This Notification has been superseded vide Notification No. 52/2000 dated 19/10/2000
Special Economic Zone -Excise Duty Off on Goods Brought from Units outside the SEZ
Notification No. 41/2000-CE
Dated 26th May, 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, 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 said unit) located in Special Economic Zone(SEZ) as notified by the Government of India in the Ministry of Commerce and Industry (hereinafter referred to as the Zone) from factory of manufacture or warehouse situated in other parts of India, for the purposes of manufacture of goods, services, production, processing, assembling, trading, repair, reconditioning, re-engineering, packaging or in connection therewith the 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 CCentral 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 unit has been allowed by the Development Commissioner to bring the said goods as per the Export and Import Policy.
(3) The said unit executes a legal undertaking with the Development Commissioner concerned to fulfil the Net Foreign Exchange Earning as a Percentage of Exports (hereinafter referred to as "NFEP") as specified in the Export and Import Policy and the Handbook of Procedure, Vol. I.
(4) The said goods are brought directly into the unit from the factory of manufacture of warehouse.
(5) The said unit executes a bond in such form and for such sum as may be prescribed 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 NFEP annually and cumulatively and in case the said unit is a trading unit, to achieve a turnover of US $ 1 million in 5 years and to comply with the conditions stipulated in this notification, the Export and Import Policy and the Handbook of Procedures Vol. I and to pay on demand, in case of failure to achieve positive NFEP annually and cumulatively or failure to achieve a turnover of US $ 1 million in 5 years, as per the relevant provisions of the Export and Import Policy and the Handbook of Procedure, Vol. I, or to utilise the said goods for the said purpose within the period of one year or within such period as may be extended by the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs, an amount equal to the duty as leviable on the goods and interest at the rate of 20% per annum on the said duty from the date of duty-free procurement of the said goods till the payment of such duty.
(6) The unit shall maintain proper account, 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, etc., 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 computer hardware, 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.l. ,
(7) The manufacturer of the said goods follows the procedure contained in rules 156A and 1568 of the Central Excise Rules, 1944 (hereinafter referred to as the said rules) as modified by rule 173N of the said rules.
(8) The unit follows the procedure contained in Chapter X of the said rules with the modification that certificate in form CT -3 annexed to this notification as Annexure-1 shall be used by the Central Excise Officer-in-charge of the unit in place of a certificate in form CT -2 provided in the said rules.
(9) 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 another unit in the other Special Economic Zone or to Export Oriented Unit(EOU)/ Export Processing Zone(EPZ)/ Software Technology Park(STP)/ Electronics Hardware Technology Park(EHTP) units temporarily without payment of duty for
(a) repairs, processing, testing or display and to be returned to the said unit thereafter, or
(b) for the purposes of manufacture and export therefrom,subject to maintenance of proper accounts by both the receiving and supplying units :
Provided that nothing contained in this clause shall apply to goods procured for repairs, reconditioning or re-engineering and which have been so repaired, reconditioned, re-engineered;
(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, job-work 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 :
Provided that in case of export from the job-worker's premises, such job- worker shall be Central Excise registrant under rule 174 of the said rules .
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, tools, fixtures, tackles, instruments, hangers, patterns, drawings to the premises of the sub-contractor subject to the condition that the such goods shall be brought back to the said units in the Z0ne 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.
(10) Scrap, dust or sweepings of gold arising in the manufacturing process may. be forwarded to the Government Mint/Private Mint by the importer for conversion into standard gold bars and return to the said unit in the Zone in accordance with the procedure specified by the Assistant Commissioner of Customs or Central Excise or Deputy Commissioner of Customs or Central Excise in this regard or may be cleared to the Domestic Tariff Area with permission of the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs on payment of duty on the gold content in the said scrap, dust or sweepings.
(11) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs may allow the said unit engaged in gem and jewellery in the Zone 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 purity and quantity in weight as that of gold or silver or platinum jewellery, as the came may be, subject to the condition that the Domestic Tariff Area unit supplying such jewellery against exchange of gold/silver/platinum shall not be entitled for deemed export benefits and the said unit shall not be eligible for wastage or manufacturing loss against such jewellery" ,
(12) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs may allow-
(i) the items of gem and jewellery to be taken out temporarily into Domestic Tariff Area without payment of duty for the purpose of display and to be returned thereafter;
(ii) personal carriage of gold/silver/platinum jewellery or precious 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 or semiprecious stones or beads and articles or the sale proceeds" within a period of 45 days from the date of departure through normal banking channel;
(iii) export of branded jewellery for display and sale in the permanent shops set up abroad, or in the showroom of their distributors or agents:
Provided that items not sold abroad within a period of 180 days shall be re-imported within 45 days from the expiry of such period;
(iv) the said units engaged in gem and jewellery to remove parts and tools of machines temporarily without payment of duty for repair and return thereof:
Provided that in case of export from the job-worker's premises, such job- worker shall be Central Excise registrant under rule 174 of the said rules .
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, tools, fixtures, tackles, instruments, hangers, patterns, drawings to the premises of the sub-contractor subject to the condition that the such goods shall be brought back to the said units in the Z0ne 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.
(10) Scrap, dust or sweepings of gold arising in the manufacturing process may. be forwarded to the Government Mint/Private Mint by the importer for conversion into standard gold bars and return to the said unit in the Zone in accordance with the procedure specified by the Assistant Commissioner of Customs or Central Excise or Deputy Commissioner of Customs or Central Excise in this regard or may be cleared to the Domestic Tariff Area with permission of the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs on payment of duty on the gold content in the said scrap, dust or sweepings.
(11) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs may allow the said unit engaged in gem and jewellery in the Zone 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 purity and quantity in weight as that of gold or silver or platinum jewellery, as the came may be, subject to the condition that the Domestic Tariff Area(DTA) unit supplying such jewellery against exchange of gold/silver/platinum shall not be entitled for deemed export benefits and the said unit shall not be eligible for wastage or manufacturing loss against such jewellery" ,
(12) The Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs may allow-
(i) the items of gem and jewellery to be taken out temporarily into Domestic Tariff Area(DTA) without payment of duty for the purpose of display and to be returned thereafter;
(ii) personal carriage of gold/silver/platinum jewellery or precious 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 or semiprecious stones or beads and articles or the sale proceeds" within a period of 45 days from the date of departure through normal banking channel;
(iii) export of branded jewellery for display and sale in the permanent shops set up abroad, or in the showroom of their distributors or agents:
Provided that items not sold abroad within a period of 180 days shall be re-imported within 45 days from the expiry of such period;
(iv) the said units engaged in gem and jewellery to remove parts and tools of machines temporarily without payment of duty for repair and return thereof:
(13) 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, manufactured, 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 and 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 -
(a) the conditions stipulated in this notification are complied with by the said unit engaged in the development of software; and
(b) the procedure specified by the Assistant Commissioner of Central Excise or Customs or Deputy Commissioner of Central Excise or Customs is followed.
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 NFEP under this notification.
3. Notwithstanding anything contained in this notification, the said units (other than a trading unit), subject to achievement of NFEP as stipulated in the Export and Import Po1icy shall be allowed to clear in accordance with the said Policy, the finished goods including by-product and services, manufactured or produced out of the said goods (including rejects, waste and scrap material 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 and scrap materials) 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 where the goods have been procured for repairing, reconditioning or re-engineering and export thereof, such goods shall not be allowed after repairs, reconditioning or re-engineering, to be cleared in the domestic tariff area.
Provided also that where the goods have been procured as scrap, waste and remnants, such goods shall not be allowed to be sold in Domestic Tariff Area.
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 without payment of duty, if such clearance is against Advance License or Special Duty free entitlement as per the. provisions of the Export and Import Policy or to other Special Economic Zone(SEZ)/ Export Oriented Unit(EOU)/ Export Processing ZoneEPZ)/ Electronic Hardware Technology Park(EHTP)/ Software Technology Park(STP) units.
5. Without prejudice to any other provisions contained in this notification, the Assistant Commissioner of Central Excise or Custom 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 Export and Import Policy, allow said unit in the Zone to clear any of the said goods except gold. silver, platinum. diamond, precious and semi-precious stones for being taken outside the Zone, to any other place in India in accordance 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.
Explanation.- For the purpose of this notification -
(a) "Export and import Policy" means the Export and Import Policy, 1997-2002, published by the Government of India in the Ministry of Commerce vide notification No.1 (AE-99)/1997-2002, dated 31st March, 2000, as amended from time to time;
(b) "Export Oriented Unit(EOU)" means a Hundred Percent Export Oriented Unit(EOU) 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(EPZ)" means the Export Processing Zone(EPZ) 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, 1914 (1 of 1944);
(d) "Electronic Hardware Technology Park (EHTP) unit" means a unit establisbed 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(AE-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. No. 117(E), dated the 22nd February, 1993;
(e) "Handbook of Procedures, Vol. 1" means the Handbook of Procedures, Vol. I, 1997-2002 published by the Government of India, Ministry of Commerce vide Public Notice No. (AE-2000)/1997-2002 dated the 31 st March, 2000;
(f) "Special Economic Zone(SEZ)" means the Special Economic Zone(SEZ) 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(AE- 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.
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