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This notification exempts goods used
within special economic zone from basic Customs duty and
Additional duty.
19th October, 2000.
Notification No. 137 / 2000-Customs
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 and in supersession of the notification of the Government of
India in the Ministry of Finance ( Department of Revenue) No.
79/2000-Customs, dated the 26th May,2000[ G.S.R.
499(E), dated the 26th May, 2000], except as respects
things done or omitted to be done before such supersession,
hereby exempts all goods other than those prohibited under the
Export and Import Policy (hereinafter referred to as the said
goods), falling under the First Schedule to the Customs Tariff
Act, 1975 ( 51 of 1975) , when imported into India or procured
from a Public Warehouse or a Private Warehouse appointed or
licensed, as the case may be, under section 57 or section 58 of
the said Customs Act for the purposes of manufacture of goods,
services, production, processing, assembling, trading, repair,
reconditioning, re-engineering, packaging or in connection
therewith and export thereof ( hereinafter referred to as the
said purpose) by a unit ( hereinafter referred to as the said
unit) within a Special Economic Zone (hereinafter referred to as
the Zone ) as notified by the Government of India in the Ministry
of Commerce and Industry, from the whole of the duty of customs
leviable thereon which is specified in the said First Schedule
and from the whole of the additional duty leviable thereon under
section 3 of the said Customs Tariff Act, subject to the
following conditions, namely:-
- The importer has been authorised by the Development
Commissioner to establish the said unit in the Zone for the said
purpose.
- The importer executes a bond in the form specified by
the Assistant Commissioner of Customs or Deputy Commissioner of
Customs, binding himself -
to bring the said goods into the said
unit in the Zone and use them for the said purpose;
to dispose of the said goods or services,
the articles produced, manufactured, processed and packaged in
the said unit 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;
to achieve positive NFEP ( Net Foreign
Exchange Earning as a Percentage of Exports) as provided in
paragraph 9.32 of the Export and Import Policy read with the
provisions of Handbook of Procedure, Vol. I and to comply with
the conditions stipulated in this notification, the relevant
provisions of Export and Import Policy and the relevant
provisions of Handbook of Procedures, Vol. I and to pay on
demand, -
(a) in case of failure to achieve the
said positive NFEP, the duty equal in amount to the portion of
the duty leviable on the said goods but for the exemption
contained in this notification and the duty so payable shall
bear the same proportion as the unachieved portion of NFEP
bears to the positive NEFP to be achieved along with interest
at the rate of 24% per annum on the said duty to be paid on
demand from the date of importation or procurement of the said
goods till the payment of such duty.
(b) in case of failure to utilise the
said goods for the said purpose within the period of five
years, an amount equal to the duty as leviable on the said
unutilized goods along with interest at the rate of 24% per
annum on the said duty from the date of importation or
procurement of the said unutilized goods till the payment of
such duty.
- The said unit shall maintain proper account, in the
format convenient to it and 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, similar other accounts, consumption,
utilisation of the said goods and sale of goods produced,
manufactured, processed, packaged, 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 gem and jewellery, to the Assistant
Commissioner of Customs or Deputy Commissioner of Customs in the
proforma prescribed in Appendix 16H of the Handbook of
Procedures, Vol. I .
- 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 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 other unit in another Special
Economic Zone or to Export Oriented Undertaking or Export
Processing Zone or Electronic Hardware Technology Park or
Software Technology Park units temporarily without payment of
duty -
- (ii) permit the said goods or goods 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 Central Excise Rules,
1944:
Provided further that waste or scrap or
remnants generated during such process at the job-worker's
premises shall be either returned to the said unit in the
Zone or shall be cleared on payment of duty as if the said
waste or scrap or remnants have been imported by the said
unit;
- (iii) permit removal of moulds, jigs, tool, fixtures,
tackles, instruments, hangers, patterns and drawings without
payment of duty to the premises of the sub-contractors subject
to the condition that such goods shall be brought back to the
said unit on completion of the job-work within the stipulated
period as specified by the Assistant Commissioner of Customs
or Deputy Commissioner of Customs:
Provided that this condition shall not
apply to the said unit if such unit is engaged in gem and
jewellery.
- 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 the
provisions of Export and Import Policy, permit the said unit
engaged in gem and jewellery in the Zone -
- (i) to take out gold, silver or platinum for job-work
in the Domestic Tariff Area and to bring back the jewellery
finished or semi-finished, including studded jewellery
containing quantity and purity equal to the gold, silver ,
platinum taken out within the period of thirty days from the
date of such taking out:
Provided that no diamonds, precious
stones or semi-precious stones shall be allowed to be taken
out of the Zone;
- (ii) 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 the said gold or silver or platinum
jewellery, as the case may be:
Provided that in case of activities
mentioned at (i) and (ii) above in this condition, the
Domestic Tariff Area unit supplying such jewellery against
exchange of gold or silver or platinum or after jobwork shall
not be entitled for deemed export benefits and the said unit
in the Zone shall not be eligible for wastage or
manufacturing loss against such jewellery;
- (iii) to take out items of gem and jewellery
temporarily into Domestic Tariff Area without payment of duty
for the purpose of display and to be returned thereafter;
for personal carriage of gold jewellery
or silver jewellery or platinum jewellery or precious stones
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 stones or
semi-precious stones or beads and articles or the sale
proceeds within a period of forty-five days from the date of
departure through normal banking channel;
to export Jewellery including branded
jewellery for display and sale in the permitted shops set up
abroad, or in the showroom of its distributors or agents:
Provided that items not sold abroad
within a period of one hundred and eighty days from the date
of their export shall be re-imported within a period of
forty-five days from the date of expiry of such period;
to remove parts and tools of machines
temporarily into Domestic Tariff Area without payment of duty
for the purpose of repairs and return thereof after such
repairs;
to remove moulds, tools, patterns and
drawing to the premises of the sub-contractors for jobwork
without payment of duty and to be returned to the unit
thereafter within the period specified in this behalf by the
Assistant Commissioner of Customs or Deputy Commissioner of
Customs, as the case may be;
to send scrap, dust or sweepings of
gold arising in the manufacturing process in its unit to the
Government Mint or Private Mint for conversion into standard
gold bars and to be returned to the said unit thereafter or
to clear such scrap, dust or sweeping to the Domestic Tariff
Area on payment of duty on the gold content in the said
scrap, dust or sweepings.
- Subject to the satisfaction of the Assistant
Commissioner of Customs or Deputy Commissioner of 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 production, manufacture, 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, diamond,
precious stones 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 imported 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 the conditions stipulated in
this notification are complied with by the unit engaged in the
development of software;
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 positive NFEP under this
notification.
3. Notwithstanding anything contained in
this notification, the said unit (other than a trading unit)
shall be allowed to clear in accordance with the Export and
Import Policy, the finished goods including by-products and
services, manufactured or produced out of the said goods
(including rejects, waste, scrap and remnants 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 and remnants) are not
excisable, customs duty equal in amount to that leviable on the
inputs imported 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 services shall be
allowed to be rendered by the said unit in the Domestic Tariff
Area subject to achievement of the said positive NFEP as
stipulated in the Export and Import Policy.
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
Licence or special duty free entitlement as per the provisions of
the Export and Import Policy or to other Special Economic Zone or
Export Oriented Undertaking or Export Processing Zone or
Electronic Hardware Technology Park or Software Technology Park
units.
5. Without prejudice to any other provision
contained in this notification, the Assistant Commissioner of
Customs or Deputy Commissioner of 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 the said unit in the Zone to
clear any of the said goods 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 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 import and at rates 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.
6. Notwithstanding anything contained in
paragraph 1, the exemption contained therein shall also apply to
silver, gold and platinum falling under heading No. 71.06, 71.08
and 71.10 respectively, of the First Schedule to the said Customs
Tariff Act imported by the nominated agencies for being supplied
to the gem and jewellery units in the Zone under the scheme for
export of gold jewellery and articles as specified in the Export
and Import Policy, read with Chapter 8 of the Handbook of
Procedures, Vol. I:
Provided that where silver or gold or
platinum is imported on behalf of the said unit engaged in gem
and jewellery, the exemption shall apply only if-
- (a) the procedure as may be specified by the Assistant
Commissioner of Customs or Deputy Commissioner of Customs is
followed by such jewellery unit; and
- (b) the conditions stipulated in paragraph 1 are
complied with by such jewellery unit.
Provided further that in the event of the unit engaged in gem and
jewellery unit to whom the silver, gold and platinum has been
supplied, fails to export the jewellery made out of such silver
or gold or platinum 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 silver, gold or
platinum as the case may be, not contained in the jewellery
exported at the rate of duty leviable on the silver or gold or
platinum as provided in the notification of the Government of
India in the Ministry of Finance 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
silver or gold or platinum was required to be exported.
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(RE-99)/1997-2002, dated 31st March, 2000, as
amended from time to time;
(b) "Export Oriented Unit" means
a Hundred Percent Export Oriented Unit 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"
means the Export Processing Zone 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, 1944 ( 1
of 1944);
(d) " Electronic Hardware Technology Park (EHTP) unit "
means a unit established 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( RE-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. 117(E), dated the 22nd February, 1993;
(e) "Handbook of Procedures, Vol. I" means the Handbook
of Procedures, Vol. I, 1997- 2002 published by the Government of
India, Ministry of Commerce vide Public Notice No. (RE-2000)/
1997-2002 dated the 31st March, 2000;
(f) "Nominated Agencies" means
the Metals and Minerals Trading Corporation Limited (MMTC), the
Handicraft and Handloom Export Corporation, the State Trading
Corporation (STC), the Projects and Equipment of India Limited
and any agency authorised by the Reserve Bank of India;
(g). "Special Economic Zone"
means the Special Economic Zone as notified by the Government of
India in the Ministry of Commerce and Industry ;
(h) " 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 (RE-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.
(RAJENDRA SINGH)
Under Secretary to the Government of
India
F. No. 305/66/2000-FTT
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