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Export Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry, Govt. of India)
705, Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : epces@vsnl.net

EPCES CIRCULAR NO. 49 DATED 28-5-04

L.B. Singhal
Director General

 

Sub : Sharing of Cost Recovery Charges by various EOUs : Department of Revenue Circular No. 36/2004-Cus dated 24-5-2004


I am happy to inform you that after sustained efforts of EPCES, Department of Revenue had issued Circular No. 36/2004-Cus dated 24-5-04 (copy enclosed) wherein it has been clarified that where an officer, posted against the cost recovery post, attends or is assigned to more than one EOU, the cost of the post shall be equally shared amongst all such EOUs. This will bring down the cost of recovery charges for the EOUs considerably.

EOUs had brought to the notice of EPCES that if Cost Recovery Officer who is assigned the work of more than one EOU then its cost recovery charges had to be paid by all the EOUs independently. EPCES had taken up this matter with the Department of Revenue. This issue was discussed in the Gandhidham, Kandla Open House held on May 10, 2004. In this Open House, Shri A. K. Prasad, Director (Customs) agreed that cost recovery charges shall be shared equally amongst all the EOUs. He also agreed for issuing instructions before May end. I am happy to inform that Shri A. K. Prasad, Director
(Customs) has kept his promise in the Open House and has issued these instructions.

I would like to inform that in the Open House held at Gandhidham, Kandla, the agreement has been arrived at on certain issues on which the instructions will be issued within 60 days. These issues are as follows:-

i) It has been agreed that EOUs which are in existence for a period of more than 2 years and is having good track record then they will not be required to give any bank guarantee/ surety along with B-17 Bond. At present EOUs are required to give bank guarantee and EPCES had requested Department of Revenue to do away with the requirement of Bank Guarantee.

ii) It has been agreed that a Fast Track Scheme will be worked out for EOUs based on certain criteria like export, investment etc.

iii) Ministry of Commerce has agreed for taking up the issue of exemption of CST for supplies from DTA to EOUs. Since it will require an amendment in the CST Act, Ministry of Commerce has agreed for taking up the issue before the Cabinet. I am happy to inform that Shri G. K. Pillai, Additional Secretary, Ministry of Commerce has taken up the matter with the Ministry of Finance, immediately after the Open House, on 24-5-2004.

iv) For avoiding repeated registration with different authorities for EOUs, it has been agreed that information relating to EOUs shall be placed on the website of Development Commissioner and the customs authorities shall verify the information from the website of Development Commissioner. This system will be worked out and the instructions will be issued within 60 days.

v) For SEZs, supplies from DTA to SEZs has become entitled for DEPB w.e.f. 11-5-04 with the operationlisation of Chapter XA of the Customs Act. In respect of the past cases, it was agreed in the Gandhidham, Kandla Open House that Ministry of Commerce will take up the matter with the Department of Revenue for giving instructions for regularizing past cases. I am happy to inform that immediately after the Open House, Shri Dipak Chatterjee, Secretary Commerce has taken up the matter with Smt. Vineet Rai, Secretary, Department of Revenue.

vi) In the Open House held in Gandhidham, Kandla, it was requested that supplies from DTA to EOUs should be exempted from Service Tax. It was decided that Ministry of Commerce will take up the matter with Ministry of Finance again. I am happy to inform that Shri G. K. Pillai, Additional Secretary, Ministry of Commerce has again taken up the matter with Smt. Vineeta Rai, Secretary, Ministry of Finance on 24-5-2004.

As informed vide EPCES Circular No. 48 of today, EPCES is going to have an Open House with Shri Kamal Nath, Honourable Commerce & Industry Minister on Saturday, June 5, 2004, exclusively for EOUs and SEZ Units.

This is for your information please.

 

Circular No 36/2004-Customs 24th May, 2004
F.No 305/75/2000-FTT(Vol VI)
Government of India Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)


Subject: Posting of Cost Recovery Officer in EOU/EHTP/STP Regarding


I am directed to invite your attention to the Boards Circular No 31/2003-Cus dated 7TH April,2003 wherein it has been clarified that the EOUs and EHTP/STP units will be given an option of either using the services of Customs and Central Excise Officers on payment of cost recovery charges or on payment of Merchant Over Time. In the said circular it was also clarified that Customs /Central Excise officer already promoted against cost recovery posts will not be reverted back but will continue to function in higher cost recovery posts till these officers get promotion against a permanent post in their own cadre. The purpose of this was to limit the scope and extent of exercising the "MOT" by assessee.

2.The circular appears to have created an impression in the field formations that the officers occupying cost recovery posts on promotion have a right to continue in the post indefinitely till they are absorbed against permanent vacancy in the equivalent posts. The matter has been examined in the Board. It is hereby clarified that as per Board's guidelines issued under F.No. A-11018/7/90-Ad.IV dated 2-5-1990, cost recovery posts are created/sanctioned on a yearly basis only. For continuation of cost recovery officer beyond a period of one-year, clearance/sanction is required from IFU. Hence, in all such cases, where there is requirement to continue the cost recovery officers beyond one year, the concerned Commissionerate would be required to take prior sanction of IFU. Paragraph 6 of Board's Circular 31/2003-Cus dated 7-4-2003 stands modified to the above extent.

3.It is further clarified that where an officer posted against a cost recovery post attends or is assigned to more than one EOU, the cost of the post shall be equally shared among all such EOUs. This aspect shall be mentioned in the posting order of cost recovery officer itself by the concerned Commissioner of Customs or Central Excise, as the case may be. Past cases where this practice was not being followed, need not be opened. This will apply to cost recovery charges payable for the year 2004-2005.

4. It may be noted that as per Board's letter F.No. A-11018/8/91-AD IV dt 1.4.1991 the cost recovery charges to 100% EOU is equal to the average cost of the post.

5. Wide publicity may be given to the above said Circular in the form of public notice.

6. Hindi version follows

7. Please acknowledge the receipt.

Ranjit Kumar
Sr. Technical Officer(FTT)
Tel No 23093859