CUS CIR NO. 11/2004 DATE 05/02/2004

Admissibility of DEPB benefits in respect of supplies made by DTA Units to SEZ Units -reg.
Kind attention in invited to entry Sr. No. 2 of Customs Notification NO. 57/2003-Cus. dated 1-4-2003 which inter-alia amended customs notification No. 45/2002-Cus. dated 22-4-2002 issued under DEPB Scheme. Through this amendment the provisions of DEPB Scheme were extended in respect of supplies made by DTA units of SEZ units. Para 2.5 of the DOR Circular No. 25/2003-Cus. dated 1-4-2003 Inter-alia outlined the procedure to be adopted for the purpose of availing benefit of DEPB Scheme in respect of such supplies.

2. Special provisions relating to Special Economic Zones were inserted in the Customs Act through Finance Act, 2002 by creating a new Chapter XA (vide Sections 76A to 76N) and the aforesaid provisions were to be brought into operation from a date to be notified. Till now, the said Chapter XA of the Customs Act pertaining to SEZ Scheme has not been brought into operation.

3. Till the operation of Chapter XA ibid, benefit of DEPB Scheme does not become legally available in respect of supplies made by DTA Units to SEZ Unit. It is, therefore, clarified that benefit of DEPB Scheme in respect of supplies made by DTA Units to SEZ Units can only be allowed on & from a future date when Chapter XA ibid in brought into operation. In case benefit of DEPB Scheme was extended in respect of supplies made by DTA Units to SEZ Units in the past in terms of Customs Notification No. 45/2002-Cus. dated 22-4-2002 as amended read with DOR Circular No. 25/2003-Cus. dated 1-4-2003, recovery action should be initiated immediately.

4. Suitable Public Notice for Trade and Standing Order for the guidance of customs filed formation may be issued.

5. Receipt of the Circular may please be acknowledged.

Yours faithfully,

(R.K. TALAJIA)
OFFICER ON SPECIAL DUTY (DBK)

F.NO. 605/1/2003-DBK

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