Monitoring of Utilization of Goods Imported or Procured Duty Free - Central Excise Practice Manual (OLD) - Central Excise

Monitoring of Utilization of Goods Imported or Procured Duty Free In terms of Notification Nos. 52/03-Cus., dated 31.3.2003 and 22/03-CE, dated 31.3.2003 , the capital goods imported or procured from DTA are to be installed by the EOU within a period of one year or the period extended by the jurisdictional Assistant Commissioner/Deputy Commissioner of Customs and Central Excise. Similarly in case of raw material the same should be utilized within a period of three years or the period extended. In case of goods produced or manufactured, raw material/ consumables and empty cones, bobbins or containers, suitable for repeated use either should be exported or disposed off in the manner provided under FTP within a period of one year from the date of production/manufacture or importation/procurement. Thus the unit which fails to comply with above conditions would be required to pay duty and interest on the goods. The EOU may seek extension of warehousing period in respect of capital goods/raw material well in advance to avoid any action in terms of the notifications. The CBEC has issued instruction that in the case of EOUs, extension may be granted liberally and the duty and interest may be demanded only in cases involving mala fide and diversion of raw material. Further, CBEC, vide Circular No. 7/2005-Customs , has further liberalized the procedure for extension of warehousing in respect of capital goods. It provides that extension of warehousing in respect of capital goods should be given in such a manner so as to make it co-terminus with the terms of LOA and warehousing license.