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Regarding 100% <a href='http://www.eximguru.com/exim/eou/default.aspx'>EOU</a>/ EPZ/ EHTP units - Permission to send out goods for
job work outside the unit
Circular No. 59 dated 12th
August 1998
I am directed to refer to the Board's instructions
issued from F. N. 305/ 147/93- FTT dated January 31, 1994 wherein it has been
prescribed that the EOU/ EPZ may be allowed to sub - contract part of their
production process provided the substantial activity of manufacture is carried
out within the EOU/ EPZ/ EHTP units and that it is possible to identify the
finished products received after job work with the raw materials.
2. The Trade
Associations have requested for revision of the above instructions requesting
that EOU unit may be allowed to sub-contract part of their production process
which may also result in the change of form or identity of the goods. It was
also requested that these units might be permitted to remove moulds, jigs,
tools, fixtures, tackles, instruments, hangers and patterns of drawing to the
premises of the sub-contractors subject to the condition that these shall be
brought back to the bonded premises of the parent unit on completion of the job
work within a stipulated period.
3. The matter has
been examined by the Board and it has been decided that EOU/ EPZ/ EHTP units may
be permitted to remove moulds, jigs, tools, fixtures, tackles, instruments,
hangers and patterns or drawings to the premises of the sub-contractor subject
to the condition that these shall be brought to the premises of the EOU on
completion of the job work within a stipulated period. The Notifications
No.133/94-Cus. dated 22.6.94, and 53/97 dated 3. 6. 97 and 95/93 & 96/93
both dated 2.3.98 have since been amended by Notification No. 12/98-Cus. dated
27.4.98 to incorporate the above facility. In addition, Board has agreed to
permit EOU/ EPZ units to sub-contract part of their production process where the
raw materials sent out for processing will lose its identity or where its
substantial manufacturing activity does not take place in the parent unit
subject to the condition that input/ output norms in such cases would be
specified by the Assistant Commissioner of Customs.
4. However, the
suggestion that the EOU/ EPZ units using predominantly indigenous raw materials
may be allowed to sub - contract a part of their production for job work has not
been agreed to as this would covert EOU/ EPZ units to trading units rather than
manufacturing units and accounting raw materials may become more difficult.
5.
In view of the above, Board's instructions dated 31.1.94 cited in
paragraph 1, above stand modified to the above extent.
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