Notification No. 263 dated 16^th August 1985 (As amended by notification nos. 320/86, 328/86, 402/86, 202/87, 349/87, 131/88, 232/88, 237/90, 114/91, 212/92, 287/92, 154/94, 189/93,111/94)

The Central Government, exempts goods specified in Annexure to this notification, (hereinafter referred to as the goods) when imported into India for the production or packaging of goods for exports out of India or for the promotion of such exports by units within the Madras Export Processing Zone at Madras (hereinafter referred to as the Zone) comprising of places bearing the survey numbers and enclosed by the boundaries specified in paragraph 4, from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51of 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 authorised to establish  manufacturing unit or units in the Zone;

(2)      the importer has been granted necessary licence for the import of goods;

(3)      the importer satisfies the Development Commissioner that the goods so imported will be used in connection with the production or packaging of goods for exports out of India, or with the promotion of such exports of goods;

(4)      the importer agrees to execute a bond in such form and for such sum as has been prescribed by the development Commissioner of the Zone binding himself to fulfil the export  obligations, and to fulfill, inter alia the conditions stipulated in this notification, and in or under the Import & Export Policy for April 1985-March, 1988 notified by the Government of India in the Ministry of Commerce Public Notice No.1-ITC (PN)/85-88, dated the 12^th April, 1985 as amended from time to time;

(5)      the importer agrees: -

(a) to bring the goods into the Zone and use them within the Zone in connection with the production or packaging of goods for export out of India or with the promotion of such exports of goods;

(b) to export out of India, all goods so produced or packaged or to use such goods for imparting  training to worker or to sell such goods (or packages) within the said Zone, as the case may be;

(c) to export or dispose off in the manner approved by the Development Commissioner of the Zone all remnants arising out of such production or packaging;

(6)      the importer shall maintain a proper account of import, consumption and utilization of goods and of export made by him, and shall submit such account periodically to the Development Commissioner, in such form and in such manner as may be laid down by the said Commissioner;

(7)      the importer shall pay, on demand, an amount equal to the duty leviable:-

(a) on goods which are capital goods as are not proved to the satisfaction of the Assistant Collector of Customs to have been:-

(i) installed or otherwise used within the Zone or re-exported within a period of one year from the date of importation thereof or within such extended period as the Assistant Collector of Customs may, on being satisfied that there is sufficient cause for not using them within the said period, allow;

(ii) retained within the Zone after installation for use inside the Zone;

(b) on goods other than capital goods as are not proved to the satisfaction of the Assistant Collector of Customs to have been:-

(i) used in connection with the production or packaging of goods (with in the Zone) for export out of India or with the promotion of export of such goods or re-exported within a period of one year from the date of importation thereof or within such extended period as the Assistant Collector of Customs may, on being satisfied that there is sufficient cause for not using them or for not re-exporting them within the said period, allow;

(ii) retained within the Zone in connection with the promotion of exports of goods;

(c) on goods so produced or packaged as have not been exported out of India, and on unused goods, (including empty cones, bobbins or containers, if any, suitable for repeated use)as have not been exported, within a period of one year from the date of importation of such goods or within such extended period as the Assistant Collector of Customs may, on being satisfied that there is  sufficient cause for not exporting such goods within the said period, allow;

(8)      the Collector of Customs, may, subject to such conditions and limitation as may be imposed by him, permit any goods imported or goods, produced or packaged there from to be taken outside the Zone temporarily without payment of duty for repairs, processing or display, and the importers shall be bound to comply with such conditions and limitations;

(8A)    the Assistant Collector may, subject to such conditions as may be prescribed by him, allow goods (including goods manufactured) in the Zone to be supplied/transferred from a unit in the Zone to a unit in another Zone or to a 100% Export Oriented Unit subject to necessary permission granted by the Development Commissioner and satisfaction of conditions prescribed in para 4.13 of the �Hand book of Procedures� (April 1990 � March 1993) issued by the Government of India, Ministry of Commerce.

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

(9)      subject to the satisfaction of the Collector of Customs, duty shall not be leviable in respect of the following goods, namely: -

(a) goods lost or destroyed not due to any wilful act, negligence or default of the importer, his employee; or agent;

(b) goods damaged or deteriorated not due to any wilful act, negligence or default of the importer, his employee or agent and therefore, not suitable for use in production of goods for packaging with in the Zone;

(c) scrap or waste material arising in the course of such production if such scrap or waste material is within  such limits as may be specified in this behalf by the Central Government and destroyed within the Zone;

(d) samples of goods produced or packaged in the Zone which are allowed by Assistant Collector of Customs to be sent for test outside the Zone subject to such conditions as may be specify in this behalf and which are consumed in the course of test;

(e) samples of goods imported for study or design within the Zone, which in the course of manufacturing operations have been broken up and rendered insignificant in commercial value;

(f) goods used for imparting training to workers within  the Zone or goods sold by a manufacturer within the Zone to another manufacturer inside the Zone subject to such conditions, and the execution of such bonds, as may be specified by the Assistant Collector of Customs for ensuring that the goods so  sold will be used in connection with the production or packaging of goods for export out of India or with the promotion of such exports of goods;

(g) goods manufactured in the Zone an which are allowed to be taken outside the Zone, temporarily for repairs, processing or display;

(h) rags, trimmings and tailor cuttings arising in the course of manufacture of readymade garments when cleared from the Zone, provided that the percentage of such waste material in the form of rags, trimmings and tailor cuttings does not exceed the percentage fixed in this regard by the Madras Export Processing Zone Board;

(i) goods (including goods manufactured) in the Zone and which are allowed to be supplied/ transferred  from a unit in another Zone or to a 100% Export Oriented Unit;

(j) goods which are allowed to be re-exported from a unit in the Zone.

(2)    The following goods will not be required to be accounted for under condition (6) of the preceding paragraph by way of export, namely:

(a)

(i) goods damaged or deteriorated not due to any wilful act, negligence, or default of the importer, his employee or agent and therefore not suitable for use in the production of goods within the Zone, if destroyed within the Zone or if cleared from the Zone for use in any other part of India on payment of the duty equal to that leviable on the goods if imported in such condition, or

(ii) scarp or waste material arising in the course of production of goods within the Zone, if cleared from the Zone for use in any other part of India on payment of the duty of excise leviable under section 3 of the Central Excise and Salt Act, 1944(1 of 1944) or where such waste and scrap material is not excisable, on the payment of customs duty on imported goods used for the purposed of manufacture of goods for export in an amount equal to the customs duty leviable on such waste and scrap material as if imported as such;

(b) empty cones, bobbins or containers, suitable for repeated, use and cleared from the Zone for use in any other part of India, on payment of the duty equal to that leviable on such goods at the time of their importation into India;

(c) chindies, paper cuttings and the waste packing material arising in the course of production of goods, within the Zone, when destroyed under the supervision of an officer of customs in accordance with the procedure specified in this behalf by the Assistant Collector of Customs of the Zone.

(d) rags, trimmings and tailor cuttings arising in the course of manufacture of readymade garments, when cleared from the Zone.

(3)    Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to those goods which on importation into India are used in connection with the production or manufacture or packaging of excisable goods produced or manufactured within the Zone and such excisable goods even if not exported out of India, but brought to any other place, in India, under and in accordance with the Appendix 15 of the Import & Export Policy Book for March, 1985 to April, 1988 (Vol.1) as amended from time to time, and subject to the quantity and such other limitation and conditions as may be specified in this behalf by the Development Commissioner of the said Zone, on payment of duty of excise leviable on such excisable goods under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944);

3A.   Without prejudice to any provisions contained in this notification where it is shown to the satisfaction to the Assistant Collector of Customs that any unit in the Zone has been permitted to clear any of the goods outside the Zone to any other place in India by the Development Commissioner of the Zone, in accordance with the Export and Import Policy -

(a) such clearance of machinery, material handling equipments, office equipments and captive power plants may be allowed on payment of an amount equal to the customs duty leviable on such goods on the depreciated value thereof and at the rate in force on the date of payment of such duty;

(b) such clearance of goods (including empty cones, bobbins, containers, suitable for repeated use) other than the goods specified in clause (a) may be allowed on payment to customs duty on the value at the time of import and at rates in force on the date of payment of such customs duty;

(c) such clearance of used packing materials such as cardboard boxes, polythene bags of kind unsuitable for repeated use may be allowed without payment of any customs duty;

Provided that the importer shall not be eligible to avail of the exemption applicable to goods falling under heading 98.01 of the First Schedule to the customs Tariff Act, 1975 (59 of 1975) or the exemption available to goods imported under the Export Promotion Capital Goods (EPCG) Scheme in terms of the Export and Import Policy or any other Export Promotion Schemes.

3B.   Notwithstanding anything contained in this notification, the Assistant Collector of Customs may allow any excisable goods produced or manufactured or packaged within the Zone, to be taken outside the Zone to any other place in India for the purposes of display as samples subject to such conditions and restrictions as may be specified by the Development Commissioner of the Zone in this behalf, on payment of the duty of excise leviable on such excisable goods under section 3 of the Central Excise and Salt Act, 1944 (1 of 1944);

Provided that, the quantity of the excisable goods so allowed to be taken outside the Zone to any other place in India for the purposes of display as samples together with the quantity of excisable goods allowed to be taken outside the Zone to any other place in India for the purposes of sale under and in accordance with Import and Export Policy for April, 1985 -March, 1988 [Volume (1)] (published with the Public Notice of the Government of India in the Ministry of Commerce No. I-ITC (PN)/85-88, dated the 12^th April, 1985) as amended from time to time, in respect of any unit in the Zone shall not, in any financial year, exceed the limit specified in the said Import and Export Policy for the purposes of such sale of the excisable goods concerned.

3C.   Notwithstanding anything contained in paragrapp, in the case of units engaged in the development of computer software, the exemption contained therein shall also apply to goods imported by such unit for the development of software for export and for providing consultancy services for development of software �on site� abroad�.

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.     For the purpose of this notification the Zone shall comprise of Survey Numbers 3, 7, 8, 10, 11, 12, 13, 14, 15, 16, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61 & 92 (part) 132/1A2, 1B2, 134/1, 2, 3B, 135/2, 143/2A, 144/1, 145, 146/1, 147/1, and 164/1 (part) of Kadapperi village of Saidapet Taluk, Chengai-Anna District of Tamil Nadu lying at a distance or 24 Kilometres from the port of Madras and 6 Kilometres from Madras National Air Port and 8 Kilometres from the Madras International Air Port, enclosed by masonary brick wall upto a height varying from 3.35 metres to 3.85 metres depending upon the site conditions with �Y� angle barbed wire fencing extending upto a further height of 1.2 metres, starting from the North West corner of the area, which runs upto 258 metres towards North East, takes a turn towards South upto 1045.2 metres and takes a turn towards East upto 18 metres and North East upto a distance of 262 metres, towards North upto 70.8 metres, turn towards East upto 157.7 metres runs towards South upto 154 meters and runs towards East upto 227 meters runs towards South upto 96 metres, turns towards East upto 72 metres, after which it further runs parallel the main G.S.T. Road for 86.4 metres, towards South upto North East to Booster Station and runs towards West for 30 meters, turns towards south for 30 metres around the Booster Station and turns towards West upto 200 meters, towards North upto 41 metres, towards West for 99.8 metres, towards North 82.6 metres, towards West for 304.4 metres, towards North upto 111 metres and towards West by 34 metres, temporary fencing East to West 630 metres, masonary compound wall commencing again from the South West corner of the boundary near Western and of Alleri Tank bund, proceeds, towards North 320 metres, takes slight kink, proceeds North 320 metres, turns towards East for 166.15 metres, takes a turn towards North for 380 metres, turns towards East for 203.35 metres, turns towards South for 361.95 metres, takes a turn towards East for 208.55 metres and joins with the starting point of the Phase I compound wall, covering a circumference of 5,888.10 metres of brick compound wall and barbed wire fencing of 630 metres, thus constituting a total circumference of 6,518.10 metres.

ANNEXURE