Exemption to specified goods imported for manufacture of jewellery for export by hundred per cent export-oriented undertaking

Government of India

Ministry of Finance

(Department of Revenue)

12-12-1990

Notification No. 277/90-Customs

Exemption to specified goods imported for manufacture of jewellery for export by hundred per cent export-oriented undertaking.

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Annexure to this notification (hereinafter referred to as the said goods), when imported into India for the purposes of use in the manufacture of jewellery for export out of India, by or on behalf of a hundred per cent export-oriented undertaking, from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and from the whole of the additional duty, if any, leviable thereon under section 3 of the said Customs Tariff Act, subject to the following conditions, namely :-

(i) the importer has been authorized to establish a hundred percent export oriented undertaking for the purpose of manufacture of jewellery.

(ii) Omitted (vide notfn. 56/20001 dt. 18.5.01)

(iii) the importer has been granted necessary licence for the import of the said goods;

(iv) the importer carries out the manufacturing process or other operations in respect of jewellery in customs bond and subject to such other conditions as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, having regard to the circumstances of the case, specify in this behalf;

(v) [*         *         *]

(vi) the importer satisfies the Assistant Commissioner of Customs or Deputy Commissioner of Customs that the said goods shall be used in the manufacture of jewellery for export out of India;

(vii) the importer agrees to execute a bond in such form and for such sum . and with such authority as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs]binding himself to fulfil the export obligation with the prescribed Net Foreign Exchange Earnings as Percentage of Exports (NFEP) and to fulfil, inter alia, the conditions stipulated in this notification and in the Letter of Approval of Intent or the Industrial Licence issued by the Board of Approval and to pay on demand an amount equal to the duty of Customs leviable on the said goods as are not proved to the satisfaction of the Assistant Commissioner of Customs to have been used in the manufacture of the jewellery for export;

Explanation. – For the purposes of condition (vii), duty of customs leviable on said goods in respect of gold and silver shall be limited to the duty as specified under notification of the Government of India, Ministry of Finance, Department of Revenue, No. 80/97-Customs, dated the 21st October, 1997 as amended from time to time;

(viii) the importer agrees to bring the said goods into the said undertakings and use them within the undertaking in the manufacture of jewellery for export out of India;

(ix) the importer agrees to export out of India all the jewellery manufactured within the said undertaking for the period stipulated by the Board of Approval or such extended period as may be specified by the Board of Approval;

(x) on expiry of the period specified in condition (ix), the importer shall pay the following duties, namely :-

(a) duty of customs on capital goods on depreciated value but at the rates of duty of customs in force on the date of payment of such duty;

(b) duty of customs on raw materials and on components on the value at the time of import and at the rates of duty of customs in force at the time of clearances;

(xi) the importer shall maintain proper account of import, consumption and utilisation of the said goods and of exports made by him and shall submit such account to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, in such form, in such manner, at such intervals and within such time, as may be specified by the Commissioner of Customs;

(xii) the importer agrees that the jewellery, including the waste, refuse and rejects thereof, manufactured in the said undertaking, shall not be brought to any other place in India, for whatever purpose :

Provided that scrap, dust or sweepings of gold or silver arising in the manufacturing process may be forwarded to the Government Mint by the importer for conversion into standard gold or silver bars as the case may be, and return to the said undertaking in accordance with the procedure specified by the Commissioner of Customs in this regard or such scrap, dust or sweepings of gold or silver arising in the manfacturing process may be cleared to the Domestic Tariff Area on payment of duty as specified in the notification of the Government of India, Ministry of Finance, Department of Revenue, No. 80/97-Customs, dated the 21st October, 1997 on the gold or silver content, as the case may be, in the said scrap, dust or sweepings;

Provided further that jewellery up to 10% of the value of export by the unit in the preceding year, may be allowed clearance into Domestic Tariff Area by the Development Commissioner in consultation with the Assistant Commissioner of Customs or Deputy Commissioner of Customs, on payment of applicable duties:

Provided also that exchange of plain gold or plain silver or plain platinum jewellery, from any place in India to the said undertaking with the gold or silver or platinum of the equivalent quantity in weight as that of gold or silver or platinum, as the case may be, contained in the said jewellery, permitted subject to such conditions as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs

(xiii) in the event of such a hundred per cent export oriented undertaking ceasing its operation or in the event of the said undertaking fails to discharge the export obligation specified in condition (i), gold, other precious metals/ alloys, gems and other material for the manufacture of jewellery shall be transferred to such person, undertaking, agency or authority, as the Government of India in the Ministry of Commerce may specify in this behalf;

(xiv) the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow, subject to fulfilment of such conditions as he may specify, the percentage of wastage of gold or platinum specified in column (2) of the Table given below or percentage of wastage of silver as specified in Column (3) of the said Table, during the manufacture of jewellery of description specified in the corresponding entry in column (1) of the said Table;

Table

Explanation. –

(a) Omitted.

(b) The percentage of wastage shall be calculated with reference to the total quantity of gold or silver, imported or issued for manufacture of the jewellery.

(c) No wastage shall be allowed for the jewellery procured under Para 6.15(d) of the Export and Import policy;

(d) the expression “plain jewellery and articles thereof unstudded” shall include “Mangal Sutra” containing gold and black beads, and jewellery. studded with imitation stones, and cubic zirconia and semi-precious stones:

Provided that per gram value of the semiprecious stones utilised in the making of jewellery and articles is less than the per gram value of gold.

(xv) the import and export of the said goods, other than the capital goods,

under this notification shall be allowed only by air-freight through the Customs Airports at Bombay, Calcutta, Madras, Trivandram Delhi and Bangalore

(xv a) gems and jewellery manufactured in the units situated in municipal limits of Calcutta, Chennai, Delhi and Mumbai and sold to foreign bound passenger may be transferred, in accordance with Export and Import Policy, to Customs Warehouse at respective Customs Airport for being handed over to the said passenger for the purpose of export as per procedure specified by the respective Commissioner of Customs in this regard;

(xv aa) gems and jewellery manufactured in the said undertaking may be supplied to the retail outlets or showrooms set up in the departure lounge at international airports at Calicut, Chennai, Cochin, Delhi, Hyderabad, Kolkata, Mumbai, Thiruvananthapuram and Vishakapatnam in accordance with the Export and Import Policy and the Handbook of Procedures Volume-I, for sale to a tourist as defined in the Baggage Rules, 1998, leaving India in accordance with the procedure specified by the Commissioner of Customs.

(xv b) the export of gems and jewellery manufactured in the Export Oriented Units may be made through the authorised couriers as per procedure specified by Commissioner of Customs:

Provided that the exports are made through Customs Houses at Mumbai, Calcutta, Chennai, Delhi, Jaipur, Bangalore, Ahmedabad or Hyderabad and the Free On Board (FOB) value of any consignment through authorised courier shall not exceed rupees twenty lakhs.

(xvi) the Assistant Commissioner of Customs or Deputy Commissioner of Customs may subject to such conditions and limitations as may be imposed by him and subject to provisions of the Export and Import Policy 1 April, 1997 – 31 March, 2002 –

(a) permit re-export of imported goods and export of domestically procured goods including goods generated out of partial processing/manufacture from such goods;

(b) permit supply of unsuitable or broken cut and polished diamonds, precious and semi-precious stones or rough diamonds up to 5% of value of import or indigenously procured goods to the Domestic Tariff Area against the valid REP on GEM REP or Diamond Imprest Licences as applicable on payment of appropriate duty.

(c) permit with the approval of Development Commissioner personal carriage of precious metals jewellery or precious or semi-precious stones or beads as samples up to US $ 1,00,000 for export promotion tours and temporary display abroad subject to the condition that the exporter would bring back the jewellery or its sale proceeds within 45 days from the date of its clearance;

(ca) permit, with the approval of Development Commissioner, export of jewellery for holding, or participating in, an exhibition abroad subject to the condition that jewellery not sold shall be re-imported within 60 days of the close of the exhibition.

(d) permit export of jewellery including branded jewellery for display and sale in the permanent shops set up abroad, provided that such items not sold abroad within 180 days, shall be re-imported within next 45 days.

(e) permit clearance of used packing materials, such as cardboard boxes and polyethylene bags of a kind unsuitable for repeated use, without payment of any customs duty;

(f) permit clearance of parts and tools of machinery in Domestic Tariff Area without payment of duty for repairs and return thereof;

(g) permit clearance of capital goods on payment of an amount equal to the customs duty. leviable on such goods on the depreciated value thereof at the rate in force on the date of payment of such duty:

Provided that the importer shall not be eligible to avail of the exemption applicable to goods failing under heading No. 98.01 of the First Schedule to the Customs Tariff Act/1975 (51 of 1975), or the exemption available to imported goods under the Export Promotion Scheme other than the Export Promotion Capital Goods Scheme permitting import of capital goods at the rate of duty of 5% advolorem in terms of notification in force at the time of de-bonding.

Explanation. – The depreciation in respect of capital goods covered by clause (g) above shall be allowed for the period from the date of commencement of commercial production of the unit or where such goods have been imported after such commencement, from the date such goods have come into use for commercial production, upto the date of payment of duty.

2. Notwithstanding anything contained in paragraph 1, the exemption contained therein shall also apply to silver and gold falling under heading Nos. 71.06 and 71.08, respectively of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) imported by the Metals and Minerals Trading Corporation Limited, Handicraft and Handloom Export Corporation, State Trading Corporation, the Projects and Equipments .of India Limited and any agency authorised by Reserve Bank of India for being supplied to the hundred per cent export oriented undertakings under the Scheme for Export of gold/silver and platinum jewellery and articles from Export Processing Zones (EPZs) and from Export Oriented Unit (EOU) Complexes specified in Export and Import Policy read with Chapter 6 of the Handbook of Procedures Volume-I

Provided that where the silver or gold is imported on behalf of a jewellery unit, the exemption shall apply only if –

(a) the procedure as may be specified by the Commissioner of Customs is followed by .such jewellery unit; and

(b) the conditions stipulated in paragraph 1 are complied with by such a  jewellery unit.

Provided further that in the event of”the Gem and Jewellery units to whom the gold or silver has been supplied, fails to export the jewellery made out of such gold or silver within the time specified in the Export and Import Policy under the respective Scheme, the nominated agencies shall deposit duty on the quantity of the gold or silver not contained in the jewellery exported at the rate of duty of customs leviable on the gold or silver, as the case may be, as provided in the Notification No. 80/97-Customs, dated the 21st October, 1997 within seven days of the expiry of the period within which the said jewellery manufactured out of the said gold or silver was supposed to be exported. , :

Explanation. – For the purposes of this notification, –

(a) “Board of Approval” means the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and the rules made there under, for the grant of approval to a hundred per cent export-oriented undertaking;

(b) “hundred per cent export-oriented undertaking” means an undertaking which has been approved as such by the Board of Approvals or the Development Commissioner concerned as the case may be. ,

(c) “Export-Import Policy” means the Export and Import Policy 1^st April, 2002-31^st March, 2007 published by the Government of India in the Ministry of Commerce and Industry vide notification No. 1/2002-07, dated 31^st March, 2002, as amended from time to time;

(d) “Handbook of Procedures Volume I’ means the Handbook of Procedures Volume I, 2002-2007 published by the Government of India in the Ministry of Commerce and Industry vide Public Notice No. 1/2002-07, dated the 31^st March, 2002.”

[Annexure]
Description of goods

1. Capital goods.

2. Raw Materials.

3. Components.

4. Spare parts of machinery.

5. Consumables required for manufacture of goods.

6. Samples prototype, not exceeding two in number, of each type of articles covered by the manufacturing activity.

7. Drawing, blue-prints, techincal maps and Charts, relating to the manufacturing activity.

8. Packaging materials.

9. Tools, Jigs, Gauges, Fixtures, Moulds, Dies, Instruments and Accessories.

10. Goods re-imported within one year from the date of exportation from the undertaking for re-export after repairs or re-conditioning.

11. Office Equipments, spares and consumables thereof.

12. Old gold jewellery, old  platinum jewellery, and old silver jewellery for repair or remaking for re-export.

(b) in the ANNEXURE, in item number 12, the word “plain” wherever it occurs, shall be omitted;

Notification No. 277/90-Cus., dated 12-12-1990 as amended by Notifications No. 16/92-Cus., dated 3-1-1992; No. 145/93-Cus., dated 28-6-1993; No. 101/95-Cus., dated 26-5-1995; No. 116/95-Cus., dated 8-6-1995; No. 33/97-Cus., dated 1-4-1997; No. 57/97-Cus., dated 3-7-1997; No. 76/97-Cus., dated 14-10-1997; No. 11/98-Cus., dated 27-4-1998; No. 12/98-Cus., dated 27-4-1998; No. 40/99-Cus., dated 28-4-1999, and No. 55/2000-Cus, dated 5-5-2000; No. 10/2000-Cus., dated 28-1-2000 ;no.56/2001 dt.18-05-01, No.116/2001 dt.6-11-2001.and No.64/2002 dated 24-6-2002.