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Regarding valuation of plastic waste & scrap by <a href='http://www.eximguru.com/exim/eou/default.aspx'>EOU</a>/ EPZ/ SEZ units
sold/ cleared to other EOU/ EPZ/ SEZ units or to the DTA units
Circular No. 62 dated 12th
November 2001
I am directed to
invite your attention to Board's instructions (Issued from F. No. 268/35/92-Cx8)
dated 17.8.1994 and 28.8.1997 (issued from F. No. 268/45/97-Cx 8) regarding
valuation of goods manufactured and cleared into DTA by 100% EOU. It was
clarified that in case of DTA sales the invoice price can be accepted for
purposes of assessment if the same is in the nature of transaction value under
the Customs Valuation Rules, 1988. It was also clarified that the above
instructions would be applicable to assessment of waste & scrap generated
(in the unit) and cleared into DTA by EOUs/ EPZ units. In this connection, a
doubt has been raised regarding valuation of certain variety of plastic waste
& scrap, which is not generated out of the manufacturing operations but
emerges during segregation of such plastic waste & scrap after import.
2. The
matter has been examined by the Board. It is seen that plastic waste & scrap
reprocessors operating under EOU/ EPZ/ SEZ Scheme, who are producing plastic
agglomerates out of imported plastic waste & scrap, use only a portion of
such plastic waste & scrap for manufacture of plastic agglomerates. The
balance quantity is sought to be cleared in DTA or to other EOU/ EPZ/ SEZ units.
Paragraph 9.18 of the Exim Policy provides that in case an EOU/ EPZ/ ETHP/ STP
unit is unable, for valid reasons, to utilise the goods, imported or procured
from DTA, it may dispose of them in DTA on payment of applicable duties. As per
the notifications issued by the Government in these cases the value taken for
Customs purposes is the CIF value of materials at the time of import. It is seen
that waste and scrap sought to be sold/cleared to other DTA units or to other
EOU/ EPZ/ SEZ units arises due to segregation of imported materials at a stage
prior to their being used in the production process and therefore, the same
cannot be treated as plastic waste and scrap generated out of the production
process. Therefore, for the purpose of charging duty, such plastic waste and
scrap will have to be treated as un-utilised material and valuation of such
waste & scrap will have to be done on the basis of their CIF value at the
time of import. Even for inter-unit or inter-zone transfer of such segregated
un-utilised plastic waste & scrap, the goods will have to be assessed on the
basis of CIF value of imported scrap.
3. These
instructions may kindly be brought to the notice all concerned by way of
issuance of a suitable Standing Order/ Public Notice.
4. Difficulties,
if any, faced in the implementation of the above instructions, may also be
brought to notice of the Board at an early date.
Kindly
acknowledge receipt.
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