APPENDIX 14 I-O
Guidelines for Conversion of Domestic Tariff Area (DTA) Unit into Export Oriented Unit (EOU)/ Electronic Hardware Technology Park (EHTP)/ Software Technology Park (STP)/ Bio-Technology Park (BTP) Unit
Note: Please see paragraph 6.37.1 of the Handbook of Procedures
DTA units intending to get converted into EOU/EHTP/STP/BTP unit will follow the procedure as below for such conversion:-
(1) Apply to concerned Development Commissioner (DC) in a manner as applicable to new units.
(2) After getting approval of the project and obtaining Letter of Permission (LOP) from DC, execute Legal Undertaking (LUT) in prescribed format with DC.
(3) Thereafter, apply for private bonded licence to concerned Customs/ Central Excise authority with execution of B-17 Bond.
WHERE ADVANCE AUTHORISATION IS PENDING REDEMPTION
(3.1) If the unit is having outstanding export commitment under advance authorization scheme, following procedure before execution of Bond with customs and Central Excise Authority need to be adopted :
(i) Approach concerned Customs & Central Excise Authority and obtain certificate showing physical verification of unutilized material held in stock against all advance authorizations (not yet redeemed) and such raw material as intended to be carried forward to EOU;
(ii) Approach Regional Authority along with a copy of the following documents:
(a) LOP/LUT executed with DC,
(b) Certificate of stock verification obtained from Customs/Central Excise
(c) LUT with RA as annexed.
(d) Details of imports/exports against all advance authorizations and utilized/ balance materials as per prescribed consumption register.
The firm must submit original authorizations and connected documents of exports to concerned R.A.
(iii) RA, will calculate unfulfilled export obligation, as per prevailing norms. In case norms are not fixed, R.A. will take up with Norms Committee for its fixation. Such export performance would only be taken into account, as within valid export obligation period of Advance Authorization ;
(iv) R.A. will thereafter communicate “No objection” to DC and Central Excuse Authority with endorsement to applicant unit.
(v) The unit will approach the Customs/Central Excise Authority for execution of B-17 bond ;
(vi) Raw material obtained under Advance Authorization, which is having valid export obligation period can only be carried over;
Where export obligation period has expired, only course available is payment of duties, interest and penalty as applicable, proportionate to unfulfilled export obligation ;
(vii) RA would accordingly process case for discharge of obligation and redemption of bond LUT executed against all the advance authorizations issued already.
EPCG Authorization:
(4) In case there is an outstanding export commitment under EPCG Scheme, it will be added to future export obligation by adding value of capital goods to the imported capital goods value of the EOU and all previous obligations under EPCG would cease to exist on such inclusion.
ANNEXURE
FORM OF LEGAL UNDERTAKING FOR CONVERSION OF DTA UNIT INTO EOU
M/s ___________________________ _____________________ were granted Advance/ EPCG Authorization Nos._______________________________ dated ________________ for manufacture and export of _____________________________________ subject, inter-alia, to condition that they would achieve required export obligation as per provisions of Duty exemption/EPCG Scheme.
The unit filed a Bond with Bank Guarantee/ legal undertaking with President of India through Commissioner of Customs --------------------for achieving the above mentioned commitments.
As against above commitments, the unit’s actual performance has been as under: -
The unit applied for conversion from Duty Exemption /EPCG scheme to EOU Scheme which was approved vide letter No._________________________ dated _______________ subject inter-alia to the condition that penalty imposed by appropriate Authority under the F.T.(D&R) Act, 1992 for non fulfilment of the conditions of approvals would be paid.
In view of the approval for conversion from DTA to EOU Scheme, I/We ___________________________________________________________ hereby undertake as under:
(i) That I/We_________________ shall continue to be under obligation to fulfill the conditions of above authorization even after getting converted into EOU
(ii) That I/We _______________________________________________________ shall pay whatever penalties are imposed by the Development Commissioner under FT(DR) Act for non-fulfilment of the terms and conditions of Authorization
(iii) That I/We____________________________________________________ shall adhere to the mode of payment of penalties, if any, and time frame in which penalties are required to be paid to the Director General of Foreign Trade without any demur or protest.
Full and expanded description
of The unit with full address.
IN WITNESS WHEREOF the unit hereto has duly executed this agreement on ______________________________ this ______________________________ day of ___________________________200__ signed, sealed and delivered by the unit in the presence of :
| 1. | Name | ___________________________ |
| Address | ___________________________
|
| 2. | Name | ___________________________ |
| Address | ___________________________
___________________________ |
(To be authenticated/affirmed by 1st class Magistrate/ Notary Public)
Accepted by me on behalf of the President of India.
Dy./Jt.DGFT
(Above Appendix 14 I-O has been substituted vide
PN. NO. 74/2007, DT. 24/10/2007)
[OLD-
APPENDIX -14-I-O
Guidelines for Conversion of DTA Unit into EOU/EHTP/STP/BTP Unit
Note: Please see paragraph 6.37.1 of the Handbook of Procedures
DTA units intending to get converted into EOU/EHTP/STP/BTP unit will follow the following procedure:-
(1) Apply to the concerned Development Commissioner in the same manner as applicable to new units. After getting approval of the project and obtaining LOP from Development Commissioner, execute LUT in the prescribed format with Development Commissioner. Thereafter, apply for private bonded licence to concerned Customs/Central Excise authority and execute B-17 Bond with them.
Advance Authorization:
(2) If the unit is having outstanding export commitment under advance authorization scheme, it will follow the following procedure before execution of Bond with Customs/Central Excise authority:
(i) Approach the concerned Customs/Central Excise authority for physical verification of unutilized material held in stock of the unit against one or more advance authorizations which have not been redeemed and intended to be carried forward into EOU;
(ii) Obtain a certification of unutilized material as per (i) above from the Customs/Central Excise authority;
(iii) Approach the RA along with a copy of LOP/LUT executed with the Development Commissioner and Certificate of stock verification obtained from Customs/Central Excise and a LUT as given in the Annexure. The firm will also give details of imports/exports against all the advance authorizations and utilization/balance materials with the unit as per the prescribed consumption register. The firm will also submit original authorization and connected documents of exports to the R.A.;
(iv) Based on above documents, R.A will send a communication to the Development Commissioner and the concerned Central Excise authority giving their “No objection” to the unit getting converted into EOU. A copy of the same will be endorsed to the unit.
(v) The unit will approach the Customs/Central Excise Authority for execution of bond and subsequent action;
(vi) R.A., based on the details given by the firm, will work out the revised export obligation as per the norms fixed. In case norms are not fixed, R.A. will take up the matter with the Norms Committee for fixation of norms;
(vii) Based on revised export obligation and actual consumption of raw materials etc, firm would be required to pay duty with interest on the differential value and quantity of inputs etc., if any, i.e. Qty. remains unutilized as per norms/consumption register minus qty. being carried forward under EOU as per Central Excise Certificate.
(viii) RA would process the case for discharge of obligation and redemption of bond/LUT executed against the advance authorization.
EPCG Authorization :
(3) In case there is an outstanding export commitment under EPCG Scheme, it will be subsumed in the export performance of the unit by adding the value of capital goods to the imported capital goods value of the EOU. In addition, in case there is default in fulfillment of E.O. as per para 5.8 of HBP Vol. I unit will pay duty with interest as per para 5.8.3 of HBP Vol. I.
Annexure
FORM OF LEGAL UNDERTAKING FOR CONVERSION OF DTA UNIT INTO EOU
M/s._______________ _______________were granted Advance/EPCG authorization Nos._______________dated_________ for the manufacture and export of _____________________________subject to inter-alia to the condition that they would achieve the required export obligation as per the provisions of Duty Exemption/EPCG Scheme.
The unit filed a Bond with Bank Guarantee/Legal undertaking with the President of India through the Commissioner of Customs,_________ for achieving the above mentioned commitments.
As against the above commitments, the unit’s actual performance has been as under:
The unit applied for conversion from the Duty Exemption/EPCG Scheme to EOU Scheme which was approved vide letter No._____________dated_________subject inter-alia to the condition that penalty imposed by the appropriate Authority under the FT(DR) Act, 1992 for non fulfillment to the conditions of approvals would be paid.
In view of the approval for conversion from DTA to EOU Scheme, I/We_________________________________hereby undertake as under:
(i) That I/We_________shall continue to be under obligation to fulfill the conditions of above authorization even after getting converted into EOU.
(ii) That I/We___________ shall pay whatever penalties are imposed by the Regional Authority under FT(DR) Act for non-fulfillment of the terms and conditions of Authorization.
(iii) That I/We__________ shall adhere to the mode of payment of penalties, if any, and time frame in which penalties are required to be paid to the Director General of Foreign Trade without any demur or protest.
Full and expanded description
of the Unit with full address.
IN WITHNESS WHEREOF the unit hereto has duly executed this agreement on ________________________ ________this ______________________________ day of _________________200 ___ signed, sealed and delivered by the unit in the presence of:
| 1. | Name _______________
Address______________
| |
| 2. | Name__________________
Address________________ | |
(To be authenticated/affirmed by Ist Class Magistrate/Notary Public)
]
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