Exemption to specified goods imported for manufacture and development of electronics hardware, or electronics hardware and software in an integrated manner by the Electronics Hardware Technology Park units.

2-3-1993

Notification No. 96/93-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, hereby exempts goods specified in the Table below (hereinafter referred to as the 'goods') when imported into India or procured from a Public Warehouse or 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 and development of electronics hardware, or electronics hardware and software in an integrated manner, by the Electronics Hardware Technology Park units under the 100 per cent export-oriented scheme, approved in this behalf by the Inter-Mirdsterial Standing Committee (hereinafter referred to as the 'Committee') appointed by notification of the Government of India in the Department of Industrial Development S. 0. No. 117(E) dated the 22nd February, 1993 (as amended), from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty, if any, leviable thereon under section 3 of the second mentioned Act, subject to the following conditions, namely :-

(1) the importer has been granted necessary approval by the Committee for the import of goods for the said purposes;

(2) the importer carries out the manufacture or development or both of the electronics hardware or software under customs bond and subject to such other conditions, as may be specified by the [Assistant Commissioner of Customs or Deputy Commissioner of Customs], in this behalf;

(3) the importer.exports out of India hundred per cent, or such other percentage, as may be fixed by the Committee, of electronics hardware or software manufactured wholly or partly from the goods for the period stipulated by the Committee or such extended period, as may be specified by the Committee.

Provided that all such exports are made against freely convertible foreign currency;

(4) Omitted;

(5) the importer agrees,

(a) to bring the goods into the unit and use them within the unit in connection with the manufacture or development or both of electronics hardware or software for export;

(b) not to move the goods from the unit without the approval of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs];

(c) to export out of India all electronics hardware or software manufactured in the unit;


(6) the importer shall produce a certificate to the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] from the designated officer, to the effect that the goods imported are to be installed or used in the unit and that the import of such goods has been authorised by the Committee;

(7) 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 designated officer or the Committee where it is exclusively required under Export and Import Policy, allow the said unit to clear any of the said goods for being taken to any other place in India in accordance with the Export and Import Policy, -

(a) such clearance of capital goods, material handling equipments, office equipments 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 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, polythelene 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 Promotion 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) above 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 upto the date of payment of duty.

(8) the importer executes a bond in such form and for such sum and with such authority, as may be prescribed by the [Assistant Commissioner of Customs or Deputy Commissioner of Customs], binding himself to fulfil the export obligations and conditions under this notification, conditions under the Export and Import Policy and to pay on demand an amount equal to the duty leviable on the goods and interest at the rate of 20% per annum on the said duty from the date of duty free importation or procurement of the said goods till the date of payment of such duty if -

(i) in the case of capital goods, such goods are not proved to the satisfaction of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] to have been installed or otherwise used within the bonded premises 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 mat 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 not 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 container 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 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 year 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;

(9) Omitted;

(10) the procedure, as may be prescribed by the Commissioner of Customs, is followed by such unit;

(11) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, subject to such conditions and limitations as may be stipulated in the Export and Import Policy and those as may be specified by him in this behalf permit the goods imported or procured by the unit or goods partially processed or manufactured or packaged therefrom to be taken outside the unit without payment of duty for the purposes of test, repairs refining, processing, display, jobwork or any other process necessary for manufacture of final products and to be returned to the said unit thereafter or remove the same without payment of duty under bond for export from the jobworker's premises;

        Provided that the waste or scrap or remnants generated during such processes at the jobworker'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;

(11A) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, permit to remove moulds, jigs, tools, 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 Electronics Hardware Technology Park unit on completion of the job work, within a stipulated period;

(12) the Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, allow the supply or transfer of goods imported by a unit or electronic hardware or software manufactured by such a unit to any other hundred per cent export oriented undertaking or to a unit in the Free Trade Zone/Export Processing Zone for the purposes of manufacture and export or for use within the said unit as per procedure specified by him in this regard and necessary permission granted by the Committee;

(13) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, subject to such conditions as he may deem fit to impose under the circumstances of the case for the proper safeguard of the revenue interest, allow a unit to re-export goods;

(14) Omitted;

(15) notwithstanding anything contained in this notification, the exemption contained herein shall also apply to,

(a) goods which on importation into India are used for the manufacture or development of electronics hardware or software within the unit and such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software), even if not exported out of India, are allowed to be sold in India, under and in accordance with the Export and Import Policy and in such quantity and subject to such limitations and conditions as may be specified in this behalf by the Committee, on payment of duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software) are not excisable, customs duty equal in amount to that leviable on the inputs obtained under this notification and used for the purpose of manufacture or development of such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such electronic hardware or software), which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such electronic hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software);

(b) spares and consumables other than those specified in the Table, to the extent of 1.5% of the ex-factory value of manufacture of articles for export out of India by the unit during the preceding year or such percentage in excess thereof as the Central Government may, in each individual case, allow having regard to the recommendations made to it in this behalf by the Committee for the purpose of supply of such spares and consumables with the export articles for after-sale service, subject to the condition that such supply is specifically stipulated in the relevant export contract and the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] is satisfied that the value of such spares and consumables have been included for arriving at the value addition as required under the said Export and Import Policy.

        Provided that sale of software within India shall be allowed through data communication link or telecommunication link subject to such conditions as may be specified by the Commissioner of Customs.

(c) goods which on importation or procurement are used for the manufacture or development of Electronics Hardware or Software, within the unit and such hardware or software even if not exported out of India, are allowed to be cleared to the warehouses appointed or registered under notification of the Government of India in the Ministry of Finance Number 26/98-Central Excise (N.T.), dated the 15th July, 1998, or cleared to the warehouses authourise to carry out manufacturing process or other oprations under section 65 of the Customs Act, 1962 (52 of 1962) and under the Manufacture and Other Operations in Warehouse Regulation 1966 or cleared, on licence holders referred to in clause (e) of paragraph 9.10 of the Export and Import Policy, without payment of duty;


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

(i) the said goods used for imparting training to workers;

(ii) the said goods or goods manufactured, produced, processed or packaged in the unit if such goods are destroyed within the unit;

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

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

(17) The Assistant Commissioner of Customs or Deputy Commissoner of Customs may, subject to such conditions or limitations as Inter-Ministerial Standing Committee, permit the goods imported or procured by the unit or goods partially processed or manufactured or packaged there from 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.

2. 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.".

Explanation. - For the purposes of this notification,

(a) "designated officer" means an officer designated by the Department of Electronics in pursuance of the notification of the Government of India in the Ministry of Commerce No. 42(N-8)/92-97, dated the 14th September, 1992;

(b) Export and Import Policy means Export and Import Policy 1 April, 1997 - 31 March, 2002, published by the Government of India under Ministry of Commerce Notification No. 1/1997-2002, dated 31st March, 1997 as amended from time to time.

Table

Sl. No.

Description of Goods

(1)

(2)

1. 
2.
3.
4.
5.

5A.

 

 

5B

6.
7.
8.
9.
10. 
11.
12.

12A.

12B.

13. 

14. 

15.

Capital goods. 
Raw materials. 
Components. 
Spares and accessories of capital goods. 
Material handling equipment, namely, forklifts, over-head cranes, mobile cranes, crawler cranes, hoists and stackers. 

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

Spares and consumables for goods specified at serial number 5A above.";


Consumables required for the manufacture of goods. 
Sample/proto-types of electronics hardware/software covered by the manufacturing activity. 
Drawing, blue prints, technical maps, charts, relating to the manufacturing activity. 
Packaging materials. 
Office equipments,including PABX, fax machine, video projection system, spares  and consumables thereof.
Tools,jigs, gauges, fixtures, moulds, dies, instruments and accessories. 
Captive power plants including captive generating sets and transformers as recommended by the Committee. 
Omitted 

Spares, fuel, lubricants , consumables and accessories for captive power plants and captive generating sets and spares, consumable and accessories for transformers  as approved by the Assistant Commissioner of Customs or Central Excise. 
Goods re-imported within three years of the date of exportation for repairs or re-conditioning or re-engineering.
Goods re-imported within one year from the date of exportation from the unit due to failure of the foreign buyer to take delivery. 
Goods imported for repairs, reconditioning, testing calibration, quality improvement, upgradation of technology and re-engineering activities and export thereof within three years of the date of importation.

16.

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

17.

Any other item required in relation to production of export goods with the prior approval of Inter Miniterial Standing Committee.

Notification No. 96/93-Cus., dated 2-3-1993 as amended by Notifications No. 189/93-Cus., dated 27-12-1993;
No. 110/94-Cus., dated 15-4-1994; No. 193/94-Cus., dated 6-12-1994; No. 83/95-Cus., dated 31-3-1995;
No. 101/95-Cus., dated 26-5-1995; No. 117/95-Cus., dated 12-6-1995; 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. 65/99-Cus., dated 19-5-1999 and No. 9/2000-Cus., dated 28-1-2000.and 71 of 2000 dated 22-5-2000, No.56/2001-Cus. dated 18.05.2001.and No.65/2002-cus dated 25-6-2002