Notification No. 237 dated 15^th November 1985 (As amended by 244/88, 175/89, 127/90)

In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), and Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods when brought into Madras Export Processing Zone being free trade zone, (hereinafter referred to as the Zone) from the factories of their manufacture or warehouses situated in other parts of India for use by the industries located in the Zone for the production of goods or in connection with the production of goods or for packaging of goods intended for export or for supply to a unit situated in another Free Trade Zone, Export Processing Zone or hundred percent export oriented undertaking for the manufacture of goods, solely meant for export from the whole of -

(i)       the duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944(1 of 1944), and

(ii)    the additional duty of excise leviable thereon under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957).

          subject to the following conditions, namely: -

(a)   the consignee is authorised to establish manufacturing unit or units in the  Zone;

(b)   the consignee brings the excisable goods directly from the factory of manufacture or warehouse;

(c)      the entire excisable goods so brought are used by or on behalf of the consignee in the Zone for the production of goods or in connection with the production of goods or for packaging of goods solely meant for export and all  such goods are exported; and

(d)   the procedure set out in the Appendix to this notification is followed in Zone.

Provided that where the goods are supplied to a unit located in another Free Trade Zone, Export Processing Zone, or hundred per cent export oriented undertaking, the transmission of goods shall be under bond in such manner and subject to such conditions as may be specified by the Collector of Central Excise having jurisdiction over the factory of removal.

2.     Notwithstanding anything contained in this notification the goods produced or manufactured in the Zone may be cleared for home consumption outside the Zone in such quantity and subject to such limitations and conditions as may be specified by the Development Commissioner of the Zone (hereinafter referred to as the Development Commissioner), on payment of duty of excise leviable on such goods under section 3 of the Central Excises and Salt Act, 1944(1 of 1944).

2A.   Without prejudice to any other provisions contained in this notification, where it is shown to the satisfaction of the Assistant Collector of Central Excise, -

(a)      that any unit in the Zone has been allowed to withdraw from the Zone, or has been permitted to dispose of any capital goods outside the Zone in any other place in India, by the Madras Export Processing Zone Board appointed by the Notification of the Government of India in the Ministry of Commerce of 14/13/82-EPZ, dated the 4^th January, 1985; and

(b)   that the concerned capital goods so permitted have been used within the zone for a period of not less than three years,

the Assistant Collector of Central Excise may allow such capital goods to be taken outside the Zone to any other place in India on payment of an amount equal to the duty leviable on such capital goods on the depreciated value thereof at the time of clearance.

2B.   Without prejudice to any other provisions contained in this notification, if it is shown to the satisfaction of the Collector of Central Excise that any unit in the said Zone has been allowed to withdraw from the said Zone, or has been permitted to dispose of any inputs outside the Zone in any other place in India by the Madras Export Processing Zone Board, the Collector of Central Excise may allow such inputs to be taken outside the said Zone to any other place in India on payment of Central Excise duty leviable on such inputs in India.

Provided that such duty of excise shall in no case be less than the duty of excise that was payable on the date of clearance of such inputs from the supplier factory.

3.     For the purposes of this notification, the �Madras Export Processing Zone� shall comprise of the places bearing the survey numbers and enclosed by the boundaries specified in the notification of the Government of India in the Ministry of Finance (Department of revenue) No. 236/85 - Central Excise, dated the 15^th November 1985.

APPENDIX: PROCEDURE TO REGULATE �IN BOND� MOVEMENT OF DUTY FREE EXCISABLE GOODS FOR USE IN THE ZONE

Any person intending to obtain duty free goods for use by him in his factory or warehouse situated in the Zone shall make an application in writing to the Development Commissioner in proper form to be prescribed by the Development Commissioner, stating therein the annual quantity of the excisable goods required and the purpose for and the manner in which such goods are intended to be used and declaring that the goods will be used for such purpose and in such manner only. The Development Commissioner or any officer duly authorised by him may grant the application after causing such inquiries to be made as he may deem fit and the applicant shall then enter into a bond in the form given in Annexure D1 to D4 below with such surety or sufficient security, in such amount and under such conditions as the Development Commissioner may approve. The Development Commissioner may, however, allow the annual quantity of excisable goods to be brought as furnished by the manufacturer or such quantity as the Development Commissioner may extend on a request to that effect. The concession shall expire on the 31^st December every year, but may be reviewed if the Development Commissioner or a duly authorised officer sees no reason to the contrary;

Provided that, in the event of death, insolvency or insufficiency of the surety, or where the amount of the bond is inadequate, the Development Commissioner or his duly authorised officer, may, in his discretion, demand a fresh bond, and may, if the security furnished for a bond is not adequate, demand additional security.

After the grant of the application and execution of bond by the applicant, the security officer will issue a certificate, in the form given in Annexure E below certifying that:

(i)     the applicant is a bonafide plot holder of the Zone;

(ii)    has executed a bond in the form given in Annexure D1 to D4 below with the zone authorities showing  the number and particulars of the bond; and

(iii)   that the specimen signature of the authorised agent of the importer furnished on the body of the certificate is genuine and he would attest it. The certificate will be sent by the security officer under registered post (acknowledgement due) to the factory or warehouse from which the goods are to be obtained. A copy of the certificate will also be sent by the security officer to the Superintendent of Central Excise incharge of the range under which the factory or warehouse, from where the goods are to be received falls.

On receipt of the aforesaid certificate the factory or warehouse (consignor) from where the goods have to be removed shall prepare an application in the form given in Annexure A below in quadruplicate for removal of non-duty paid goods from one warehouse to another mentioning clearly the number and date of the bond in Annexure D1 to D4 as per the certificate issued by the Security Officer of the Zone. Removal Application in Annexure A below must be serially numbered. The serial No. should be according to the financial year. The Serial No. must be noted on all the copies. Whenever any removal application has to be cited in the course of correspondence, the name of the factory or warehouse, the serial number and date of Annexure A below should always be quoted as reference. The consignor shall, however, intimate, to the proper officer about the removal of goods at least 12 hours before such removal is expected to take place.

Packages to be marked and address to be noted in the application.

The factory or warehouse of removal (consignors) must -

(i)     ensure the packages bear proper marking and number;

(ii)    ensure that all copies of Annexure A below are prominently marked �Intended for use in Madras Export Processing Zone�;

(iii)   give the full address of the factory or warehouse of removal as well as of the Superintendent of Central Excise in-charge of the range under which the factory or warehouse falls and the Central Excise Collectorate to which it is attached.

Whenever any of these addresses is used for despatching purposes, care must be taken by the despatching factory or warehouse to see that the full address of the Superintendent of Central Excise in-charge of the range including the names of the district is properly reproduced.

The consignor shall also prepare a gate pass in form G.P.2 given in Appendix I to the Central Excise Rules, 1944 in respect of the goods proposed to be removed from his warehouse and will thereafter clear the goods on his own without any verification by any Central Excise Officer.

The consignor shall send the original and triplicate copy of Annexure A below and original copy of the gate pass alongwith the consignment to the consignee. The duplicate copy of Annexure A below will be sent by the Consignor to the Development Commissioner. The quadruplicate copy of Annexure A below alongwith a copy of the gate pass will be sent by the consignor to the officer-in-charge of his factory or warehouse within 24 hours of the removal of the consignment in question. The said officer-in-charge shall maintain an account of all such removals in Annexure B below.

On receipt of the duplicate copy in the Zone�s Administrative Officer, it must immediately be entered in the �Record of Receipts in bond� given in Annexure C below and forwarded the same day to the Security Officer. The entries in this record should be verified against relative entries of the Record of Raw Materials prescribed by the Development Commissioner.

After delivery of the non-duty paid excisable goods from a manufacture in the rest of India to the Plot holder in the Zone, Proper accounting of these goods will be the responsibility of the Zone authorities.

(1)    The consignee must give intimation of the arrival of the consignment at this premises to the Security Officer of the Zone without any delay and should store the same separately and intact, pending examination and check by the Preventive officer who will be deputed by the Security Officer for this purpose. The Preventive Officer after taking account of the goods will identify them with the marks and numbers, and weigh the consignment in full. Thereafter, he shall complete the re-warehousing certificate on the duplicate copy received from the Security Officer and original and triplicate copy of the applications presented by the consignee, return duplicate to the Central Excise Officer-in-charge of the factory or warehouse of removal direct and triplicate to the consignee for despatch to the consignor after noting thereon the deficiency or excess, if any.

(2)    Duty on shortages/ losses in transit: Since the bond in Annexure D1 to D4 (surety/ security/ general surety/ general security) would have been executed by the consignee, duty on shortages will be demanded from him after condoning the permissible losses in transit. For each commodity a separate schedule of losses will be formulated and issued by the Development Commissioner.

If the duplicate application is received by the Security Officer of the Zone, before the arrival of the goods is reported to him by the consignee, he must keep it pending, securely and systematically file in a file marked �pending duplicate in Annexure A application� and record the particulars of the consignment in the �Record of receipts in bond� prescribed as in Annexure C below and no sooner the consignment is received, he will follow the procedure prescribed in paragraph (h) above.

If any excisable goods obtained under this procedure are not duly accounted for as having been utilised in the production of goods or in connection with the production of goods or for packaging of goods meant for export only, or are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accidents during storage or handling in the approved premises, or, have been permitted to be disposed off as refuse or wastage within the permissible limits prescribed by the Development Commissioner, the applicant shall, on demand by the proper officer, immediately pay the duty leviable on such goods. The concession may at any time be withdrawn by the Development Commissioner, if a breach of the procedure is committed by the applicant, his agent or any person employed by him. In the event of such a breach, the Development Commissioner may also order the forfeiture of the security deposited under para (a) above and may also confiscate the excisable goods and all goods manufactured from such goods in store in the premises of the applicant.

Despatch of the duplicate application in Annexure A referred to in paragraph (e) above must always be made by registered post acknowledgement due, and the postal receipt acknowledgement must be systematically filed by the consignor and presented for inspection to the Superintendent of Central Excise in-charge of the factory whenever required.                      

Under sub-rule (1) of rule 156-B of the Central Excise Rules, 1944, if the certificate of re-warehousing of a consignment of excisable goods despatched to the consignee at the Zone [as per paragraph (h)(l)] is not received back by the consignor within 90 days of the removal of the goods or within such extended period as may be allowed by the Collector of Central Excise, it is the responsibility of the consignor to himself pay the duty leviable on the consignment by a debit entry in his account current. However, a provision has been made that in such cases where the consignor produces proof of re-warehousing to the satisfaction of the proper officer after payment of duty in the manner indicated above, he will be eligible for grant of refund of the duty so paid by making an application.

The Officer-in-charge of the factory or warehouse may also demand duty on a consignment the re-warehousing certificate in respect of which has not been received within the stipulated period. In such cases if the consignor has already paid the duty leviable on the consignment by a debit entry in his account current, he may intimate the officer-in-charge about the particulars of such deposit in reply to this notice of demand.

If the duplicate copy of Annexure A below [see paragraph (h)(l)] is not returned to the officer-in-charge of the factory or warehouse of removal  within a month of the removal of consignment, reminders must be issued regularly at fortnightly intervals to the security officer of the Zone. If, despite such reminders the duplicate application is not received within two months of the date of removal of the consignment, the matter should be reported to the Assistant Collector of Central Excise in whose charge the consignor operates who must immediately communicate with the Assistant Collector of Customs of the Zone and either secure a satisfactory proof of the consignment having been duly received by the importer at the Zone or ensure that the duty, due on the goods not so received at destination is properly recovered as per paragraph (l) above.

On receipt by the consignee, such goods shall be utilised in the production of goods or in connection with the production of goods or for packaging of goods intended solely for export. It shall be responsibility of Assistant Collector of Customs/Security Officer of the Zone to ensure that all non-duty paid goods have been fully utilised for the production of goods or in connection with the production of goods or for packaging of goods intended for export only or are otherwise accounted for to the satisfaction of the Development Commissioner.

ANNEXURE A: FORM-AR 3A

Application for removal of excisable goods from a bonded warehouse in India to a plot in the Madras Export Processing Zone

Range ___________________

Original/ Duplicate/ Triplicate/ Quadruplicate

I/ We (holder(s) of Central Excise Licence No. ____________ in Form _____________ apply for leave to remove the under-mentioned goods from the warehouse at _____________________ to the Factory at Plot No. ____________ of Sector No. ____________ of Mr./ Messrs. ______________ of the Madras Export Processing Zone.

1.     To be entered by the consignor/ owner or his authorised agent in words and figures.

2.     The aforesaid Mr./ Messrs __________________ have executed a bond at destination; in Form B-5A (Surety or Security) or B-5 (General-Surety) bearing No. ___________ dated _________ for rupees _____________________

Delete the entries not applicable

A certificate from the Central Excise Officer of Central Excise ______________ in Form C.T. 3 is attached

3.     I/ we hereby declare the above particulars to be true.

Place: ________________

Signature of Consignor(s)/ Owner(s) or his/

their authorised agent ________________

Date: _________________       

1: Certificate of Central Excise Officer at Warehouse of Removal

To,

The Security Officer,

Madras Export Processing Zone

I hereby certify that the consignment conforms in all respects to the description given above and I have permitted removal under Transport permit in form G.S. No. _________________ dated ____________.

Place: _______________

Inspector of Central Excise _______________________

Date: ________________

2: Certificate of Preventive Officer at Warehouses at Madras Export Processing Zone

I hereby certify that the consignment arrived at Plot No. _________ of Sector No. _____________ of the Madras Export Processing Zone and that the goods conform in all respects to the description given above/ overleaf/ except for the following discrepancies and that they have been re-warehoused under Entry No. ______________ dated ________________ of the Raw materials Account Register prescribed by the Development Commissioner, Madras Export Processing Zone.

Place: _______________

Preventive Officer (Madras Export Processing Zone) __________________________

Date: ________________                    

ANNEXURE B: Record of Removals in Bond

RANGE OFFICER

ANNEXURE C: MADRAS EXPORT PROCESSING ZONE

Record of Receipts in Bond (For Madras Export Processing Zone)

ANNEXURE D1: FORM B-5 A (SURETY)

Bond (with surety) for the due arrival and re-warehousing of excisable goods removed from a warehouse in India to a factory in the Madras Export Processing Zone

(Delete letters and words not applicable)

I/ We (I)____________________ of __________________ (hereinafter called the obligor(s) and (2) I/ We _____________ of __________ (hereinafter called the surety) are jointly and severally bound to the President of India in the sum of ___________ rupees to be paid to the President of India for which payment we jointly and severally bind ourselves and our legal representatives.

The above bounden obligor(s) being permitted to remove the goods described in his/ their application No. ______________ dated ________________ from the bonded warehouse at __________________ to the factory at Plot No. _____________________ Sector No.  __________________ of the Madras Export Processing Zone.

The condition of this Bond is that if the obligor(s) and his/ their legal representatives shall observe all the provisions of the Central Excise Rules, 1944, and all such amendments thereto, as may be issued form time to time to be observed in respect of the goods so transferred;

And, if all the said goods are duly removed to and re-warehoused at the factory at Madras Export Processing Zone, before the ___________________ day of ____________ 199___.

This obligation shall be void. Otherwise and on breach or failure in the performance of any part of this condition, the same shall be in full force.

I/ We declare that this bond is given under the orders of the Central Government for the performance of an Act in which the public are interested.

Place: _______________

Signature(s) of obligors(s) _______________________

Date: ________________

Witnesses:

Place: ______________

Signature of Surety ____________________

Date: ______________                                

Witnesses:

Accepted by me this __________________ day of __________ 199_.

_____________________ of Central Excise

Madras Export Processing Zone

(For and on behalf of the President of India.)

ANNEXURE D2: FORM B-5A (SECURITY)

Bond (With security) for the due arrival and re-warehousing of excisable goods removed from a bonded warehouse in India to a factory in the Madras Export Processing Zone

(Delete the letters and words not applicable)

I/ We of ___________________ (hereinafter called the obligor(s) am/are jointly and severally bound to the President of India in the sum of _________________ rupees to be paid to the President of India for which payment I/ we jointly and severally bind myself/ ourselves and my/ our legal representatives.

The above bounden obligor(s) being permitted to remove the goods described in his/ their application No, ____________ dated _________________ from the bonded warehouses at  ______________ to the factory of _________ at Plot No. ____________ Sector No. _____________ at ________________ Madras Export Processing Zone.

Whereas the Collector of Central Excise at ______________ (hereinafter called, the Collector), Development Commissioner, Madras Export Processing Zone (hereinafter called, the Development Commissioner) has required the obligor(s) to deposit as guarantee for the amount of this bond the sum of ___________________ rupees in cash/ the securities as hereinafter mentioned of a total/ face value of _____________ rupees endorsed in favour of the Collector/ Development Commissioner, namely ______________.

Whereas the obligor(s) has/ have furnished such guarantee by depositing with the Collector/ Development Commissioner the cash/ Securities as aforementioned;

The condition of this Bond is that if the obligor(s) and his/ their legal representatives shall observe all the provisions of the Central Excise Rules, 1944, and such amendments thereto, as may be issued form time to time to be observed in respect of the goods so transferred;

And if all the said goods are duly removed to and re-warehoused at __________________ before the ___________ day of _____________________ 199.

This obligation shall be void. Otherwise and on breach or failure in the performance of any part of the condition the same shall be in full force.

And the President of India, shall, at his option, be competent to make goods all the losses and damages either from the amount of the guarantee deposit or be enforcing his rights under the above written bond or by both.

I/ We declare that this bond is given under the orders of the Central Government for the performance of an act in which the public are interested.

Place: _______________

Signature(s) of obligors(s) _______________________

Date: ________________

Witnesses:

Accepted by me this ____________________ day of ____________ 199.

____________________ of Central Excise

Madras Export Processing Zone

(For and on behalf of the President of India)

ANNEXURE D3: FORM B-5 (GENERAL SECURITY)

General bond (with security) for the due arrival and re-warehousing of excisable goods removed from a bonded warehouse in India to a factory in the Madras Export Processing Zone

(Delete the letters and words not applicable)

I/ We of ____________________ (hereinafter called the obligors(s) am/are jointly and severally bound to the President of India in the sum of _________________ rupees to be paid to the President of India for which payment I/ we jointly and severally bind myself/ourselves and my/ our legal representatives.

The above bounden obligor(s) being permitted to remove from time to time, conditional on the provisions of the Central Excise Rules, 1944 being observed, from bonded warehouse(s) at ________________ to a factory in Madras Export Processing Zone or vice versa.

Whereas the Collector of Central Excise at __________ (hereinafter, called the Collector), Development Commissioner, Madras Export Processing Zone (hereinafter called, the Development Commissioner) has required the obligor(s) to deposit as guarantee for the amount of this bond the sum of _____________ rupees in cash/ the securities as hereinafter mentioned of a total/ face value of ____________ rupees endorsed in favour of the Collector/ Development Commissioner, namely ___________________.

And whereas the obligor(s) has/ have furnished such guarantee by depositing with the Collector/ Development Commissioner the cash securities as aforementioned. The condition of this bond is that if the obligor(s) or his/ their representatives shall observe all the provisions of the said Rules and all such amendments thereto as may be issued from time to time to be observed in respect of the goods so removed from time to time.

And if the said goods are duly removed to and re-warehoused at the bonded warehouse(s) of destination, which they are permitted, to be removed within such time as the proper officer directs;

This obligation shall be void. Otherwise and on breach or failure in the performance of any part of this condition the same shall be in full force.

And the President of India, shall, at his option, be competent to make goods all the loss and damages either from the amount of the guarantee deposit or by enforcing his rights under the above written bond or by both.

I/ We declare that the bond is given under the orders of the Central Government for the performance of an act in which the public are interested.

Place: _______________

Signature(s) of obligors(s) _______________________

Date: ________________

Witnesses:

Accepted by me this ____________________ day of ____________ 199.

____________________ of Central Excise

Madras Export Processing Zone

(For and on behalf of the President of India)

ANNEXURE D4: FORM B-5 (GENERAL SECURITY)

General Bond (with surety/ ies) for the due arrival and re-warehousing of excisable goods removed from a bonded warehouse in India to a factory in the Madras Export Processing Zone

(Delete letters and words not applicable)

I/ We_____________ of _______________ [hereinafter called the obligor(s)] am/are bound to the President of India in the sum of ___________ rupees.

(i)       I/We ______________________ (hereinafter called the �First Surety�);

(ii)       and I/We ___________________ (hereinafter called the �Second Surety�);

(iii)      and I/We ___________________ (hereinafter called the �Third Surety�);

(iv)      and I/We ___________________ (hereinafter called the �Fourth Surety�)

(all hereinafter collective referred to as the First Surety, the Second Surety, the Third Surety, the Fourth Surety) am/ are each of us severally bound to the President of India for in the sum of rupees _________________ each/ respectively to be paid to the President of India for which payment. I/ We the obligor/ obligors bind myself/ ourselves and my/ our legal representatives and I/ We the above named First Surety, the Second Surety, the Third Surety and the Fourth Surety; severally bind myself/ ourselves and my/ our legal representatives.

The above bounden obligor(s) being permitted to remove from time to time, conditional on the provisions of the Central Excise Rules, 1944 being observed ________________ from the bonded warehouse(s) at ________________ to a factory situated in the Madras Export Processing Zone or vice versa.       

The condition of this bond is that if the obligor(s) and his/ their legal representatives shall observe all provisions of the said Rules and all such amendments thereto, as may be issued from time to time.

And if the said goods are duly removed to and re-warehoused at the bonded warehouses(s) of destination to which they are permitted to be removed within such time as the proper officer directs; 

This obligation shall be void. Otherwise and on breach or failure in the performance of any part of the condition the same shall be in full force.

I/We declare that this bond is given under the orders of the Central Government for the performance of an act in which the public are interested.

Place: _______________

Signature(s) of Obligors(s) _______________________

Date: ________________

Witnesses:

Place: ______________

Signature of Surety (ies) __________________________________

Date: ______________

Witnesses:

Accepted by me this __________________ day of __________ 199_.

_____________________ of Central Excise

Madras Export Processing Zone

(For and on behalf of the President of India.)

ANNEXURE E: MADRAS EXPORT PROCESSING ZONE

No. ____________                                                                                                                                                                                                                                                   Date __________________ 

FORM CT 3: CERTIFICATE FOR REMOVAL OF WAREHOUSED GOODS UNDER BOND

This is to certify that:

(1)    Mr./ Messrs ____________________________________________________________ (name and address) is/ are bonafide plot-holders in the Madras Export Processing Zone.

(2)    That he/ they has/ have executed a bond in Form B-5A/ B-5 (Surety) (Security)(General Surety)(General Security) No. _____________________ date _____________ for Rs. _____________________ with the Madras Free Trade Zone Authorities and as such, may be permitted to remove _________________ (Qty.) of __________ (excisable goods) from the factory at __________________ to his factory  __________________ in the Madras Export Processing Zone.

(3)    That the specimen signature(s) of his/ their agent namely Shri ________________________ are furnished here below duly attested:

Specimen Signatures of owner or his authorised agent __________________________

Security Officer (Madras Export Processing Zone) _______________________________

Sd/- Attested Security Officer