EOU exit debonding will be done after the final exit order?

[syed Anwar Hussain]

ours unit has got Inprinciple exit order from the Development commissioner in favour of eou exit .We have paid all customs and central excise duty as per central excise officials. we want to know wheather de bonding will be done now or after final exit order issued by Dc.We want know that wheather penalitywill be imposed on us as we done minimum export obligation is 0.70milion usd and ours export is 10 time than the imported capital goods. please give us suggestion.

[YAGAY andSUN]

Debonding Procedure

The unit intending to exit out of the EOU/EHTP/STP scheme is required to intimate the Development Commissioner in case of EOU or Director STPI/designated officer in case of STP/EHTP units and jurisdictional Customs and Central Excise authorities in writing.

The units are required to assess the duty liabilities arising out of such debonding of its own and submit such assessment to the jurisdictional Customs/Central Excise authorities. The Customs and Central Excise authorities are required to confirm the duty liabilities on priority within 15 working days. After clearance of all dues, the unit obtain “No Objection” from the Customs/Central Excise authorities.

On the basis of “No Dues’ Certificate, issued by the Customs/Central Excise authorities, the unit apply for final debonding to the Development Commissioner (Director STPI/designated officer in case of STP/EHTP units). In case, no proceedings are pending under Foreign Trade (Development & Regulation) Act, 1992, the Development Commissioner (Director STPI/designated officer in case of STP/EHTP units) is required to issue the final debonding order within a period of 7 working days.

During the period between the date of receipt of “No Dues Certificate” issued by Customs/Central Excise authorities and the date of issuance of final debonding order, the unit is not entitled for any duty free import/procurement of goods.

If you pay applicable duty alongwith interest before issue of SCN then penalty may not be levied for non fulfilment of export obligation.

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[RadheyShyam Mangal]

Please note that presently there is no requirement of minimum export obligation for EOU, the only requirement is to achieve positive Net Foreign Exchange Earning as per provisions of FTP read with HBP.

The final debonding order is required for completing the debonding process. Between the No dues from Central Excise and final debonding letter from Development Commissiner, Unit can avail DBK or Advance Authorisation on its exports but cannot procure duty free goods. However the domestic sale will be made as per EOU provisions. For more clarification mail me at my id [email protected].

[Mahendra Kothari]

Dear Sirs,

In case of indigenously procured capital goods and inputs, the duty liability that arised due to de-bonding can be discharged from CENVAT A/c or not, where actually no CENVAT was availed at the time of procurement of these capital goods and inputs since the goods were procured duty free under EOU scheme. A plain reading of provisions of Rule 3 of CENVAT Credit Rules do not allows of paying the afore said duty liability from CENVAT A/c for the reasons that these capital goods and inputs are neither final products nor they falls in the category of inputs and capital goods removal as such. Primafacie, the duty liability so arised is required to be discharged from account current only. However, on payment of such duty from account current, the duty so paid shall be available as CENVAT Cr to the EOU concern.

May i have considered view of the learned readers on the above.

Mahendra Kumar [email protected]

 

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[Mukul Ved]

For Capital Goods you are entitle for Depreciation as per Customs Notifications. But the depreciation % is restricted to percentage of total export obligation achieved or as per notification which ever is less. Further, after discharging all Customs and Central Excise duty liabilities you have to obtained no due certificate from Divisional Central Excise Deputy/Asitant Commissioner addressed DGFT authorities The DGFT authorities will decide of de bonding by order issued by the Director of DGFT

[SAKTHIVEL PONNUSWAMY]

Dear Sir,

Could you please let us know in support of time limit prescribed i..e "The Customs and Central Excise authorities are required to confirm the duty liabilities on priority within 15 working days" any departmental circular or notification.

Regards

Sakthivel Ponnuswamy

AI Summary

Units Exiting EOU Scheme Must Notify Authorities, Settle Duties Before Final Debonding; No Duty-Free Imports Allowed A unit seeking to exit the Export Oriented Unit (EOU) scheme must notify the Development Commissioner and relevant Customs and Central Excise authorities. The unit should assess and settle duty liabilities, after which a 'No Objection' certificate is issued, allowing them to apply for final debonding. During this interim period, duty-free importation is not permitted. There is no minimum export obligation, only a requirement for positive Net Foreign Exchange Earnings. Duty liabilities on indigenously procured goods must be settled from the current account, and depreciation on capital goods is allowed per Customs notifications.