Exemption to Specified Goods when Imported into India by the Gem and Jewellery Units Set up in an EPZ or in a FTZ

Notification No. 177 dated 21^st October 1994 (As amended by notification nos. 195/94, 117/95, 170/95, 57/97, 76/97, 83/97, 11/98, 61/98, 40/99, 10/00, 56/2001, 116/2001, Notification No. 64 dated 24^th June 2002)

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 goods specified in the Annexure-I of this notification (hereinafter referred to as the said goods), when imported into India by the gem and jewellery units set up in an Export Processing Zone or in a Free Trade Zone specified in Annexure II of this notification (hereinafter referred to as the Zone), for the manufacture or packaging of gem and jewellery for exports out of India, or for the promotion of exports of gem and jewellery, from the 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, if any, leviable thereon under section 3 of the said Customs Tariff Act, subject to the following conditions, namely: -

(1)��������� the importer has been authorised to establish a manufacturing unit in the Zone for the purposes specified in this notification;

(2)��������� the importer is covered, wherever required, by a general or specific permit issued by this Reserve Bank of India;

(3)��������� the importer has been granted necessary licence for the import of the said goods;

(4)��������� the importer executes a bond in such form and for such sum as may be specified by the Assistant Commissioner of Customs binding himself to -

(i) bring the said goods into his unit and use them within the Zone for the purposes specified in this notification;

(ii) dispose of the said goods or the gem and jewellery manufactured or packaged in the unit or the waste arising out of such production or packaging in the manner as may be prescribed in the Export Import Policy and in this notification;

(5)��������� the importer shall maintain a proper account of import, consumption and utilisation of the said goods and of the exports made by him, and shall submit such account periodically to the Assistant Commissioner of Customs;

(6)��������� the importer satisfies the Development Commissioner of the Zone that the goods so imported have been used for the purposes specified in the notification or for any other purposes specified in Export-Import Policy;

(7)��������� the Assistant Commissioner of Customs, may subject to such conditions and limitations as may be imposed by him and subject to the provisions of Export-Import Policy -

(i) permit the said goods or goods manufactured or packaged in the unit to be transferred or supplied to another unit in the same Zone;

(ii) permit re-export of imported goods and export of domestically procured goods including goods generated out of partial processing/manufacture from such goods;

(iii) permit supply of unsuitable or broken cut and polished diamonds, precious and semi-precious stones or rough diamonds up to 5% of value of import or indigenously procured goods to the Domestic Tariff Area against the valid REP or GEM REP or Diamond Imprest Licence as applicable on payment of appropriate duty.

(iv) permit with the approval of Development Commissioner, personal carriage of precious metals jewellery or precious or semi-precious stones or beads as samples upto US$ 1,00,000 for export promotion tours and temporary display abroad subject to the condition that the exporter would bring back the jewellery or its sale proceeds within 45 days from the date of its clearance.

(iva) permit, with the approval of Development Commissioner, export of jewellery for holding, or participating in, an exhibition abroad subject to the condition that jewellery not sold shall be re-imported within 60 days of the closure of the exhibition;

(v) permit export of jewellery including branded jewellery for display and sale in the permanent shops set up abroad, provided that such items not sold abroad within 180 days, shall be re-imported within next 45 days.

(vi) permit clearance of used packing materials, such as cardboard boxes and polyethylene bags of a kind unsuitable for repeated use, without payment of any customs duty;

(vii) permit clearance of parts and tools of machinery in Domestic Tariff Area without payment of duty for repairs and return thereof;

(viii) permit clearance of capital goods out of the zone on payment of an amount equal to the customs duty leviable on such goods on the depreciated value thereof at the rate in force on the date of payment of such duty;

Provided that the importer shall not be eligible to avail of the exemption applicable to goods falling under heading No. 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), or the exemption available to imported goods under the Export Promotion Scheme other than the Export promotion Capital Goods Scheme permitting import of capital goods at the rate of duty of 5% ad valorem, or at zero rate of duty in terms of notification in force at the time of de-bonding.

(8)��������� gem and jewellery, including the rejects manufactured in the said Zone, shall not be brought to any other place in India (that is to say the Domestic Tariff Area) for whatever purpose:

Provided that scrap, dust or sweepings of gold arising in the manufacturing process may be forwarded to the Government Mint by the importer for conversion into standard gold bars and return to the said Zone in accordance with the procedure specified by the Commissioner of Customs in this regard;

Provided also that exchange of plain gold or plain silver or plain platinum jewellery, from any place in India to the said Zone with the gold or silver or platinum of the equivalent quantity in weight as that of gold or silver or platinum, as the case may be, contained in the said jewellery, permitted subject to such conditions as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs:

Provided further that jewellery up to 10% of the value of export by the unit in the preceding year, may be allowed clearance into Domestic Tariff Area by the Development Commissioner in consultation with the Assistant Commissioner of Customs, on payment of applicable duties.

(9)��������� in the event of a unit ceasing its operation, gold other precious metals, alloys, gem and material for the manufacture of jewellery shall be handed over to the Agency, nominated in this behalf by the Government of India in the Ministry of Commerce;

(10)�������� the Assistant Commissioner of Customs may allow, subject to the fulfilment of such conditions as he may specify, the percentage of wastage of gold or platinum specified in column (2) of the table given below or percentage of wastage of silver as specified in column (3) of the said Table during the manufacture of jewellery of the description specified in the corresponding entry in column (1) of the said Table.

(11)�������� export under this notification shall be allowed -

(i) by air freight through the airports specified in Annexure-II to this notification, and

(ii) through post parcels or through the authorised couriers, in accordance with such procedure as may be specified by the Commissioner of Customs;

Provided that when exports are made through authorised couriers through Customs Houses at Mumbai, Calcutta, Chennai, Delhi, Bangalore or Hyderabad, the Free on Board value of any consignment shall not exceed rupees twenty lakhs.

(12)�������� gem and jewellery manufactured in the said Zone may be supplied to the retail outlets or show rooms set up in the departure lounge at international airports at Calicut, Chennai, Cochin, Delhi, Hyderabad, Kolkata, Mumbai, Thiruvnanthapuram and Visakhapatnam in accordance with the Import and Export Policy for sale to a tourist as defined in the Baggage Rules, 1944, leaving India in accordance with the procedure specified by the Commissioner of Customs.

(13)�������� gem and jewellery manufactured in the said Zone and sold to a foreign bound passenger may be transferred in accordance with the Import and Export Policy to the retail outlets or showrooms set up in the departure Lounge or customs warehouse at International Airports specified in the Annexure-II to this Notification for being handed over to the said passenger for the purpose of export, as per procedure specified by the Commissioner of Customs in this regard.

2.���� Notwithstanding anything contained in the first paragraph, the exemption contained therein shall also apply to silver and gold falling under Heading No. 71.06 and 71.08 respectively of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) imported by the Minerals and Metals Trading Corporation of India Limited the Handicraft and Handloom Export Corporation, the State Trading Corporation and the State Bank of India and any agency authorised by Reserve Bank of India for being supplied to the gem and jewellery units in the said Zone under the scheme for export of gold and silver jewellery and articles from the Export Processing Zone as specified in paragraph 88 of the Export and Import Policy read with Chapter 6 of the Handbook of Procedures, Volume I of the Government of India in the Ministry of Commerce and Industry:

Provided that where gold is imported on behalf of a jewellery unit, the exemption shall apply only if:

(a) the procedure as may be specified by the Commissioner of Customs are followed by such a jewellery unit; and

(b) the conditions stipulated in the first paragraph are complied with by such a jewellery unit.

3.�������

(1)��������� The notification of the Government of India in the Ministry of Finance, Department of Revenue, specified in Annexure-III to this notification, are hereby rescinded.

(2)��������� Notwithstanding such rescission, anything done or action taken under the notification so rescinded shall be deemed to have been done or taken under the corresponding provisions of this notification.

4.���� For the purposes of this notification, the duty of customs leviable on gold and silver imported by the importer shall be limited to the duty specified under notification of the Government of India, Ministry of Finance, Department of Revenue, No.80/97-Customs, dated the 21^st October, 1997.

ANNEXURE: I

Annexure: II