11
th
May, 2004
Notification No. 62 /2004 - Customs (N.T.)
In exercise of the powers conferred by sub-section (1) of section 157, read with sub-section (2) of section 76C of the
Customs Act, 1962 (52of 1962), the Board hereby makes the following regulations further to amend the Special Economic
Zones (Customs Procedures) Regulations, 2003, namely:-
1.(1)
These regulations may be called the Special Economic Zones (Customs Procedures) ( Fourth Amendment)
Regulations, 2004.
(2)They shall come into force on the day of their publication in the Official Gazette.
2.In the Special Economic Zones (Customs Procedures) Regulations, 2003,-
(A) in regulation 2,-
(i)
in clause (f), for the words " permitted by the
Commissioner of Customs" the words " approved by
the Board of Approvals" shall be substituted;
(ii)
after clause(n), the following clause shall be inserted ,
namely:-
'(nn) " Unit Approval Committee", in respect of a
special economic zone means a committee set up
for the special economic zone as notified in the
Official Gazette by the Central Government in the
Ministry of Commerce and Industry' ;
(B) in regulation 3, for sub-regulation (3), the following sub -regulation shall be substituted, namely:
"(3) Each zone unit shall have separate establishment distinct and identifiable or distinct and partitioned, from other
zone unit";
(C) for regulation 10, following regulation shall be substituted , namely:-
'10. Procurement of goods by zone unit or developer from domestic tariff area.- (1) The zone unit or developer, as the
case may be, may procure any goods from domestic tariff area for carrying out authorised operation subject to the
following conditions, namely:-
(i)
the domestic tariff unit supplying the goods to the
zone unit or developer, or the zone unit or developer
on behalf of the domestic tariff area unit, as the case
may be, shall file a bill of export giving therein
complete description, model, make, specifications,
nature of goods such as capital goods, raw materials,
spares, consumables, with specially stamped
endorsement as "special economic zone cargo"
alongwith invoice, packing list and purchase order for
noting and assessment of the bill of export in the
zone;
(ii)
the bill of export shall be assessed by the customs
officer in the zone;
(iii)
the assessed bill of export shall be submitted to the
proper officer having jurisdiction over the domestic
tariff area unit and the same shall be treated as
permission for transfer of goods to the zone;
(iv)
the domestic tariff area unit supplying goods to the
zone unit or the developer, as the case may be, shall
be allowed to remove the goods on the cover of
ARE-I and the assessed bill of export, giving therein
complete description, model, make, serial number,
specifications and other relevant particulars ;
(v)
the goods so brought to the zone may be allowed
admission into the zone on the basis of assessed of
bill of export and ARE-I and a copy of bill of export
and ARE-I, with an endorsement that goods have
been admitted in full into the zone, shall be forwarded
to the Central Excise Superintendent having
jurisdiction over the domestic tariff area unit within
forty-five days, failing which the Superintendent shall
raise demand of duty against the domestic tariff area
unit;
(vi)
where domestic tariff area unit or zone unit, on behalf
of such domestic tariff area unit, has filed a bill of
export under claim of duty drawback or duty
entitlement passbook scheme and the domestic tariff
area unit does not intend to claim duty drawback or
duty entitlement passbook scheme credit, a
disclaimer to this effect may be given to the zone unit,
and on the basis of such disclaimer given by the
domestic tariff area unit, duty drawback or duty
entitlement passbook scheme credit may be claimed
by the zone unit;
(vii)
the proper officer in the zone shall assess the bill of
export in the same manner as it is assessed in the
case of export of goods under claim of duty drawback
or duty entitlement passbook scheme credit or no
claim, as the case may be, and instruction issued
under respective export promotion scheme shall
apply mutatis mutandis in respect of these goods ;
and valuation of such goods shall be done in terms
of section 14 of the Act;
(viii)
before allowing admission of such goods in to the
zone, the goods shall be examined by the customs
officer of the zone in respect of description, quantity,
marks, model and other relevant particulars. given in
the ARE-I and bill of export, invoice and packing list
and also as per the examination norms laid down in
respect of export goods and instruction issued by the
Board in this behalf from time to time;
(ix)
the duty drawback or duty entitlement passbook
scheme credit against such supply of goods by
domestic tariff area unit to the zone unit or to the
developer shall be admissible only when the payment
for such supply of goods to the zone unit is received
in freely convertible foreign currency;
(x)
a copy of the bill of export and ARE-I with
endorsement of zone customs authorities on it to the
effect that goods have been admitted in full in the
zone shall be treated as proof of export;
(xi)
where the goods are intended to be procured by the
zone unit or developer from a trader or merchant
exporter, the procedure as stated hereinabove shall
apply mutatis mutandis, including filing of bill of
export except that the goods shall not be required to
be brought to the zone under the cover of ARE-I and
assessed copy of bill of export shall not be required
to be submitted to the jurisdictional Central Excise
authority for removal of goods, from the premises of
the trader or merchant exporter.
(2)
Notwithstanding any thing contained in sub- regulation (1), where the goods are procured by a zone unit or developer from
a domestic tariff area unit and where either the zone unit or the developer or the domestic tariff area unit do not claim
duty drawback or duty entitlement pass book scheme credit or where such supplies from domestic tariff area unit to the
zone unit or developer, as the case may be, are not against fulfillment of export obligation under any export promotion
scheme or where no export benefits against such supplies are claimed either by the domestic unit supplying the goods or
the zone unit or developer, as the case may be, then, the zone unit or the developer may procure any such goods from
domestic tariff area for carrying out authorised operation subject to the following conditions, namely:-
(i)
zone unit or developer shall submit application to the proper officer of the zone for issuance of pre-authenticated
Domestic Procurement Certificate and on the basis of such application, the proper officer of the zone or any other
officer authorised by him in this regard shall issue to the zone unit or developer, as the case may be pre-authenticated
Domestic Procurement Certificate in the Form specified in Annexure -I to these regulations;
(ii)
the Superintendent of Central Excise having jurisdiction over the domestic tariff area unit shall , on the basis of
Domestic Procurement Certificate issued under clause (i), allow the domestic tariff area unit to remove the goods
under the cover of ARE-I ;
(iii)the ARE-I shall contain complete description of goods such as model, make, serial number, technical specifications;
(iv)
the goods allowed to be removed under clause (ii) may be allowed admission into the zone on the basis of ARE-I and a
copy of ARE-I, with an endorsement that goods have been admitted in full into the zone, shall be forwarded to the
Superintendent of Central Excise having jurisdiction over the domestic tariff area unit within a period of forty-five days
from the date of removal of goods from the factory or warehouse in the domestic tariff area , failing which the proper
officer in charge of zone unit shall raise demand of duty against such domestic tariff area unit;
(v)
before allowing admission of such goods in to the zone, the goods shall be examined by any officer of customs
authorised in this behalf by the proper officer of the zone in respect of description, quantity, marks, model and other
relevant particulars given in the ARE-I and invoice and packing list and also in accordance with the examination norms
laid down in respect of export goods and instruction issued by the Board in this behalf from time to time;
(3)
Nothing contained in sub-regulations (1) and (2) shall apply in cases where the duty paid goods are procured from
domestic tariff area and no duty concession or export incentives are being claimed against such supplies by the domestic
supplier or the zone unit or the developer, as the case may be, and such goods shall be allowed admission into the zone
on the basis of invoice issued by the supplier of the goods and concerned transport documents, if any.
Explanation 1.- for the purpose of this regulation, ''export incentives'' includes drawback, duty entitlement passbook scheme,
rebate, advance license or counting of proceeds as export earnings or counting of proceeds as fulfillment of export obligation
under any scheme.
Explanation 2.- For the purposes of this regulation, " ARE-I" means Form ARE-I referred to in notification No 40/2001-Central
Excise (N.T), dated the 26
th
June, 2001.'
(D)
in regulation 12, for the words " goods namely, capital goods or manufactured goods" the words " goods including
capital goods or manufactured goods" shall be substituted .;
(E)
in regulation 15, in sub-regulation (1), in clause (i), the words " alongwith advance remittance certificate duly certified by
the bank" shall be omitted;
(F)
in regulation 20, the words " subject to condition that no wastage or manufacturing loss against such exchange of
jewellery shall be permissible;" shall be omitted;
(G)for regulation 21, the following regulation shall be substituted , namely:-
" 21. Removal of goods from a zone
unit to an export oriented
undertaking or software technology
park unit or electronic hardware
technology park unit .- (1) The
proper officer may permit a zone
unit to transfer goods to an export
oriented undertaking or software
technology park unit or electronic
hardware technology park unit, as
the case may be, without payment
of duty for the purpose of
manufacture and export, or for
export or for use within the unit
subject to the following conditions,
namely:-
(i)
the zone unit shall make such transfer against the
procurement certificate issued by the proper officer in
charge of receiving export oriented undertaking or
software technology park unit or electronic hardware
technology park unit, as the case may be;
(ii)
a warehousing bill of entry shall be filed by the export
oriented unit or software technology park unit or
electronic hardware technology park unit or by the
supplying special economic zone unit on behalf of the
receiving export oriented unit or software technology
park unit or electronic hardware technology park unit,
as the case may be, with the officer of the customs
authorised in this behalf by the proper officer the
zone;
(iii)
export oriented undertaking or software technology
park unit or electronic hardware technology park unit
shall submit re-warehousing certificate duly signed by
the proper officer, having jurisdiction over the
receiving export oriented undertaking or software
technology park or electronic hardware technology
park unit within a period of forty five days from the
date of clearance, to the officer of the customs
authorised in this behalf by the proper officer of the
zone;
(iv)
where export oriented undertaking or software
technology park unit or electronic hardware
technology park unit fails to submit the re-
warehousing certificate within a period of forty-five
days from the day of clearance of goods, officer of
the customs concerned in the zone shall take up the
matter with the jurisdictional proper officer of the
receiving unit, to initiate recovery proceeding against
such export oriented undertaking, software
technology park unit or electronic hardware
technology park unit, as the case may be;
(v)
where goods admitted into zone unit from domestic
tariff area, on which benefit under duty exemption
pass book scheme or duty draw back has been
availed, are removed as such or after subjecting it to
a process not amounting to manufacture, to an export
oriented undertaking or software technology park unit
or electronic hardware technology park unit directly by
the zone unit or through any unit in the same zone or
another zone, the duty equal to benefit availed under
duty exemption pass book scheme or duty
drawback shall be liable to be paid."
(H)in regulation 22,-
(i)
in sub-regulation (4), for the word, bracket and
figure " clause(4)" the word, bracket and figure " sub-
regulation (3)" shall be substituted;
(ii)
for sub- regulation (6), the following sub-regulation
shall be substituted, namely:-
' (6) Where the goods so procured from domestic
tariff area by the zone unit are supplied back to the
domestic tariff area as it is or without substantial
processing, such goods shall be treated as re-
imported goods and shall be subject to such
procedure and conditions as applicable in the case
of normal re-import of goods from outside India:
Provided that in the case where such goods are
supplied back to the domestic tariff area as it is and
where the import duty on such goods is ''Nil" and
while procurement of such goods no export benefits
were allowed against such goods, the zone unit may
be allowed to supply back such goods to domestic
tariff area on the basis of invoice only and filing of bill
of entry in such cases shall not be required.
Explanation.- For the purpose of this regulation
"export benefits" includes drawback, duty entitlement
passbook scheme, rebate, advance license or
counting of proceeds as export earnings or counting
of proceeds as fulfillment of export obligation under
any scheme.' ;
(I)
in regulation 24, for sub-regulation
(5), the following sub-regulation
shall be substituted, namely:-
" (5) Subject to such condition as
the proper officer of the zone may
specify and subject to such
procedure, as may be laid down by
the proper officer of the zone from
time to time, the zone unit shall be
allowed to take limited quantities of
goods manufactured or produced
into domestic tariff area without
payment of duty for the purpose of
display, market promotion, export
promotion, exhibition and return
thereof within the period of time as
specified by such proper officer of
the zone:
Provided that in case of failure of
the zone unit to bring back the
goods in the zone within the period
as specified in this behalf by the
proper officer, the zone unit shall
pay the duty applicable on such
goods under the provisions of
clause (b) of section 76F of the
Act." ;
(J)in regulation 25,-
(a) in sub-regulation (1),-
(i)
in clause (iii), for the word "
substantial" the word " entire"
shall be substituted;
(ii)
in clause (vii) , for the proviso,
the following proviso shall be
substituted, namely:-
" Provided that no such bank
guarantee shall be required in
case of status holder zone
unit having an unblemished
track record or a unit which
has not come to the adverse
notice of Customs authorities
at least for a period of last
two years ;" ;
(iii)
in clause (viii), for the second
proviso, the following proviso
shall be substituted, namely:-
" Provided further that no
such bank guarantee shall be
furnished by the status
holder zone unit having an
unblemished track record or a
unit which has not come to the
adverse notice of Customs
authorities at least for a
period of last two years ;" ;
(b)
in sub-regulation (2), for clause (iii) the following
clause shall be substituted, namely:-
" (iii) the facility of sub-contracting of production shall
be allowed subject to the condition that the product is
also being manufactured by the zone unit in the zone ;
" ;
(c)
for sub -regulation (3), the following sub-regulation
shall be substituted, namely:-
" (3) Subject to permission of the proper officer, the
zone unit shall be allowed to remove moulds, jigs,
tools, fixtures, tackles, instruments, hangers, patterns
and drawings to the job-worker's premises in the
domestic tariff area without payment of duty and shall
be allowed to keep such moulds, jigs, tools, fixtures,
tackles, instruments, hangers, patterns and drawings
in the job-worker's premises till the sub-contracting
arrangement with job worker is in existence, subject
to the following conditions, namely:-
(i)
the zone unit shall produce to
the proper officer a
verification report quarterly
obtained from the
jurisdictional Superintendent
of Central Excise having
jurisdiction over the of job-
worker's unit to the effect that
such moulds, jigs, tools,
fixtures, tackles, instruments,
hangers, patterns and
drawings are lying in the job-
worker's premises and are
being used for production of
goods for export on account
of zone unit;
(ii)
the zone unit shall bring back
such goods to the unit
immediately on expiry of such
jobwork contract; and
(iii)
such moulds, jigs, tools,
fixtures, tackles, instruments,
hangers, patterns and
drawings shall be returned to
the zone unit within a period
of one year from the date of
such removal where the job-
worker's unit is not registered
with Central Excise
Department. " ;
(d)
for sub-regulation (6) the following sub-regulation
shall be substituted, namely:-
"(6). The waste or scrap or remnants generated
during such processes at the job-worker's premises
shall either be returned to the zone unit or shall be
cleared on payment of duty as if the said waste or
scrap or remnants have been cleared by the zone unit
or may, where the job worker is a Central Excise
Registrant , be destroyed at the job worker's
premises and such destruction shall be carried out
under supervision of a central excise officer having
jurisdiction over the job worker's unit and proof of
such destruction duly certified by such Central
Excise officer shall be submitted to the officer of the
customs who is in charge of the zone."
(K)
in regulation 28, for sub-regulation
(2), the following sub-regulation
shall be substituted, namely:-
"(2) Where any goods procured
from domestic tariff area under
claim of duty drawback or duty
entitlement passbook scheme
credit or under any export
promotion scheme are destroyed
due to natural calamities , the zone
unit shall be required to pay duty
drawback or duty entitlement
passbook scheme credit claimed
on such goods:
provided that in case where the
zone unit has procured the goods
from domestic tariff area against
payment of foreign exchange, the
zone unit shall not be liable to pay
back duty drawback or duty
entitlement passbook scheme
credit or any export incentive
claimed on such goods" ;
(L)in the regulation 29,-
(i)
for sub -regulation (4), the following sub-regulation
shall be substituted, namely:-
"(4) The bond amount shall be equal to the twenty five
per cent. of the duty leviable on the imported and
indigenous capital goods plus duty forgone on raw
materials to be held in stock for three months by the
zone unit.";
(ii)
for sub-regulation (7), the following sub-regulation
shall be substituted, namely:-
" (7) Notwithstanding anything contained in sub-
regulation (5), where the zone unit have a turnover of
rupees one crore or above, or where the zone unit is
in existence for more than a period of three years with
an unblemished track record, such unit shall not be
required to furnish surety or security.";
(iii)
for sub -regulation (9), the following sub-regulation
shall be substituted, namely:-
"(9) The bond shall be a running bond and shall be
debited for an amount equal to duty forgone on the
goods imported or procured by the zone unit, and
credited for an amount equal to duty forgone on the
raw materials used in the manufacture of finished
products where such manufactured goods are either
exported or cleared into domestic tariff area on
payment of duty or for such imported or procured
goods when exported as such or cleared into
domestic tariff area on payment of duty as per the
provisions of the Act or rules and regulations, made
there under and such debiting and crediting of bond
shall be done once at the end of every three months."
;
(M)
for regulation 30, the following
regulation shall be substituted,
namely:-
" 30. Monitoring of performance.-
Performance of the zone unit shall
be monitored by the Unit Approval
Committee in which the
Commissioner of Customs having
jurisdiction over the zone or his
nominee shall be a member."
(N)
for regulation 33, the following
regulation shall be substituted,
namely:-
"33. Import and procurement of
goods by developer.- (1) The
developer shall be allowed to import
or procure the goods from
domestic tariff area without
payment of duty for the purpose of
development, operation and
maintenance of the zone, subject to
following conditions, namely :-
(i)
the activity of the developer shall be approved by the
Board of Approvals;
(ii)
the developer shall submit a list of machinery,
equipments and the construction material required for
development, operation and maintenance of the
zone, duly certified by a chartered engineer ;
(iii)
the developer shall make an application to the
concerned Development Commissioner for approval
of the list of goods alongwith the certificate of the
chartered engineer referred to clause (ii) , proposed
to be imported or procured duty free for the purposes
of the activity as approved by the Board of
Approvals;
(iv)
the developer shall submit to the Development
Commissioner the proof of the ownership of
concerned land, encumbrances certificate relating
thereto, or in case the land is acquired on lease at
least for a period of twenty years in his favour, the
proof of such lease;
(v)
on the basis of approval of the Development
Commissioner, the proper officer having jurisdiction
over the zone may allow the developer to import or
procure goods with out payment of duty;
(vi)
the goods shall be stored in the premises appointed
or licensed as public warehouse or private
warehouse under section 57 or section 58 of the Act;
(vii)
the developer shall maintain proper account of
import or procurement, consumption and utilisation of
the goods and submit quarterly return to the proper
officer having jurisdiction over the zone in such form,
as may be specified by such proper officer ;
(viii)
the developer shall execute a bond in Form II as
annexed in the Special Economic Zone Rules, 2003
with the proper officer having jurisdiction over the
zone , binding himself to utilise the goods within a
period of six months or such period, as may be
extended by such proper officer , and if the developer
fails to do so, then the developer shall pay on
demand an amount equal to the duty as leviable on
the said goods alongwith interest at the rate of fifteen
per cent. per annum on the said duty from the date of
import or procurement of said goods ;
(ix)
the developer shall not remove the goods from the
zone except with the permission of the proper officer
having jurisdiction over the said zone and on payment
of duty applicable on such goods;
(x)
no goods, other than which are required for the
purposes of construction, development, operation,
maintenance of the zone or for providing utilities in
the zone, shall be allowed admission in the zone
without payment of duty;
(xi)
the developer shall produce, a certificate of utilisation
of the goods from an independent chartered
engineer other than who has given a certificate for
the purpose of clause(ii), to the proper officer having
jurisdiction over the zone on every six months of
importation or procurement of the goods ;
(xii)
the procedure for import or procurement of goods as
applicable to the zone unit shall apply mutatis
mutandis in case of developer of the zone except that
in case of developer, the goods imported or
procured from domestic tariff area shall be allowed to
be moved or utilised for the purposes of authorised
operations in the non-processing area of the zone.
Explanation.- For the purposes of this regulation, it is
clarified that all approvals or permissions or
extensions for utilisation to be given by or other
functions to be discharged by the proper officer
under this regulation shall be exercised by the Deputy
Commissioner of Customs or Deputy Commissioner
of Central Excise or Assistant Commissioner of
Customs or Assistant Commissioner of Central
Excise , as the case may be , posted under the
Commissioner of Customs or Commissioner of
Central Excise, as the case may be, having
jurisdiction over the zone during only l such time
when a regular Deputy Commissioner of Customs or
Assistant Commissioner of Customs, as the case
may be, is not posted in the zone.";
(O)
the following Annexure shall be
inserted at the end , namely:-
"Annexure-I
Form
Domestic Procurement Certificate
Certificate for removal of goods under bond
This is to certify that-
(1) Mr/ M/s-------------------( Name and address) is / are a bonafide unit in the special economic zone holding Letter of
Permission No------ valid upto-------
(2) That he / they has executed a bond No---- date------ for Rs ---------with the Assistant Commissioner or Deputy
Commissioner of Customs of the special economic zone and as such may be permitted to receive --------(quantity) of -----------
-------------------------( excisable goods )(please mention the complete description of the goods such as make, model number,
serial number, specification of the goods) from the unit at----------( name and address of the supplying unit at domestic tariff
area) to his/ their unit ----------- at-----------------
(3) That the specimen signatures of his/ their authorized agent, namely, shri------------------------ are furnished below and is duly
attested
Specimen signature of the owner or his
authorised agent
Attested
Sd/-
Signature with seal of the Superintendent/ Appraise of Customs of the
Special Economic Zone".
V.Kezo
Under Secretary to the Government of India
F. No. 314/24/2001-FTT (Pt-V)
Note: The principal notification No. 53/2003-Customs (N.T.), dated the 22nd July, 2003, was published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide G.S.R. 571 (E), dated the 22
nd
July, 2003 and was last amended by
notification No.59/2004-CUSTOMS (N.T.), dated the 30
th
April, 2004 [G.S.R.295 (E), dated the 30
th
April, 2004].
