supply to SEZ without payment of duty

[Ramesh Patel]

We are registered under excise. received order from SEZ developer for two products say A and B. We are mfg A, and same is cleared under UT - 1. without excise duty. Weather we can buy "B" from other excise registered mfg without duty and sell it to SEZ developer without duty. If yes, pls give rule under which this can be done and procedure for the same

[RAKESH R]

Dear Sri Ramesh Patel. You can procure Product B from other manufacturer without payment of duty for onward supply to SEZ Developer in the capacity of 'merchant exporter'. You have to execute a Bond before your divisional assistant commissioner and obtain CT-1 certificate in terms of Rule 19 of CE Rules read with procedure under Notification No. 42/2001 CE NT dated 26.6.2001 as amended. Since supplies to SEZ Developer is 'export' in terms of SEZ Act read with SEZ Rules and Board circular. advised accordingly. S. Gokarnesan, advocate, Chennai

AI Summary

Supply to SEZ without duty: procure goods duty-free as merchant exporter by executing bond and obtaining CT 1.
Supplies to an SEZ Developer qualify as export; a party may procure goods from another excise-registered manufacturer and supply them duty-free to the SEZ as a merchant exporter by executing the prescribed bond with the divisional assistant commissioner and obtaining the requisite CT-1 certificate under the central excise procedural rules and notifications implementing export exemption for SEZ supplies.