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

Manufacturing Firm Challenges Customs Over Brass Scrap Conversion in SEZ; Considers Notification 32/97-Cus for Relief A manufacturing company in a Special Economic Zone (SEZ) is facing issues with customs regarding the temporary removal of brass scrap for conversion into rods. The company typically sends the scrap for conversion, a common industry practice, but customs disallows this under temporary removal or subcontract. Selling the scrap is uneconomical, and they must pay customs duty for removal from the SEZ. A respondent suggested checking notification no. 32/97-Cus for potential benefits. The company procures brass rods from a Domestic Tariff Area (DTA) without duties under an LUT Bond and seeks advice on applicable rules for conversion.