| Date: |
10-03-1995
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| Notification No: |
Customs Circular No 21/1995
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| Issuing Authority: |
Indian Customs
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| Type: |
Circular
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| File No: |
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| Subject: |
Regarding issue of show cause notice for recovery of customs duty on goods imported by 100% EOU
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Regarding issue of show cause notice for recovery of customs duty on
goods imported by 100% <a href='http://www.eximguru.com/exim/eou/default.aspx'>EOU</a>
Circular No. 21 dated 10th
March 1995
A number of
instances have come to the notice of the Board where 100% EOUs had imported
capital goods, raw materials and other permissible items under Notification No.
13/81-Cus. dated 9/2/81 but have failed to export any goods or have closed down
after exporting a few consignments. A question has been raised as to the stage
at which the customs authorities should proceed to recover duties on imported
goods and other goods lying in the factory premises of the 100% EOU.
2. The
matter has been examined by the Board in the context of an Audit Objection and I
am directed to say that the Board has taken a view that liability of
customs duties on goods imported by 100% EOUs arises either at stage of the unit
being debonded or if any of the conditions of the exemption notification No.
13/81 dated 9.2.1981 has been violated or remains unfulfilled. In this regard,
it is seen that one of the conditions of the exemption notification is that the
importer exports out of India 100% or such other percentage, as may be fixed by
the said Board, or articles manufactured wholly or partly from the goods for the
period stipulated by the Board or such extended period as may be specified by
the said Board. It is, thus, clear that if the competent authority namely the
Board of Approval or the Development Commissioner concerned determines that the
unit has failed to export the fixed percentage of articles for the specified
period, then in such case it may be help that the conditions of the exemption
notification has been violated. At this stage, it will be open for this
Department to issue a show cause notice to the Unit for demanding the due duty
on the imported goods.
3. Normally
the customs authorities should immediately inform the Development Commissioner
in case a 100% EOU ceases production prematurely or fails to commence production
or export within the stipulated period. In case the Development Commissioner
initiates action against the unit for non-fulfilment of export obligation etc.
simultaneously the customs authorities should issue show cause notice for
failure to comply which conditions of Notification 11/81-Cus. dated 9.2.81. The
demand of duty should be confirmed only after a definite conclusion has been
arrived at by the Development Commissioner.
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