Export Processing Zones/Free Trade Zones - Specified goods used by units in EPZ/FTZ exempted - 126/94 - Central Excise - Tariff

Export Processing Zones/Free Trade Zones - Specified goods used by units in EPZ/FTZ exempted

Notification No. 126/94-C.E.

Dated 2-9-1994

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the 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, hereby exempts excisable goods, specified in Annexure I to this notification (hereinafter referred to as the said goods), when required for the use by units (hereinafter referred to as the user industry) located in any Export Processing Zone, specified in Annexure II of this notification, being free trade zone (hereinafter referred to as the zone), and brought by the user industry from the factory of their manufacture or warehouse situated in other parts of India, for use by such user industry.

(a)  for the production or manufacture of articles for export out of India; or

(b)  for being used in connection with the production, manufacture or packaging of articles for export out of India; or

(c)  for carrying out processing of, or operations (including repairs, re-conditioning and re-engineering) in relation to, the articles intended for export out of India; or

(d)  for promotion of such export, from the whole of, -

(i)  the duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944),

(ii)  the additional duty of excise leviable thereon under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957),

subject to the following conditions, namely :-

(1)  the user industry has been authorised to establish a unit in the zone for the purposes specified in clauses (a) to (d) above;

(2)  the user industry brings the excisable goods directly from the factory of manufacture or warehouse;

(3)  the entire excisable goods so brought are used by the user industry in the zone for the purposes specified in clauses (a) to (d) above;

(4)  the user industry disposes of the said goods or the articles produced, manufactured, processed or packaged in the 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-Import Policy and in this notification;

(5)  the user industry executes a bond with the Assistant Collector of Central Excise (hereinafter referred to as Assistant Collector) in the prescribed form and for such sum as may be specified by that Assistant Collector, for the proper accountal of the receipt, storage and utilisation of such goods;

(6)  the user industry satisfies the Development Commissioner of the zone that the said goods have been used for the purposes specified in clauses (a) to (d) or for any other purposes specified in the Export-Import Policy and in this notification;

(7)  the manufacturer of the said goods follows the procedure contained in rules 156A and 156B of the Central Excise Rules, 1944 (hereinafter referred to as the said rules) as modified by rule 173N of the said rules;

(8)  the user industry follows the procedure contained in Chapter X of the said rules with the modification that a certificate in form C.T. 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 a certificate in form C.T. 2 provided in the said rules.

2.  The Assistant Collector, may subject to such conditions and limitations as may be imposed by him and subject to the provisions of the Export-Import Policy :-

(a) permit the said goods or goods manufactured, produced, processed or packaged in the unit to be taken outside the zone temporarily, without payment of duty, for repairs, processing, testing or display and to be returned to the unit thereafter;

(b)  permit the said goods or goods manufactured, produced, processed or packaged to be supplied or transferred from a unit in the zone to another unit in the same zone or to a unit in another zone or a hundred per cent export oriented undertaking for any of the purposes specified in clauses (a) to (c) of paragraph 1;

Provided that clause (b) shall not apply to said goods for repairs, reconditioning or reengineering.

3.  Subject to the satisfaction of the Assistant Collector, duty shall not be leviable in respect of -

(a)  the said goods used for imparting training to workers of the user industry;

(b)  the said goods or goods manufactured, produced, processed or packaged in the unit, if such goods are destroyed within the zone in the presence of the Central Excise Officer;

(c)  the scrap or waste materials 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 in the presence of the Central Excise Officer.

Explanation. - For the purposes of this notification, "Export-Import Policy" means the Export and Import Policy, 1 April, 1992 - 31 March, 1997, published vide Public Notice of the Government of India in the Ministry of Commerce No. 1/ITC(PN)/92-97, dated the 31st March, 1992, as amended from time to time.

4.  Notwithstanding anything contained in paragraph 1, in the case of user industry engaged in the development of computer software, the exemption contained therein shall also apply to said goods procured by such user industry 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 -

(a)  the conditions stipulated in this notification are complied with by such software development unit; and

(b)  the procedure specified by the Assistant Collector is followed.

Explanation. - The consultancy fees received by software development units in convertible foreign currency for consultancy service for development of software 'on site' abroad shall be deemed to be exports for the purposes of fulfilment of export obligation under this notification.

5.  Notwithstanding anything contained in this notification the exemption contained herein shall also apply to the said goods used for the purposes of production, manufacture, processing or packaging of articles in a unit in the zone and such articles (including rejects, waste, scrap and remnants arising out of such production, manufacture, processing or packaging of such articles) even if not exported out of India are allowed to be cleared outside the zone under and in accordance with the Export-Import Policy and subject to such other limitations and conditions as may be specified in this behalf by the Development Commissioner of the zone, on payment of appropriate duty of excise.

Provided that goods which have been repaired, reconditioned or reengineered shall not be allowed to be cleared outside the zone.

6.  Without prejudice to any other provisions contained in this notification, where it is shown to the satisfaction of the Assistant Collector that any unit in the zone has been permitted to clear any of the said goods for being taken outside the zone, to any other place in India by the Development Commissioner of the zone, in accordance with the Export-Import Policy -

(a)  such clearance of capital goods, material handling equipment, office equipment and captive power plants or as the case may be, captive generating sets may be allowed on payment of an amount equal to the excise duty leviable on such goods on the depreciated value thereof and at the rate in force on the date of payment of such duty;

(b)  such clearance of used packing materials such as cardboard boxes, polyethylene bags of a kind unsuitable for repeated use, may be allowed without payment of any excise duty;

(c)  such clearance of goods [other than those specified in clauses (a) and (b) above] may be allowed on payment of excise duty leviable on such goods, on the full value at the time of their clearance from the factory of manufacture and at rates in force on the date of payment of such excise duty.

Explanation. - The depreciation in respect of goods covered by clause (a) shall be allowed for the period from the date of commencement of commercial production of the unit or the date of receipt of the goods in the unit, whichever is later, till the date of payment of duty.

7. (1)  The notifications of the Government of India in the Ministry of Finance in the Department of Revenue and Insurance or Department of Revenue, as the case may be, specified in Annexure IV to this notification are hereby rescinded.

(2)  Notwithstanding such rescission, anything done or action taken under the notifications so rescinded shall be deemed to have been done or taken under the corresponding provisions of this notification.

ANNEXURE I

(see paragraph 1)

 

Sl. No.	Description of Goods
1.	Capital goods and spares thereof.
2.	Material handling equipments, namely, fork lifts, over-head cranes, mobile cranes, crawler cranes, hoists and stackers and spares thereof.
3.	Captive power plants, including captive generating sets and their spares, fuel, lubricants and other consumables for such plants and sets as recommended by the Board of Approval.
4.	Office equipments, spares and consumables thereof as recommended by the Board of Approval.
5.	Raw materials.
6.	Components.
7.	Consumables.
8.	Packaging materials.
9.	Tools, Jigs, gauges, fixtures, moulds, dies, instruments and accessories and spares thereof.
10.	Prototype, technical and trade samples for development and diversification.
11.	Drawings, blue prints and charts.

ANNEXURE - II

(see paragraph 1)

Name of the Zone

1.  Santa Cruz Electronics Export Processing Zone.

2.  Kandla Free Trade Zone.

3.  Falta Export Processing Zone.

4.  Madras Export Processing Zone.

5.  NOIDA Export Processing Zone.

6.  Cochin Export Processing Zone.

7.  Vishakhapatnam Export Processing Zone.

Explanation. - For the purposes of this notification, -

(a)  the "Santa Cruz Electronics Export Processing Zone" shall comprise of the places specified in clause (xiva) of rule 2 of the said rules;

(b)  the "Kandla Free Trade Zone" shall comprise of the places bearing survey numbers and enclosed by the boundaries specified in clause (viia) of rule 2 of the said rules;

(c)  the "Falta Export Processing Zone" and the "Madras Export Processing Zone" shall comprise of places bearing the survey number and enclosed by boundaries specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 236/85-Central Excises, dated the 15th November, 1985;

(d)  the "NOIDA Export Processing Zone" shall comprise of the places bearing the khasra numbers or survey numbers, as the case may be, and enclosed by the boundaries specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 4/86-Central Excises, dated the 20th January, 1986;

(e)  the "Cochin Export Processing Zone" shall comprise of the places bearing the survey numbers, location, area and enclosed by the boundaries specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 397/86-Central Excises, dated the 26th August, 1986;

(f)  the "Vishakapatnam Export Processing Zone" shall comprise of the places bearing the khasra numbers or survey numbers, as the case may be, and enclosed by the boundaries specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 38/94-Central Excises (N.T.), dated the 2nd September, 1994.

ANNEXURE - III

(see paragraph 1)

No.__________________          

Date __________________

FORM C.T. 3

Certificate for removal of excisable goods under bond

This is to certify that:

(1) Mr./Messrs ________________ (Name and address) is/are bona fide licensee holding licence No. __________ Valid upto ______________

(2) That he/they has/have executed a bond in Form B-16 (General Surety/General Security).No. ________ date _____________________________ for Rs.__________________ with the Assistant Collector of Central Excise _______________________________ and as such may be permitted to remove__________________ (quantity) of _______________(excisable goods) from the unit at ______________ to their undertaking__________________ at _____

 

(3) That the specimen signatures of his/their authorised agent namely Shri__________________. are furnished herebelow duly attested;

Specimen Signatures of the owner or his authorised agent

  Sd/- Attested

 Central Excise Officer-in-charge of the unit in Export Processing Zone.

ANNEXURE - IV

1. Notification No. 186/75-Central Excises, dated the 21st August, 1975.

2.  Notification No. 272/79-Central Excises, dated the 18th October, 1979.

3.  Notification 237/85-Central Excises, dated the 15th November, 1985

4.  Notification No. 238/85-Central Excises, dated the 15th November, 1985.

5.  Notification No. 5/86-Central Excises, dated the 20th January, 1986.

6.  Notification No. 398/86-Central Excises, dated the 26th August, 1986.