Notification No. 3 dated 14^th January 1988 (As amended by notification nos. 232/88, 250/90, 151/91, 15/92, 155/92, 7/93, 145/93, 178/94, 194/94, 101/95, 115/95, 117/95, 57/97, 76/97, 11/98, 40/99, 10/00, 55/2000, 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 the goods specified in the Annexure to this notification (hereinafter referred to as the said goods), when imported into India for the purposes of use in the manufacture of Jewellery for export out of India by a hundred percent export oriented undertaking in the Special Export Oriented Complex for the manufacture of jewellery at Jhandewalan, New Delhi (hereinafter referred to as the said Complex), from the whole of the duty of customs leviable thereon under the said 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 conditions, namely: -

(i)���� the importer has been authorised to establish� a hundred per cent export oriented undertaking in the said Complex for the purpose of manufacture of jewellery for export out of India;

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

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

(iv)��� the importer carries out the manufacturing� process or other operations in respect of jewellery in customs bond and subject to such other conditions as the Assistant Commissioner of Customs may, having regard to the circumstances of the case, specify in this behalf;

(v)��� the importer satisfies the Assistant Commissioner of Customs that the said goods so imported shall be used in the manufacture of jewellery for export out of India;

(vi)��� the importer agrees to execute a bond in such form and for such sum and with such authority as may be specified by the Assistant Commissioner of Customs binding himself to fulfil the export obligation with the prescribed value addition and to fulfill, inter alia, the conditions stipulated in this notification and in the Letter of Approval or Intent or the Industrial Licence issued by the Board of Approval and to pay on demand� an amount equal to the duty of customs leviable on the said goods as are not proved to the satisfaction of the Assistant Collector of Customs to have been used in the manufacture of the jewellery for export;

(vii)�� the importer agrees to bring the said goods into the said complex and use them within the said Complex in the manufacture of jewellery for export out of India;

(viii)� save as otherwise provided in condition (xvi), the importer agrees to export out of India all the jewellery manufactured within the said Complex for the period stipulated by the Board of Approval or such extended period as may be specified by the Board of Approval;

(ix)��� on expiry of the period referred to in condition (ix) above, the importer shall pay the following duties, namely: -

(a)��� duty of customs on capital goods on depreciated value but at the rates of duty of customs in force on the date of payment of such duty.

(b)��� duty of customs on raw materials and on components on the value at the time of import and at the rates of� duty of customs in force at the time� of clearances;

(x) ��� the importer shall maintain a proper account of import, consumption and utilisation of the said goods and of exports made by him and shall submit such account to the Assistant Collector of Customs, in such form, in� such manner, at such intervals and within such time, as may be specified by the Commissioner of Customs;

(xi) �� the importer agrees that the jewellery, including the waste, refuse and rejects thereof, manufactured in the said Complex, shall not be brought to any other place in India, for whatever purpose;

Provided that scrap, dust or sweepings of gold or silver arising in the manufacturing process may be forwarded to the Government Mint by the importer for conversion into standard gold or silver bars as the case may be, and return to the said Complex in accordance with the procedure specified by the Commissioner of Customs in this regard or such scrap, dust or sweepings of gold or silver arising in the manufacturing process may be cleared to the Domestic Tariff Area on payment of duty as specified in the notification of the Government of India, Ministry of Finance, Department of Revenue, No. 80/97-Customs, dated the 21^st October, 1997 on the gold or silver content, as the case may be in the said scrap, dust or sweeping;

Provided further that jewellery upto 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;

Provided also that exchange of plain gold or plain silver or plain platinum jewellery, from any place in India to the said Complex 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;

(xii)�� in the event of such a� hundred percent export oriented undertaking ceasing its operations, gold, other precious metals, alloys, gems and other material for the manufacture of jewellery shall be transferred to such person, undertaking, agency or authority, as the Government of India in the Ministry of Commerce may specify in this behalf;

(xiii)� the Assistant Commissioner of Customs may allow, subject to 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 description specified in the corresponding entry in column (1) of the said Table.

Provided that per gram value of the semi-precious stones utilized in the making of jewellery and articles is less than the per gram value of gold.

(xiiib)gem and Jewellery manufactured in the Jhandewalan Complex 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 Customs Airport at Delhi for being handed over to the said passenger for the purpose of export, as per procedure specified by the Collector of customs in this regard.

(xiv)� the export and import under this notification of the said goods other than capital goods may be made by air-freight through Delhi Airport or through post parcel and the export under this notification may also be made through authorized couriers as per procedure prescribed by the� Commissioner of Customs;

Provided that the Free on Board value of any consignment through the authorised courier shall not exceed rupees twenty lakhs.

(xv)�� gem and jewellery manufactured in the said Complex may be supplied to the retail outlets or show rooms set up in the departure lounge at international airport at Calicut, Chennai, Cochin, Delhi, Hyderabad, Kolkata, Mumbai, Thiruvnanthapuram and Visakhapatnam in accordance with Export and Import Policy and the Handbook of Procedures Volume I, for sale to a tourist as defined in the Baggage Rules, 1998, leaving India in accordance with the procedure specified by the Commissioner of Customs;

(xvi)� Omitted

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

(a)��� permit the said goods or goods manufactured or packaged in the unit to be transferred or supplied to another unit of the Jhandewalan Complex;

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

(c)��� 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 Licences as applicable on payment of appropriate duty;

(d)��� 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;

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

(e)��� 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.

(f)���� permit clearance of used packing materials, such as card-board boxes and polyethylene bags of a kind unsuitable for repeated use, without payment of any customs duty;

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

(h)��� permit clearance of capital goods 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.

2.���� Notwithstanding anything contained in paragraph 1, of this notification, the exemption contained therein shall also apply to silver and gold falling under Heading Nos.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, the Projects and Equipments of India Limited and any agency authorised by Reserve Bank of India for being supplied to the hundred percent export orient undertaking under the scheme for export of gold/ silver and platinum jewellery and articles from Export Processing Zone (EPZs) and from Export Oriented Unit (EOU) Complexes specified in Export and Import Policy read with Chapter 6 of the Handbook of Procedures Volume - I.

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

(a)����� the procedure as may be specified by the Collector of Customs is followed by such a jewellery unit; and

(b)����� the conditions stipulated in paragraph 1 of this notification are complied with by such a jewellery unit.

Provided further that in the event of the Gem and Jewellery units to whom the gold or silver has been supplied, fails to export the jewellery made out of such gold or silver within the time specified in the Export and Import Policy under the respective Scheme, the nominated agencies shall deposit duty on the quantity of the gold or silver not contained in the jewellery exported at the rate of duty of Customs leviable on the gold or silver, as the case may be, as provided in the notification No. 80/97-Customs, dated the 21^st October, 1997 within seven days of the expiry of the period within which the said jewellery manufactured out of the said gold or silver was supposed to be exported.

ANNEXURE