Exemption to specified goods imported for use in the articles, etc. meant for export /export promotion/ processing (including repairing, reconditioning etc.) of export articles by units in EPZ or FTZ - Consolidation of exemption.

22-6-1994

Notification No. 133/94-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 necessry in the public interest so to do, hereby exempts goods specified in the Annexure I of this notification (hereinafter referred to as the said goods), 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, or procured from international exhibitions held in India.

        (a) for the production or manufacture of articles for export out of India, or

        (b) for being used in connection with the production, manufacture or packaging of articles for export out of India, or for export of services out of India, or

        (c) for the carrying out processing of, or operations (including repairs  re-conditioning and re-engineering in relation to, the articles intended for export out of India, or

        (d) for promotion of such export or

        (e) omitted vide Notification No.-64/2002-cus dated 24-6-2002.

        by units within an Export Processing Zone or a Free Trade Zone specified in Annexure to this notification (hereinafter referred to as the Zone) from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tafiff Act, 1975 (51 of 1975) (here in after referred to as the Customs Tariff Act) and the  additional duty, if any, leviable thereon, under section 3 of the Customs  Tariff Act, subject to the following conditions, namely :

        (1) The importer has been authorised to establish the unit in the Zone for the purposes specified in clauses (a) to (d).

        (2) The importer has been granted the necessery licence for the import of the said goods.

        (3) The importer executes a bond in such form and for such sum as may be prescribed by the Assistant Commissioner of Customs or Deputy Commissioner of Customs binding himself -

            (i) to bring the said goods into his unit in the Zone and use them within the Zone for the purposes specified in clauses (a) to (d);

            (ii) to dispose of the said goods or the articles produced, manufactured, processed and packaged in his unit in the Zone or the waste, scrap and remnants arising out of such production manufacture, processing or packaging in the manner as may be prescribed in the Export- Import Policy and in this notificonfltlons. 

            (iii) to fulfill the Export Obligations and comply with the conditions stipulated in this notification and the Export and Import Policy and to pay on demand an amount equal to the duty as leviable on the goods and interest at the rate of fifteen percent per annum on the said duty from the date of duty free importation or procurement of the said goods till the payment of such duty, if -

              (i) in the case of capital goods, such goods are not proved to the satisfaction of the Assistant Commission of Customs or Deputy Commissioner of Customs to have been installed or otherwise used within the Zone or re-exported within a period of one year from the date of importation or procurement thereof or  within such extended period not exceeding five years as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;

        (ii) in the case of goods other than capital goods, such goods are not proved to the satisfaction of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs to have been used in connection with the production or packaging of goods for export out of India or re-exported within a period of one year from the date of importation or procurement thereof or within such extended period as the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, on being satisfied that there is sufficient cause for nor using them as above within the said period, allow;

        (iii) in the case of -

        (a) goods produced or packaged, such goods have not been exported out of India, and

        (b) unused goods (including empty cones, bobbins or containers, if any, suitable for repeated use) as have not been exported,

        within a period of one year from the date of importation or procurement of such goods or within such extended period as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, on being satisfied that there is sufficient cause for not exporting such goods within the said period, allow :

        (iv) in the case of raw materials, components, spares and consumables (other than capital goods) imported or procured duty free, the unit fails to achieve  Net Foreign Exchange Earning as a Percentage of Exports (NFEP) and Export Performance (EP) as specified in Appendix- 1 of the Export and Import Policy, within one yeat of importation or procurement of such goods or within such extended period not exceeding one year, as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, on being satisfied that there is sufficient cause, allow:

        Provided that the Commissioner of Customs may extend the period for achievement of net Foreign Exchange as a Percentage of Exports (NFEP) or Export Performance (EP) for further period not exceeding five years from the date of importation or procurement.

        (4) The importer shall maintain a proper account of import, consumption and untilisation of the said goods and of exports made by him, and shall submit such account periodically to the Development Commissioner of the Zone, in such form and in such manner as may be laid down by the Development Commissioner.

        (5) The importer satisfies the Development Commissioner of the Zone that the goods so imported have been used for the purposes specified in clauses (a) to (d) or for any other purposes specified in Export-Import Policy and in this notification.

        (6) 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-Import Policy-

              (i) allow a unit to re-export the said goods;

             (ii) permit capital goods or goods manufactured, produced, processed or packaged, in the unit to be taken to another unit in the same zone or another unit in the other Export Processing Zone/Electronic Hardware Technology Parks or another Export Oriented Unit temporarily without payment of duty for repairs, processing, testing or display and to be returned to the unit thereafter;

(iii) permit the said goods or goods manufactured, produced, processed or packaged to be supplied /transferred from a unit in the Zone to another unit in the same Zone for the purposes of manufacture and export or use within the said unit:

Provided that clause (iii) shall not apply to goods imported for repairs, reconditioning or re-engineering which have been so repaired, reconditioned or re-engineered."

        (iiia) permit the said goods or goods partially processed or packaged in the unit to be taken outside the zone without payment of duty for the purpose of test, repairs, refining, processing, display, jobwork or any other process necessary for manufacture of final products 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 the-waste or scrap or remnants generated during such processes at the job worker's premises is either returned to the unit or is cleared on payment of duty as if the said waste or scrap or remnants have been cleared by the said unit.

        (iv) permit to remove moulds, jigs, fools, fixtures, tackles, instruments, hangers .and patterns and drawings to the premises of sub-contractors subject to the condition that these goods shall be brought back to the bonded premises of Export Oriented Unit in the Export Processing Zone on completion of the job work, within a stipulated period.

(v) permit, after approval of the Board of Approval, the said goods, or goods partially processed or manufactured, or packaged therefrom in the unit to be taken out of India for the purpose of processing if such processing is not available in India, without payment of duty and to be returned to the said unit thereafter.

        (7) Subject to the satisfaction of the Assistant Commissioner i or Deputy Commissioner of Customs, duty shall not be leviable in respect of -

            (i) the said goods used for imparting training to workers including commercial training,

           (ii) the said goods or goods manufactured, processed or packaged in the said unit, if such goods are destroyed within the Zone or de, stroyed outside the Zone where it is not possible to destroy the same within the Zone,

           (iii) the scrap or waste material or remnants arising in the course of such production, manufacture, processing or packaging, if such scrap or waste material or remnants are destroyed within the Zone.

           (iv) the capital goods, if such goods are destroyed within the Zone, or outside the said Zone, where it is not possible or permissible to destroy the same within the said Zone, in the presence of custom officer.

Explanation. - For the purposes of this notification, "Export and Import Policy" means the Export and Import Policy, 1st April, 2002 to 31st March, 2007, published by the Government of India in the Ministry of Commerce and Industry vide notification No.1/2002-07, dated the 31st March, 2002, as amended from time to time

        2. Notwithstanding anything contained in paragraph 1, in the case of units engaged in the development of computer 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 -

        (a) the conditions stipulated in this notification are complied with by such software development unit; and

        (b) the procedure specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs is followed.

        Explanation. - The consultancy fees received by software development units in convertible foreign currency/for consultancy service for development of software 'on site' abroad shall be deemed to be exports for the purposes of fulfilment of export obligation under this notification.

        3. Notwithstanding anything contained in this notification the exemption contained herein shall also apply to the said goods which on importation into India are used for the purposes of production, manufacture, processing or packaging of articles in a unit in the Zone and such articles (including rejects, waste and scrap material arising in the course of production, manufacture, processing or packaging of such articles) even if not exported out of India, are allowed to be cleared outside the Zone under and in accordance with the Export-Import Policy and subject to such other limitations and conditions as may be specified in this behalf by the Development Commissioner of the Zone, on payment of duty of excise leviable thereon under section 3 of the Central Excises & Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, customs duty equal in amount to that leviable on inputs obtained under this notification and unsed for the purpose of production, manufacture, processing or packaging of such articles, which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such articles,or where such articles are cleared to the warehouse appointed or registered under notification of Government of India in the Ministry of Finance No. 26/98-Central Excise (N.T.), dated the 15th July, 1998 or cleared to the warehouse authorised to carry on manufacturing process or other operations under section 65 of the Customs Act, 1962 (52 of 1962) and under the Manufacture and Other Operations in Warehouse Regulations, 1966 or cleared to the license holders referred to in clause (e) of paragraph 6.9 of the Export and Import Policy, without payment of duty:

        Provided that goods which have been repaired, reconditioned or reengineered shall not be allowed to be cleared outside the Zone.

        4. Without prejudice to any other provisions 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 the revenue interest and also subject to such permission of the Development Commissioner of the zone, where it is exclusively required under the Export-Import Policy, allow any 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 Import Policy.

        (a) such clearance of capital goods, material handling equipment, office equipment and captive power plants, may be allowed on payment of an amount equal to the customs duty leviable on such goods on the depreciated value thereof and at the rate in force on the date of payment of such 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 customs duty on the value at the time of import and at rates in force on the date of payment of such customs duty;

        (c) such clearance of used packing materials such as cardboard boxes, polyethylene bags of a kind unsuitable for repeated use, may be allowed without payment of any customs duty:

        Provided that the importer shall not be eligible to avail of the exemption applicable to goods falling under heading number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), or the exemption available to the imported goods under any Export Promotion scheme other than the Export Pro- motion Capital Goods scheme permitting import of capital goods at the rate of duty of 5% ad valorem, in terms of notifications in force at the time of debonding.

        Explanation. - The depreciation in respect of goods covered by clause (a) 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 to the date of payment of duty.

4A. Without prejudice to other provisions of this notification, where the Assistant Commissioner or Deputy Commissioner of Customs is satisfied that the unit, which has been permitted by the concerned State Electricity Board in this behalf, has been permitted by Development Commissioner to sell into Domestic Tariff Area (DTA) or transfer to other hundred per cent. export oriented undertaking or units in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone, the surplus power generated in its diesel generating sets or captive power plant subject to fulfilment of such conditions as may be specified by the Assistant Commissioner or Deputy Commissioner of Customs on this behalf, the Assistant Commissioner or Deputy Commissioner of Customs may allow the unit-

(i)   to sell such surplus power in Domestic Tariff Area on payment of an amount equal to the duty leviable on consumables and raw materials but for the exemption of duty thereon, used for generation of each unit of power so sold in the Domestic Tariff Area on the basis of norms approved by the Board of Approvals appointed by the notification of the Government of India in the Ministry of Commerce and Industry, Department of Commerce, number 14/1/2001-EPZ dated 7th August, 2001;

(ii)   to transfer such surplus power to other hundred per cent. export oriented undertaking or unit in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone without payment of duty:

Provided that both supplying and receiving unit shall maintain account for the quantity of consumables and raw materials used in generation of each unit of power so transferred as quantified on the basis of norms approved by the said Board of Approval, for the purpose of calculation of Net Foreign Exchange earning as a Percentage of Export.".

        5. (1) The notifications of the Government of India in the Ministry of Finance specified in Annexure III, are hereby rescinded.

            (2) Notwithstanding such rescission, anything done or action taken under the notifications so rescinded shall be deemed to have been done or taken under the corresponding provisions of the notification.

ANNEXURE - I

Sl. No.

Description of Goods

1.

Capital goods and against serial number 1, for the word spares thereof, the words spares and accessories thereof.

2.

Material handling equipments, namely, fork lifts, over-head cranes, mobile cranes, crawler cranes, hoists and stackers & spares thereof.

2A

Uninterrupted power supply system (UPS), pollution control equipment, quality assurance equipment, storage systems, special racks for storage, modular furniture, computer furniture, anti-static carpet, tele-conference equipment, servo control system, security systems, panels for electricals, and air conditioning system. 

2B

Spares and consumables for the goods specified at Serial- number 2A above.

3.

Captive power plants, including captive generating sets and transformers as recommended by the Development Commissioner.

3A.

Omitted

3AA.

Spares, fuel, lubricants and consumables and accessories for captive power plants and captive generating sets and spares, consumables and accessories for the transformers as approved by the Assistant Commissioner of Customs or Deputy Commissioner of Customs.

3B.

Furnace oil required for the boilers as app the Assistant Commissioner or Deputy Commissioner of Custom tral Excise.

4.

Office equipments including PABX, fax machine, video projection system, computers, laptop, server, spares and consumables thereof.

5.

 Raw materials.

6.

Components.

7.

Consumables

8.

Packaging materials.

9.

 Tools, Jigs, gauges, fixtures, moulds, dies, instruments and accessories and spares thereof.

10.

A prototype or a technical sample for each of the existing products for the purpose of product diversification, development or evaluation.

11. 

 Drawings, blue prints and charts.

12. 

 Goods re-imported within three years of the date of exportation for repair or reconditioning or re-engineering.

13. 

Goods re-imported within one year from the date of exportation from the Zone due to the failure of the foreign buyer to take delivery.

14.

 Goods imported for repairs, reconditioning, testing calibration, quality impovement, upgradation of technology and re-engineering activities and export thereof within three years of the date of importation.

15.

Raw materials for making capital goods for use within the unit for the purpose of production or manufacture of export goods.

16.

Any other item required in relation to production of export goods with the prior approval of the Board of approval.

ANNEXURE - II
Name of the Zone

        1. Omitted.

        2. Omitted

        3. Falta Export Processing Zone.

        4. Madras Export Processing Zone.

        5. Noida Export Processing Zone.

        6. Omitted.

        7. Vishakapatnam Export Processing Zone.

        8.Omitted.

        9. Kayfoam Export Processing Zone, Kandivili, Mumbai.

        Note: The Zone shall comprise of places bearing survey numbers and enclosed by boundaries as may be specified by the jurisdictional Commissioner of Customs in a Public/Trade Notice, issued in this behalf.

ANNEXURE - III

        1. Notification No. 227/79-Customs, dated the 30th November, 1979.

        2. Notification No. 77/80-Customs, dated the 17th April, 1980.

        3. Notification No. 262/85-Customs, dated the 16th August, 1985.

        4. Notification No. 263/85-Customs, dated the 16th August, 1985.

        5. Notification No. 339/85-Customs, dated the 25th November, 1985.

        6. Notification No. 340/86-Customs, dated the 13th June, 1986.

        7. Notification No. 170/93-Customs, dated the 13th September, 1993.

Notification No. 133/94-Cus., dated 22-6-1994 as amended by Notification No. 191/94-Cus., dated 6-12-1994;
No. 83/95-Cus., (. 31-3-1995; No. 101/95-Cus., dated 26-5-1995; No. 117/95-Cus., dated 12-6-1995, No. 170/95-Cus.,
dated 26-12-1995; No. 171/95-Cus., dated 26-12-1995; No. 33/97-Cus., dated 1-4-1997, No.86/97-Cus., dated 24-11-1997;
No. 12/98-Cus., dated 27-4-1998; No.. 38/98-Cus., dated 26-6-1998; No. 59/98-Cus., dated 3-8-1998;
No. 61/98-Cus., dated 5-8-1998 and No. 65/99-Cus., dated 19-5-1999, No.71/2000-Cus., dated 22-5-2000; No. 9/2000-Cus., dated 28-1-2000, No.56/2001-Cus. dt.18-05-2001., No.64/2002-cus dated 24-6-2002.and No 65/2002-cus dated 25-6-2002