Duty free procurement of goods by EOUs – duty on goods not used
Government has amended Notification No. . C.E which exempts goods cleared to EOUs.
As per Condition 4 (a) (ii), duty has to be paid
(ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods in accordance with SION for export out of India or cleared for home consumption within a period of three years from the date of procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow:
Provided that-
(a) where no SION norms have been notified, the generation of waste, scrap and remnants upto 2% of quantity of the inputs procured shall be allowed;
(b) where additional items other than those given in the SION are required as inputs or where the user industry considers the existing SION as inadequate or where generation of waste, scrap and remnants is beyond 2% of the inputs procured, use of such goods shall be allowed on the basis of self-declared norms till such norms are fixed on ad hoc basis by the jurisdictional Development Commissioner within a period of three months from the date of self declared norms and the unit undertakes to adjust the self-declared/ ad hoc norms in accordance with norms as finally fixed by the Board of Approval with six months of fixation of ad hoc norms;
Now this is changed to
“Provided that-
(a) where no SION have been notified, the generation of waste, scrap and remnants upto 2% of input quantity shall be allowed;
(b) where additional items other than those given in SION are required as input or where generation of waste, scrap and remnants is beyond 2% of the input quantity, use of such goods shall be allowed on the basis of self-declared norms till such norms are fixed on ad hoc basis by the jurisdictional Development Commissioner within a period of three months from the date of self declared norms and the unit shall undertake to adjust the self-declared/ ad hoc norms in accordance with norms as finally fixed by the Norms Committee for the unit. The ad-hoc norms will continue till such time the final norms are fixed by the Norms Committee;
(c) in case of utilization of a large number of inputs, wide variation in quantum of consumption of inputs or such other factors which render such fixation of SION difficult in the case of a particular unit, the Norms Committee may refer the case to the Board of Approval for a decision.”
Debonding : In case of failure to achieve positive NFE, depreciation shall be allowed on the value of capital goods in the same proportion as the achieved portion of NFE.
Norms Committee defined :
“Norms Committee” means the Norms Committee in the Directorate General of Foreign Trade, for recommending Input Output norms and value addition norms to be notified by the Director General of Foreign Trade.
Similar amendments have been made in the Notification No. , dated the 31st March, 2003.
Notification No. 26/2008-CX., and Dated May 5 2008