Notification No. 13 dated 9^th February 1981 (As amended by 86/84, 121/84, 270/84, 219/85, 249/85, 38/86, 221/86, 322/86, 338/86, 517/86, 7/87, 9/88, 11/88, 197/88, 226/88, 196/90, 272/90, 137/91, 9/92, 212/92, 287/92, 154/93, 189/93, 110/94, 190/94, 83/95, 114/95, 101/95, 114/95, 117/95, 171/95, 88/96)

The Central Government, exempts goods specified in the Table below (hereinafter referred to as the goods), when imported into India for the purpose of manufacture of article for export out of India or for being used in connection with the production or packaging of goods for export out of India, by hundred percent export-oriented undertaking approved by the Board of approval for Hundred Percent Export-Oriented Undertakings appointed by the Notification of the Government of India in the former Ministry of Industry and Civil Supplies (Department of Industrial Development) No. S.O.163 (E)/RLIU/10(2) 76 dated the 3^rd March, 1976, from the whole of the duty customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty, if any, leviable thereon under section 3 of the second mentioned Act, subject to the following conditions, namely: -

(1)      The importer has been granted necessary licence for the import of goods for the said purposes;

(2)      The importer carries out the manufacturing operation in Customs bond and subject to such other conditions as may be specified by the Assistant Commissioner of Customs in this behalf;

(3)      The importer exports out of India hundred percent or such other percentage, as may be fixed by the said Board, of articles manufactured wholly or partly from the goods for the period stipulated by the Board or such extended period as may be specified by the said Board;

(4)      Omitted

(5)      Provided that the importer shall not be eligible to avail of the exemption applicable to goods falling under heading number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), or the exemption available to the imported goods under any Export Promotion Scheme other than the Export Promotion Capital Goods Scheme permitting import of capital goods at the rate of duty of 15% ad valorem in terms of notifications in force at the time of debonding.

(6)      The importer executes a bond in such form and for such sum and with such authority as may be prescribed by the Assistant Commissioner of Customs, binding himself to fulfill the export obligations and conditions stipulated in this notification and in or under the said Export and Import Policy and to pay on demand as amount equal to the duty leviable on the goods as are not proved to the satisfaction of the Assistant Commissioner of Customs to have been used in the manufacture of articles for export.

(7)      Notwithstanding anything contained in this notification, the exemption contained herewith shall also apply to those goods which on importation into India are used for the purposes of manufacture of articles within hundred Percent export oriented undertakings approved by the said Board of Approvals for Hundred percent Export Oriented Undertakings and such articles (including rejects, waste and scrap material arising in the course of manufacture of such articles) even if not exported out of India, are allowed to be sold in India, under and in accordance with the said Import and Export Policy and in such quantity and subject to such other limitations and conditions as may be specified in this behalf by the Director General of Foreign Trade, on payment of duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, on payment of customs duty on imported goods used for the purposes of manufacture of such articles in an amount equal to the customs duty leviable on such articles as if imported as such.

(8)      The Commissioner of Customs may, subject to the conditions and limitations stipulated in the said Import and Export Policy, as amended from time to time, permit the goods imported into India for the purpose aforesaid or the goods manufactured or packaged there from to be taken outside the Hundred Percent Export-Oriented Undertaking concerned temporarily without payment of duty for repairs, processing or display and the importer shall be bound to comply with such conditions and limitations.

(8A)    The Assistant Commissioner of customs may allow the supply/transfer of goods imported by a Hundred Percent Export Oriented Units or articles manufactured by such a unit to another Hundred Percent Export Oriented Unit or to a Unit in the Free Trade Zone/ Export Processing Zone for the purposes of further manufacture and export or for use within the said unit, subject to the conditions prescribed by him and in accordance with the conditions of such transfer in terms of Export-Import Policy.

(8B)    The Commissioner of Customs may, subject to such conditions as may be prescribed by him, allow a unit to re-export the goods, subject to necessary permission granted by the Development Commissioner of the Zone.

(9)      Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to spares and consumables, other than those specified in the Table below, to the extent of 1.5% of the ex-factory value of manufacture of articles for export out of India by the undertaking during the preceding year or such percentage in excess thereof as the Central Government may in each individual case allow having regard to the recommendation made in this behalf by the said Board of Approval for Hundred Percent Export Oriented Undertakings for the purpose of supply of such spares and consumables with the export articles for after-sale-service, subject to the condition that such supply is specially stipulated in the relevant export contract and Assistant Collector of Customs is satisfied that the values of such spares and consumables have been included for arriving at the value addition as required under the said Import and Export Policy.

2.     Omitted

3.     Notwithstanding anything contained in paragraph 1, in the case of units engaged in the development of computer software, data entry and conversion, data processing, data analysis and control or data management, the exemption contained therein shall also apply to goods imported by such unit for any or all of the said purpose of export and for providing consultancy services for any or all of such activities on the site abroad:

Provided that-

(a)      the conditions stipulated in this notification are complied with by the said unit; and

(b)      the procedure specified by the Commissioner of Customs is followed.

Provided that-

(a)      the conditions stipulated in this notification are complied with by such software development unit; and

(b)      the procedure specified by the Collector of Customs is followed.

4.     Nothing contained in this notification shall apply to goods imported by an aquaculture unit.