Circular No. 93   /2002-Cus.
20th December, 2002

Government of India
Ministry of Finance & Company Affairs
Department of Revenue
Central Board of Excise & Customs

Subject:  Removal of Brass Borings/Scrap to the Job Worker for    Recycling into Brass Bars-Reg.

I am directed to invite your attention to the Board’s Circular No.15/96-Cus. dated the 8th March, 1996 on the above subject.

2.It has been brought to the notice of the Board by an EOU manufacturing engineering products  that during the course of production of brass glands, a lot of brass boring is generated which can be reused by getting it recycled into bars through a local job worker.  In this way unnecessary import of brass can be avoided and also raw material cost can be kept under control.  However, Board’s Circular No.15/96 dated 8.3.96 does not permit clearance of waste and scrap into DTA without payment of duty for conversion into ingots on job-work basis and return thereof to the EOU.  It has been pointed out that this provision has adversely affected the production programme and export commitments of the EOU and will make the project unviable as their product price will not be competitive in the international market.

3.The matter has been re-examined by the Board.  Circular No. 15/96 -Cus, dated 8-3-1996 referred to above was issued in the year 1996 and since then the EOU/EPZ Scheme has undergone significant changes in respect of subcontracting

of production and production process. Under the present Export and Import Policy 2002-2007, the EOUs and units in EPZ are allowed to subcontract 50% of the overall production of previous year in value terms for job work in DTA with the permission of Customs authorities.  Having regard to this new Policy provision and considering the requirements of the EOUs, it has been decided that the EOUs,  may be permitted to remove scrap/borings generated during the production process into DTA without payment of duty for conversion into ingots/bars and return thereof to the supplying EOU.  For this purpose, the procedure prescribed in Board’s Circular No.65/2002-Cus dated 7.10.2002 may be followed.

4.The Circular No.15/96-Cus. dated 8-3-1994 stands withdrawn.

5.Wide publicity may be given by issue of a Public Notice in this regard.

6.Difficulties, if any, faced in the implementation of above instructions, may be brought to the notice of the Board at an early date.

Kindly acknowledge receipt of this Circular.

(D.S. Garbyal)
Under Secretary to the Government of India

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Category : Custom Duty (7114)
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