Circular No. 71/2002-Cus
30th October, 2002

Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)

Subject: Supply/Transfer of Capital Goods/Manufactured Goods from one EOU/EPZ/EHTP/STP/SEZ unit to another EOU/EPZ /SEZ/EHTP/STP Regarding.

 I am directed to invite your attention to the Board’s Circular No.38/2002-Cus dated 1.7.2002 wherein it was clarified that the notifications governing duty free import/procurement by EOUs/EPZ/EHTP/STP/SEZ units have been suitably amended so as to specifically provide that only the capital goods and the goods manufactured by EOU/EPZ/EHTP/STP/ SEZ units will be allowed to be transferred or given on loan to another EOU/EPZ/ STP/EHTP /SEZ units.

2. In this connection, it has been brought to the notice of the Board that in notification No.133/94-Customs dated 22.6.94, there is no specific provision for supply of goods manufactured in an unit in EPZ and capital goods imported/procured by an EPZ unit to another EOU/EPZ/ EHTP/STP/SEZ unit. Therefore, a clarification has been sought whether EPZ units can transfer the goods referred to above to EOUs or units in EPZ/EHTP/STP/SEZ in absence of a specific provision to this effect in notification No.133/94-Customs.

3. The matter has been considered by the Board. Paragraph 6.14 of the Exim Policy 2002-2007 provides that transfer of manufactured goods from one EOU/EPZ/EHTP/STP unit to another EOU/EPZ/EHTP/STP/SEZ unit will be allowed. Further, it provides that capital goods may be transferred or given on loan from one EOU/EPZ/EHTP/STP/SEZ unit to another EOU /EPZ/EHTP/STP/SEZ unit with prior permission of the concerned Development Commissioner / Customs authorities. Corresponding provisions exist in Chapter 7 (paragraph 7.11) of the Exim Policy, which deals with SEZ scheme. A plain reading of these provisions makes it clear that inter unit transfer of manufactured goods and capital goods imported/locally procured under the EOU/EPZ/STP/EHTP/SEZ Scheme is allowed under the Exim Policy.

4 In view of this, you may kindly allow transfer/supply of capital goods imported/procured or goods manufactured, produced or packaged in an EOU/EPZ/EHTP/STP/SEZ unit to another EOU/EPZ/SEZ/EHTP/STP unit without payment of duty. Suitable amendments incorporating specific provisions for such supplies would be made in the notification No 133/94-Cus dated 22-6-94 at the appropriate time.

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

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

 Kindly acknowledge receipt of this Circular.

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