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Exemption to materials required for the manufacture of the final goods
when imported into India
Notification
No. 128 dated 10th June 1994 (As
amended by notification nos. 185/94, 101/95, 144/95, 22/96)
In
exercise of the powers conferred by sub-section (1) of section 25 of the Customs
Act, 1962(52 of 1962), the Central Government, being satisfied that it is
necessary in the public interest so to do, hereby exempts materials required for
the manufacture of the final goods when imported into India, from whole of the
duty of Customs leviable thereon, under the First Schedule to the Customs Tariff
Act, 1975(51 of 1975), and from the whole of the additional duty leviable
thereon under section 3 of the said Customs Tariff Act, subject to the following
conditions, namely:-
(1)
that the importer has been granted necessary import licence or release
order on the canalising agency (hereinafter called the said licence) by the
Licensing Authority for the import or release of the said materials for the
aforesaid purpose in terms of para 56 of the Export and Import Policy, 1st
April, 1992-31st March, 1997 and the said licence is produced at the
time of clearance for debit by the proper officer of the Customs;
(2)
that the import licence contains the endorsements specifying, inter-alia-
(a)
the description, quantity and the value of materials allowed to be
imported under the said licence;
(b)
the description and quantity of materials allowed to be imported duty
free; and
(c)
the description and quantity of final goods to be manufactured out of, or
with, the imported materials;
(3)
Omitted
(4)
the importer executes a bond with such surety or security and in such
form and for such sum as may be specified by the Assistant Commissioner of
Customs binding himself to pay on demand, an amount equal to the duty leviable
on the imported materials but for the exemption contained herein, in respect of
which the conditions specified in this notification have not been complied with
together with interest at the rate of 24% per annum from the date of clearance
of materials;
(5)
that the importer produces evidence of having discharged obligation to
supply final goods to the satisfaction of the said Assistant Commissioner of
Customs within a period of thirty days from the expiry of period allowed for
fulfilment of obligation to supply final goods or from such extended period as
the Assistant Commissioner of Customs may allow; and
(6)
that the exempt materials are utilised for the manufacture of final goods
and no portion of such materials shall be loaned, transferred, sold or disposed
of in any other manner;
(7)
that the imports and exports are undertaken through sea ports at Bombay,
Calcutta, Cochin, Kandla, Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep,
Tuticorin and Visakhapatnam, or through any of the airports at the Ahmedabad,
Bangalore, Bombay, Calcutta, Coimbatore, Delhi,
Hyderabad, Jaipur, Madras, Srinagar, Trivandrum and Varanasi or through any of
the Inland Container Depots at Bangalore, Coimbatore, Delhi, Gauhati, Hyderabad,
Kanpur, Ludhiana, Moradabad, Pimpri (Pune) and Pitampur (Indore):
Provided
that the Commissioner of Customs may by special order and subject to such
conditions as may be specified by him, permit import and export through any
other sea port, airport or Inland Container Depot or through a land customs
station;
Provided
that where final goods in respect of which the said materials have been imported
have already been manufactured and supplied as required under this notification,
the importer may use the said materials for the manufacture of any other goods.
Explanation:
In this notification-
(i)
�Licensing Authority� means the Director General of Foreign Trade
appointed under section 6 of the Foreign Trade (Development and Regulation and
Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant a
licence under the said Act;
(ii)
�materials� means-
(a)
raw materials, components, intermediates, consumable, computer software and
parts required for the manufacture of final goods;
(b)
packing material required for the packing of final goods to be supplied;
(iii)
�final goods� means-
(a)
Supplies made to United Nations Organisations or under the aid programme of
the United Nations or other multilateral agencies and paid for in foreign
exchange;
(b)
Supplies made to projects financed by multilateral or bilateral agencies/Funds
as notified by the Department of Economic Affairs, Ministry of Finance under
international competitive bidding or under limited tender system in accordance
with the procedures of those agencies/Funds where the legal agreements provide
for tender evaluation without including the customs duty;
(c)
Supplies made to units in the free trade zones and hundred percent export
oriented undertakings (excluding free trade zone units/export oriented
undertaking engaged in Diamond, Gem and Jewellery);
(d)
Supply of capital goods for fertiliser plants if the supply is made under the
procedure of international competitive bidding; and
(e)
Supplies of goods to any project or purpose in respect of which the Ministry
of Finance, by a notification, on or after 20th June, 1994, permits
the import of such goods at zero customs duty, coupled with the extension of
benefits under Chapter VII of the Export and Import Policy 1st
April, 1992-31st March, 1997 for domestic supplies.
(iv)
�free trade zone� and �hundred percent export oriented
undertaking� have the same meaning as in Explanation 2 to sub-section (1) of
section 3 of the Central Excise and Salt Act, 1944(1 of 1944)
(v)
�Export and Import Policy, 1st April, 1992-31st
March, 1997� means Export and Import Policy, 1st April, 1992-31st
March 1997 (Revised edition: March 1994) notified by Ministry of Commerce vide
notification number 34 (RE)/92-97, dated the 30th March, 1994.
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