ISSUE OF SHOW CAUSE NOTICES: If the units have failed to achieve the export obligation, after obtaining concurrence of the Development Commissioner, action is taken to ensure that the unit discharges duty liability.   Wherever required show cause notices are issued to safeguard the interest of revenue on account of non-fulfillment of export obligation as well as any violation of provisions under Customs Act / Notifications / FTP by the units.

RECOVERY OF ARREARS OF REVENUE:  In respect of the confirmed demands necessary action is taken to recover the dues. Range Officers liaison and attend meetings with the Officers of financial institutions (like KSSIDC, KSFC) and Official Liquidator wherever involved, for recovery of arrears of revenue. Officers also arrange for inspection of seized goods by prospective bidders in cases where Disposal Section has taken up Auction and in successful cases, the Officers go to the premises and release the goods. The Officers find and/or visit the premises of the Directors of the Defunct Units for persuasion and service of Notices.

RENEWAL OF LICENCE: The Licence will be initially valid for a period of 5 years. On expiry of the licence period if the unit intends to continue under the scheme they will obtain approval of the Development Commissioner to continue in the scheme and then approach the jurisdictional Asst / Dy Commissioner of Customs to renew the Licence and In-bond Manufacturing Sanction Order. While renewal of licence it is ensured that the duty free goods imported and procured are available in the bonded premises and they are in usable condition till the validity of the permissible warehousing period and requests are forwarded to the Divisional Office for renewal. 

EXIT FROM SCHEME:   Where unit requests for exiting from the scheme, the NFE is verified, applicable duties on capital goods, raw materials, consumables, finished goods, packing materials are collected and recommended to the Divisional Office for issue of no due certificate. 

BRIEF WRITE-UP ON DIVISIONAL PREVENTIVE SECTION  : The Divisional Preventive Section was formed during April 2004 with a strength of One Superintendent (Preventive) and one Inspector working both for Technical and Preventive Sections. .  Thereafter, during April 2005 one Inspector was exclusively posted for Preventive Section and during December 2005 one more Inspector joined Preventive Section.   The jurisdiction of the Divisional Preventive Unit covers the entire jurisdiction of the Customs Division comprising of 06 EOU Ranges and 01 CWC Range geographically falling within the Districts of Bangalore, Kolar & Tumkur.  The Divisional Preventive Unit is engaged in collection of intelligence relating to violation of provisions by the 100% EOUs, STPIs & PBWHs  and verification of records from time to time.  The Divisional Preventive Unit is not dealing with any cases pertaining to Anti-Smuggling & COFEPOSA.  The performance of the Divisional Preventive Unit since inception is as detailed below:- 

BRIEF NOTE WORK DONE IN EOU RANGES:   

  LICENSING: The work relating to EOU’s begins with issue of Private Bonded Warehouse License and In Bond Manufacturing Sanction Order under Section 58 & 65 of Customs Act, 1962. On receipt of application from EOU unit, the premises is verified by the jurisdictional Range Officers. The premises is verified whether it is safe and secure for storing  duty free goods capital goods and raw materials and to carry out in-bond manufacturing activity . The documents submitted by the unit is verified and then the said License and In-bond Manufacturing Sanction Orders are issued by the jurisdictional Asst/Dy Commissioner, in charge of Customs Division.

BONDING OF GOODS : After issue of licence/order, the unit has to furnish B.17 Bond with Bank Guarantee / Solvency Certificate  to cover the procurement/purchase of Capital goods and raw materials approved by CSEZ. Thereafter the unit may start procuring/sourcing of imported/indigenous capital goods and raw materials which are  listed in Annexure to Notification Nos. 52/2003 Cus dated 31/3/2003 & 22/2003 CE dated 31/3/2003. A procurement certificate or block transfer is issued for importing of goods without payment of duty and Certificate in form CT 3 is issued for indigenous procurement of  goods without payment of duty  by the  jurisdictional Superintendent. The goods so received on importation are bonded in the warehouse within 24 hours of its receipt. On receipt of request for bonding of duty free goods from the unit the Range Superintendent orders for open examination of the packages / containers   and after examination by Inspector, the goods are bonded and re-warehousing certificate is issued. The receipts of goods received from local market are warehoused and intimation under D3 is filed by the party within 24 hours. The ARE 3 sent alongwith goods are signed accordingly by the Range Inspector and sent to the Supplying unit. In case of shortages the units are directed to pay duty.

After the goods are bonded  continuous monitoring is done to ensure that the capital goods are put in to use within one year of bonding and raw-materials within 3 years. If there is any violation duty will be collected along with interest.

EXPORT: The unit has to intimate the date of start of commercial production. Thereafter the unit can undertake exports under physical supervision, by filing Shipping Bill with Invoice and packing list. The Range Superintendent will assess the shipping Bill in advance. The Inspector then verifies the cargo for export and after duly satisfying on comparison with the packing list will seal the packages or container and reports accordingly.   The duplicate copy of the Shipping Bill is sent to the port of shipment in a sealed cover. After export a proof of export is filed by the unit, which is verified.  It is also ensured that the units receive export realization. 

EXPORTS THROUGH SELF SEALING : In respect of Units which have opted for self sealing the Shipping Bill is assessed by the Superintendent and the invoice is verified by the Inspector. The container/packages are sealed by the person authorized by the unit. 

THIRD PARTY EXPORTS : If the party intends to export the goods through third party, the application filed by the party will be verified and permission will be given by the jurisdictional Asst/Dy Commissioner after ensuring that  disclaimer certificates are given by the third party and  there is no duplication in a ailment of export benefits.

RE-EXPORT : The units are also allowed to re-export defective capital goods / spares for repair and return or on replacement basis and also in cases of unutilized raw materials. Such requests by the party are scrutinized on case to case basis and in respect of eligible cases requests are forwarded to the Divisional Office for permission.  

DTA SALE OF FINISHED GOODS/REJECTS/WASTES/SCRAPS: If permitted in Letter of Permission, the sale of finished goods  to DTA upto 50% of FOB value of exports of the previous  year is  verified and forwarded to Divisional Office. Once permitted,  the duties paid by the unit are verified by the Range. Sale of rejects wastes and scrap arising during manufacturing process to Domestic market is allowed on payment of applicable duties and  such sale shall not exceed 50% limit.  It is also ensured that the quantity of  rejects/waste/scrap arising during the manufacture is  within the SION norms or norms approved Board of Approval and is forwarded to Divisional Office. 

DESTRUCTION OF SEMI/ FINISHED GOODS/REJECTS:  In respect of  semi finished goods/goods manufactured/rejects / capital goods/ scrap/ waste/ remnants/ raw materials etc., which are not fit for use it is recommended to Divisional Office for destruction. Once ordered for destruction by Asst Commissioner the goods are destroyed under physical supervision by the Range Officers and proceedings recorded under mahazar.  

INTER UNIT TRANSFER:  EOUs are permitted to undertake inter unit transfer of manufactured goods or capital goods to another EOU. Applications for IUT are scrutinized in the Range Office and forwarded to Divisional Office for permission or treating it as intimation on case to case basis. Documents for IUT are treated as export documents and the same procedure in respect of exports is followed.

SUBCONTRACTING:  On application made by EOU for subcontracting part of their manufacturing process, the same is verified and forwarded to Divisional Office for permission under job work procedure. It is ensured that the goods are received within the prescribed period. In doubtful cases samples are drawn to ensure that there is no diversion to DTA.

EXTENSION OF WAREHOUSING PERIOD FOR BONDED GOODS: Where the goods are due for expiry of warehousing period, the application submitted by the Units are scrutinized and goods are verified as to whether the same is in good condition or in use and afterwards the same is sent to Divisional Office for onward submission to the Commissioner of Customs for approval of extension of warehousing period.

DE-BONDING OF GOODS : Wherever application is received for de-bonding of goods, the same are verified by the Range Officers with regard to Depreciation allowable and rate of duty applicable on the goods. Then the condition of the goods are also verified and request is forwarded to Divisional office  for de-bonding of goods. The unit files Ex-bond Bill of Entry and the same is assessed to duty and after payment of duty pass out is given. Duty is collected from date of expiry of warehousing period with interest if warehousing period is expired. It is ensured in the premises that no duty free (bonded) goods are stored and then request of the unit for de-bonding of premises are recommended. 

BONDING OF ADDITIONAL PREMISES: If the licensee intends to expand their operations they will request for bonding of additional premises.  The Range Officers visit and verify the premises to ensure that the same is safe and secure for storage of duty free bonded goods and to carry in-bond manufacturing activities. After satisfaction the same is recommended to for approval for bonding additional premises by the Asst/Dy Commissioner. 

DE-BONDING OF PREMISES :   On moving to a new bonded premises  the unit may request for de-bonding of the old premises. On receipt of applications in this regard it is verified by the Range Officers and ensured that no duty free (bonded) goods are stored in the said premises and then the request is forwarded to the Divisional office for debonding of premises.

MONITORING OF NFE SCRUTINY OF APRS: It is ensured that the unit is achieving positive net foreign exchange earnings and the Annual Progress Reports filed with CSEZ are scrutinized with Customs Registers.

ISSUE OF SHOW CAUSE NOTICES: If the units have failed to achieve the export obligation, after obtaining concurrence of the Development Commissioner, action is taken to ensure that the unit discharges duty liability.   Wherever required show cause notices are issued to safeguard the interest of revenue on account of non-fulfillment of export obligation as well as any violation of provisions under Customs Act / Notifications / FTP by the units.

RECOVERY OF ARREARS OF REVENUE:  In respect of the confirmed demands necessary action is taken to recover the dues. Range Officers liaison and attend meetings with the Officers of financial institutions (like KSSIDC, KSFC) and Official Liquidator wherever involved, for recovery of arrears of revenue. Officers also arrange for inspection of seized goods by prospective bidders in cases where Disposal Section has taken up Auction and in successful cases, the Officers go to the premises and release the goods. The Officers find and/or visit the premises of the Directors of the Defunct Units for persuasion and service of Notices.

RENEWAL OF LICENCE: The Licence will be initially valid for a period of 5 years. On expiry of the licence period if the unit intends to continue under the scheme they will obtain approval of the Development Commissioner to continue in the scheme and then  approach the jurisdictional Asst / Dy Commissioner of Customs  to renew the Licence and In-bond Manufacturing Sanction Order. While renewal of licence it is ensured that the duty free goods imported and procured are available in the bonded premises and they are in usable condition till the validity of the permissible warehousing period and requests are forwarded to the Divisional Office for renewal.

EXIT FROM SCHEME:  Where unit requests for exiting from the scheme, the NFE is verified, applicable duties on capital goods, raw materials, consumables, finished goods, packing materials are collected and recommended to the Divisional Office for issue of no due certificate.