CUS CIR NO.22/2003 DATE 31/03/2003

DTA Sale of Power by EOUs and units in EPZ/SEZ/EHTP/STP– De-linking of Such Sale from the DTA Sale Entitlement of the Units-Reg.
I am directed to invite your attention to the Board’s Circular No. 38/2002–Cus, dated 1-7-2002 whereunder, among other things, a procedure for sale of surplus power in DTA by EOUs and units in EPZ/STP/EHTP/SEZ has been laid down. It has been clarified in paragraph 26 of the said Circular that the surplus power so sold in DTA may be adjusted against the DTA sale entitlement of the units in terms of value

2. Representations have been received from the trade and industry that the stipulation of counting the domestic sale of power against the domestic sale entitlement of the units is contrary to the provisions of the Exim Policy and nullifies the entire scheme of sale of surplus power. It has been stated that only a handful of units are selling surplus power in the domestic market. Captive power plants come only with certain capacity rating. If, for any reason, the whole of power cannot be consumed in the manufacturing process, the excess or surplus power has to be evacuated as the same cannot be stored. There is, therefore, no alternative but to sell it in the domestic market. It has, therefore, been represented that domestic sale of power should not be counted against the domestic sale entitlements of the units under the Exim policy.

3. The matter has been examined by the Board. Having regard to the fact that the surplus power is not a finished product of the unit, as also the fact that the sale of such power in DTA is allowed only on payment of duty foregone on consumables and raw materials used for generation of the power so sold, it has been decided that sale of power in DTA by EOUs and units in EPZ/STP/EHTP/SEZ shall not be counted against the domestic sale entitlement of the units under the Exim Policy.

4. The Circular No. 38/2002-Cus dated 1-7-2002 stands modified to the above extent.

5. Wide publicity may be given to the above instructions by way of issue of a Public Notice.

6. The Development Commissioner will, however, ensure, at the time of issue of LOP/ LOI that the capacity of captive power plant is commensurate with the power requirement of the unit.

Kindly acknowledge receipt of this Circular.

(C.P. GOYAL)
Sr. Technical Officer (FTT)

F. No. 305/25/1997-FTT

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