Governing Body
According to the guidelines mentioned in the Appendix 16-E of the Handbook of Procedures (Vol.I) the monitoring of Export Oriented Units is done jointly by the Development Commissioner and the concerned Customs and Central Excise officers.
The main objective of the joint monitoring is to ensure that the performance of EOUs is effectively monitored and action is taken against the units which have contravened the provisions of the EXIM Policy/Handbook and the Customs Law/Procedures. Also such joint monitoring gives an opportunity to the Government to discuss and help resolve the problems/difficulties being faced by the EOUs. The idea is to remove all bottlenecks in export promotion efforts while not jeopardizing the interests of revenue.
Supervision of EOUs under the Development Commissioner
The rules and regulations in matters related to EOUs are basically governed and monitored by the Development Commissioner who is administrative head of Export Processing Zones. Development Commissioner functions under the guidelines given by the Ministry of Commerce, Government of India.
The Development Commissioner of the Zone concerned is more or less the one point servicing official agency for EOUs and has wide powers including the following:-
- To adjust for currency fluctuation, in case of capital goods import
- Enhancement of production capacity
- Broad banding/diversification of product range
- Change in name or ownership
- Change of location/expansion
- Extension of validity of Letter of Permission
- To adjudicate in all matters
In all, there are seven Development Commissioners at Mumbai, Gandhidham, Chennai , Cochin , Vizag, Noida and Calcutta , who supervise the functioning of the EOUs and eight Export Processing Zones/Special Economic Zones in the country.
Supervision of EOUs under the Customs and Central Excise
As compared to Development Commissioner, supervision of EOUs under the Customs and Central Excise is quite liberal. The EOUs no longer carry out manufacturing operations under physical supervision of Customs officers and operational flexibility has been also given to EOUs by amendment of "Manufacture and Other Operations in Warehouse Regulations, 1966". The system of for locking of the warehouse and control of imported goods etc by the Customs and Central Excise has also been abolished.
All the movements from and to the unit like clearance of raw materials/ component to the job workers premises, return of goods from the job-workers’ premises, clearance to other EOUs, export and sale in DTA are allowed to be made by the unit subject to maintenance of the records. Physical control over the EOUs has, thus, been replaced by Record Based Control.
As most of the physical control has been abolished greater stress is given on proper maintenance of prescribed records & accounts and non-maintenance of the accounts by the units is viewed seriously. The cost recovery officers/the officer’s incharge of EOUs are required to scrutinize /examine the accounts/ records of the units and transaction undertaken by the unit at least once in a month. The cost recovery officer has to ensure that all movements of goods are recorded in the proper register. The Chief Commissioner is empowered to order special audit of the unit by Cost Accountant nominated by him in this regard. Cost audit is employed as a tool to check the correctness of raw materials, quantity used, finished goods produced or other such situation.