Audit of EOU/STP/EHTP unit under Customs control- DGEP clarifies
EOUs including EHTP and STP unit situated within the municipal limit of the port cities are under administrative control of the Commissioner of Customs and in other places (except Bangalore), under the administrative control of the jurisdictional Commissioner of Central Excise as per Board's circular No. 31/2003- Cus dated 07.04.2003. In Bangalore, they are under the control of the Bangalore Customs Commissioner.
EOUs/STP/EHTPs avail different concessions/exemptions and could be source of leakage of revenue. Many measures have already been taken to safeguard revenue. These include, interalia, accountal of inputs in accordance with SION, filing of return E.R.-2 consisting of details of inputs received, consumed, cleared as such and closing balance.
Another measure could be regular audit of these units.
Since, the Customs formations having control over EOUs are not conducting audit of such units at the premises of the unit, the Board vide circular No. 693/9/2003- CX dated 13.02.2003 had instructed that EA-2000 audit of such units under Customs control shall be conducted by the jurisdictional Central Excise Commissionerate.
In view of these instructions, the Directorate General of Export Promotion reiterates that the audit of EOUs under Customs control need to be undertaken regularly by the audit parties of the jurisdictional Central Excise Commissionerates and these audit parties are also to be provided with copies of C&AG reports on EOUs/STPs/EHTps etc.
The DGEP advises the Central Excise filed formations to carry out audit of EOUs at prescribed periodicity notwithstanding the fact that some of these EOUs may be under the administrative control of Customs formations.
Now will this not lead to a conflict between the Customs and Excise wings? When the units are under the Customs control, how can the Central Excise officers go about auditing these units? With what authority can the Central Excise officers enter the EOUs under Customs control?
F.No. DGEP/EOU/120/2007 of DGEP Dated: August 22, 2008