Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry,
Govt. of India)
Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : email@example.com
CIRCULAR NO. 8 DATED 20.10.04
L. B. Singhal
SUB : DEPARTMENT OF REVENUE
CIRCULAR NO. 55/2004-CUS DATED
14TH OCTOBER 2004 FACILITATING DEBONDING BY EOUs/EHTP/STP
(i) At present, if against
these units, any show cause notice for demand of duty is
pending then they are allowed to debond on furnishing undertaking
on stamp paper along with Bank Guarantee of 10% of the amount
involved. However, now it has been clarified that in case
of these show cause notices involving an issue which has
already been decided against the Revenue Department then
the unit will not be required to give such bank guarantee.
This circular has clarified that in all such cases where
the Department has lost in the CESTAT and has preferred
appeal to Apex Court, the amount involved in show cause
notice issued on the same issue either in respect of the
said unit or in other unit, will not be taken into consideration
for computing 10% bank guarantee amount of such demand.
(ii) It has also been clarified
in this Circular that in case of units has already executed
Bank Guarantee along with B-17 Bond, and unit requests to
adjust this 10% amount along with bank guarantee, then the
adjustments may be allowed.
This issue has been raised
by the EOUs in Kandla Open House organized by EPCES on 10-5-2004
and Shri A. K. Prasad, Director (Customs), present in this
Open House, had assured consideration of this issue. Accordingly
this request has been considered.
This is for your information
No. 55 /2004-Customs
Government of India
Department of Revenue
of Excise & Customs
New Delhi, October
All Chief Commissioner of
All Chief Commissioners
of Central Excise,
All Commissioners of
All Commissioners of
Webmaster @ cbec.gov.in.
Sub:- Debonding by EOU/EHTP/STP
I am directed to invite
your attention to Boards Circular No. 8/2004-Customs,
dated 28-1-2004 on the above subject. whereunder it has
been provided that EOUs against whom any show cause notice
for demand of duty is pending may be allowed to be debonded
on furnishing undertaking on stamp paper along with Bank
Guarantee of 10% of the amount involved. .
2. Clarification has been
sought as to whether 10% Bank Guarantee is to be insisted
upon in the case of those show cause notices involving an
issue which has already been decided against the revenue
and department has preferred appeal against such decision.
The issue has been considered in the Board. If the decision
of the Tribunal is in favour of the assessee, strictly speaking,
no duty is payable, notwithstanding the fact that Department
has preferred appeal, [for example Favourite Industries
v Commissioner of Central Excise, Surat-I, 2003 (156)) ELT
802 (Tri-Mumbai) where the issue was whether goods supplied
by an EOU is to be considered as goods supplied by a manufacturer
in India Appeal filed by Department before the Apex
Court in CA No.D 24920/03]. Further, as the ratio-decidendi
of the case has not attained finality because of appeal
preferred by the department, Show Cause Notices on these
issues are pending for adjudication even for other EOUs.
Therefore, in all such cases where the Department has lost
in the CESTAT and has preferred appeal to Apex Court, the
amount involved in SCN issued on the same issue either in
respect of the said unit or any other unit, will not be
taken into consideration for computing 10% Bank Guarantee
amount of such demand
3. The EOU/EHTP/STP units
are required to execute B-17 Bond at the time of commencement
of the unit. The units are also required either to furnish
surety or security along with the B-17 bond. In cases where
security has been furnished in form of Bank Guarantee along
with the bond and the assessee requests to adjust 10% of
duty as required to be furnished in terms of Circular 8/2004-Cus
out of the said Bank Guarantee, such requests of the unit
may be considered. However, before acceding to such request
it may please be ensured that the Bank Guarantee is valid.
4. Clarification has also
been sought as to whether part duty deposited earlier by
the assessee during the course of investigation can be adjusted
towards 10% duty required to be paid at the time of debonding
in terms of Circular 8/2004. The matter has been considered.
The intention of the Circular 8/2004- Cus is to take 10%
bank guarantee of the duty demanded at the time of debonding.
Therefore, the duty paid earlier during the course of investigation
can not be used to adjust the 10% guarantee required at
the time of debonding. However, while calculating 10% of
the amount involved in terms of the Circular No. 8/2004-Cus
dated 28.01.2004, the deposited amount against the Show
Cause Notice would be deducted from the total demand and
the Bank Guarantee amount would be 10% of such deducted
amount. For example, if an EOU has a demand notice of Rs.
100/ and he has deposited Rs. 10/ then the Bank Guarantee
amount would be 10% of (100-10) i.e Rs 9/..
5.The Circular was placed
on the website of the CBEC and also it was advertised in
the newspaper. The views/comments received have been considered.
6. Wide publicity may please
be given to the above said instruction by way of issuance
of Public Notice.
7. Hindi version follows.
( Ranjit Kumar)
Sr. Technical Officer
Copy for information to :
PS to Chairman and Members
of the CBEC
To all sections of the Board Office
To all Directorates under CBEC
Joint Secretary (EP), Ministry of Commerce
Directorate General of Foreign Trade.
Joint Secretary (Administration), CBEC