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Regarding Extension of the Jurisdiction of the Customs Act, 1962 and the
Customs Tariff Act, 1975 to whole of the EEZ and Continental Shelf under the
Territorial Waters, Continental Shelf, Exclusive Economic Zone and other
Maritime Zones Act, 1976
Custom Circular No. 17 dated 13th March
2002
I am directed to refer to Board�s
letter F.No. 450/76/92-Cus.IV dated 28/9/1994 and Circular No. 28/95-Cus.dated
27/3/1995 explaining the legal position regarding levy of Customs duty on goods
brought into a �designated area� of the Exclusive Economic Zone (EEZ) and
levy of central excise duty on oil produced in such areas. It was clarified in
these instructions that any oil produced in the offshore installations in the
said �designated areas� or within the Territorial Waters of India would be
deemed to be produced in India and subject to the levy of central excise duties
under section 3 of the Central Excise Act, 1944. In case, however, the oil is
produced at such of the installations which have not been designated by the
Ministry of External Affairs and which lie outside the Territorial Waters of
India, such oil would be deemed to be imported into India when this oil is
transferred to the mainland and be subject to customs duties as specified in the
Customs Tariff Act, 1975.
2. The matter has been
reviewed by the Government. In this connection, please find enclosed a copy of
notification dated 7th February, 2002 issued by the Ministry of
External Affairs, whereby the jurisdiction of the Customs Act, 1962 and the
Customs Tariff Act, 1975 has been extended to whole of the EEZ and Continental
Shelf of India for certain purposes. The purposes specified in the notification
are (i) the prospecting for extraction or production of mineral oils in the
Continental Shelf and EEZ of India, and (ii) the supply of any goods (as defined
in clause (22) of section 2 of the Customs Act, 1962) in connection with any of
the activities mentioned in clause (i) above. In the �Explanation� to the
notification, it has been clarified that for the purposes of the notification,
"mineral oils" would include petroleum and natural gas.
3. The implication of the
said notification is that mineral oils extracted or produced in the EEZ and
Continental Shelf of India if brought to the mainland shall not be treated as
import and therefore, no customs duty shall be leviable on such mineral oils.
Likewise, the goods supplied from the mainland to a place in EEZ or Continental
Shelf of India in connection with any activity related to mineral oil extraction
or production shall not be treated as export under the Customs Act, 1962 and
consequently, no export benefits can be availed of on such supplies. Another
implication of the said notification is that bringing of any goods from any
other country to any place in EEZ or Continental Shelf of India in connection
with any activity related to extraction or production of mineral oils shall be
treated as import under the Customs Act, 1962 and would be charged to duty
accordingly. Further, mineral oils produced in the EEZ or Continental Shelf of
India would be deemed to be produced in India and subject to levy of central
excise duties under the Central Excise Act, 1944.
4. These instructions may
be brought to the notice of all concerned by way of issuance of suitable Public
Notice/Standing Orders.
5. Difficulties, if any,
faced in the implementation of above instructions may be brought to the notice
of the Board. Kindly acknowledge receipt.
MINISTRY OF EXTERNAL AFFAIRS
NOTIFICATION
New Delhi, the 7th February
2002
S.O. 189 (E). In exercise of the
powers conferred by clause (a) of Sub-section (6) of Section 6 and clause (a) of
sub-section (7) of Section 7 of the Territorial Waters, Continental Shelf,
Exclusive Economic Zone and other Maritime Zone Act, 1976 (80 of 1976), the
Central Government hereby extends the Customs Act, 1962 (52 of 1962), and
Customs Tariff Act, 1975 (51 of 1975) to the continental shelf of India and the
exclusive economic zone of India with effect from the date of publication of
this notification in the Official Gazette, for the following purposes, namely:-
(a) the prospecting for extraction
or production of mineral oils in the continental shelf of India or the exclusive
economic zone of India, and
(b) the supply of any goods [as
defined in clause (22) of Section 2 of the Customs Act, 1962] in connection with
any of the activities referred to in clause (a).
Explanation: For the purposes
of this notification, �mineral oils� include petroleum and natural gas.
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