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Customs Notification No-53/2003 (NT) dated
22.7.2003
Special Economic Zones (Customs Procedures) Regulations, 2003
G.S.R (E).- In exercise of the powers conferred by sub-section (1) of section
157 read with sub-section (2) of section 76 C of the Customs Act, 1962 (52 of
1962), the Board hereby makes the following regulations, namely: -
1. Short title, extent and commencement.-
(1) These regulations may be called the Special Economic Zones (Customs
Procedures) Regulations, 2003.
(2) It extends to the whole of India.
(3) They shall come into force on the 15th day of August, 2003.
2. Definitions.- In these regulations, unless the context otherwise requires, -
(a) “Act” means the Customs Act, 1962 (52 of 1962);
(b) “Board” means the Board defined under clause (6) of section 2 of the Act;
(c) “Board of Approvals” means the combined Board of Approvals for export
oriented unit and special economic zone units, as notified in the Official
Gazette, from time to time, by the Government of India in the Ministry of
Commerce and Industry;
(d) “custodian” means any person approved by the Commissioner of Customs under
section 45 of the Act for the custody of imported goods unloaded in the
customs area;
(e) “Development Commissioner” means the Development Commissioner of the
concerned special economic zone;
(f) “ developer” means a person engaged in development, or operation, or
maintenance of zone or in providing public utility services within the special
economic zone, duly permitted by the Commissioner of Customs and includes any
other person authorised by the developer for such purpose;
(g) “Export and Import Policy ” means the Export and Import Policy, notified
from time to time, in the Official Gazette by the Government of India in the
Ministry of Commerce and Industry under section 5 of the Foreign Trade
(Development and Regulations) Act, 1992 (22 of 1992);
(h) “export oriented undertaking” means an undertaking which has been approved
as a hundred per cent. export oriented undertaking by the Board of Approvals;
(i) “Electronic Hardware Technology Park” means the “Electronic Hardware
Technology Park Scheme notified by the Government of India in the Ministry of
Commerce, and approved by the Inter-Ministerial Standing Committee appointed
by notification of the Government of India in the Ministry of Industry
(Department of Industrial Development);
(j) “Manufacturer Exporter” shall have the same meaning as defined in the
Export and Import Policy.
(k) “Nominated Agencies” means the Metals and Minerals Trading Corporation
Limited, the Handicraft and Handloom Export Corporation, the State Trading
Corporation, the Projects and Equipment of India Limited and any other agency
authorized by the Reserve Bank of India;
(l) “self certification” means the certification regarding sealing of
container or package of goods under export given by the zone unit and includes
the certificate regarding contents and sealing of the container or package,
given by the owner, the working partner, the Managing Director or Company
Secretary of the said unit or any person, (holding a high position in such
zone unit, authorised by such owner, working partner or the Board of Directors
of such unit (m), as the case may be, on the copies of shipping bill, which
indicates that such package or container in respect of goods under export have
been sealed in his presence;
(m) “Software Technology Park Scheme” means Software Technology Park Scheme
notified by the Government of India in the Ministry of Commerce, and approved
by the Inter-Ministerial Standing Committee appointed by notification of
Government of India in the Ministry of Industry (Department of Industrial
Development);
(n) “status holder” shall have the same meaning as defined in the Export and
Import Policy;
(o) “zone” means a special economic zone specified by the Central Government
under section 76 A of the Act;
(p) “zone unit” means a special economic zone unit of business establishment
set up in the processing area of the zone for carrying out authorised
operations only;
(q) Words and expressions used herein and not defined, but defined in the Act
or Rules made there under, shall have the meanings respectively assigned to
them in the Act or the rules.
3. Setting up of unit in the zone.-
(1) A zone unit may be set up for the purposes of carrying out authorised
operations.
(2) The Letter of Permission for setting up of zone unit shall be issued by
the Development Commissioner.
(3) Two or more zone units shall not operate from the same premises.
4. Import of goods by the zone unit.-
(1) The zone unit may import goods required for carrying its authorised
operations or for the purposes of setting up the unit, through-
(a) ports or airports;
(b) land customs stations;
(c) inland container depots;
(d) foreign post offices;
(e) authorised courier;
(2) The goods may also be procured from public bonded warehouse or private
bonded warehouse or international exhibition held in India.
(3) In case of software, imports shall also be allowed through data
communication link, internet, e-mail or any other electronic mode.
(4) For clearance of imported goods at all ports, airports, land customs
stations, inland container depots, the zone unit or developer, as the case may
be, shall be required to follow the procedures, namely:-
(i) the zone unit or developer, as the case may be, shall file a bill of entry
for home consumption in quintuplicate giving therein, complete description,
model, make, specifications, purpose of import of goods such as trading,
manufacturing, nature of goods such as capital goods, raw materials, spares,
consumables, with specially stamped endorsement as “ special economic zone
cargo” alongwith bill of lading or airway bill, a invoice, packing list and
purchase order or contract for noting of the bill of Entry in the zone;
(ii) the bill of entry shall be assessed by the Custom officers in the zone;
(iii) the assessed bill of entry shall be submitted to the Deputy Commissioner
of Customs or Assistant Commissioner of Customs, as the case may be,
(hereinafter referred to as proper officer ) at the place of import such as
port, airport, land customs station, inland container depot, and the same
shall be treated as permission for transfer of goods to the zone;
(iv) in case of sealed full container load ( FCL) container, the goods shall
be transferred to the zone on the basis of assessed bill of entry after
verification of the seal, without customs escorts;
(v) in case of other cargo, the goods shall be allowed to be transferred to
the zone on the basis of assessed bill of entry either under customs escort or
under transshipment procedure, depending on the option made by the zone unit;
and for such transshipment, no separate documents shall be required to be
filed and the transshipment permission shall be stamped on the fifth copy of
the bill of entry;
(vi) on arrival of the goods in the zone, the goods shall be subjected to
verification of seal in case of full container load container or verification
of marks and numbers of packages in other case and after such verification, if
in order, such goods received shall be allowed admission in the zone;
(vii) the zone unit shall submit fifth copy of bill of entry bearing
endorsement of the Customs officers in the zone that the goods have been
received in the zone, to the proper officer in charge of the airport, port,
inland container deport, land customs station, post office, public or private
bonded warehouse, as the case may be, within a period of forty-five days from
the date of clearance of goods from such airport, port, inland container
deport, land customs station, post office, public or private bonded warehouse,
as the case may be, failing which the proper officer in charge of such
airport, port, inland container deport, land customs station, post office,
public or private bonded warehouse, as the case may be, shall write to the
proper officer having jurisdiction over the zone for raising demand of duty
from the zone unit;
(viii) the zone unit shall be required to obtain notional out of charge of
goods from the proper officer of the zone on the same day if the goods are
brought during the working hours or immediately on the next working day in
case goods are brought beyond working hours;
(ix) where goods are imported by the zone unit or developer through courier,
customs officer in the zone shall assess the goods as per the Courier Import
and Export(Clearance) Regulations, 1998.
(5) The goods imported by the zone unit or developer shall not be subject to
detailed examination except in case of prior intelligence or information or to
maintain an element of surprise.
(6) Where the goods have been imported by post, the zone unit or the
developer, following the procedure specified in sub-regulation (4), shall file
the bill of entry with the Customs officers in the zone marking clearly
“Postal Imports” subject to following conditions, namely:-
(i) for the purpose of bill of entry, the post-office registration number as
indicated in the intimation letter issued by the post office shall be taken as
the import general manifest and item number, of the bill of entry;
(ii) copy of intimation letter received from the post office shall also be
pasted on the reverse of the original bill of entry;
(iii) where the zone is away from the foreign post office, the goods shall be
moved to the zone under customs escort from such post office or under control
of the postal authorities.
5. Import of goods through personal carriage by gems and jewellery unit.-
(1) Notwithstanding anything contained in regulation 4, the zone unit
engaged in manufacture and export of gems and jewellery, shall be allowed to
import precious goods, namely gold, silver, platinum, gem and jewellery
through personal baggage subject to the following procedure, namely:-
(i) the passenger bringing the precious goods shall declare the goods with the
customs authorities at the airport in the arrival hall in the declaration form
as specified by Commissioner of Customs in charge of concerned airport
alongwith a duly acknowledged copy of intimation submitted to the Customs
officers in the zone ;
(ii) the passenger shall hand over the goods duly packed indicating name and
address of the consignee zone unit and accompanied by invoice and packing list
to the customs authorities for detention in the warehouse under the detention
receipt;
(iii) the Customs officers shall detain the goods and issue detention receipt
indicating full details such as weight, purity and number of bars, name of
unit, passport number of the passenger and name of the supplier, etc.;
(iv) the zone unit shall file the bill of entry in quintuplicate alongwith a
copy of invoice, packing list, declaration with the Customs officers in the
zone and in such cases, the detention receipt number issued by the Customs at
Airport at the time of arrival of the passenger shall be treated as Import
General Manifest and item number;
(v) after assessments of bill of entry, original copy of the bill of entry
shall be retained by the Custom officers in the zone and the remaining copies
shall be handed over to the representative of the zone unit for presenting at
the airport detention counter where goods shall be allowed clearance after
receiving the original detention receipt, authorization from the zone unit and
making entries in the warehouse register, detention receipt register and
obtaining signatures from the authorised representative of the zone unit;
(vi) after release of the goods, the goods shall be moved to the zone under
customs escort and shall be allowed admission into the zone unit after
verification of marks and numbers of packages and notional “out of charge” by
the Customs officers in the zone;
(vii) the goods so detained at the airport may also be allowed to be
transported by an authority or agency approved by the Commissioner of Customs
having jurisdiction over the zone.
6. Import through data communication or telecommunication link.-
(1). Where the zone unit import computer software through data
communication or telecommunication links, the zone unit shall file bill of
entry within a period of twenty four hours of such import alongwith invoice
and other relevant documents and shall obtain notional ‘out of charge’ from
the Customs officers in the zone, subject to the following conditions,
namely:-
(i) the documents such as invoice, etc. in respect of such import of computer
software shall be routed through banks;
(ii) the value of such software shall be verified by the Development
Commissioner of the zone;
(iii) instruction issued by the Reserve Bank of India, from time to time, if
any, in this behalf shall be followed.
7. Procurement from warehouse.-
(1) Where goods are procured from the warehouse appointed or licensed under
section 57 or section 58 of the Act, the zone unit shall file bill of entry
giving therein complete description of the goods such as model, make, serial
number, specification, with the Customs officers in the zone.
(2) The zone unit shall submit the duly assessed bill of entry assessed by the
Customs officers in the zone to the proper officer in charge of the warehouse
from where the zone unit intends to procure the goods. (3) The proper officer
in charge of the warehouse shall allow clearance of the goods from the
warehouse for supply to the zone unit without payment of duty on the cover of
ex-bond shipping bill and on the basis of bill of entry duly assessed by the
customs officers in the zone. (4) Where the re-warehousing certificate by way
of endorsement by the Customs officers in the zone on the copy of ex-bond
shipping bill is not received by the proper officer incharge of warehouse
within the period of forty-five days from the date of clearance of the goods
from the warehouse, the proper officer incharge of the warehouse shall proceed
to demand of duty from the owner of such goods so supplied to the zone unit.
(5). The zone unit shall obtain notional “out of charge” of goods from the
proper officer of the zone on the same day if the goods are brought during the
working hours, or immediately on the next working day in case goods are
brought beyond working hours.
8. Procurement of goods from international exhibition held in India.-
Subject to the procedure as specified in the regulation 7, the zone unit shall
be allowed to procure goods from international exhibitions held in India.
9. Re-import or replacement or re-export of goods.-
(1) The zone unit shall be allowed to re-import the goods exported and
found to be defective or damaged by the overseas buyer or in the case of
failure of the buyer to take delivery of the goods, subject to the procedure
as mentioned in regulation 4 and subject to the following conditions, namely:-
(i) identity of goods is established at the time of re-import ; and
(ii) goods are re-imported within a period of one year from the date of
export.
(2). Where the goods imported by the zone unit are found to be defective or
damaged or found to be otherwise unfit for use and suppliers agree to replace
such defective or damaged or unfit for use goods, then such goods received as
free replacement shall be allowed admission in the zone by way of import or
replacement through the authorized dealer of the overseas supplier in India,
subject to the following conditions, namely:-
(i) the goods so found to be defective or damaged or otherwise unfit for use
may be re-exported later on; or
(ii) where the overseas supplier of such goods does not insist for re-export
of such goods, the re-export of the same shall not be insisted provided such
goods are either destroyed with the permission of proper officer, or shall be
cleared into domestic tariff area on payment of duty as if cleared for home
consumption.
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 etc.;
(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 officers 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 etc. 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 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.
11. Procurement of goods from export oriented undertaking or software
technology park unit or electronic hardware park unit .-
(1) The zone unit or the developer may also procure capital goods or
manufactured goods from export oriented undertaking or software technology
park unit or electronic hardware technology park unit subject to following
conditions, namely:-
(i) subject to the procedure specified in regulation 7, the export oriented
undertaking or software technology park unit or electronic hardware technology
park unit, as the case may be, may transfer capital goods imported or procured
duty free to the zone unit or the developer, as the case may be;
(ii) subject to the procedure as specified in the regulation 10, the export
oriented undertaking or software technology park unit or electronic hardware
technology park unit, as the case may be, may also transfer manufactured goods
to the zone unit or to the developer duty free;
(iii) the goods procured by the zone unit or developer under clauses (i) and
(ii) shall be used by it for the purposes of carrying out authorised
operations in the zone only;
(iv) the capital goods or manufactured goods in export oriented undertaking or
software technology park unit or electronic hardware technology park unit so
transferred under clauses (i) and (ii) to the zone unit shall be considered as
imported goods for zone unit for all purposes.
12. Transfer of goods from one zone unit to another zone unit in the same
zone or different zone.-
A zone unit may procure goods namely, capital goods or manufactured goods
from another zone unit located in the same zone or in another zone, subject to
following conditions, namely:-
(i) the receiving zone unit shall file bill of entry for home consumption in
quintuplicate giving therein, complete description, model, make,
specifications, purpose of import of goods, nature of goods such as capital
goods, raw materials, spares, consumables, alongwith a invoice, packing list
with the customs authorities in the zone, having jurisdiction over such unit;
(ii) on the basis of such assessed bill of entry, the goods shall be allowed
to be removed or transferred to the receiving zone unit under transshipment
permit;
(iii) there shall be no requirement to file any additional documents for the
purpose of transshipment of goods and the transshipment permission shall be
stamped on the bill of entry itself;
(iv) the supplying zone unit shall submit the re-warehousing certificate to
the proper officer having jurisdiction over the such supplying unit within a
period of forty five days, failing which the jurisdictional proper officer of
the supplying zone unit shall write to the jurisdictional proper officer of
the receiving zone unit for demand of duty from the receiving zone unit;
(v) Notwithstanding anything contained in clause (1), in case where supplying
and receiving zone units are located in the same zone, the movement of goods
including raw materials shall be allowed subject to maintenance of accounts by
both receiving and supplying zone unit and no bill of entry shall be required
to be filed with the customs authorities in the zone.
13. Export of goods by special economic zone unit.-
(1) Any goods manufactured, produced, reconditioned, re-engineered,
imported or procured by the zone unit, as the case may be, as per the terms
and condition of Letter of permission, may be exported out of India through
airport or port or inland container depot, or land customs station or by post
or courier or personal carriage, as the case may be, subject to the following
conditions, namely:-
(i) the zone unit shall file shipping bill in quadruplicate with customs
officers in the zone, giving therein complete description of goods such as
model, make, serial number, specification, alongwith relevant documents,
namely, invoice, packing list, GR Form (in duplicate) for noting;
(ii) the shipping bill shall be assessed by the customs officers in the zone
in the manner and procedure as is followed in case of normal exports;
(iii) the goods shall not be examined in routine and Let Export Order may be
given on the basis of self certification by the zone unit ;
(iv) notwithstanding anything contained in clause (iii), during the transit of
goods from the zone to the gateway port or at the gateway port, airport, or
land customs station itself, the goods may be examined by the customs officers
as per the norms prescribed by the Board from time to time ;
(2) The zone unit may export goods by post subject to the normal procedure
applicable to export through Foreign Post Office.
14. Export by software unit though data communication link or by providing on site services.-
(1) The zone unit engaged in software sector may be permitted to export
software or processed data or data analysed including call centre services via
data link, internet, e-mail or through other electronic mode and Softex Form
duly certified by the Development Commissioner of the zone as per Foreign
Exchange Management (Export of Goods and Services) Regulation, 2000, is
submitted to the customs authorities in the zone within a period of one month
from the date of such exports.
(2) The zone unit engaged in export of services including software may be
permitted to provide consultancy services “on site” abroad subject to
submission of details regarding the contract or purchase order, foreign
exchange remitted and the persons deputed abroad, to the customs officers in
the zone.
(3) The consultancy fee received by the zone unit for providing on site
consultancy services in convertible foreign exchange shall be deemed to be
export for the purposes of Net Foreign Exchange Earning.
15. Export by gems and Jewellery through Personal Carriage.-
(1) Where the zone unit is engaged in manufacture and export of gems and
jewellery, the zone unit may be allowed to export goods to be carried by the
foreign bound passenger in their personal baggage, subject to the following
conditions, namely:-
(i) the zone unit shall submit the shipping bill alongwith advance remittance
certificate duly certified by the bank, invoice, GR-I with the customs
officers in the zone;
(ii) the shipping bill shall be assessed by the customs officers in the zone
in the same manner as is done in the case of normal exports;
(iii) the goods shall be transferred from the zone to the airport under the
cover of assessed shipping bill by the authorized agency approved by the
Commissioner of Customs having jurisdiction over the zone under customs escort
of the zone;
(iv) at the airport, the consignment shall be deposited with the warehouse in
the airport against a “Detention Receipt” issued by the Customs officers at
the airport;
(v) the consignment shall be handed over to the authorised passenger at the
time of departure on submission of original Detention Receipt;
(vi) the zone unit shall submit the proof of export issued by the Customs
officer at the airport of export within a period of seven days from the date
of removal of goods from the zone to the customs in the zone.
16. Export of goods by gems and jewellery unit through display and sale at
showrooms at international airports.-
The zone unit engaged in manufacture and export of gems and Jewellery, shall be
allowed to take gems and jewellery for display in the showrooms set up at
Departure Lounge at International Airports in India for sale to passenger
leaving India subject to such conditions and procedure as may be laid down by
the Commissioner of Customs having jurisdiction over the zone.
17. Export for participation in exhibition abroad.-
(1) The zone unit shall be allowed to export goods including gem and
jewellery for display or participating in exhibitions abroad in terms of the
Export and Import Policy subject to following conditions, namely:-
(i) the zone unit shall obtain the permission of Development Commissioner of
the zone allowing the zone unit to participate in the exhibition abroad;
(ii) shipping bill alongwith relevant documents shall be filed with the
customs in the zone in the same manner and following the same procedure as
applicable to normal exports;
(iii) exports shall be allowed by the customs officers in the zone on
provisional basis after examination of the goods;
(iv) the goods unsold in the exhibition shall be imported within such period
as it is stipulated in the Export and Import Policy;
(v) the zone unit shall file bill of entry for unsold goods as required in
case of normal imports and it shall be assessed in the same manner and subject
to same procedure as applicable to normal imported goods;
(vi) the re-imported goods shall be allowed admission free of duty in the unit
subject to establishment of identity of the goods with reference to the
attested export documents and finalize the provisional assessment accordingly;
(vii) the zone unit shall submit proof of inward remittance in respect of
goods sold during exhibition abroad.
18. Export through courier.-
In cases where the zone unit exports goods through couriers, such exports shall
be allowed only through authorised courier, registered with the Commissioner of
Customs having jurisdiction over the gateway airport and the procedure specified
in the Courier Export and Import (Clearance) Regulations, 1998 shall be followed
for this purpose.
19. Export of goods by the zone unit through merchant exporter. -
The zone unit may export goods through third party in accordance with the Export
and Import Policy subject to the following conditions, namely:-
(i) the goods shall be exported directly from the zone;
(ii) export document shall contain the name of the merchant exporter and zone
unit;
(iii) merchant exporter at the time of assessment of shipping bill in the zone
shall submit a disclaimer that no export benefit is being or shall be availed
by him.
20. Exchange of plain Jewellery with unit in domestic tariff Area.-
The zone unit engaged in manufacture and export of gems and jewellery shall be
permitted to receive plain gold or silver or platinum jewellery from domestic
tariff area gems and jewellery unit in exchange of equivalent content of gold or
silver or platinum contained in the said jewellery subject to condition that no
wastage or manufacturing loss against such exchange of jewellery shall be
permissible; and such exchange shall be allowed only after appraisement of the
jewellery as well as precious metals by jewellery appraiser in the zone.
21. Removal of goods manufactured or produced 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 capital goods or
goods produced or manufactured by the zone unit 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 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 park
unit, as the case may be, with the customs officers in 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 Customs officers in 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, customs officers 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.
22. Sale of goods by a zone unit in domestic tariff area.-
(1) The zone unit shall be allowed to sell goods manufactured or produced
in the zone unit including reject waste, scrap remnants and by-products
arising out of such production, in the domestic tariff area on payment of
customs duty in terms of clause (b) of section 76F of the Act.
(2) The zone unit engaged in trading activities shall be allowed to sell
imported or indigenously procured goods in domestic tariff area on payment of
duty under clause (b) of section 76F of the Act subject to the condition that
the zone unit has achieved positive Net Foreign Exchange Earning cumulatively
at the time of making sale in domestic tariff area and such sale of goods
shall be allowed to the extent that Net Foreign Exchange Earning of the unit
remain positive.
(3) Domestic tariff area unit intending to buy goods from the zone unit shall
be required to file bill of entry for home-consumption giving therein complete
description of the goods such as make, model number, serial number,
specification, alongwith invoice and packing list with the customs officers in
the zone.
(4) Notwithstanding anything contained in clause (4), the bill of entry for
home consumption may also be filed by the zone unit on the basis of
authorization by buyer located in domestic tariff area.
(5) The valuation of the goods cleared into domestic tariff area shall be
determined in accordance with section 14 of the Act and rules made thereunder.
(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.
(7) Where the zone unit has surplus power generated in its captive power plant
or diesel generating set, such surplus power may be allowed to be transferred
to domestic tariff area on payment of duty on consumables and raw materials
used for generation of power so sold on the basis of norms worked out for raw
materials and consumables used, as may be approved by the Board of Approvals
subject to the following conditions, namely:-
(i) the proposal for sale of surplus power received in the office of the
Development Commissioner shall be examined in consultation with the concerned
State Government including State Electricity Boards of that State;
(ii) the norms for production of unit of power that may be finalized shall be
submitted to the Board of Approval for consideration;
(iii) in case of sale of surplus plus to other unit in the same zone or other
zone or to other export oriented undertaking or to electronic hardware
technology park unit or to other software technology park unit, as the case
may be, the same shall be allowed without payment of duty:
Provided that the quantity of consumables and raw materials used for
generation of power so transferred to another special economic zone unit or
export oriented undertaking, electronic hardware technology park unit or
software technology park unit, as the case may be, as quantified and approved
by the Board of Approvals is accounted for by the supplying as well as
receiving units for the calculation of Net Foreign Exchange Earning.
23. Removal of scrap or dust by gems and jewellery zone unit.-
(1) The zone unit engaged in the manufacture and export of gem and
jewellery shall be allowed to send gold or silver or platinum scrap, dust or
sweepings generated in such unit to the Government Mint or Private Mint for
conversion into standard gold bars and return thereof to the zone following
the procedure laid down by the Customs officers in this regard.
(2) The gold or silver or platinum dust, scrap or sweepings may also be
allowed to be cleared into domestic tariff area on payment of duty on the gold
or silver or platinum content in the said scrap, dust or sweepings, in
accordance with the provision of clause (b) of section 76F of the Act:
Provided that the samples of such gold or silver or platinum sweepings, scarp
or dust shall be taken at the time of clearance and sent to Government Mint or
Private Mint for assaying and assessment shall be finalised on the basis of
reports received from the Government Mint or Private Mint, as the case may be.
24. Temporary removal of goods by a zone unit into the domestic tariff area
for specified purposes without payment of duty.-
(1) Subject to the grant of permission and fulfillment of such condition as
may be imposed by the proper officer, the zone unit shall be allowed to remove
goods manufactured or produced including imported or procured capital goods to
domestic tariff area temporarily without payment of duty for the purpose of
test or repairs or calibration or re-engineering or re-conditioning in the
domestic tariff area:
Provided that the identification marks such as make, model, seal number,
specification of the goods received back after such test, repair, calibration
or re-engineering or re-conditioning matches with those mentioned in the
repair challan prepared and countersigned by the customs officers in the zone
at the time of taking capital goods into domestic tariff area:
Provided further that goods shall be brought back to the zone within a period
of forty-five days from the date of taking the goods out of the zone:
Provided also that the proper officer of the zone may, if he thinks proper,
extend the said period of forty-five days upto further period of two months.
(2) In case of failure of the zone unit to bring back the goods in the zone
within the period specified in sub-regulation (1), the zone unit shall pay the
duty applicable on such goods in term of provision of clause (b) of section
76F of the Act.
(3) Subject to the provisions in sub-regulations (1) and (2), the zone unit
shall be allowed to take goods including capital goods to another unit in the
same zone or in another zone, or export oriented undertaking unit or
electronic hardware technology park unit or software technology park unit, as
the case may be, for the purpose of test or repairs or calibration or
re-engineering or re-conditioning.
(4) The zone unit, engaged in development of software or otherwise, shall be
allowed by the proper officer to take lap top computers and video projection
system out of the zone temporarily for use by the authorised employees of such
unit subject to the following procedure, namely:-
(i) the zone unit shall account for the laptop computers or video projection
system in their inventory after import or local procurement;
(ii) the zone unit shall issue a certificate authorising the employee by name
and giving the full specification, such as serial number, model number, make
etc., of the laptop computers and video projection system intended to be taken
outside the bonded area temporarily and a copy of the certificate shall be
endorsed to the proper officer and acknowledgement received by the unit;
(iii) the zone unit shall be required to maintain a record of such certificate
of authorization issued under clause (ii) for temporarily taking out or
bringing in such unit the laptop computer or video projection system and the
same shall be made available at the time of inspection by the customs officers
having jurisdiction over the zone.
(5) Subject to such condition as the proper officer may specify and subject to
such procedure, as may be laid down by the Commissioner of Customs 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 or as the case may be, the Commissioner of Customs:
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
25. Sub- contracting of production or production process in domestic tariff
area or abroad by the zone unit.-
(1) The zone unit shall be permitted to take goods including inputs,
semi-finished or semi-processed goods to the job-worker’s premises into
domestic tariff area without payment of duty for further processing of the
goods or to carry out a production, subject to the following conditions,
namely:-
(i) the zone unit shall file an application containing the name and address of
the job-worker, Central Excise registration number of the job-worker, if
registered with the Central Excise Department, processing capacity of the
job-worker, details of the processes to be carried out by the job-worker,
justification for processing of goods outside the bonded premises and any
other relevant information before the proper officer for further processing of
the goods or to carry out production;
(ii) the proper officer may, after examining the application and after
satisfying himself about the bonafide requirement of the zone unit, grant
permission for job-work and such permission shall normally be valid for a
period of one-year. However considering the sensitive nature of the
commodities to be sent out for job-work and past record of the zone unit, such
permission may be less than said period of one year;
Provided that in case of zone unit engaged in manufacture and export of gem
and jewellery, no cut and polished diamonds, precious stones and semi-precious
stones shall be allowed to be taken out of the zone;
(iii) while considering the application of the zone unit, the entire
processing activity in relation to the manufacture of the export products by
the said units may be studied, and the proper officer may ensure that there is
no attempt to parcel out the substantial manufacturing operations outside the
bonded premises;
(iv) in respect of activities permitted to be carried out on job-work basis
outside the premises of the zone unit, identity of finished products received
after job work shall be established with the raw materials or components or
partially processed goods sent out to ensure that the finished products are
manufactured out of raw materials imported or procured duty free by the units
or admitted under claim of duty drawback or duty entitlement passbook scheme
credit into the zone unit and there is no substitution or diversion of such
goods in the domestic tariff area:
Provided that in case of zone unit engaged in manufacture and export of gem
and jewellery, there shall be no requirement of taking out the samples or
retaining the same if such goods have been appraised by jewellery appraiser at
the time of both taking out of such goods from the zone or receiving back of
goods in the zone after completion of job-work:
Provided further that where the precious metal in bullion form, having marking
regarding fineness, purity, make, serial number, is being taking out of the
zone for the purpose of job-work, appraisement by jewellery appraiser shall
not be mandatory;
(v) the zone unit sending out goods for job work in domestic tariff area shall
be required to give an intimation to the proper officer and a sample of the
goods being sent out for job work shall be drawn and retained in the office of
the proper officer in the zone;
(vi) on receipt of the goods in the zone unit after job work, the Customs
officers of the zone shall establish the identity of the goods so returned
with reference to the sample retained by him at the time of removal and a
sample of the processed goods so returned to the zone shall be retained for
the purpose of record for a period of six months and both the samples shall be
returned to the zone unit after obtaining an acknowledgement from the zone
unit;
(vii) the zone unit sending out imported or domestically procured raw
materials, components, etc. as it is, i.e without any processing in the unit
for job work in the domestic tariff area, shall furnish bank guarantee to
cover the duty forgone on such duty free materials being taken out to the
proper officer:
Provided that no such bank guarantee shall be required in case of status
holder unit having an unblemished track record;
(viii) the zone unit removing semi processed goods for job work in domestic
tariff area shall furnish bank guarantee equivalent to fifty per cent. of the
duôy payable on the goods being taken out for job work:
Provided that no fresh or additional bank guarantee shall be insisted upon if
the zone unit has furnished a bank guarantee as security along with bond in
Form-I, and the same is sufficient to cover the duty payable on such goods
being taken out:
Provided further that the no bank guarantee shall be furnished by the status
holder zone units having unblemished track record;
(ix) in all cases of job work in domestic tariff area, the goods sent out for
job work shall be required to be returned to the zone unit within a period of
ninety days or such period as may be extended by the proper officer for
reasons to be recorded in writing for granting such extension, from the date
of removal and in case of failure to receipt of goods within the said period,
action shall be taken by the proper officer to recover duty, such as,
encashment of the bank guarantee given at the time of removal of goods into
domestic tariff area for job work;
(x) the proper officer shall carry out the checks expeditiously to verify the
premises of the job worker, processing capacity of the job worker, existence
of facility for carrying out the declared process in the job worker’s premises
within a period of one month from the date of granting permission for job work
by either visiting the premises of the job worker by himself or the officer
authorised by him in this behalf or by letters or fax or E-Mail to the
concerned Range officer having jurisdiction over job worker’s premises and
getting report in writing;
(2) The zone unit shall be allowed to sub-contract production in domestic
tariff area subject to the following conditions, namely:-
(i) the proper officer shall satisfy himself regarding the bonafide necessity
of such sub-contracting of production in domestic tariff area and shall not
allow such permission in routine manner to the zone unit;
(ii) while giving permission for subcontracting of production in domestic
tariff area or in other export oriented undertaking or software technology
park unit or electronic hardware technology park unit or zone unit, the proper
officer may verify the past antecedents of the zone unit as well as
job-working units, and in case of any misuse of serious nature noticed by him
in the past or due to any other reasons, where it is satisfied that there is
no justification for such permission or there are high chances of abuse of
such facility, such permission may be denied with the approval of Commissioner
of Customs having jurisdiction over the zone;
(iii) the facility of sub-contracting of production shall only be limited to
the extent of fifty per cent. of the free on board value of physical export
made in the previous year subject to the condition that the product is also
being manufactured in the zone;
(iv) in case of zone unit engaged in manufacture and export of gem and
jewellery, no cut and polished diamonds, precious stones and semi-precious
stones shall be allowed to be taken out of the zone;
(v) other conditions as stipulated in sub-regulation (1) except clause (viii),
shall apply mutatis mutandis in case of sub-contracting of production in
domestic tariff area.
(3) Subject to permission of the proper officer, the zone unit shall be
allowed to remove moulds, jigs, tool, fixtures, tackles, instruments, hangers,
patterns and drawings to the job-workers premises in the domestic tariff area
without payment of duty subject to the condition that such unit shall bring
back such goods to the unit on completion of such sub-contracting within a
period of six month from the date of such removal.
(4) The zone unit shall be allowed to sub-contract part of the production
process abroad, that is outside India following the provisions of Export and
Import Policy in this regard, and after such processing abroad, the goods
shall either be returned to the zone unit for carrying out further processing
or may be sold to buyers in that country or any third country:
Provided that the scrap or waste or remnants generated at the sub-contractors
premises abroad may either be returned to the zone unit; or may be disposed of
abroad itself:
Provided further that in case of sale of goods processed abroad or scarp,
waste or remnants arising during the processing of goods abroad, directly from
the job-workers premises abroad, the unit shall take permission from the
Reserve Bank of India.
(5) The proper officer may permit the zone unit to export the finished goods
directly from the job-worker’s premises subject to the following conditions,
namely:-
(i) the job-worker, who is registered with the Central Excise Department;
(ii) export of finished goods from the job-worker’s premises shall not be
allowed through third party;
(iii) sample of goods exported from the job-workers premises shall be sent to
the proper officer in the zone for establishing the identity of the goods
exported with the sample drawn at the time of taking out of the goods to the
job-worker;
(iv) in case of such exports, the shipping bill for duty free goods shall be
processed at the port of export as in the case of normal export and shipping
bill shall be filed in the name of the zone unit;
(v) the goods for such export shall be removed from the job-worker’s premises
under bond.
(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.
(7) The zone unit engaged in trading shall not be allowed the facility of
sub-contracting of production or production process in domestic tariff area.
26. Sub-contracting of production process for domestic tariff area unit in
the zone unit for export.-
The zone unit shall be allowed to undertake job-work for export on behalf of
domestic tariff area unit, subject to the following conditions, namely :-
(i) the semi-finished goods or raw materials shall be supplied by domestic
tariff area unit to the zone unit;
(ii) no export benefit shall be claimed by the domestic tariff area unit on
such semi-finished goods or raw materials supplied to the zone unit for
job-working;
(iii) the finished goods shall be exported directly from the zone unit on
behalf of domestic tariff area unit;
(iv) the export document shall be in the name of domestic tariff area unit;
(v) the value of such goods shall not be counted towards achievement of Net
Foreign Exchange Earning of the zone unit; and
(vi) the unit in domestic tariff area shall not be eligible for all industry
rate of drawback or duty entitlement passbook scheme credit.
27. Removals of samples from the zone unit.-
(1) Subject to the provisions of Export and Import Policy, the zone unit
shall be allowed to take out the samples of the goods manufactured or produced
by it into domestic tariff area for the purposes of display or market
promotion on payment of duty as per the provision clause (b) of section 76F of
the Act or for the purposes of export without payment of duty.
(2) Where samples of the goods manufactured or produced are to be taken into
domestic tariff area on payment of duty, the procedure as laid down in
regulation 21, shall apply except that the bill of entry shall be filed by the
zone unit.
28. Destruction of goods imported including capital goods or goods
manufactured or produced by the zone unit.-
(1) Subject to the procedure specified in regulation 22, where any scrap,
waste or remnants arises out of destruction of goods in terms of rule 12 of
the Special Economic Zone Rules, 2003, the zone unit shall be permitted to
take the same into domestic tariff area on payment of duty applicable to such
scrap and remnants as per the provision of clause (b) of section 76F of the
Act.
(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 of natural calamities, the zone unit shall
be required to pay duty drawback or duty entitlement passbook scheme credit
claimed on such goods.
29. Security.-
(1) On the basis of the Letter of Permission issued by the Development
Commissioner of the zone, the zone unit shall execute a bond with the proper
officer, in the Form I as annexed to the Special Economic Zone Rules, 2003 and
such surety or security shall be given as per procedure specified hereinafter
in this regulation.
(2) The bond, in respect of a limited company, shall be executed by the
Managing Director of the company or the Director(s) who have been duly
authorised for this purpose by a resolution of the Board of Directors of the
Company and shall be affixed with the common seal of the company.
(3) Where the unit is a partnership firm, the Bond shall be executed by the
all the partners of the unit.
(4) The bond amount shall be equal to the duty leviable on the goods but for
the goods admitted duty free in the zone unit and the value of the goods shall
be taken as per declared value on the bill of entry at the time of admission
of goods in the zone.
(5) The zone unit shall furnish surety for the bond amount or furnish five per
cent. of the bond amount as bank guarantee or any other security as approved
by the Central Government and in case of surety, the solvency of sureties
shall be certified by any Chartered Accountant or the Banker of the Surety, as
the case may be.
(6) The Directors or Members of the limited company may stand as surety in
their personal capacity for the company and other corporate bodies included
limited companies may also stand as surety for the unit.
(7) Notwithstanding anything contained in sub-regulation (5), where the zone
unit have a turnover of rupees one crore or above, such unit shall not be
required to furnish surety or security.
(8) Where the value of the bond executed with the custom officers is initially
worked out on the projected value of goods imported and the value of such bond
falls short of duty forgone on goods admitted duty free in the unit, then the
unit shall be required to submit a revised bond and furnish additional
security or surety, as the case may be, and in case of sub-contracting of
production process or production in domestic tariff area, if the security
given with the bond is not sufficient to cover duty leviable on goods being
taken into domestic tariff area, the unit shall be required to give additional
security.
(9) The bond shall be a running bond and shall be debited whenever there is
fresh admission of duty free goods in the unit. The value debited from the
bond amount in respect of raw materials shall be credited again when the raw
material is used in the manufacture of finished products and such manufactured
goods are either exported or cleared into domestic tariff area on payment of
duty as per the provisions of Act or rules and regulations, as the case may
be, made thereunder.
(10) In respect of the capital goods or infrastructure materials, surety or
security shall not stand discharged on arrival of the capital goods or
infrastructure materials within the unit and the surety or security shall not
be discharged as long as the capital goods are in the zone unit or the capital
goods of the unit are not debonded.
(11) The duty for debiting the bond amount in respect of capital goods or
infrastructure materials or raw materials shall be as per the duty foregone
amount given in the bill of entry or shipping bill, as the case may be.
(12) After execution of the bond, the proper officer shall retain the original
copy of the bond and provide a certified copy to the unit for its record.
(13) Notwithstanding anything to the contrary, in case the zone unit is
engaged in manufacture and export of gem and jewellery, the effective rate of
duty as specified in notification No 80/97-Customs of the Government of India
in the Ministry of Finance ( Department of Revenue), dated 21st October, 1997,
shall be taken instead of tariff rate of duty, for the purpose of calculation
of bond amount in case of import of gold or silver.
30. Monitoring of Performance.- Performance of the zone unit shall be
monitored by the Commissioner of Customs having jurisdiction over the zone .
31. Disposal of obsolete or surplus goods.-
(1) The zone unit shall be allowed to dispose of obsolete or unusable
capital goods, spares and other goods in the domestic tariff area on payment
of customs duty as per provisions of clause (b) of section 76F of Act
following the conditions mentioned in the Export and Import Policy and the
provisions of ITC(HS) Classification of Export and Import Items Book as
applicable in case of goods imported into India.
(2) In case of used capital goods, depreciation shall be allowed in terms of
sub-rule (1) of rule 9 of the Special Economic Zone Rules, 2003.
32. Co-relation of import consignment with corresponding export consignment.-
The zone unit using homogenous material may be allowed to adopt
‘First-in-First-Out’ arrangement and a consignment which has been received
first, may be deemed to have been utilised first for this purpose, and in such
cases, co-relation of every import consignment with the corresponding export
consignment may not be required.
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 developer shall make an application to the concerned Development
Commissioner for approval of the list of goods proposed to be imported or
procured duty free;
(ii) the developer shall submit the application accompanied with the proof of
ownership of land, encumbrances certificate, 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;
(iii) 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;
(iv) 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;
(v) the developer shall maintain proper account of import or procurement,
consumption and utilisation of the goods and submit quarterly return to the
Deputy Commissioner of Customs or Deputy Commissioner of Central Excise, as
the case may be, having jurisdiction over the zone in such form, as may be
specified by him;
(vi) the developer shall execute a bond in Form II as annexed in the Special
Economic Zone Rules, 2003 with the Commissioner of Customs 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 him, 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;
(vii) 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;
(viii) 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.
(2) The application mentioned in clause of sub-regulation (1) shall be
submitted by the developer to the concerned Development Commissioner of the
zone and the Development Commissioner after processing of the application,
shall forward such application alongwith relevant documents to the Committee
of Approval, for consideration.
(3) The approval for duty free import or procurement shall be given to the
developer only in respect of such goods which are required for construction,
maintenance and operation of the zone.
(4) When an application is submitted for approval of additional items, the
Committee of Approval shall determine such additional requirement taking into
account quarterly statement submitted by the developer.
(5) The Committee of Approval shall fix the time schedule for commencement and
completion of the construction of the zone and in case of delay in the
completion of the project, the developer of the zone shall explain the reasons
of such delay to the Committee of Approval.
(6) The Committee of Approval may direct the developer to get the account
audited by a Cost Accountant as nominated by Committee of Approval in this
behalf.
(7) 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, the Committee of Approval
shall consist of following persons, namely:-
(i) Commissioner of Customs or Commissioner of Central Excise, as the case may
be having jurisdiction over the zone- Chairman.
(ii) Development Commissioner of the Zone- Member.
(iii) Joint Director General of Foreign Trade-Member.
(iv) The Chief Engineer of Central Public Works Department- Member.
(v) Jurisdictional Deputy Commissioner of Customs or Assistant Commissioner of
Customs having jurisdiction over the zone- Member.
[F. No. 314/24/2001-FTT]
( D. S. Garbyal)
Under Secretary of the Government of India