6.8

EOU/EPZ/EHTP/STP units may sell in the DTA rejects as per paragraph 6.8 (a) of the Policy subject to the following conditions:

(a) The term ‘rejects’ shall cover the products which have definite manufacturing defects and are not exportable as per declaration of the unit concerned and shall include sub-standard products, but not spares, tools, waste/scrap/remnants and by-products.

(b) The following parameters shall be kept in view for determining ‘rejects’.

(i) The unit must certify that the rejects were an unavoidable feature on account of flaws of technology, technique or material deployed in manufacture.

(ii) ‘Rejects’ must be invoiced and stamped by the manufacturer as ‘Rejects’ at the time of clearance into the Domestic Tariff Area.

DTA Sale and Bunching of products

(c) DTA sale shall be admissible only to similar goods as that of the goods manufactured and exported from the unit. In case of doubt in regard to similar nature of goods, the matter shall be referred to the BOA for decision.

(In this para (c) has been corrected vide PN No. 16/2002, Dt. 05/06/2002)

[OLD
(c) DTA sale shall be admissible only to similar goods or which belong to the same class as that of the goods manufactured and exported from the unit. In case of doubt in regard to similar nature of goods, the matter shall be referred to the BOA for decision.]

(d) Within the entitlement of DTA sale, as provided in paragraph 6.8 (b )of the Policy, the unit may sell in DTA its products and services. Entitlement will be determined in totality and not with reference to specific items. Detailed Guidelines on DTA sales are given at Appendix 14-F of the Handbook (Vol.1).

Disposal of waste/ scrap

(e) Norms for disposal of Waste/scrap/remnants arising out of production process and in connection therewith, including wastage or manufacturing loss on gold/silver/ platinum jewellery and articles thereof, is given in Appendix 14-L of the Handbook (Vol.1).

(f) In respect of items not covered by Appendix 14-L Development Commissioners shall fix the wastage keeping in view the norms notified under Duty Exemption Scheme. For items not covered by these two, the Board of Approval shall fix Norms. However, Development Commissioners may fix ad-hoc norms on the basis of data for a period of six months and within this period he shall get norms fixed by the Board of Approval.

(Para 6.8 (f) has been amended vide PN. No. 40/2002-07, Dt. 08/10/2002)

[OLD - (f) In respect of items not covered by Appendix- 14-L, Development Commissioner shall fix the wastage keeping in view the norms notified under Duty Exemption Scheme. For items not covered by these two, the Development Commissioner shall send proposals to the Board of Approval for decisionAll cases where wastage norms have not been fixed by the Development Commissioner within 45 days from the date of receipt of application, the same shall be referred to the Board of Approval for information alongwith reasons for delay. ]

(Bold words in (e) & (f) has been corrected vide PN No. 16/2002, Dt. 05/06/2002)

(g)EOU/EPZ units may clear scrap/waste/ remnants arising out of sub-contracting of production/production process from the job worker’s premises, on payment of applicable duties, or bring it back to its own premises

(h) Scrap/Dust/sweeping of gold/silver/platinum may be sent to the Government of India Mint/Private Mint from the EOU/EPZ units and returned to them in standard bars in accordance with the procedure prescribed by the Customs authorities or may be permitted to be sold in the DTA on payment of applicable Customs duty, on the basis of gold/ silver/ platinum content, as may be notified by Customs.