Section 74 in The Special Economic Zones Rules, 2006
74. Exit of Units. - (1) The Unit may opt out of Special Economic Zone with the approval of the Development Commissioner and such exit shall be subject to payment of applicable duties on the imported or indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock:
Provided that if the Unit has not achieved positive Net Foreign Exchange, the exit shall be subject to penalty that may be imposed under the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992).(2)The following conditions shall apply on the exit of the Unit, namely:-(i)Penalty imposed by the competent authority would be paid and in case an appeal against an order imposing penalty is pending, exit shall be considered if the Unit has obtained a stay order from competent authority and has furnished a Bank Guarantee for the penalty adjudicated by the appropriate authority unless the Appellate Authority makes a specific order exempting the Unit from this requirement.(ii)In case the Unit has failed to fulfill the terms and conditions of the Letter of Approval and penal proceedings are to be taken up or are in process, a legal undertaking for payment of penalties, that may be imposed, shall be executed with the Development Commissioner.(iii)The Unit shall continue to be treated a Unit till the date of final exit.(3)In the event of a gems and jewelery Unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewelery shall be handed over to an agency nominated by the Central Government at a price to be determined by that agency.(4)Development Commissioner may permit a Unit, as one time option, to exit from Special Economic Zone on payment of duty on capital goods under the prevailing Export Promotion Capital Goods Scheme under the Foreign Trade Policy subject to the Unit satisfying the eligibility criteria under that Scheme.(5)Depreciation norms for capital goods shall be as given in sub-rule (1) of rule 49.(6)[ The Unit opting out from Special Economic Zone shall execute a legal undertaking in Form L.][74A. Transfer of Assets by Special Economic Zone Units upon their exit. - The Unit may opt out of Special Economic Zone by transferring its assets and liabilities to another person by way of transfer of ownership including sale of Special Economic Zone units subject to the following conditions:-(i)the Unit has held a valid Letter of Approval as well as lease of land [or Standard Design Factory] for not less than a period of five years on the date of transfer;(ii)the unit has been operational for a minimum period of two years after the commencement of production as on the date of transfer;(iii)such sale or transfer transactions shall be subject to the approval of the Approval Committee;(iv)the transferee fulfills all eligibility criteria applicable to a Unit; and(v)the applicable duties and liabilities, if any, as calculated under rule 74, as well as export obligations of the transferor Unit, if any, shall stand transferred to the transferee Unit which shall be under obligation to discharge the same on the same terms and conditions as the transferor Unit.]
