Section 12 in The Special Economic Zones Rules, 2003
12. Destruction of goods imported or procured from domestic tariff area including capital goods or goods manufactured or produced by a special economic zone unit.
(1)After obtaining the permission of the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, a person entitled to discharge such function of a special economic zone unit, may destroy the goods ( including capital goods) procured from domestic tariff area by such unit or imported from outside India or goods manufactured or produced by such unit including rejects, waste, scrap or remnants, in the presence of proper officer without payment of duty within the special economic zone, and such destruction shall be carried out outside such zone only where it is not possible to destroy within such zone, subject to the condition that -(i)[ in case of destruction of goods procured from domestic tariff area, the special economic zone unit shall be required to pay back the export benefits taken by the domestic tariff area supplying unit or taken by the special economic zone unit on the basis of disclaimer from domestic tariff area unit; [Substituted by Notification No. G.S.R. 305(E) dated 11.5.2004 (w.e.f. 22.7.2003)]Provided that where such goods have been procured by the special economic zone unit against payment of foreign exchange, the special economic zone shall not be liable to pay back the export benefits, taken by the domestic tariff unit from which such goods have been procured or, taken by the special economic zone unit on the basis of disclaimer from such domestic tariff area unit, in case of destruction of such goods; and](ii)in case of gems and jewellery item, no such destruction shall be allowed in respect of precious and semi-precious stones and precious metals to the special economic zone unit;Explanation.- For the purposes of this rule, export benefit includes drawback, duty entitlement passbook scheme, rebate, advance license, or counting of proceeds as export earnings or counting proceeds as fulfillment of export obligation under any scheme.
