TMI BlogAmendments in Exim Policy and Handbook of Procedures, 1997-2002 relating to Gem& Jewellery Sector and EOU/EPZ/ STP/ EHTP/SEZ Scheme- Issuance of Customs/ Central Excise notifications - regX X X X Extracts X X X X X X X X Extracts X X X X ..... factured by EOUs and units in EPZ/SEZ/EHTP against Advance Release Orders issued against Advance Licence/Duty Free Replenishment Certificate. Further, a Customs notification (No. 55/2001- Cus, dated 16-5-2001) has been issued to allow re-importation of cut polished diamonds without payment of duty after certification/grading by specified laboratories / agencies. This facility is available to certain category of exporters. A copy each of the notifications is enclosed for reference. The revision of Exim Policy and HOP has also necessitated amendments in existing Circulars/instructions, and the same has been made wherever necessary. The salient features of the changes are explained below: A. Changes Relating to Gem Jewellery Sector: (i) Export of Cut Polished Diamonds for Certification/Grading. 2. In the revised EXIM Policy, in para 8.13(b) a new provision has been made to allow gem jewellery exporters with track records of at least three years and having an annual average turnover of Rs.5 crore and above during the preceding three licensing years to export cut polished diamonds each weighing 0.50 of a carat and above for the purpose of certification/grading by speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery to nominated agencies/status holder exporters under the scheme "Export Against Supply by Foreign Buyers". To implement the above said change in the Policy provision, notification No.56/2000-Cus, dated 5-5-2000 has been suitably amended vide notification No. 56/2001-Cus, dated 18-5-2001 so as to include exporters having an annual average turnover of Rs.5 crore and above during the preceding three licensing years within its ambit subject to condition mentioned about bond and bank guarantee etc, which already applies to status holders. (iii) Personal Carriage of Jewellery/Precious, Semi-Precious Stones/Beads/Articles as Samples for Export Promotion Tours. 6. The notifications governing duty free imports by gem jewellery units in EOU/EPZ Jhandewalan Special Export Oriented Complex, allow personal carriage of precious metal jewellery or precious or semi-precious stones or beads as samples upto US$ 1,00,000 for export promotion tours on approval of Gem and Jewellery Export Promotion Council. In the revised Handbook of Procedures, in Paragraph 9.41 (c), the condition of approval by Gem and Jewellery Export Promotion Council has been substituted by approval of Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No.277/90-Cus, dt.12-12-90 governing duty free import by gem jewellery EOUs has been suitably amended vide notification No. 56/2001-Cus, dated 18-5-2001 to allow import of gold and export of gem jewellery by air-freight through the Bangalore airport. (v)Deletion of Condition from Notification No.277/90-Cus, dt.12-12-90, Governing Duty Free Import by Gems Jewellery Units in EOU. 9. Presently, one of the conditions [condition No.(ii)] of notification No.277/90-Cus, for allowing duty free import of goods by Export Oriented units in gem and jewellery sector is that "the importer is covered, wherever required, by a general or specific permit issued in this behalf by the Reserve Bank of India". It has been brought to our notice by the trade as well as DOC that under the EOU scheme, no permission from RBI is required for import of raw material and as such, imports should be allowed without insisting on RBI permission. 10. As per the paragraph 9.5 of the Handbook of Procedures ( HOP), Vol. I, the Letter of Permission ( LOP) / Letter of Intent (LOI) issued to EOU/EPZ/EHTP/STP units by the concerned authority would be construed as a license for all purposes including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en for details. (iv) Disposal of Waste/Scrap/Remnants by EOU/EPZ/STP/EHTP Units in DTA 14. Prior to revision of the EXIM Policy, scrap/waste/remnants arising out of production process or in connection therewith, within overall limit of 50% of FOB value of exports were allowed to be sold in DTA on payment of concessional rate of duty subject to achievement of minimum NFEP. In paragraph 9.20 of the revised Policy, for DTA sale of scrap /waste/remnants within the overall limit of 50% of FOB value of exports on payment of concessional rate of duty, linkage with achievement of NFEP has been removed. Notification No.2/95-CE, dated 4-1-95, has been suitably amended, vide notification No. 29/2001-CE, dated 18-5-2001, in order to implement this change. (v) Items Permitted for Duty free Import by EOU/EPZ/STP/EHTP Units. 15. Para 9.8 of the Handbook of Procedures provides the list of items which are permitted for import by EOU/EPZ units. In the revised edition of HOP, two additional items viz. (i) raw materials for making capital goods for use within the unit, and (ii) any other item with the prior approval of Board of Approval, have been incorporated. To give effect to this chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Order or Back to Back Inland Letter of Credit Issued against an Advance Licence . 20. The EXIM Policy provides that EOU/EPZ/EHTP/STP/SEZ units may supply goods against Advance Release Order or Back to Back Inland Letter of Credit issued against Advance Licence (except Advance Licence for intermediate supply) and Duty Free Replenishment Certificate (DFRC). The notification No.82/92-CE, dated 27-8-92, provides for clearance of the goods against ARO or Back to Back Inland Letter of Credit issued against Advance Licence by EOU/EPZ units without payment of Central Excise duty. However, the notification provides that where the goods are cleared against Advance Licence issued on or after 1-4-95, the exemption is restricted to basic customs duty. Also in the notification, there is no provision to clear goods against ARO or Back to Back Inland Letter of Credit issued against DFRC. Further, there is no provision in the notification allowing advance licence holder to procure goods from SEZ units. 21. The EXIM Policy as revised upto 31-3-2000, provides that import of inputs under Advance Licence including Advance Licence for deemed export are exempted from payment of basic customs du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SEZ scheme, the units are liable to pay excise duty equal in amount to aggregate of customs duty leviable on like imported goods on their DTA sale. With effect from 1-11-2000, four Export Processing Zones (EPZ) have been converted into Special Economic Zones. Due to this sudden conversion from EPZ to SEZ, some units producing Castor oil, working in the Zone prior to 1-11-2000, have started facing serious problem with regard to clearance of their by-product viz. Castor Oil Cake in DTA. These goods are stated to be manufactured wholly from indigenously procured Castor Oil Seeds using indigenous plant and machinery. Prior to 1-11-2000, such units were eligible for clearance of Castor Oil Cake on payment of Nil rate of duty under notification No.6/97-CE, dated 1-3-97. Now, suddenly due to conversion from EPZ to SEZ after 1-11-2000, the good viz. Castor Oil Cake has become liable for payment of full rate of import duty. As major part of this Castor Oil production is already in domestic area and they are not suffering any excise duty on waste oil cake, the Castor Oil producing units located in SEZs (erstwhile EPZs) have been seriously affected and are unable to market waste oil cake b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifications talk about payment of customs duty on the inputs used in the manufacture of articles in an amount equal to the customs duty leviable on such articles as if imported as such. In order to remove this anomaly, all the notifications governing duty free import of goods by STP/EHTP/EPZ units and EOUs including those in Aquaculture and Agriculture sector have been amended so as to bring the provisions of these notifications in harmony with the provisions of corresponding Central Excise notifications. Notification No. 56/2001-Cus, dated 18-5-2001 may be seen for details. (xii) Destruction of Flower/Floriculture Products Without Payment of Duty 28. A number of requests has been received from the Trade for allowing destruction of flowers and floriculture products without payment of duty as, in the notifications governing duty free import/procurement by agriculture units in EOU there is no enabling provision for destruction of finished products like flowers and vegetables, which are grown/processed in the EOU, without payment of duty. 29. Flowers, Vegetables and agricultural products have a very short shelf life and are prone to malformation, injury, damage, infectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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