Circular No. 9/2000-Cus

F.NO 305/129/99-FTT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

New Delhi, the 17th February, 2000

Subject: EOUs and EPZ/ST/EHTP Units – amending notifications clarified

       Representations have been received from Trade and Industry as also the Ministry of Commerce about the need to align the provisions of the Customs and Central Excise notifications governing import/procurement by EOUs and units in EPZ/STP/EHTP with those of the Exim Policy, 1997-2002 and to provide for procedural simplification in relation to EOU/EPZ/STP/EHTP schemes.

2.    The various issues raised by the Ministry of Commerce and the Trade have been examined and to address the same, notification nos. 9/2000-Customs, dated the 28th January, 2000 and 2/2000-Central Excise, dated the 28th January, 2000 have been issued to amend the different notifications governing import/procurement by EOU and units in EPZ/STP/EHTP. A copy each of the notification is enclosed for reference.

3.    The sailent features of the amendment made are as given below:

(i)  Clearance of Used Packing Mqaterials and Goods other than Cpapital Goods, Material Handling Equipment etc.

Hitherto, the Export Oriented Units and units in EPZ/STP/EHTP were required to obtain permission of Development Commissioner/Board of Approval/Standing Committee, as the case may be, for clearance of used packing materials without payment of duty and clearance of goods other than capital goods, material handling equipment etc. on payment of duty. The notifications governing duty free import/procurement of goods by EOU/EPZ/STP/EHTP units, have now been amended to dispense with the requirement of the permission of the Development Commissioner/Board of Approval/Standing Committee etc. for clearaance of used packing materials without payment of duty and clearance of goods other than capital goods, material handling eqipment etc. on payment of duty. Henceforth, the EOU/EPZ/STP/EHTP nits can clear the said goods with the permission of the Assistant Commissioner.

(ii) Re-export of Imported Goods – Delegation of Powers to the Assistant Commissioner of Customs

Under some of the existing notification relating to EOU/EPZ/STP/EHTP schemes, the re-export of imported goods is permitted by Assistant Commissioner whereas in other cases, the same requires permission of Development Commissioner/Commissioner of Customs. To make the provisions uniform in all the Scheme, notifications Nos. 138/91-Cus, dated 20.10.91, 140/91-Cus, dated 20.10.91, 95/93-Cus, dated 2.3.93, 96/93-Cus, dated 2.3.93, 196/94-Cus, dated 8.12.94 and 53/97-Cus, dated 3.6.97, governing duty free import of goods by STP/EHTP/Aquaculture/100% EOU respectively, have been amended suitably to allow re-export of imported goods by the Assistant Commissioner of Customs.

(iii) Import/Procurement of Spares/Fuel/Lubricants

EOU units operating under notification No. 53/97-Cus, dated 3.6.97 and 1/95-CE, dated 4.1.95, can now import/procure spares, fuels, lubricant and consumables for captive power plants or captive generating sets without recommendation of the Development Commissioner. The requirement of permission of Development commissioner has been done away with.

(iv) Procurement of Captive Power Plants or Captive Generation Sets

Notification No. 126/94-CE, dated 2.9.94, governing indigenous procurement of goods by EPZ units and notification Nos. 196/94-Cus, dated 8.12.94 and 10/95-CE, dated 23.10.95, governing import and procurement of goods by Aquaculture units have been suitably amended to allow duty free procurement/import of captive power plants or captive generating set upto a capacity of 1000 KVA on the recommendation of Development Commissioner and of capacity exceeding 1000 KVA on the recommendation of the Board of Approval.

(v) Import of Sample and Prototype

Under notification No. 53/97-Cus, dated 3.6.97 and 95/93 and 96/93 both dated 2.3.93 relating to 100% EOU and EHTP units respectively, the units are not allowed to import samples or prototypes more than two in number. However, there is no such restriction on the import of samples or prototypes in paragraph 9.8 of the Handbook of Procedure, Vol. I, 1997-2002. In order to align the provisions of the notifications have been amended and the restriction on number of samples or prototypes to be imported by the EOUs operating under notification Nos. 95/93-Cus, dated 2.3.93 and 96/93-Cus, dated 2.3.93, has been removed.

(vi) Problems being faced by the Horticulture Units

Notification Nos. 126/94-Cus, 3.6.94 & 136/94-CE, dated 10.11.94, governing import/procurement of duty free goods by agriculture units, were last amended by notification Nos. 25/99-CE, dated 19.5.99- and 65/99-Cus, dated 19.5.99 to include “processed fruits & vegetables, meat &edible meat offal” in the eligible category of export items. It was reported that these amendments have placed the agro-processing units in a disadvantageous position y way of debarring them from availing of exemption nder notification Nos. 53/97-Cus, dated 3.6.97 & 1/95-CE, dated 4.1.95, which they were availing of prior to the said amendment. Notification Nos. 126/94-Cus, dated 3.6.94 & 136/94-CE, dated 10.11.94, have been amended accordingly to delete “processed fruits and vegetables, meat and edible, meat offal” from the list of items allowed to be exported under notifications ibid. With this, the ago processing units, which operate in physically bonded area, now can operate under the EOU scheme i.e. notification Nos. 53/97-Cus, dated 3.6.9 and 1/95-CE, dated 4.1.95.

4.    Wide publicity may be given by issue of a Public Notice in this regard.
5.    Kindly acknowledge receipt of this Circular. Difficulties, if any, faced in the implementation of the above changes,
may be brought to the notice of the Board at an early date.

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