Ministry of Finance
Department of Revenue
Central Board of
Excise & Customs
Directorate General of Export Promotion
New Delhi, dated the 10th April, 2017
All Principal Chief Commissioners/ Chief Commissioners of
Customs & Service Tax,
All Principal Chief
Commissioners/Chief Commissioners of Customs,
All Principal Chief
Commissioners/Chief Commissioners of LTU.
Sub: DTA clearance of goods procured by EOUs/EHTP/STP units from
indigenous sources – charging of Duty – reg.
Attention is drawn to Circular No.74/2001-Cus dated 04th Dec, 2001 issued on the
2. Vide the above circular, it was clarified that in case raw materials/
capital goods etc., procured from indigenous sources by EOUs/EPZ/SEZ/EHTP/STP
units are transferred/ sold back to DTA except for the purpose of replacement,
the deemed export benefits already availed of against such goods shall be
required to be refunded back and that the export benefits shall be deposited
through TR in the designated bank. It was further clarified that the goods will
be allowed to be cleared to DTA only on production of a certificate from the
jurisdictional Development Commissioner to the effect that such deemed export
benefits are paid back. In cases, where no deemed benefits were availed, a
certificate to this effect from the jurisdictional Development Commissioner
shall be produced. Only after production of such certificate, these raw
materials/capital goods could be cleared on payment of appropriate central
3. It has been brought to the notice of the Board that following difficulties
are normally being faced in getting the certificate from the Development
- Some of the indigenous manufacturers would have shifted their manufacturing
units and/or have closed their manufacturing activities.
- The suppliers may not entertain correspondence pertaining to capital goods
procured from them several years ago.
- From commercial perspective, it is unfair to expect indigenous manufacturers
to refund / surrender deemed export benefits availed by them several years ago
(to enable their Customer units to de-bond indigenously procured goods).
- Deemed export benefits provided to indigenous manufacturers under Foreign
Trade Policy, should not hinder de-bonding of such goods.
4. Matter has been examined. Attention is drawn to the amendment made to the
No.23/2003-CE dated 31th March, 2003 vide Notification
dated 06th July, 2007 whereby an ‘Explanation’ was added to the principal
notification stating that “goods received from Domestic Tariff Area under the
benefits of deemed exports under Paragraph 8.3(a) and (b) of the Foreign Trade
Policy shall be treated as imported goods.” This amendment has been made for the
purpose of levy of duty on goods manufactured by such procured raw material so
as not to treat them at par with goods manufactured out of wholly indigenous
material. This has been amply brought in para 12 of Circular
dated 24th July, 2008. Therefore, goods procured domestically by EOUs/EPZ/SEZ/EHTP/STP
units on which deemed export benefits have been availed shall be treated as
imported goods and applicable Customs Duty has to be paid (after granting
applicable depreciation on capital goods) at the time of clearance of such
5. However, it appears that field formations are insisting on production of a
certificate from the Development Commissioner as required under Circular
74/2001-Cus dated 04th Dec, 2001 even after payment of applicable Customs Duties on
clearance of capital goods procured from DTA by EOU/STP/EHTP units where deemed
export benefits have been availed.
6. It is therefore, clarified, that the indigenous goods supplied to the
EOUs/EPZ/SEZ/EHTP/STP units after availing the deemed export benefits are to be
treated as ‘imported goods’ and accordingly, duty as applicable to the imported
goods is liable to be paid. Once the goods are treated as imported goods and
applicable Customs Duty is paid at the time of their transfer/sale back into DTA
or exit, there is no requirement of refund of the deemed export benefits availed
on such goods or for the production of a certificate from the Development
Commissioner regarding refund or nonavailment of deemed export benefits at the
time of clearance of such goods or exit.
Alternatively, the EOU/STP/EHTP units would also be allowed to clear the
domestically procured goods or on exit, on payment of Excise Duty as per
No. 22/2003-CE dated 31th March, 2003 only on production of certificate
from Development Commissioner to the effect that deemed export benefits have
been paid back or not availed, as the case may be, as envisaged in Circular
No.74/2001-Cus dated 04th Dec, 2001.
No. 74/2001-Cus dated 04th Dec, 2001 is modified to the above extent.
8. This issues with the approval of Board.
9. This may be brought to the notice of all the field formations and also the
(Saroj Kumar Behera)