EOU - Waiver of interest on the customs duty in respect of warehoused goods belonging to 100% EOU.

Document Text

Circular F. No. 475/42/91-Cus. Dated: 06-06-91. Sub: - Waiver of interest on the customs duty in respect of warehoused goods belonging to 100% EOU - Regarding. Please refer to the correspondence resting with Board's instructions contained in Circular No. 457/10/89-Cus, VII dated 15.9,1989. A number of representations from the Confederation of 100% EOUs have been received alleging that the customs authorities are charging interest on the customs duty under Section 61 (2) of the Customs Act and also issuing demand notices under section 142 of the Customs Act, 1962 for realisation of the said amount from their members. In this connection, I am directed to say that the Board with the approval of Finance Minister has framed guidelines for granting waiver of interest on the customs duty in which Board would generally consider the request. The goods warehoused by 100% EOUs are also included in the category of guidelines. Keeping in view the nature of manufacturing activities which normally require longer period between 5 to 10 years for fulfilling export obligation and the element of interest which will be leviable after the expiry of initial warehousing period of one year would add additional burden as well as make the goods more uneconomical in the international market, it has been decided that the demand notices for realisation of interest on the warehoused goods may be issued in time but may not be enforced till the completion of export-obligation. The requests of the 100% EOUs may be forwarded to the Board for considering waiver of interest at the time of de-bonding the unit only.

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