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EOUs/ EPZ Units - CVD on DTA sale of plastic granules manufacture out of
plastic scrap & waste
Circular No. 38 dated 10th May
2000
It is directed to
invite your attention on the above subject and to state that a doubt has been
raised regarding levy of additional duty of customs (CVD) on DTA sale of
reprocessed plastic agglomerates/ granules (reprocessed out of plastic scrap) by
EOU/ EPZ units. The doubt has arisen in relation to exemption for plastic
materials falling under heading Nos. 39.01 to 39.14 under notification Nos. 5/
98-CE, dated 2.6.98 (ref: S.No. 63), 5/ 99-CE, dated 28.2.99 (ref: S.No. 64) and
6/ 2000-CE, dated 1.3.2000 (ref: S.No. 63).
2. The
matter has been examined. The aforesaid notifications exempt plastic materials
falling under heading Nos. 39.01 to 39.14 from excise duty, subject to the
condition that they are reprocessed in India out of the scrap or the waste of
goods falling within Chapters 39, 54, 55, 56, 59, 64, 84, 85, 86, 87, 90, 91,
92, 93, 94, 95, and 96. It may be seen that the notification enjoins fulfilment
of two conditions for availing of the exemption: (I) reprocessing of plastic
scrap material should be done in India; (ii) plastic scrap or waste should be of
the goods falling within the above-mentioned Chapters of the Customs Tariff.
3. In
so far as levy of additional duty of customs (CVD) on imports of reprocessed
plastic materials (viz. Plastic granules/ agglomerates) is concerned, condition
(I) above will not be satisfied because; the reprocessing has not been done in
India. Thus, in case of normal imports of reprocessed plastic materials, the
importers/ domestic manufacturers are liable to pay, among other duties,
additional duty of customs (CVD). It, therefore, follows that no CVD exemption
will be available when reprocessed plastic materials are cleared in Domestic
Tariff Area (DTA) by EOUs and EPZ units. In other words, the plastic processor
EOUs/ EPZ units are liable to pay, among other duties, excise duty equivalent to
CVD payable on imported reprocessed plastic materials (e.g. plastic granules/
agglomerates) in respect of their DTA clearances of such materials/ goods.
4. In
view of the position explained above, you are requested to kindly review the DTA
clearances made by plastic processor EOUs/ EPZ units to satisfy yourself as to
whether the Customs authorities in charge of EOUs/ EPZ units have taken the said
CVD into account in their computation of excise duty while allowing DTA
clearance of reprocessed plastic materials and initiate action to recover short
levy, if any, urgently. The details of such short levy and recovery, if any, may
be furnished to the Board by 25th May, 2000.
5. Difficulty, if
any in implementation of the above instructions may kindly be brought to the
notice of the Board.
6. These
instructions super cede the individual clarifications issued earlier by the
Board.
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