Debonding from EOU Scheme - Central Excise Practice Manual (OLD) - Central Excise

Debonding from EOU Scheme The EOU units are allowed to debond from the Scheme subject to approval of the jurisdictional DC. The detailed guidelines for exiting out of EOU/EHTP/STP Scheme are given in the Appendix 14-I-L of the HOP, Vol. I. In the event of debonding, the unit is required to pay applicable customs and excise duty on the imported and indigenous capital goods, raw materials, components, consumables, spares, finished goods, waste scrap etc. in stock. The unit has to apply for debonding to the jurisdictional DC who permits 'In-principle' debonding subject to certain conditions. The penalty imposed by the appropriate authority under FT (D R) Act, 1992 for non-fulfillment of conditions of approval, is required to be paid. In case an appeal against the order is pending, exit from the Scheme would be considered if the unit has obtained a stay order from the competent authority and furnished a bank guarantee for the penalty adjudicated by the appropriate authority unless the appellate authority makes a specific order exempting the unit from this requirement. If any unit has failed to fulfill terms and conditions of LOP and penal proceedings are to be taken up/are in process, a legal undertaking for payment of penalties, that may be imposed, would be required to be executed with the concerned Development Commissioner as per proforma prescribed in Error! Hyperlink reference not valid. The unit would be required to fulfill the above conditions before obtaining final debonding order from Development Commissioner. The unit would continue to be EOU unit till the final debonding order is issued. The Development Commissioner however, may allow further extension of period required for fulfillment of the conditions in deserving cases. Clearance from Central Excise Department prior to Final Debonding The unit is required to obtain clearance from the jurisdictional Central Excise Officers before obtaining final debonding order. The unit is allowed to pay duty on imported and indigenous capital goods on depreciated value at the time of debonding.