Foreign Trade Policy (FTP) announced on 31.8.2004- Amendment of notifications relating to EOU and Gems and Jewellery Export Promotion Schemes- Reg

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....TP), 1st September, 2004- 31st March, 2009, brought into effect from 1.9.2004 .The New Foreign Trade Policy and Handbook of Procedures (HOP) Vol I, 2004-2009, replace the old Exim Policy and Handbook of Procedures 2002-2007. In the new Foreign Trade Policy and HOP certain changes have been introduced relating to EOU/EHTP/STP Schemes and Gem and Jewellery Export Promotion Scheme. To implement the changes amendments have been made in the notifications governing duty free import/ procurement of goods and DTA sale of goods by EOU/EHTP/STP . Amendments have also been made in the notifications relating to Gem and Jewellery Schemes. In this regard notification Nos 87/2004-Cus and 46/2004-CE, both dated 6-9-2004, may please be referred to. Importan....

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....procure goods from domestic tariff area without payment of duty. Therefore, there was no necessity for extending CENVAT credit facility to them . However, some EOU's have to procure their raw materials on payment of duty also. As a trade facilitation measure, it has been decided to allow EOUs (including STP/EHTP units) an option either to procure the goods from DTA without payment of duty under CT-3 procedure or to procure the goods on payment of duty and avail CENVAT credit. The credit could be utilized by them as per the Cenvat Credit Rules, 2004, including payment of duty on their DTA sales . 5. The EOU's can also take credit of the Service Tax borne by them which will in effect provide them relief from Service Tax [para 6.1© of the F....

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.... manufactured by an EOU. In other words, when such goods are cleared into DTA, duty foregone on inputs utilized for production of such goods will have to be paid (as in the case of non-excisable goods vide para 6 of notfn no 22/2003-CE dated 31.3.2003 and para 3 of notfn no 52/2003-Cus dated 31.3.2003 ) 9. For implementation of the said provision, notification Nos. 22/2003-CE dated 31.3.2003 and 52/2003-Cus dated 31.3.2003, governing duty free domestic procurement and import of goods, respectively, by EOUs and EHTP/STP units, have been amended . (iv) Supply from one EOU/EHTP/STP to another EOU/EHTP/STP 10. In the new FTP, a new provision, by way of paragraph 6.13(c), has been introduced providing that the goods supplied by one EOU/EHTP/....

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....Fabrics into DTA on Payment of Duty on Transaction Value instead of Value Declared at the Time of Import 13. In the new FTP, in paragraph 6.15 (c), it has been provided that in the case of textile sector, disposal of leftover material/fabrics up to 2% of CIF value or quantity of import, whichever is lower, shall be allowed on payment of duty on value determined as per customs valuation rules, subject to the certification of Central excise/Customs Officers that these are leftovers. 14. To implement this, notification No. 52/2003-Cus, dated 31.3.2003 and 22/2003-CE dated 31-3-2003, governing duty free import and procurement, respectively, by EOU/EHTP/STP, have been suitably amended providing that the prescribed percentage of textile mater....

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....by Gem and Jewellery units. 18. Earlier, notification No. 41/99-Customs, dated 28.4.1999 provided for duty free import of specified consumables, when imported against Replenishment Licence referred to in paragraph 8.88 of the earlier Hand Book of Procedures, upto 1% of FOB value of preceding financial year of exports of Gem and Jewellery or cut and polished diamonds. In the new FTP [para 1B.1(iv)(c)], a provision has been incorporated for enhancing this duty free import entitlement of consumables for metals other than gold/ platinum from 1% to 2% of FOB value of exports during the previous financial year. To implement this the provisions of notification No. 41/99-Cus dated 28.4.1999 have been amended so as to increase the duty free entitle....