Sub : i) Department of Revenue Notification No. 50/2005-Customs dated 20-5-2005 permits:-

(i) Transfer of capital goods from one EOU to another EOU etc based on intimation.
ii) Permits the EOU to take out the capital goods for test, repair etc.
iii) Permits the EOU to take samples to other EOU etc for display
(iv) Permits status holder EOUs personal carriage of gold jewellery etc based on intimation
(v) Permits EOUs sharing of equipment with the other units of the same owner.

ii) Department of Revenue Notification No. 28/2005-Central Excise dated 20-5-2005 incorporating the above changes under the Central Excise Act, 1944.

iii) Department of Revenue Notification No. 46/2005-Customs dated 17-5-2005 notifying “SEZs as a Port” under various export promotion schemes.

iv) DGFT Notification No. 3 dated 17-5-2005 permitting advance licence/ diamond imprest licence holder etc to procure goods from SEZ without ARO.

V) Service Tax Refund to EOUs through Cenvat Credit : clarification in Bangalore Open House

(A) Annual Supplement of the Foreign Trade Policy was announced on 8-4-2005. The major changes relating to EOUs which were incorporated in the Annual Supplement were informed to the members vide EPCES Circular No. 40 dated 8-4-2005. Now Department of Revenue has issued Notification No. 50/2005-Customs and Notification No. 28/2005-Central Excise both dated 20-5-2005 making the changes affected in the FTP operational. Notification No 50/2005-Customs has carried out the following changes in Notification No. 52/2003-Customs dated 31-3-2003 relating to EOUs:-

i) An EOU has been permitted to take out capital goods from one unit to another unit in SEZ or to other EOU or EHTP or STP unit based on intimation to the Central Excise officers

ii) EOUs have been permitted the capital goods to be taken outside the unit without payment of duty for the purpose of test, repair, calibration, and return thereof. In case of a status holder unit the capital goods have permitted to be taken out on the basis of prior intimation to the Customs and Central Excise Officers and no prior permission shall be required. It may be recalled that though FTP had permitted taking out of all goods for repair etc, Notification No. 52/2003-Customs had permitted taking out of goods (other than capital goods). This issue had been highlighted by many of the EOUs and this was again taken up by EOUs coming under Noida SEZ in the interaction, organized by EPCES, with Shri G. K. Pillai, Additional Secretary, Ministry of Commerce & Industry on 6-4-2005 and Shri Lakhinder Singh, Chief Commissioner, Customs & Central Excise on 27-4-2005. Accordingly now the Department of Revenue has accepted this request of EPCES and the amendment has been carried out.

iii) EOUs have been permitted to take outside the samples of manufactured goods to another units in a SEZ or to other EOU or to other EHTP/STP units without payment of duty for display, after giving intimation to the Customs/Central Excise officers, subject to the condition that such samples shall be returned to the unit within a period of 30 days of taking out the samples from the unit.

iv) Status holder EOUs have been permitted personal carriage of goods based on intimation to the DC and the Central Excise officers.

v) EOUs have been permitted to share specified equipments with another EOU belonging to the owner of the importing unit. The Customs/Central Excise officer subject to the approval of the Commissioner of Customs or Commissioner of Central Excise, as the case may be, may allow diesel generating sets, captive power plants, central air-conditioning equipments, uninterrupted power supply system, networking equipments, EPABX, Fax, photocopier equipments, data transfer protocol equipments and security system imported by an export oriented undertaking, or Electronic Hardware Technology Park (EHTP) unit, or Software Technology Park (STP) unit to be utilized by other export oriented undertaking, or Electronic Hardware Technology Park (EHTP) unit, or Software Technology Park (STP) unit , belonging to the owner of the importing unit for the purposes of development of software, data entry and conversion, data processing, data analysis and control data management or call center services and export thereof but such goods shall not be removed from the premises of the importing unit.

Similar changes have been carried out by Notification No. 28/2005-Central Excise dated 20-5-2005. Copy of Notification No. 50/2005-Customs and Notification No. 28/2005-Central Excise are available at the website www.cbec.gov.in.

(B) Department of Revenue has issued Notification No. 46/2005-Customs dated 17-5-2005 wherein it has notified SEZs as a Port under different notifications relating to various export promotion schemes It may be recalled that this issue came up in various open houses organized by EPCES specifically at Kolkata, Cochin, Chennai, Hyderabad and Noida etc and then EPCES had taken up this issue with DGFT and Deptt. Of Revenue. DGFT has notified all SEZs as port vide Public Notice No. 57/2004 (2004-2009) dated 23-2-2005. Now Department of Revenue also notified SEZs as a Port vide Notification No. 46/2005-Customs dated 17-5-2005. This Notification is available at the website www.cbec.gov.in.

(C) DGFT has issued Notification No. 3(RE-2005)/2004-2009 dated 17-5-2005. Vide this notification Paragraph 4.1.11 of the FTP has been amended. Accordingly an Advance Licence Holder, Diamond Imprest Licence Holder, has been permitted to source goods from SEZs without ARO. In the Annual Supplement of the FTP announced on 8-4-2005, Paragraph 4.1.11 has extended this facility for procurement from EOU but the SEZ was missed out. SEEPZ SEZ has taken up this issue with EPCES and EPCES had taken up this issue with DGFT. Now DGFT has carried out this amendment. This Notification is available at the website www.nic.in/eximpol.

(D) EPCES has organized an Open House in Bangalore on 27-5-2005. In this Open House many of the EOUs had raised the issue of taking refund of service tax. It was clarified again in the Open House that Rule 17 of the Central Excise Rules 2002 has been amended by Notification No. 18/2004-CX dated 6-9-2004 to allow EOUs/EHTP/ STP units to pay duty through Cenvat Credit. Department of Revenue has issued Circular No. 54/2004-Customs dated 13-10-2004 clarifying that EOUs has been given an option either to procure goods from DTA without payment of duty under CT3 procedure or to procure the goods on payment of duty and avail Cenvat Credit. This Circular further categorically clarified that EOUs can also take the credit of the service tax borne by them, which will provide them relief from service tax. The Cenvat Credit so availed could be utilized by the unit as per Cenvat Credit Rules 2004, including payment of duty on their DTA sale. For availing Cenvat Credit, the procedure and provision as specified in the Cenvat Credit Rules 2004 will apply. In the Open House in Bangalore, it was further clarified that if the Cenvat Credit so taken against the service tax could not be utilized, then the Cenvat Credit can be taken back as a refund from the concerned Central Excise authorities as per Rule 5 of Cenvat Credit Rules 2004.

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