Specified goods meant for manufacture and packaging of articles in 100% EOU or manufacture or development of electronic hardware and software in EHTP or STP

4-1-1995

Notification No. 1/95-Central Excise

             In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act/ 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods, specified in Annexure I to this notification (hereinafter referred to as the said goods), when brought in connection with -

(a)    the manufacture and packaging of articles, or for production or packaging or job work for export of goods or services out of India into hundred percent. export oriented undertaking ( hereinafter referred to as the user industry); or";

(b)    manufacture or development of electronics hardware and software by a unit in Electronics Hardware Technology Park (hereinafter referred to as user industry) under Electronic Hardware Technology Park (EHTP) Scheme notified by the notification of the Government of India in the Ministry of Commerce No. 42 (N-8)/92-97, dated the 14th September, 1992; or

(c)    manufacture or development of software by a unit in Software Technology Parks (hereinafter referred to as user industry) under Software Technology Parks (STP) Scheme notified by the notification of the Government of India in the Ministry of Commerce No. 33/(RE)/92-97, dated the 22nd March, 1994,

from the whole of,

(i)    the duty of excise leviable thereon under section 3 of the 1 [Central Excise Act, 1944] (1 of 1944), and

(ii)    the additional duty of excise leviable thereon under sub-section (1) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957),

subject to the following conditions, namely :-

(a)    the user industry;

(i)    hundred per cent export oriented undertaking has been approved by the Board of Approval for hundred per cent export oriented undertaking (hereinafter referred to as the said Board) appointed by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and the rules made under that Act;

(ii)    unit in Electronic Hardware Technology Park (EHTP) Scheme has been approved by the inter-Ministerial Standing Committee (hereinafter referrred to as the said 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;

(iii)    unit in Software Technology Parks (STP) Scheme, has been approved by the said Committee;

(b)    the user industry brings the excisable goods directly from the factory of manufacture or from the warehouse and uses them for purposes as specified in clauses (a) to (c) above solely for export;

(c)    such user industry exports out of India hundred per cent or such other percentage as may be fixed by the said Board or the said Committee, as the case may be, of articles manufactured wholly or partly from the said goods for the period stipulated by the said Board or the said Committee, as the case may be, or such extended period as may be specified by the said Board or the said Committee, as the case may be;

(d)    the user industry executes a bond with the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise (hereinafter referred to as Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise in the prescribed form and for such sum as may be specified by that Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, for the proper accountal of the receipt, storage and utilization of such goods and to fulfill the export obligations and to comply with the conditions stipulated in this notification and the Export and Import Policy, and binding itself to pay on demand an amount equal to the duty leviable on the goods and interest at the rate of fifteen per cent per annum on the said duty from the date of duty free 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 Central Excise to have been installed or otherwise used within the bonded premises within a period of one year from the date of procurement thereof or within such extended period not exceeding five years as the Assistant Commissioner of Customs or Central Excise or Deputy Commissioner of Central Excise] 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 as are not proved to the satisfaction of the Assistant Commissioner of Customs or Central Excise to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within a period of one year from the date of procurement thereof or within such extended period as the Assistant Commissioner of Customs or Central Excise 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 so 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 or cleared for home consumption,

 within a period of one year from the date of procurement of such goods or within such extended period as the Assistant Commissioner of Customs or Central Excise may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;

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

Provided that the Commissioner of Customs of Central Excise 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 procurement;

(e)    the user industry satisfies the Development Commissioner or the Chief Executive of Software Technology Park Society or the designated officer in the case of Electronic Hardware Technology Park (EHTP) unit, as the case may be, that the said goods have been used for the purposes specified in clauses (a) to (c) above, or for any other purposes specified in the Export-Import Policy and in this notification;

(f)    the manufacturer of the said goods follows the procedure contained in rule 11 and 20 of the Central Excise Rules, 2002

    1. the user industry follows the procedure contained in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, with the modification that a certificate in Form CT-3 annexed to this notification as Annexure-II shall be used by the Central Excise officer in charge of the user industry in place of an application in the Form at Annexure-I provided in the said rules

           2.    The Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise may, subject to such conditions and limitations, as may be imposed by him and subject to the provisions of the Export-Import Policy,-

(a)    permit the said goods or goods manufactured/ produced, processed or packaged in the unit to be taken outside the user industry, without payment of duty, for testing, repairs, refining, display, processing, job work or any other operation necessary for manufacture of final product and to be returned to the unit thereafter or to be removed without payment of duty under bond for export from jobworker's premises :

Provided 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 of remnants have been cleared by the said unit;

(b)   Omitted

    1. permit to remove moulds/jigs, tools, fixtures, tackles/instruments, hangers and patterns or drawings from the premises of the user industry to the premises of sub-contractors subject to the condition that the goods so removed shall be brought back to the premises of such user industry on completion of the job work, within a period fixed by the Assistant Commissioner of Central Excise or Deputy Commissionor of Central Excise.

(d) permit the goods manufactured, produced or packaged to be supplied or transferred from user-industry to another unit in a free trade zone or special economic zone or a hundred per cent export oriented undertaking or an Electronic Hardware Technology Park (EHTP) or Software Technology Parks(STP) unit, as the case may be, for any of the purposes as specified in clauses (a) to (c) of the first paragraph or for export;

(e) permit the capital goods to be supplied or transferred from user-industry to another unit in the free trade zone or special economic zone or a hundred per cent export oriented undertaking or an Electronic Hardware Technology Park (EHTP) or Software Technology Parks (STP) unit, as the case may be, for use within the unit.";

         3.    Subject to the satisfaction of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, duty shall not be leviable in respect of -

(a)    the said goods used for imparting training (including commercial training) subject to the condition that the user industry imparting such training had achieved net foreign exchange earnings as percentage of exports prescribed in the Export-Import Policy and that no computer terminal shall be installed outside the premises of such user industry for this purpose;

(b)    the said goods or goods manufactured, produced, processed or packaged in the user industry, if such goods are destroyed within the user industry in the presence of the Central Excise Officer;

(c)     the capital goods if such goods are destroyed within the user industry, or outside the said user industry, where it is not possible or permissible to destroy the same within the said user industry, in the presence of the Central Excise Officer.

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

          3A.    The Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise may, subject to such conditions as he may prescribe, permit destruction of reject, waste and scrap material without the payment of duty, within a hundred per cent export oriented unit or outside the said -unit where it is not possible or permissible to destroy the same within the said unit.

          4.    Notwithstanding anything contained in paragraph 1 in the case of user industry engaged in the development of computer software, the exemption contained therein shall also apply to the said goods procured by such user industry 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 Central Excise or Deputy Commissioner of Central Excise 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 fulfillment of export obligation under this notification.

          5.    Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to the said goods used for the purposes of production, manufacture, processing or packaging of articles in a user industry and such articles (including rejects, waste, scrap and remanants arising out of such production, manufacture, processing or packaging of such articles) even if not exported out of India, are allowed to be cleared outside the user industry 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 said Board or the said Committee, as the case may be, on payment of appropriate duty of excise or where such goods are cleared to the Warehouse appointed or registered under notification of the Government of India in the Ministry of Finance, Department of Revenue, number 26/98-Central Excise (NT), dated the 15 th 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 licence 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 re-engineered shall not be allowed to be cleared outside the user industry.

              Provided further that where such articles (including rejects, waste and scrap materials) are not excisable, excise duty equal in amount to that leviable on the inputs obtained under this notification and used for the purpose of manufacture 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.

              6.    Without prejudice to any other provisions contained in this notification, "the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] 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 said Board or the said Committee, as the case may be, where it is exclusively required under Export and Import Policy, allow the user industry to clear any of the said goods for being taken outside the premises of such industry to any other place in India" as the case may be, in accordance with the Export - Import Policy -

(a)    such clearance of capital goods, material handling equipment, office equipment and captive power plants or as the case maybe, captive generating sets may be allowed on payment of an amount equal to the excise 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 used packing materials such as cardboard boxes, polyethylene bags of a kind unsuitable for repeated use, may be allowed without payment of any excise duty;

(c)    such clearance of goods [other than those specified in clauses (a) and (b) above] may be allowed on payment of excise duty leviable on such goods, on the full value at the time of their clearance from the factory of manufacture and at rates in force on the date of payment of such excise duty.

           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 the date of receipt of the goods in the unit, whichever is later, till the date of payment of duty.

            7.    Nothing contained in this notification shall be applicable to an undertaking which avails of any concession in terms of notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 136/94-Central Excises, dated the 10th November, 1994 or to a service providing undertakings which does not export services out of India.

8 Notwithstanding anything contained in this notification, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, subject to approval of Commissioner of Customs or Central Excise, as the case may be, may allow diesel generating sets/captive power plants, central air-conditioning equipments, uninterrupted power supply system, networking equipments, data transfer protocol equipments, EPABX, Fax, photocopier equipment and security system procured by the user industry engaged in development of computer software, to be utilised by the other units under Software Technology Park Scheme, belonging to the owner of the user industry and located in the same compound or nearby/ adjoining premises for the purpose of manufacture or development of software and export thereof.

9. Without prejudice to other provisions of this notification, where the Assistant Commissioner or Deputy Commissioner of Central Excise 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 Central Excise on this behalf, the Assistant Commissioner or Deputy Commissioner of Central Excise 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 said Board;

(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, for the purpose of calculation of Net Foreign Exchange earning as a Percentage of Export.".

 

ANNEXURE I

1.    Capital goods and spares and accessories thereof.

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

2A     Uninterrupted power supply system (UPS), pollution control equipment, quality assurance equipment, storage systems, special racks for storage, modular furniture, computer furniture, antistatic carpet, tele-conference equipment, servo control system, security systems, panels for electricals, air conditioning system, networking equipments, data transfer protocol equipments and central air conditioning equipments.

2B.     Spares and consumables for the goods specified at item 2A above.

3.    Captive power plants including captive generating sets and transformers as recommended by the Development Commissioner/Designated Officer.

3B.    Spares, fuel, lubricants, consumables and accessories for captive power plants including captive generating sets and spares, consumables and accessories for transformers as approved by the Assistant Commissioner or Deputy Commissioner of Central Excise.

3C.    Furnace oil required for the boilers as approved by the Assistant Commissioner of Customs or Central Excise on the recommendation of the Development Commissioner.

4.     Office equipment including PABX, fax machines, video projection system, computer, laptop, server, spares and consumables thereof" shall be substituted;

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.    Drawing, blue prints and charts.

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

13.    Any other item required in relation to production of export goods with the prior approval of Board of Approval/Inter Ministerial Standing Committee.

 

ANNEXURE II
No.................                                                                                                                                             Date...................

FORMC.T.3

Certificate for removal of excisable goods under bond

This is to certify that:

(1)    Mr. /Messrs............................(Name and address) is/are bonafide licensee holding licence No................................. valid up to....................

(2)    That he/they has/have executed a bond in Form B-16 (General Surety/General Security). No................date............... for Rs. ................. with the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise.............................. and as such may be permitted to remove .................................(quantity) of ..................(excisable goods) from the unit at..........................to their undetaking........................at...............................

(3)    That the specimen signatures of his / their authorised agent namely Shri .................................are furnished herebelow duly attested :

Specimen Signatures of the
 owner or his authorised agent.

Sd./- 
Attested

Central Excise Officer-in-charge of the 100% Export-oriented Undertaking/Electronic Hardwarre Technology Park (EHTP) unit/Software Technology Parks (STP) unit

 Notification No. 1/95-C.E., dated 4-1-1995 as amended by Notifications No. 96/95-C.E., dated 26-5-1995; No. 112/95-C.E., 14-9-1995; No.113/95-C.E., dated 20-10-1995; No. 21/97-C.E., dated 11-4-1997; No.41/97-C.E., dated 7-7-1997; 
No. 26/98-C.E., dated 24-8-2998; No. 31/98-C.E., dated 15-9-1998; No. 25/99-C.E., dated 19-5-1999;

No. 2/2000-C.E., dated 28-1-2000 ,No. 11/2000-C.E., dated 1-3-2000,  No. 40/2000-C.E. dated 22-5-2000, No. 29/2001-c.E., dated 18-5-2001 , No. 49/2001-C.E., dated 10-10-2001., No. 35/2002 dated 24-6-2002.and No.36/2002 dated 25-6-2002.

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