EOUs under watch – Physical control?
Remember the days of D3? Remember the days of rushing to the Range office with an intimation and organizing an Inspector to be ferried to your factory for the goods waiting to be verified by his highness? If you don’t – you will experience them soon – if you are an EOU.
If you are getting excisable goods without payment of duty under Notification No. 22/2003-CE, dated 31 stMarch, 2003, for use in the EOU, you are in for hassles that will make you feel that it is better to get duty paid goods and take credit rather than get duty free goods and go through hell.
See the latest procedure prescribed by the Board for EOUs. If you are an EOU getting duty free goods:-
1. Your consignor has to prepare an application ARE-3 in quadruplicate and send three copies to you and one copy to his Range Superintendent. That leaves no copy for him. So obviously he has to make five copies instead of four as required by the Board.
2. On receipt of the goods, the EOU has to make an entry in the ARE 3 copies and send all the three copies to his Superintendent. And don’t forget to keep the goods separately.
3. The Superintendent will depute an officer to conduct physical verification of the goods within 24 hrs of receipt of intimation regarding arrival of goods. How will this officer reach your factory? Obviously in a car arranged by you!
4. After verification, this bond officer (it is not specified as to who this James Bond is), will give a report to his Superintendent who shall countersign the certificate of warehousing on all copies of the application.
5. What will the Superintendent do with all the three copies of the ARE 3? He will send the Original to the Superintendent-in-charge of the consignor, duplicate copy to the consignor and triplicate copy to the user industry for record. A photo copy of the original copy of ARE-3 will be kept in the office for records.(Who will make the photocopy? The assessee of course!, Range offices do not have Xerox machines!)
6. What happens if the copies are lost in transit? Correspondence, more correspondence, and Audit Paras?
Where are we heading to? Back to the nineteenth Century? Is the Board creating more avenues for corruption and complaints? Long ago, the Government abolished physical control as it was found to be useless. Only more officers got charge-sheeted for conniving with the assessees!
Is it worthwhile for an EOU to go through all these troubles when they can as well get the goods on payment of duty and take credit and even if they do not have DTA clearances, they can claim refund of the unutilized credit?
CBEC CIRCULAR NO. 851/9/2007-CX., Dated: May 3, 2007