Raw Material More Than 3 Years

[Amit Apshankar]

If Eou cant utalize duty free raw materail within period of three year, than custom impose any penlty /interest on the same  

[YAGAY andSUN]

Please refer  para 6.15 of the FTP  in this regard.

[CASeetharaman KC]

Para 6.15 reporduced as under:

• In case an EOU / EHTP / STP / BTP unit is unable to utilize Material goods and services, imported or procured from DTA, it may be (i) transferred to another EOU / SEZ / EHTP / STP / BTP unit; or (ii) disposed off in DTA with approval of Customs authorities on payment of applicable duties and submission of import authorization; or (iii) exported. Such transfer from EOU / EHTP / STP / BTP unit to another such unit would be treated as import for receiving unit.
• Capital goods and spares that have become obsolete/ surplus, may either be exported, transferred to another EOU/ EHTP / STP / BTP / SEZ or disposed of in DTA on payment of applicable duties. Benefit of depreciation, as applicable, will be available in case of disposal in DTA only when the unit has achieved positive NFE taking into consideration the depreciation allowed. No duty shall be payable in case capital goods, raw material, consumables, spares, goods manufactured, processed or packaged, and scrap / waste / remnants / rejects are destroyed within unit after intimation to Customs authorities, or destroyed outside unit with permission of Customs authorities. Destruction as stated above shall not apply to gold, silver, platinum, diamond, precious and semi precious stones.
• In case of textile sector, disposal of left over material / fabrics, upto 2% of cif value or quantity of import, whichever is lower, on payment of duty on transaction value, may be allowed, subject to certification of Central Excise / Customs officers that these are left over items.
• Disposal of used packing material will be allowed on payment of duty on transaction value.

AI Summary

Utilisation of duty-free raw material: unused imports may be transferred, exported, or disposed in DTA on duty payment. If an EOU cannot utilise duty free imports within the stipulated period, the FTP permits transfer to another eligible unit (treated as import for the receiver), export, or disposal in DTA with Customs approval upon payment of applicable duties and submission of import authorisation; capital goods/spares may be similarly handled, with depreciation benefit on DTA disposal only where positive Net Foreign Exchange is achieved, and permitted destruction without duty subject to Customs intimation/permission except for specified precious items.