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Imports by units situated in Kandla Free Trade Zone
Notification
No. 77 dated 17th April 1980 (As amended by notification
nos. 99/80, 112/83, 119/83, 120/83, 182/83, 24/84, 228/84, 182/85, 218/85,
297/85, 244/86, 381/86, 170/87, 129/88, 232/88, 111/91, 212/92, 287/92 154/93,
189/93, 111/94)
Goods
specified in the annexure to this notification, when imported into India for the
production of goods for exports out of India or for being used in connection
with the production or packaging of goods for exports out of India or for the
promotion of such exports by units within the Kandla Free Trade Zone
(hereinafter referred to as the Zone) comprising of places bearing the survey
numbers and enclosed by the boundaries specified in the paragraph 3 are exempted
from whole of the duty of 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 Customs Tariff 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 export 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 fulfil, 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 12th April,
1985 (hereinafter in this notification referred to as the said Import &
Export Policy), 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 workers 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
utilisation of goods and of exports 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 Zone or for not re-exporting them
within the said period allow;
(ii)
retained within the Zone after installation or 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 (within 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 periods 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 limitations
as may be imposed by him, permit any goods imported or any goods manufactured or
packaged therefrom 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 willful act, negligence or default
of the importer, his employee or agent and therefore, not suitable for use in
production of goods or packaging within 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 he may specify in this behalf and which are consumed in the course
of such 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 and 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 Kandla Free Trade Zone Board;
(i)
goods (including goods manufactured) in the Zone and which are allowed to be
supplied/ transferred from a unit in the Zone to 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
sound condition; or
(ii)
scrap 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 Excises and Salt Act,
1944 (1 of 1944) or where such waste and scrap material is not excisable, on
payment of customs duty on imported goods used for the purposes 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 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.
2A.
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 said Import & Export Policy as
amended from time to time and subject to such other limitations and conditions
as may be specified under paragraph 2 of the notification of the Government of
India in the Ministry of Finance (Department of Revenue and Insurance) No.
272/79-Central Excise, dated the 18th October, 1979 as amended from
time to time 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);
2B.
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, being the excisable goods, in the nature of rejects, produced
or manufactured or packaged within the zone and such excisable goods even if not
exported out of India but are allowed to be sold in India upto a limit of five
per cent of the excisable goods so produced or manufactured or packaged or such
other limit as may be fixed by the said Kandla Free Trade Zone Board, 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).
2C.
Without prejudice to any other 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,
polyethylene bags of a 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.
Explanation:
The depreciation in respect of goods covered by clause (a) shall be allowed
for the period from the date of commencement of commercial production of the
unit or where such goods have been imported after such commencement from the
date such goods have come into use for commercial production upto the date of
payment of duty.
2D.
Notwithstanding anything contained in this notification, the 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 Excises 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 the
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 12th 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.
2E.
Notwithstanding anything contained in paragraph 1, 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.
Explanation:
With effect from 13th August, 1993 the consultancy fees received by
software development units in convertible foreign currencies for consultancy
services for development of software �on site� abroad shall be deemed to
be exports for the purposes of fulfilment of export obligation under this
notification.
3.
For the purpose of this notification, the Kandla Free Trade Zone shall
comprise of the places bearing the survey numbers and enclosed by the
boundaries, specified below: -
SURVEY
NUMBERS
(A)
199, 200, 201, 202, 204, 205, 206, 207, 208, 209, 211, 212, 216, 217,
218, 219, 220, 221, 222, 223, 224, 257, 266, 267, 268, 269, 270, 271, 272, 273,
274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289,
290, 291, 292, 293, 294, 295, 296, 297, 299, 301, 302, 303, 304, 310, 312, 313
and 315 in the Taluka of Anjar, District of Kutch, State of Gujarat, at a
distance of 9.6 kilometres from the port of Kandla, enclosed by a 3.3528 metres
high fencing consisting of stone masonary in the plinth and mild steel bar mesh
at the top, extending upto 1042.49 metres in the North, 1529.51 metres in the
West 777.85 metres in the South and 1847.88 metres in the East; and
(B)
12, 13, 14, 18, 19, 20, 21, 22, 23, 210, 213, 214, 215, 227, 256, 258,
259, 264, 265, 298, 299, 300, 307, 308, 309, 311, 314, 316, 317, 318, 319, 320,
321, 322, 323, 324, 325, 326, 327, 328, and 331, in the Taluka of Anjar,
District to Kutch, State of Gujarat, at a distance of 9.6 Kilometres from the
port of Kandla, enclosed partly by 3.3528 metres high fencing consisting of
stone masonary in the plinth and mild steel bar mesh at the top and partly by
4.20 metres wall consisting of stone masonary wall upto 3 metres with 1.20
metres bared wire fencing at the top.
These
two combined together extending upto 1552.49 metres in the North, 1512.00 metres
in South, 1849.08 metres in the East and 1560.00 metres in the West.
ANNEXURE
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Sl.
No.
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Description
of goods
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(1)
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(2)
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1.
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Machinery
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2.
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Raw
Materials
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3.
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Components
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4.
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Spare
Parts of Machinery
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5.
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Consumables
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6.
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Packaging
materials
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7.
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Office
equipments, spares and consumables thereof
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8.
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Goods
re-imported within 1year from the date of exportation from the Zone due
to the failure of the foreign buyer to take delivery
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9.
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Tools,
Jigs, Gauges, Fixtures, Moulds, Dies Instruments and Accessories
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10.
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Prototypes,
technical and Trade Samples for Development and diversification
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11.
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Drawings,
Blue prints, Charts
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12.
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Goods
received for repairs or re-conditioning, within three years of the date
of exportation for export after repairs or re-conditioning
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13.
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Material
handling equipments, namely, fork lifts, over-head cranes, mobile
cranes, crawler cranes, hoists and stackers
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