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Exemption to finished products, rejects, waste or scrap from <a href='http://www.eximguru.com/exim/eou/default.aspx'>EOU</a>s/ FTZs
and sold in India
Notification
No. 13 dated 2nd June 1998 (As amended by Notification No. 11 dated 1st
March 2002, Corrigendum dated 1st March 2002)
In exercise of
the powers conferred by sub-section (1) of section 5A of the Central Excise Act,
1944 (1 of 1944), the Central Government, being satisfied that it is necessary
in the public interest so to do, hereby exempts the finished products, rejects
and waste or scrap specified in the Schedule to the Central Excise Tariff Act,
1985 (5 of 1986), produced or manufactured, in a hundred per cent,
export-oriented undertaking or a free trade zone wholly from the raw materials
produced or manufactured in India, from so much of the duty of excise leviable
thereon under section 3 of the said Central Excise Act, as is in excess of the
amount equivalent to thirty percent of the aggregate of the duties of customs,
which would be leviable under section 12 of the Customs Act, 1962 (52 of 1962)
read with any other notification for the time being in force issued under
sub-section (1) of section 25 of the said Customs Act, on the like goods
produced or manufactured outside India if imported into India, subject to the
following conditions, namely: -
(a) such finished products, if manufactured and cleared
by a unit other than a hundred percent, export-oriented undertaking or a unit in
a free trade zone, are wholly exempt from the duties of excise or are chargeable
to Nil rate of duty; and
(b) the finished products, rejects and waste or scrap
are allowed to be sold in India under and in accordance with the provisions of
sub-paragraphs (a), (b), (c), (d) or (f) of paragraph 9.9 or of paragraph 9.20
of the Export and Import Policy 1 April, 1997-31 March, 2002.
Illustration. - Assuming product X has
the value Rs. 100 under section 14 of Customs Act, 1962 and is chargeable to
basic customs duty of 30% ad valorem, special additional duty of 4% ad
valorem and not chargeable to additional duty. The computation of duty
required to be paid would be as follows: -
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Basic customs
duty
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=Rs. 30/-
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Value for the
purpose of special additional duty
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=Rs. 100/- + Rs.
30 = Rs. 130/-
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Special
additional duty
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=4% of Rs. 130/-
= Rs. 5.20
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Total duty
payable but for this exemption
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=Rs. 30 + Rs.
5.20 =Rs. 35.20
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Thirty percent of
the aggregate of the duties of customs
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=30% of Rs. 35.20
= Rs. 10.56
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Duty required to
be paid in accordance with this notification
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=Rs. 10.56.
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