Clarification regarding EOU scheme - Customs - F. No. 305/111/86-FTT

Clarification regarding EOU scheme F. No. 305/111/86-FTT Dated 12-9-1986 Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs, New Delhi Subject : Clarification regarding EOU scheme Ministry of Commerce have provided for establishment of 100% Export Oriented Units and the scheme is covered by the provisions in Appendix 23 of the Import-Export Policy, 1985-88. Annexure I to Appendix 23 reproduces the Policy Resolution of the Government for 100% EOUs. Annexure II to Appendix 23 reproduces the OGL applicable to imports effected by 100% EOUs. Department of Revenue have exempted imports of goods required by 100% EOUs vide notification No. 13/81-CUS. dated 9.2.1981, as amended. This exemption applies to capital goods, raw materials, components, spares of production machinery, consumables required for manufacture of goods, specified type of material handling equipments, samples, prototypes, drawings, blue prints, technical maps and charts and packaging material. By virtue of condition no. 2 in the above notification, 100% EOUs are required to carry out their manufacturing operation in Customs bond and accordingly the provisions of the Warehousing chapter in the Customs Act have been extended to them. It has, however, been the Board's intention to ensure that the provisions of the Warehousing Chapter are not applied rigidly to the 100% EOUs are they are engaged in export production and export promotion rather than warehousing of imported goods. 2. It has been brought to the notice of the Board that Custom Houses and Collectorates have been insisting on production of space certification before goods imported by 100% EOUs are allowed to be transported from the port of import to the location of the EOUs concerned. In view of the position stated above and in view of the fact that each 100% EOU is required compulsorily to hold a private warehouse under section 58 of the Customs Act, it is not necessary to insist on the requirement of producing the space certificate which unnecessarily delays clearance the goods imported by 100% EOUs. You may kindly do away with this requirement and instruct the staff suitable in the matter. Instructions may also be issued to the concerned staff to ensure that requirement of Warehousing Chapter are not rigidly applied to these units and extension in the warehousing period are considered liberally in their case. Their request for waiver of interest are already being considered by the Board liberally and, therefore, there should be no need to issue any demand notices in their case for recovery of interest etc. 3. Such units are required to take a private bonded warehousing license. They are being asked to renew the license every year. 100% EOUs have export obligation period for five years or ten years, as the case may be. It would, therefore, be proper that the private bonded warehousing license issued in their case should be for the entire period of export obligation, as per the Letter of Approval issued in their favour by the Board of Approval. Kindly ensure that the staff concerned are suitable instructed on the above lines so that there are no complaints of delay and harassment by the 100% EOUs.