Temporary removal of goods/Job work on contract from SEZ to a DTA

[Guest]

We are a manufacturing company located in special economic zone. We use brass rods for our manufacturing process and that generates brass scraps (its in the process of forging and machining). Its the practice of the industry across the globe that the scraps are sent for conversion to the manufacturer for making rods.The customs are not allowing it under temporary removal or under sub contract.

converting saves lot but selling the scrap so generated to the manufacturer is uneconomical and we also have to pay custom duty for removal of goods from Special economic zone.

Kindly advise on priority under which rule we can get the scraps generated converted.

Regards

Ram

[Spudarjunan S]

Have you tried the benefit under notification no.32/97- Cus dated 01-04-1997.

[Guest]

thanks for your input. The point here is the raw material - brass rods are procured by us from DTA without payment of any duties or taxes under LUT Bond and during our the process of manufacture, we generate brass scraps. When the whole of the industry follows the practice of converting scraps again to brass rods, we fail to understand how customs here disallows the temporary removal of goods or under job work.

AI Summary

Temporary removal of goods: permitting job-work conversion of SEZ-generated scrap in the DTA hinges on customs notification relief. An SEZ manufacturer procures brass rods duty-free under an LUT/bond and generates brass scrap during production. The operator seeks temporary removal of scrap to a DTA converter under job work/subcontracting, but customs disallows such removal. The operative issue is whether temporary removal or job-work provisions and applicable customs notification relief can be invoked to permit reconversion in the DTA without payment of customs duty, and what procedural or evidential steps are required to obtain customs acceptance.