MARCH 14, 2012

For FM, It's time to bury EOU worries

By J Rama krishna Sastry

I am working as a Sr. Manager - Excise in leading pharma company situated in UP.  I would like to bring the following points regarding EOUs problems

1) If any EOU purchased manufactured goods from another EOU, the Excise duty is NIL by following the ARE3 procedure.  But the supplier EOU is paying CST and receiving EOU is claiming the CST refund from Development commissioner. Hence, there is no logic to pay the CST by supplier EOU.  So, exemption should be granted from CST for transaction between one EOU to another EOU.

2) EOU may send the goods for job work.  But all the materials should be reported first at EOU premises and after completion of re-warehouse procedure, the same will be dispatched for job work.  This will be burden to EOUs by paying the extra transportation charges. Hence, the Government may allow all materials direct delivery to Job worker and mechanism of getting re-warehousing at job worker jurisdictional central excise authorities.

3) Inter unit transfer of inputs / capital goods among group companies without any restrictions. For example, one group having different EOUs in different parts of India.  The Govt should allow transfer of inputs within the Group EOUs.  This will help to maintain minimum inventory and also restrict the foreign exchange outflow.

4) Spelling mistakes of item description in Procurement certificate Vs Labels on the containers should be ignored by Customs and Central Excise authorities.  The EOUs are facing lot of problems at the time of getting re-warehousing certificate from field staff of central excise. So many times the department is denying to give the re-warehousing certificates.

5) Allow unutilized Duty free indigenous procured materials sale in DTA on payment of applicable duties. The EOUs are facing lot of problems when any indigenous duty free material become unutilized and want to sell in DTA by paying applicable duties, the Customs authorities are asking the certificate from original supplier DGFT jurisdiction regarding non availment of deemed export benefits as per circular 74/2001-cus dt. 4.12.2001 .  This is very difficult to get the certificate from Supplier DGFT. This should be streamlined otherwise it is very difficult to EOUs to sell the indigenous duty free materials in DTA by paying applicable duties.

6) Pre-authentication of CT3 and PC for units having status holders.  There should not be any permission from Jurisdictional Asst/Dy.Commisisoner because the Development commissioner issued the status holder certificate on the basis of turnover.  Hence, there is no further permission required from jurisdictional Asst./Dy. Commissioner of central excise.  It should be only on intimation basis.

Further, the Govt should think of avoiding permission from Jurisdictional Central Excise authorities and allow maximum intimation basis.  This will help smooth functioning of 100% Eous.