100% Export Oriented Unit

[SNEHAL SHAH]

Sir,

We have Manufacturer of Excisable Product and We have totally 2 Units in DTA and 1 Unit at EOU .

Due to Space issue we are only checking and packing of this DTA material at EOU premises .

Finished Product attract Excise duty . We are dispatching this product as a export with proper documentation from DTA premises .

Is it any litigation issue arise in future . Plz suggest us .

Thanks and Regards,

SNEHAL SHAH

[VVFINDIA Taloja]

Dear Snehal,

EOU's are registered as bonded location. You should not carry out any other premises activities in EOU bonded premises unless specifically permitted. This will be violation of Rules and regulation of EOU. It does not matter that, the DTA Unit is a sister concern. But EOU has got the separate status and it will be treated as foreign territory. Requirement of earmarking of both entities are precisely mentioned in HBP V1 09-14 Para 6.2.8. Penalty may be imposed on violation of Rules and EOU license may not be renewed.

[Mahir S]

space issue problem is not a concern of the department.

[SNEHAL SHAH]

Thanks a lot both of you for reply ......

AI Summary

Manufacturer Risks Penalties for Using EOU Space for DTA Activities Without Permission, Violating EOU Regulations. A manufacturer with units in both Domestic Tariff Area (DTA) and an Export Oriented Unit (EOU) is using EOU premises for checking and packing DTA materials due to space constraints. The finished product attracts excise duty and is dispatched for export from the DTA premises. Concerns were raised about potential legal issues, as using EOU space for DTA activities without specific permission violates EOU regulations. This could result in penalties and non-renewal of the EOU license, as EOUs are considered separate entities and treated as foreign territories. The space issue is not a departmental concern.