Exit from EOU Scheme

6.18

(a) With the approval of the Development Commissioner, EOU units may opt out of the scheme. Such exit from the scheme shall be subject to payment of Excise and customs duties and the industrial policy in force at the time of exit.

(b) If the unit has not achieved the obligations under the scheme, it shall also be liable to penalty at the time of exit.

(c) In the event of a gem and jewellery unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by the Ministry of Commerce and Industry (Department of Commerce) at the price to be determined by that agency.

(d) An EOU//EHTP/STP/BTP unit may also be permitted by the Development Commissioner, to exit from the scheme on payment of duty on capital goods under the prevailing EPCG Scheme as a one time option. This will be subject to fulfillment of the eligibility criteria under that Scheme and standard conditions indicated in Handbook (Vol-I).

(e) Units proposing to exit from EOU scheme should obtain permission for in principle approval and submit details of imports and exports made to the Central Excise/Customs Authority. After such verification, the said authority will assess the duty payment and the unit will pay the duty so assessed and obtain ‘no dues certificate’ from the excise authority. During the period between such payment of customs duty and obtaining the final debonding letter , the unit will not be entitled to claim any exemption for procurement of capital goods or inputs. They can however, claim DEEC/DEPB/DFRC/Duty Drawback .

(f) In cases where a unit is initially established as DTA unit with machine procured from abroad after payment of applicable import duty or from domestic market after payment of excise duty and the units are subsequently converted to EOU, in such cases removal of such capital goods to DTA after de-bonding would be without payment of duty. Similarly in cases where a DTA unit imported capital goods under the EPCG Scheme as a DTA units and after completely fulfilling the export obligation under the EPCG scheme gets converted into EOU, the unit would not be charged customs duty on CG at the time of removal of such capital goods in DTA .