Notification No. 147 dated 19^th May 1989 (As amended by 96/95, 21/97)

In exercise of powers conferred by sub-section (1) of section 5A of the Central Excise and Salt Act, 1944(1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable capital goods, components, raw materials, packaging materials, consumables and spares (hereinafter referred to as the said goods), when brought for the purposes of use in the manufacture of jewellery for export out of India by a hundred percent export-oriented undertaking in the Special Export Oriented Complex for the manufacture of jewellery at Jhandewalan, New Delhi (hereinafter referred to as the said Complex), 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 sub-section (1) of 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 hundred percent export oriented undertaking has been approved as a hundred percent export oriented undertaking for the manufacture of jewellery in the said Complex by the Board of Approval;

(b)    the said goods required by such undertaking for the manufacture of jewellery are brought directly to the factory of manufacture of the undertaking in the said Complex and are used in the manufacture of such jewellery solely meant for export out of India;

(c)    such undertaking exports out of India all the jewellery manufactured in the said Complex for the period stipulated by the Board of Approval or such extended period as may be specified by the said Board;

(d)    the jewellery, including the waste, refuse and rejects thereof, manufactured by the hundred percent export oriented undertaking in the said Complex are not brought to any other place in India for whatever purpose;

Provided that the plain gold or silver jewellery up to 10% of the value of export of the said jewellery during the preceding financial year by the unit may be allowed clearance into the Domestic Tariff Area by the Development Commissioner in consultation with the Commissioner of Customs if the recipient furnishes a freely transferable Special Import Licence for clearance of such items from the hundred percent export oriented undertaking and agrees to pay the appropriate duty of excise leviable on such clearance from his Exchange Earners Foreign Currency (EEFC) account in free foreign exchange;

(e)    on expiry of the period referred to in condition (c) above, such undertaking shall pay the said duty of excise and the additional duty of excise on the said goods which are unused and the jewellery manufactured from the said goods, at the rate in force at the time of clearance;

(f)     the loss of gold in the said manufacturing process, or other operations not exceeding 3% in the case of studded jewellery, and 2% in the case of handcrafted or machine made plain jewellery, may be allowed by the Assistant Commissioner of Customs, subject to the fulfilment of such conditions as the Commissioner of Customs may think fit to specify; and in case of findings and mountings and the like, the loss allowed shall be determined on the basis of the weight of the gold content of each findings, mountings and the like exported out of India;

(g)      the export of jewellery shall be allowed only by air-freight through the Customs Airport at Delhi;

(h)    the movement of the goods for the manufacture of jewellery for export shall be regulated under and in accordance with the procedure set out in the Appendix to this Notification.

(i)     the Assistant Commissioner of Customs, may subject to such conditions and limitations as may be imposed by him and subject to the provisions of the Export-Import Policy, permit the clearance of dead-stock or broken stones into the Domestic Tariff Area, up to 5% of the value of import or indigenous stones on payment of the appropriate duty of excise leviable thereon and

APPENDIX: PROCEDURE FOR REGULATION OF THE MOVEMENT OF THE GOODS FOR MANUFACTURE OF JEWELLERY FOR EXPORT

Any person intending to obtain the goods free of duty for use by him in his 100% export-oriented undertaking shall make an application in writing to the Assistant Commissioner of Central Excise in proper form to be prescribed by the Commissioner of Central Excise stating therein the annual quantity of the goods required and the purpose for and the manner in which such goods are intended to be used and declaring that the goods shall be used for such purpose and in such manner only. The Assistant Commissioner may grant the application after causing such enquiries to be made as he may deem fit and the applicant shall then enter into a bond in the form given at Annexure A below with such surety or sufficient security, in such amount and under such conditions as the Assistant Commissioner of Central Excise approves. The Assistant Commissioner of Central Excise may, however, allow the annual quantity of the goods to be brought as furnished by the manufacturer to be extended when a request to that effect is made. The concession shall expire on the 31^st December every year, but may be renewed if the Assistant Commissioner of Central Excise 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 bound is inadequate, the Assistant Commissioner of Central Excise, in his discretion, may 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 Central Excise Officer-in-charge of the 100% Export-oriented undertaking shall issue a certificate, in the form given in Annexure E below certifying that-

(i)     the said undertaking has executed a bond in the form given in Annexure A below with the Assistant Commissioner of Central Excise showing the number  and particulars of the bond; and

(ii)    the specimen signature of the agent of the said undertaking furnished on the body of the certificate is genuine and he would attest it. The certificate shall be sent by the said officer-in-charge under registered post (acknowledgement due) to the factory from which the goods are to be obtained. A copy of the certificate shall also be sent by the said undertaking to the Superintendent-in-charge of the range of the factory from where the goods are to be received.

On receipt of the aforesaid certificate the factory (consignor) from where the goods have to be removed shall prepare an application in the form given in Annexure C 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 A below as per the certificate issued by the Central Excise Officer in charge of the 100% Export oriented undertaking. Removal application in Annexure C 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, the Serial No. and date of Annexure C below should always be quoted as reference. The Consignor shall however intimate to the Central Excise Officer-in-charge of the 100% Export-oriented gem and jewellery unit undertaking 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 of removal (consignor) must -

(i)     ensure that packages bear proper marking and number.

(ii)    ensure that all copies of Annexure �C� below are prominently marked �Intended for use in the undertaking approved for manufacturing 100% Export-oriented gem & jewellery.

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

Whenever any of these addresses is used for despatching purposes, care must be taken by the despatching factory to see that the full address of the Superintendent-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 in Appendix I (Central Excise Series No. 65 AA) to the Central Excise Rules, 1944, in respect of the goods proposed to be removed from his factory 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 C below and original copy of the gate pass alongwith the consignment to the consignee. The duplicate copy of Annexure C below will be sent by the consignor to the Assistant Commissioner of Central Excise in-charge of the 100% Export oriented undertaking. The quadruplicate copy of Annexure C below along with a copy of the gate pass will be sent by the consignor to the officer-in-charge of his factory 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 D below.

On receipt of the duplicate copy by the Assistant Commissioner of Central Excise, it must immediately be entered in the �Record of Receipts in Bond� given in Annexure E below and forwarded the same day to the Central Excise Officer-in-charge of the 100% Export-oriented undertaking. The entries in this record should be verified against relative entries of the Record of Raw Materials prescribed by the Commissioner.

After delivery of the goods from a manufacture, proper accounting of these goods shall be the responsibility of the Central Excise Officer-in-charge of the 100% Export-oriented undertaking.

1.     The consignee must give intimation of the arrival of the consignment at his premises to the Central Excise Officer-in-charge of the 100% Export-oriented undertaking without any delay and should store the same separately and intact, pending examination and check by the said 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 Central Excise Superintendent in-charge of the factory at destination and original and triplicate copy of the applications presented by the consignee, return duplicate to the Central Excise Officer-in-charge of the factory of removal direct and triplicate to the consignee for despatch to the consignor after nothing thereon the deficiency or excess, if any.

2.    Duty on shortages or losses in transit: Since the bond in Annexure A below 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 Commissioner of Central Excise.

If the duplicate application is received by the Central Excise Officer-in-charge of the 100% Export oriented undertaking before the arrival of the goods is reported to him by the consignee, he must keep it pending securely and systematically file in file marked �Pending duplicate in Annexure B application� and record the particulars of the consignment in the �Record of Receipts in bond� prescribed as in Annexure E below and no sooner the consignment is received, he will follow the procedure prescribed in paragraph (h) above.

If any excisable goods obtained under the procedure are not duly accounted for as having been utilised in connection with the manufacture of articles of export or are not shown to the satisfaction of the Central Excise Officer-in-charge of 100% Export oriented undertaking to have been lost or destroyed by natural causes or by unavoidable accidents during storage or handling in the approved premises within the permissible limits prescribed by the Commissioner of Central Excise, the applicant shall, on demand by the said Central Excise Officer, immediately pay the duty leviable on such goods. The concession may at any time be withdrawn by the Commissioner of Central Excise, the applicant shall, on demand by the said Central Excise Officer, immediately pay the duty leviable on such goods. The concession may at any time be withdrawn by the Commissioner of Central Excise 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 Commissioner of Central Excise may also order the forfeiture of the security deposited under paragraph (a) above and may also confiscate the goods and all articles manufactured from such goods in store in the premises of 100% Export-oriented undertaking.

Despatch of duplicate application in Annexure B referred to in paragraph (a) 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 Central Excise Officer-in-charge of the factory whenever required.                      

Under sub-rule (1) of rule 156B of Central Excise Rules, 1944, if the certificate of receipt of consignment of the goods despatched to the consignee [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 Commissioner 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 Central Excise Officer in-charge of the factory 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 Central Excise Officer-in-charge of the factory may also demand duty on a consignment the 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 of the 100% Export-oriented undertaking about the particulars of such deposit in reply to this notice of demand.

If the duplicate copy of Annexure B below is not returned to the officer-in-charge of the factory of removal within a month of the removal of consignment, reminders must be issued regularly at fortnightly intervals to the Central Excise Officer-in-charge of the 100% Export-oriented undertaking. 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 Commissioner of Central Excise in whose charge the consignor operates, who will either secure a satisfactory proof of the consignment having been duly received by the consignee or ensure that the duty properly due on the goods not so received at destination is recovered as per paragraph (1) above.

On receipt by the consignee, the goods shall be utilised in the manufacture of articles intended (solely) for export. It shall be the responsibility of the Central Excise Officer-in-charge of the 100% Export-oriented undertaking to ensure that all the goods have been fully utilised for manufacture of articles intended for export or are otherwise accounted for to the satisfaction of the Assistant Commissioner, Central Excise in-charge of the 100% Export-oriented undertaking.

ANNEXURE A: General bond (with surety (ies)/ security) for obtaining provisional assessment of goods to Excise duty under rule 9-B, removal from time to time for export to a foreign country of excisable goods without payment of duty, for due accounting and disposal of excisable goods obtained without payment of the whole or part of the duty for use in special industrial purposes (Rules 9-B, 13, 14 and 192)

I/ we ________________ of _________________ [hereinafter called �the obligor(s)�] and ________ of __________ (hereinafter called �the surety (ies)� am/ are held firmly bound to the President of India (hereinafter called the �President�) in the sum of  _______________ rupees to be paid to the President of India for which payment will and truly to be made. I/ we jointly and severally bind my self/ ourselves and my/ our respective heirs, executors, administrators, and legal representatives/ successors and assigns by these presents;

Dated this ________ day of __________.

B.1:  WHEREAS the above bounden obligor has been permitted to remove from time to time the excisable goods from his warehouse licensed factory at ____________ for export to foreign countries without payment of duty.

B.8:  WHEREAS the above bounden obligor having been permitted by the Commissioner of Central Excise at ______________ (hereinafter called �the Commissioner�) to purchase from the time to time such quantities of ____________ as may be required, not exceeding _____________ per year for use in his factory at __________ for the manufacture of the commodity (ies) and in the manner, specified in his application No. ____________ dated __________ without payment of the whole or part of the duty.   

B.10 and B.13:  WHEREAS final assessment of excise duty of ___________ (hereinafter called the �goods) manufactured cured/warehoused by the above bounden obligor from time to time could not be made for want of full information as regards value/description/quality or of proof therefor or for the non-completion of the chemical or other tests in respect thereof or otherwise and whereas the obligor desires that the Government should make provisional assessment as per provisions contained in rule 9B of the Central Excise Rules, 1944.  

For Security:    AND WHEREAS the Commissioner has required the obligor to deposit as security for the amount of this bound, the sum of _____________ rupees in cash (the securities as hereinafter mentioned of a total value of ____________ rupees endorsed in favour of the President and accepted on his behalf by the Commissioner, Deputy Commissioner, Assistant Commissioner, Superintendent of Central Excises namely  ________ and whereas the obligor has furnished such guarantee by depositing with the Commissioner the cash/securities as aforementioned.

The condition of this bond is that if the obligor and his representatives shall observe all the provisions of the Central Excise Rules, 1944, and all such amendments thereto, as may be issued from time to time to be observed in respect of-

B.10 and B.13: (i) provisional assessment of goods to excise duty under rule 9-B.

B.1: (ii) export of excisable goods to a foreign country.

B.8: (iii) use of excisable goods for special industrial purposes without payment of the whole or part of the duty.

B.1: AND if the relevant and specific goods are duly exported to destination within such time as the Commissioner directs;

B.8: And/ or all the dues whether excise duty or other lawful charges, which shall be demandable on the goods obtained by the obligor without payment of the whole or part of the duty and transported from the place of procurement to the premises of the obligor(s) for use in the special industrial purpose as shown by the records of the proper officer be duly paid into the treasury to the account of the Commissioner within ten days of the demands thereof being made by the proper officer;

B.10 and B.13: And/ or full information as regards value description/quality or of the proof thereof in respect of goods which were assessed on provisional basis under rule 9-B are furnished within such period as may be fixed by the proper officer and if all dues, whether excise duty or other lawful charges, which shall be demandable in respect of such goods on the basis of value, description or quality as ascertained after final assessment by the proper officer be duly paid into the treasury to the account of the Commissioner within ten days of the date of demand thereof being made in writing by such officer.

THIS OBLIGATION SHALL BE VOID OTHERWISE and on breach or failure in the performance of any part of this condition and same shall be in full force and virtue.

For Surety Bond only:   Provided always that the liability of the Surety hereunder shall not be impaired or discharged by reason of anytime being granted or any forbearance, act or omission of the Government (whether with or without the knowledge or the consent of the surety) in respect of or in relation to the obligation and condition to be performed or discharged by the obligor(s) nor shall it be necessary to sue the obligor(s) before suing the surety for amounts due hereunder,     

For Security Bond only:           AND the President shall, at his option, be competent to make good all the loss and damages from the amount of the security deposit or by endorsing his rights under the above written bond or both;

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

In these presents the words imposing singular only shall also include the plural and vice versa where the context so requires.

IN WITNESS THEREOF these presents have been signed the day hereinbefore written by the obligor(s) and the surety (ies).

Place: _______________

Signature(s) of Obligors _______________________

Date: ________________

Witnesses:

Place: ______________

Signature of Surety  __________________________

Date: ______________

Witnesses:

Signature and date _______________

Name _________________________

Designation ____________________

______________________________________________

ACCEPTED for and on behalf of the President of India.

Signature and date _______________

Name _________________________

Designation ____________________

*Delete the words clauses wherever not applicable

For Security Bond only

ANNEXURE B

No. ____________

Date ___________ 

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

This is to certify that:

(1)    Mr./ Messrs ____________________________________________________________ (Name and address) is/ are bonafide licensee holding licence no. _____________________________________ valid upto ___________________.

(2)    That he/ they has/ have executed a bond in Form B-16 (General Surety/ General Security) No. _____________________ date _____________ for Rs. _____________________ with the Assistant Commissioner of Central Excise ___________________________________________________ and as such, may be permitted to remove _________________ (Qty.) of __________ (excisable goods) from the unit at __________________ to their undertaking  __________________ at ___________________________.

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

Specimen Signatures of owner or his authorised agent __________________________        Central Excise Officer-in-Charge of the 100% EOU  ________________

Sd/- Attested Officer-in-charge of Security

ANNEXURE C: FORM-AR 3A

Application for removal of excisable goods from a factory in India to 100% Export Oriented Unit

Range _________________

Original/ Duplicate/ Triplicate

I/ We (holder(s) of Central Excise Licence No. ____________ in Form _____________ apply for leave to remove the under-mentioned goods from the factory at _____________________ to the 100% Export Oriented Undertaking of Mr./ Messrs. _____________________________________________________________.

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

2.     The aforesaid Mr./ Messrs __________________ has/ have executed a bond at destination; in Form B-16 (General Surety/ Security) 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 factory of Removal

To,

The Officer of Central Excise Incharge of the 100% Export Oriented Undertaking

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: _______________

Officer-in-charge of 100% Export Oriented Undertaking _______________________

Date: ________________

2: Certificate of Officer-in-Charge of the 100% Export Oriented Undertaking Central Excise Officer I/C of factory of removal

I hereby certify that the consignment arrived at and that the goods conform in all respect 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 Commissioner of Central Excise.

Place: _______________

Officer-in-charge of 100% Export Oriented Undertaking _______________________

Date: ________________                    

ANNEXURE D: Record of Removals in Bond

Range Officer

ANNEXURE E: Record of Receipts in Bond