice issued by NSEZ, the same could be used by DRI against them. It was observed that the Unit had removed from the Unit located in NSEZ about 196 Kg of gold for job work and had not returned the same within the period of 120 days stipulated in Rule 42 of the SEZ Rules, 2006. Therefore, the Specified Officer, NSEZ had concluded that there were persistent violation of the SEZ Rules, 2006 by the Unit. The Appellant during the BoA meeting submitted orally that in case he had given any written explanation to the Show Cause Notice, the same could have been use against him. He also stated that as the documents of the unit had been seized by DRI they were unable to give a reply to the SCN. As regards the statement of the employees it was submitted that the same had been given under duress. The submissions made by the appellant were not found acceptable and the Board decided to reject the appeal. (iii) Appeal of M/S. Prestige Polymers Pvt. Ltd., a unit in NSEZ against order dated 12.07.2017 passed by UAC, Indore SEZ. The Board heard the appellant. The appellant stated that the non of the cases of violation registered against the unit had been finalised and therefore the decision of the UAC to treat them as persistent violation was not correct. He also stated that in the absence of relevant documents which had been seized by DRI, he was unable to appear before the UAC on 17.10.2016 or 10.11.2016 when the UAC had asked him to appear before it. He also stated that the representative of the DRI was present during the personal hearing held on 31.01.2017 and had objected to the same. He also sought permission of the Board to submit additional papers before 4.P.M on 18.09.2017 which was allowed. In his additional MTitten submission he has reiterated that the impugned order had been passed without providing personal hearing as provided for in section 16(1) of the SEZ Act, 2005 and that there was no persistent violation of the terms of LOA. He also submitted that 24 containers are lying in port and the suspension of the LOA has lead to demurrage and detention charges of about ₹ 2.5 lakhs per day. The Board however noted the detailed reasons given in the order in original dated 12.07.2017 passed by DC, ISEZ and did not accept the position of the appellant that there were no persistent violations, Therefore, the Board decided to reject the appeal. Decision on Table Agenda Item No. 79.7: Requests for extension of validity of formal approvals (4 proposals) (i) Request of M/S. Electronics Corporation of Tamil Nadu Limited for further extension of the validity period of Letter of Approval, granted for setting up of IT/ITES SEZ at Vadapalanji, Madurai, beyond 07/05/2017 The Board, after deliberations, extended the validity of the formal approval up to 7th May, 2018. (ii) Request of M/S. Electronics Corporation of Tamil Nadu Limited for further extension of the validity period of Letter of Approval, granted for setting up of IT/ITES SEZ at Gangaikondan, Tirunelveli, beyond 07/05/2017 The Board, after deliberations, extended the validity of the formal approval up to 7th May, 2018. (iii) Request of M/S. Electronics Corporation of Tamil Nadu Limited for further extension of the validity period of Letter of Approval, granted for setting up of IT/ITES SEZ at Viswanathapuram beyond 07/05/2017 The Board, after deliberations, extended the validity of the formal approval up to 7th May, 2018. (iv) Request of M/S. Metro Valley Business Park Pvt. Ltd. for further extension of the validity of formal approval, granted for setting up of IT/ITES SEZ at 5th milestone, Village Gwal Pahari, Gurgaon-Faridabad Road, Distt. Gurgaon (Haryana) beyond 05.05.2015. The Board, after deliberations, noted that as per the Minutes of the 78th Meeting of the BoA held on 03.7.2017, the Government of Haryana was required to send a report in the matter by 31.72017. As no reply had been received from the Government of Haryana till 15.9.2017, the Board approved extension of validity of the formal approval of the aforesaid SEZ up to 17.09.2018. Item No. 79.8 : Miscellaneous Cases (2 proposal) (i) Request of M/S. Moser Baer Solar Ltd. (Unit-Il), a unit in Non-Conventional Energy sector specific SEZ of M/S. Moser Baer India Ltd. at 66B, Udyog Vihar, Greater Noida (U.P.) for extension of first block of five years effective from 09/09/2011 for two ears i.e. upto 08/09/2018. The Board, after deliberations, approved the proposal. (ii) Request of M/S. Helios Photo Voltaic Ltd., a unit in Non-Conventional Energy sector specific SEZ of M/S. Moser Baer India Ltd. at 66B, Udyog Vihar, Greater Noida (U.P.) for extension of 2nd block of five years effective from 17.05.2012 for one year i.e. upto 16.05.2018. The Board, after deliberations, approved the proposal. Annexure - I List of Participants for the Meeting of the Board of Approval for Special Economic Zones held on 18th September, 2017 under the Chairpersonship of Commerce Secretary, Department of Commerce. 1. Ms. Rita Teaotia, Chairpersonship, BoA Commerce Secretary, Department of Commerce 2. Shri Alok Vardhan Chaturvedi, DGFT 3. Shri Sunil Kumar, Additional Secretary, Department of Commerce 4. Dr. Prem Verma, Additional DG, DGEP, Department of Revenue, Ministry of Finance 5. Smt. Deepshikha Sharma, Director, CBDT, Department of Revenue, Ministry of Finance 6. Shri Saroj Kumar Behera, Joint Director, DGEP, BEC 7. Dr. Rakesh. A.R., Research Assistant TCPO, Ministry of Housing Urban Affairs. 8. Shri Hemant Kumar, Assistant Legal Adviser, Department of Legal Affairs. 9. Shri A.K. Tamaria, Dy. Director, O/o DC (MSME), Nirman Bhawan, New Delhi 10. Shri S. Sasikumar, Dy. Director, DIPP. 11. Ms. Suman Chandra, IAS, Assistant Resident Commissioner, Govt. of Maharashtra, Maha Sadan. 12. Shri Mukesh Goyal, Associate Architect, Noida Authority, Govt. of U.P. LIST OF DEVELOPMENT COMMISSIONERS 13. Dr. L.B. Singhal, Development Commissioner, Noida SEZ 14. Shri Baldev Singh, Development Commissioner, SEEPZ-SEZ 15. Dr. Safeena AN, Development Commissioner, CSEZ 16. Shri M.K.S. Sundram, Development Commissioner, MEPZ-SEZ 17. Shri Upendra Vashisht, Development Commissioner, KASEZ 18. Ms. Sobhana K.S. Rao, Development Commissioner, VSEZ 19. Shri J.M. Gupta, Development Commissioner, FSEZ/ISEZ 20. Shri R.P. Goyal Development Commissioner, AP SEZ /Mundra 21. S.K. Sharma, Development Commissioner, Mihan SEZ Nagpur 22. Shri K.L. Sharma, Development Commissioner, Surat SEZ 23. Shri A.K. Singh, Development Commissioner, Mangalore SEZ LIST OF PARTICIPANTS FROM DEPARTMENT OF COMMERCE 24. Shri T.V. Ravi, Director, Department of Commerce 25. Shri G. Srinivasan, Under Secretary, Department of Commerce 26. Shri Aditya Narayan, Under Secretary, Department of Commerce 27. Shri K.C. Biswal, Section Officer, Department of Commerce