EOU Scheme - Procedures and Verifications - Instructions
THE Commissioner of Customs (Export), 100% EOU, Air Cargo Complex, Mumbai in a Public Notice, notes,
"The facility of duty exemption is available to the EOU/STPS/EHTP as per the Letter of Permission (LOP) issued by the Development Commissioner. However, quantity and goods of such class and description eligible for duty exemption are to be restricted as per the particulars mentioned in each Procurement Certificate (PC) issued by the Central Excise authorities. Hence, it becomes necessary to verify the genuineness of the PCs received from the concerned authorities, as these amounts to special authorizations based on which the duty exemption is allowed.
Instances have come to the notice that procurement certificate have been issued even for those items which were not mentioned in the LOP. Further, many times import details do not correspond with the goods particulars mentioned in the PCs in terms of description and quantity.
It appears that there is a common perception that there is no revenue implication in respect of the clearance made under EOU scheme which had led to laxity in terms of the procedures to be followed and cautions to be exercised.
Therefore, it is decided that a random check of PCs will be conducted as to verify their genuineness from the concerned issuing authorities. In case of first time importers under EOU scheme, the verification of PC will be compulsory. However, to facilitate the smooth clearance of the imports under the EOU scheme, the Procurement Certificate issued from jurisdiction Central Excise/Customs authorities, recommending for duty free import to the EOUs, will be accepted by hand only if they are brought in sealed cover. Fax copy of the P.C. will also be entertained under special circumstances. The same will also be cross verified with the copy received by registered post."
The Commissioner continues,
Though the import of goods are allowed without payment of duty on the basis of the particulars in the Procurement Certificate, the fulfillment of the conditions of duty exemption under EOU will become complete only when Re-warehousing Certificates (RWCs) are received from the concerned jurisdictional Central Excise Authorities. The Board vide Circular No. 14/98 dated 10.03.1998 had prescribed maximum period of 90 days from the date of issuance of Procurement Certificate (PC) for the submission of the RWC. Also, the Board vide Circular No. 07/06 - Cus dated 13.01.2006 and Circular No. 19/2007-Cus dated 03.05.2007 has prescribed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units.
In spite of the time limit of 90 days prescribed by the Boards Circular No. 14/98-Cus dated 10.03.1998, RWCs are not submitted by the Exporters operating under the EOU scheme. In the absence of RWCs, the jurisdictional Central Excise Authorities on being advised by the Customs are under obligation to issue Demand Notices to the concerned EOUs to safeguard the interest of revenue. This office from time to time has been reminding the concerned Central Excise/Customs Authorities to issue and forward the RWCs if goods were already warehoused properly, or to issue Demand Notice to the concerned EOU.
However, it seems that the desired response is not forthcoming. It also appears that the EOUs have also become oblivious to the fact that it is their responsibility to produce the RWC from the concerned authorities regarding the duty free imported goods, failing which they will be liable for payment of Customs duties but for the exemption contained in the EOU Notification issued by the Board. Time limit of submission of RWCs from the jurisdictional authorities is 90 days from the day of P.C. issued as per the Boards Circular No. 14/98-Cus dated 10.03.1998 failing which SCNs will be issued against them for recovery of government revenue. No unit having a pendency of more than 10 RWC of more than 6 months age will be allowed duty free clearance expect with the approval of ADC/ JC for one time clearance beyond which they will be required to execute a full B.G. covering the duty of the goods intended to be imported. No duty exemption will be allowed until the authenticity of the warehousing of the goods is proved by the concerned EOUs by way of submitting the required RWCs .
It is not all enforcement - the Commissioner has offered some facility too:
To facilitate the importers operating under EOU to close their RWCs pendencies, it has also been decided to accept now onwards, by hand, the RWCs submitted by the EOUs/their authorized CHAs only in cases where the same are brought in sealed cover from Jurisdictional Central Excise/Customs authorities and entries in the Transit Allow Register (TAR) /Procurement certificate register (PCR) may be closed accordingly. The signature on the PC & RWC shall be verified with the specimen signature. In case of specimen signature is not available due to transfer of officer, the officer on duty may accept the same after confirming from the jurisdictional Central Excise authority. In case of unusual deviation, PC/RWC may be verified prior to any further action. Further, it is also decided that the entries in TA Register, for previous pendencies will be closed upon receipt of the copies of pending RWCs duly certified by jurisdictional Central Excise/Customs Authority in Sealed Cover or a Certified Copy of the pending RWC authenticated by the Authorized Signatory of the unit submitted along with original copy of the RWC, forwarded to the unit from Central Excise/Customs .
The Commissioner has also detailed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units.