IN FORCE Agenda SEZ / EOU / FTWZ 2017-09-18

Agenda for 79th Meeting of the BOA for SEZ to be held on 18th September, 2017

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3 Agenda for the 79" meeting of the Board of Approval to be held on 18" September in the Room No. 141, Udyog Bhawan, New Delhi

Item No. 79.1: Requests for extension of validity of formal approvals (one proposal)

BoA in its meeting held on 14" September, 2012, examining similar cases observed as under: -

“The Board advised the Development Commissioners to recommend the requests forthatextension offormal approval beyond 5" year and onwards only after satisfying the developer has taken sufficient steps towards operationalisation of the project andfurther extension is based on justifiable reasons. Board also observed that extensions may not be granted as a matter ofroutine unless some progress has been made on ground by the developers. The Board, therefore, after deliberations, extended the validity of the formal approval to the requests for extensions beyond fifth years for a period of one year and those beyond sixth yearfor aperiod of 6 months from the date ofexpiry oflast extension”. (i) Request of M/s. Newfound Properties & Leasing Pvt. Ltd. for further extension of the validity period of formal approval, granted for setting up of sector specific SEZ for IT/ITES at Trans Thane, Creek, MIDC District Thane beyond 30.06.2017. Name of the developer : M/s. Newfound Properties & Leasing Pvt. Ltd.

Sector : IT/ITES Location : Trans Thane, Creek, MIDC District Thane

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----- Start of picture text ----- Extension : Formal approval to the developer was granted on 21.08.2006. The developer has been granted 7” extension, last extension on 19.01.2017 validity period of which was upto 30.06.2017. The developer has requested for further extension upto 31.12.2017. The SEZ stands notified as on date. Present progress: (a) Details of Business Plan:- 40.96 | | Total | 3 40 0. 9600 (Phase-1) . (b) Incremental investment since last extension:- S. No Type of Cost Total Investment made Incremental investment so far (Rs. In | (Rs. In crores) since last Crores) up to--- extension 40.95 pe [adm] 57.38 12.11 39.01 17.24 ----- End of picture text -----

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----- Start of picture text ----- 4. Administration and 33.08 avethieadioostiacdll 210i J spk oF] wipodiladi ui wdnviese 61 | 53.10 |. 6% Other cost i ee ee 231.47 38.65 ----- End of picture text -----

(c) Details of physical progress till date:-

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----- Start of picture text ----- S. No | Authorized activity % % Completion Deadline for completion | during last completion of one year —_| balance work i. Construction of building 100% Completed No. 9 (Incubation centre) a Construction of building 44% 10% OC 2017 No. 1 3. Construction of building 22% Mar 2018 No. 4, Construction of building Yet to start No. 4 ‘J Detailed reasons for delay:- 1. There were quarrying activities in the vicinity of the SEZ leading to excessive pollution and vibrations/tremors from blasting activities. ----- End of picture text -----

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The land was undulated and was without proper drainage system. Due to expansion of the road work of thane — Belapur Highway, the adjoining areas of the road were at a lower level thus creating the problem of water logging/submerging during monsoon.
Non availability of satisfactory access to the plot because of illegal parking of oil tankers of the adjoining Indian Oil depot
Global recession of IT/ITES activities during 2008-2010

The developer informed that most of these problems now have been addressed by stopping of 80% of quarrying operations, laying down of proper drainage system by MIDC and New Mumbai Municipal Corporation and removal of parking of oil Tankers.

The development process of the infrastructure in the SEZ is in full swing. The developer is receiving various serious enquiries from the prospective IT/ITES Units. Further, one of the units has received their Letter of Approval by the Approval Committee and is in the process of execution of Bon-cum Legal Undertaking to enable them to start the commercial activities. As informed, it may take at least a month or two to get the unit operational.

Recommendation by DC

In view of the above, the request of the developer for 8" extension of Formal Approval dated 21.08.2006 beyond 30.06.2017 for a period upto six months and to make the SEZ operational is recommended. The request is placed before BOA for its consideration.

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Item No.79.2 Requests for extension of LoA beyond 3 Year onward (2 proposals)

  - e As per Rule 18(1) of the SEZ Rules, the approval Committee may approve or reject a proposal for setting up of Unit ina Special Economic Zone. 

  - e Cases for consideration of extension of Letter of Permission (LoP)s i.r.o units in SEZs are governed by Rule 19(4) of SEZ Rules. 

  - e Rule 19(4) states that an LoP shall be valid for one year. First Proviso grants power to DCs for extending the LoP not exceeding 2 years. Second Proviso grants further power to DCs for extending the LoP for one more year but subject to the condition that two-thirds of activities including construction, relating to the setting up of the Unit is complete and a Chartered Engineer’s certificate to this effect is submitted by the entrepreneur.

e Extensions beyond 3 year (in cases where two-third activities are not complete) and 4"" year are granted by BoA.
e BoA can extend the validity for a period of one year at a time. e There is no time limit up to which the Board can extend the validity
(i) Request of M/s. CHL Ltd. in the Noida SEZ for extension of Letter of Permission (LOP) beyond 28/04/2017 upto 28/04/2018
- e LoP issued on: 19/06/2008 e Nature of business of the Unit: Manufacturing of Pharmaceutical Formulations. e No of Extensions: 1 by DC, Noida SEZ (after approval of BOA) e LoP valid upto: 28/04/2017 e Request: For further extension for one year upto 28/04/2018

Present Progress:

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|(a)|Details|of Business|plan|
|S.|Proposed|Investment|
|3.15|
|| 4|| Other|Overheads|[Cd|

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(b) Investment made so far & incremental investment since last extension

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----- Start of picture text ----- S. Incremental investment Total Investment made | . ‘ in Crore) 2 [Material Procurement | = | | [3 TSewiceGost SP ee eeTc:ee —_ , ----- End of picture text -----

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—_———————(c) Details-of-Physical-progresstill-date-:-

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----- Start of picture text ----- S. Type of cost % completion | % completion | Deadline for No. as on date during last one | completion of year balance work 100% Completed Building 100% Completed ----- End of picture text -----

Detailed reasons for delay:-

The unit has submitted following reasons for delay in implementation of project:

That due to case pending in the High Court of Delhi, this LOA was not operational during its validity of 5 of 5 5 years. ;

its validity of 5 of 5 5 years. ;
1. They have now proposed for diversification of product line from pharmaceuticals products to Manufacturing of Plastic Card.
1. It has been stated that since the machinery of pharmaceuticals products has been found to be out of specification for the manufacturing of pharmaceuticals products as per the new GMP Norms.

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Unit has further stated that the existing machines have been lying idle since more than 20 years and they realized that these plant & machinery have outlived its life and has become fully junk. It has been further stated that the norms for setting up of Pharmaceuticals Industry have undergone change in terms of facility, quality control and climatic conditions due to which they will not be able to get required Drug Licence and other Pollution clearances for starting up of Pharmaceutical Products from the existing plant or even after revival of the machinery.
The unit has also submitted a letter from “Techmac Engineering Works’ wherein it has been stated that upon complete inspection carried out by them in last two months, they found that entire machine may now be scrapped as these cannot be used for any production.

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The unit has further stated that they have approached M/s. Syscom Corporation Pvt. Ltd. for providing them technical knowhow for manufacturing of plastic cards for their export through Syscom for their increased requirement in this field. .
The unit has stated that the implementation of project will take about six months and production can be undertaken in next 6-9 months period or early once they get approval for extension and diversification.

' Recommendation by DC:

DC, Noida SEZ has recommended the request of extension of LOP for a period ofone year beyond 28/04/2017 i.e. up to 28/04/2018.

The request is placed before BoA for its consideration.

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a _ (ii) Request of M/s. JBF Petrochemicals Limited, a unit in Mangalore (Multi Product) SEZ at Mangalore, Bangalore for extension of LoP beyond 15™ September, 2017

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e LoPissued: 16 September, 2011.

e Extensions: 5 (five) up to 15" September, 2017

e Request: For further extension for one year upto 15.09.2018

The unit has already invested INR 5,225 crores in their PTA plant from inception and INR 975 crores from the last extension period. As on date the overall project has completed by 99.3% and expected to finish by end October, 2017. The mechanical testing process has almost completed and simultaneously started the commission also. The unit is almost set to start their commercial production by the end of this calendar year.

(a) Progress in terms of completion of work:

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----- Start of picture text ----- S. | Description | Status on last LoA | Current Status Progress No date % (from % of | % of | % of | % of | the last work work yet | work work yet | extension) completed | to be | completed | to be completed completed 99.7% 100% 0.30% 97.9% 99.8% 1.90% |[Overall [92.378.6 % 21.4% 9 89 . 13 % 7.00%19.50% (b) Progress in terms of investment made: The unit had already made investment INR 4250 crores at the time of last LoA extension and the investment made till the date is INR 5225 crores. Further, investment of INR 150 crores is ongoing. (c) Some milestone achievement from last LoA extension:- S. Package Target Completion No. Switch yard Completed & Commissioned LIN Package Substation 1& 2 D M Plant Instrument Technical Rooms Central Control Rooms || 8.9. ||Substation-3Cooling Tower | i.|wwreBoiler package | Completed & partlyCommissioned commissioned ----- End of picture text -----

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----- Start of picture text ----- OSBL Piping network and E&I All essential services completed Insulation & painting 30.10.2017 14.;ISBL -— PTA Unit Mechanical | Mechanical Completion done & Completion commission 15.10.2017 15. |Commissioning trials Activity already started, completion by 30.10.2017 Commercial production 31.12:2017°* ----- End of picture text -----

Reason for delay:

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(i) The project was initiated with the technology given by Invista (Du Pont). After 1 year British Petroleum offered to sell its superior state of the art technology which was accepted by their management.
(ii) | The petrochemical plants consist of so many processes and each process requires a specific equipment/machinery. The unit has faced excessive delay in supply of some imported equipment/machinery. The unit has faced excessive delay in supply of some imported and indigenous equipments/machineries. Most importantly, titanium cladded distillation columns from L&T were delayed because of IR problems (strike) to the tune of over 6 months delay despite L&T shifting half made vessel to some other place to avoid IR issues, which was later landed at JBF site just before monsoon, which further delayed erection of the vessel followed by delay in piping.

(iii) |The heart of the mother plant, i.e. Reactor was delayed by the supplier M/s. TSM of South Korea by over six months as company became sick and closed down.
(iv) Strike by their own employees recruited under ‘Project Disposed Family’ scheme by Government of Karnataka to the tune of two months. Further, they lost approximately one month due to short supply of contract employees.
(v) Further, the unit has faced delay in release of payment by bankers/consortium.

DC, Mangalore SEZ, has recommended the request of the unit for extension of validity of LoP for one year upto 15.09.2018 under a proviso of Rule 19(4) of SEZ Rules, 2006..

. The request is placed before BoA for its consideration.

Item No. 79.3 Requests for co-developer (4 proposals)

(i) Request of M/s. Muthoot Infopark Private Limited, Kochi for Co-developer status in the Infopark SEZ (Phase II) for construction of IT/ITES Building, Business Incubation Centers, IT Business Centers, Food Court, Parking facility, ATMs, Conference Hall and other Infrastructure/facilities over an area of 9.37 acres in above IT/ITES SEZ. The above mentioned SEZ stands notified over an area 41.3064 hectares.

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M/s Muthoot Infopark Pvt. Ltd. has submitted a proposal for becoming a co-developer in the aforesaid SEZ for construction of IT/ITES Building, Business Incubation Centers, IT Business Centers, Food Court, Parking facility, ATMs, Conference Hall and other Infrastructure/facilities over an area of 9.37 acres in Infopark SEZ Phase II, Kakkanad.

Co-developer agreement dated 29.07.2016 entered into with the developer has been provided. The proposed amount of investment by the co-developer in the SEZ is Rs. 500.00 crore.

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Recommendation by DC :

DC, Cochin SEZ has recommended the proposal.

The request of the co-developer is submitted for consideration of BoA.

(ii) Request of M/s. Manyata Promoters Private Limited, Bangalore for codeveloper status in the Embassy Property Developments Private Limited (EPDPL) SEZ for development, conversion of bare shell buildings into warm shell buildings and to lease the built up space of the above IT/ITES SEZ.

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The above mentioned SEZ stands notified on 3 May, 2017 over an area of 2.5906 hectares.

M/s. Manyata Promoters Private Limited has submitted a proposal for becoming a codeveloper in the aforesaid SEZ for development, conversion of bare shell buildings into warm shell buildings and to lease the built up space of the above IT/ITES SEZ.

Co-developer agreement dated 8"" March, 2017 entered into with the developer has been provided. The proposed amount of investment by the co-developer in the SEZ is Rs.450.00 crore.

Recommendation by DC:

DC, Cochin SEZ has recommended the proposal.

The request of the co-developer is submitted for consideration of BoA.

(iii) | Request of M/s. Embassy Services Private Limited, Bangalore for co-developer status in the Embassy Property Developments Private Limited (EPDPL) SEZ for Operation and Maintenance of Buildings and other Infrastructure/facilities in the above IT/ITES SEZ.

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The above mentioned SEZ stands notified on 3“ May, 2017 over an area of 2.5906 hectares. M/s. Embassy Services Private Limited has submitted a proposal for becoming a codeveloper in the aforesaid SEZ for operation and maintenance of Buildings and other Infrastructure/facilities. : been provided.Co-developerThe proposedagreementamountdated 16"of investmentJune, 2017 byenteredthe co-developerinto with the indeveloperthe SEZhasis Rs.10.00 crore.

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Recommendation by DC: DC, Cochin SEZ has recommended the proposal.

The request of the co-developer is submitted for consideration of BoA.

(iv) |Request of M/s. MN Industrial Parks Private Limited for co-developer status in M/s. Brandix India Apparel City Pvt. Ltd. SEZ for the purpose of:

e To provide design, Engineering, development, commissioning and all incidental activities on the agreed land.
e Operation and maintenance of the present infrastructure facilities and proposed _ development activities as agreed in the co-Developer Agreement.

The above mentioned SEZ stands notified on 10” April, 2007 over an area 404.70 hectares. M/s. MN Industrial Parks Private Limited has submitted a proposal for becoming a co-developer in the aforesaid SEZ for providing design, engineering, development, commissioning and all incidental activities on the agreed land along with the operation and maintenance of the present infrastructure facilities and proposed development activities as agreed in the Co-Developer agreement.

Co-developer agreement dated 9" February, 2017 entered into with the developer has been provided. The proposed amount of investment by the co-developer in the SEZ is Rs. 114.40 crores.

DC VSEZ has recommended the proposal.

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The request of the co-developer is submitted for consideration of BoA.

Item No. 79.4 : Change of Shareholding Pattern Cases (2 proposals)

With a view to promote the ease of doing business in India and that restructuring of entity/ business is a fairly common occurrence, BOA in its 69" meeting held on 23.02.2016 decided that provisions ofRule 74A shall not apply to SEZ Units that do not exit or opt out of the SEZ Scheme by transferring its assets and liabilities to another person and the SEZ Unit continues to operate as a going concern in the situations mentioned above. The UACs concerned, may consider such requests under Rule 19(2) ofthe SEZ Rules, 2006.

In so far as Business Transfer Agreement is concerned, it was explained that certain acquisitions happen globally as a result of Business Transfer Agreement which result in transfer of the SEZ unit of the Indian company on a going concern basis to the acquirer. The BOA decided that such cases resulting in change of ownership would be decided on merits by the Board ofApprovals on a case to case basis.

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Proposal to incorporate the above decision of BoA in SEZ Rules, 2006 has been approved and was sent to DLA for vetting. |

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(i) Request of M/s. Diamond Nation, Plot No.106, 107, 148, 149 & Unit No.406 on Plot 248 a unit in Surat SEZ, for transfer of shares exceeding 50% to another entity.

The above mentioned unit was granted Letter of Approval on 18.11.2014 for manufacturing of (1) All kinds of Diamonds including Synthetic/processed Diamonds (Other than Natural Diamonds) comprising of (a) Lab Grown Diamonds and Precious Stones (b) HPHT Diamonds (c) Processed Precious Stones (d) CVD (Chemical Vapour Deposition) Diamonds, (2) All kinds of Jewellery, plain as well as Studded with Diamonds, Gem Stones and other Precious Stones, under chapter 71 of ITC(HS) Code and the same is valid upto 31.08.2020.

Details of shareholding pattern of the company are given below:

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Shareholding pattern before transfer

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----- Start of picture text ----- Sr. |Name of the Partner (S/Shri) | No. of shares | % of Profit /loss No. held sharing 2 Mukeshbhai Nanubhai Desai | Bakulbhai Chaturbhai 29.10% Limbasiya Shaileshbhai Bhogibhai Patel 7.27% 5 Sunilbhai Bhogibhai Patel N.A. (as it is 7.27% | Kuldish Hasmukhbhai partnership 6.36% . | 6 | KhichadiyaLalit Labhshankar Pandya firm) SES ER 7 | Shunishkumar — Bharatkuma . Et)Thakar eee ae 100% Shareholding pattern after transfer Sr. | Name of the Partner (S/Shri) No. of shares % of Profit No. held loss sharing Mukeshbhai Nanubhai Desai Bakulbhai Chaturbhai Limbasiya scree sed Shaileshbhai Bhogibhai Patel PROS eee | Sunilbhai Bhogibhai Patel cate roe.4 5 | Kuldish Hasmukhbhai Bali ia | 6 | KhichadiyaLalit Labhshankar Pandya P firm) P 7 | Shunishkumar Bharatkuma: 5% Thakar | [Total 100% ----- End of picture text -----

In view of the above, there is more than 50% change in shareholding pattern, the proposal for change of partners and its shareholding pattern has been recommended by DC Surat SEZ.

The proposal is submitted for consideration of BoA.

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(ii) Request of M/s. Surgimedik Healthcare, Plot No. 223 a unit in Surat SEZ, for change of Constitution from Proprietorship to Partnership firm and transfer of shares exceeding 50% to another entity. The above mentioned unit was granted Letter of Approval on 25.01.2007 for (1) manufacturing of Medical Devices, like Stents; Catheters; Dilators; Baskets; Pneumatic & Electronic Machines; Sheaths; Needles; Guidewires; Sets; Forceps; Accessories; Ports etc, (2) Trading of Medical Devices and the same is valid upto 06.04.2018.

Details of shareholding pattern of the company are given below:

Shareholding pattern before transfer

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----- Start of picture text ----- Sr.No.| Name of the Proprietor No. of shares held % of (Shri) shareholding 1 Shri Dhiren V. Mehta N.A. (as it is 100% proprietorship ----- End of picture text -----

Shareholding pattern after transfer

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----- Start of picture text ----- Sr.| Name of the Partner No. of shares held % Profit/loss No.| (Shri) sharing Dhiren Mehta Family Trust Dhiren Vrajlala Mehta N.A. (as it is partnership firm) Bice oe ----- End of picture text -----

In view of the above, there is more than 50% change in shareholding pattern, the proposal for change of constitution from Proprietorship to Partnership firm and shareholding pattern has been recommended by DC, Surat SEZ.

The proposal is submitted for consideration of BoA.

Item No. 79.5 : Miscellaneous Cases (7 proposal)

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(i) Request of M/s. Zafin Infra Private Limited, co-developer in the sector specific SEZ for IT/ITES being developed by M/s. Electronics Technology Parks SEZ IIIKerala at Attipra Village, Thiruvananthapuram for cancellation of co-developer status.

M/s. Zafin Infra Private Limited was granted approval as a co-developer on 31.03.2017 for infrastructure facilities for IT Sector Industry, over an area of one acre.

Now, the co-developer has stated that they have not commenced authorized operations in the above said land and submitted a request for exit from SEZ co-developer status. Further, it may be noted that the co-developer has not executed Bond Cum Legal Agreement under Rule 12 and 22 of SEZ Rules, 2006 and not availed any benefits or

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procured any imports/indigenous materials for the authorized operation. However, certificate from Specified Officer that co-developer has not availed any benefit is not available.

DC, CSEZ has recommended the proposal.

The request of the co-developer is submitted for consideration of BoA.

(ii) Proposal ofM/s. Kings Canyon SEZ Pvt. Ltd., Co-developer of IT/ITES SEZ of M/s. ASF Insignia SEZ Pvt. Ltd. at Village Gwal Pahari, Gurgaon (Haryana) for change of shareholding pattern of the company.

M/s. Kings Canyon SEZ Pvt. Ltd. had been granted LOA dated 12" July, 2016 as a Co-developer of the IT/ITES SEZ of M/s. ASF Insignia SEZ Pvt. Ltd. at Village Gwal Pahari, Tehsil-Sohna, Distt- Gurgaon (Haryana) for “Undertaking Operation & maintenance of infrastructure existing in the identified SEZ area admeasuring 2.751 acres within processing zone of ASF Insignia SEZ Pvt. Ltd. being Kings Canyon SEZ Building having built up space of 1100466 Sqft. including Block-A (Ground floor plus 14 floor), Block-B (Ground floor plus 12 floor, Block-C (Ground floor plus 12 floor) and 3 level Basements underneath, as a co-developer and / or further development in the nature of re-development of the identified SEZ area and its operation & maintenance pursuant to sanction offurther authorized operation ”’.

Details of shareholding pattern of the company are given below:

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|Shareholding|pattern|before|transfer:|
|S.|No.|Name|of Shareholder|Number|of shares|%|of|
|shareholding|
|ASF|Insignia|SEZ|Pvt.|Ltd.|9999|99.99%|
|ASF|Buildtech|Pvt.|Ltd.|0.01%|
|Pee|foe ee|ee|10000|100%|

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Shareholding pattern after transfer (as on 12.05.2017):

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|S.|No.|Name|of Shareholder|Number|of shares|%|of|
|shareholding|
|M/s. ASF|Insignia SEZ Pvt.|Ltd.|424309|22.73%|
|M/s.|ASF|Buildtech|Pvt.|Ltd.|1442812|71.27%|

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Reason for change in shareholding:

The co-developer has informed that pursuant to Clause 6.1, Clause 6.2 & Clause 7.1 of the Scheme of Demerger approved by the Hon’ble Delhi High Court and the worthy BoA, M/s. JP Morgan Iridia Property Mauritius Company II and M/s. ASF Buildtech Pvt. Ltd. were allotted 22.73% and 77.27% equity shares respectively in the co-developer, M/s. Kings Canyon SEZ Pvt. Ltd., as given below, in table form:-

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|Name|of Shareholder|Number|of shares.||_%|of shareholding|
|1.|M/s.|JP|Morgan|India Property|424309.|22.73%|
|Mauritius|Company|II|
|M/s.|ASF|Buildtech|Pvt.|Ltd.|1442812|71.27%|
|fee|Ue|a|Ts|”|al|100%|

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----- Start of picture text ----- Pe fee ----- End of picture text -----

Further, co-developer has informed that M/s. JP Morgan India Property Mauritius . Company II has transferred the shares held by it in M/s. Kings Canyon SEZ Pvt. Ltd., in favour of M/s. ASF Insignia SEZ Pvt. Ltd. (an ASF Group Company) on 12.05.2017 resulting in change in shareholding pattern of M/s. Kings Canyon SEZ Pvt. Ltd.

In this regard, the co-developer has submitted following documents:

(i) Details of shareholding pattern of the company prior to 12.05.2017 & w.e.f. 12.05.2017 duly certified by Chartered Accountant.

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(ii) Copy of Form MGT-14 filed in ROC towards transfer of shares.
(iii) An Undertakings from M/s. ASF Buildtech Pvt. Ltd. (major shareholder) regarding seamless operation of the co-developer’s activity of SEZ commensurate with provisions of SEZ Act 2005 & SEZ Rules, 2006.

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(iv) Copy of Share Purchase Agreement dated 24.03.2017 signed between M/s. ASF Insignia SEZ Pvt. Ltd., M/s. JP Morgan India Property Mauritius Company II, and M/s. Kings Canyon SEZ Pvt. Ltd.

As per Clause 2.3 of Share Purchase Agreement M/s. ASF Insignia SEZ Pvt. Ltd. (Purchaser) shall pay to M/s. JP Morgan India Property Mauritius Company II (Seller) an amount of Rs.100,89,00,725/- in consideration of purchase of 424309 share of the codeveloper company.

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Here it is mentioned that DOC vide Instruction No.21 dated 16.07.2009 has issued guidelines for change of name/transfer of In-principle or Formal approval issued to a SEZ Developer/approved Co-developer to its subsidiary or SPV in the following categories:-

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(i) Category I —Where there is mere change in name and no change in share holding pattern of the original developer.
(ii) Category If — Where approval is transferred to a 100% SPV or a wholly owned subsidiary (WOS) of the developer company,
(iii) Category III- De-merger in terms of a Court decision in respect of M/s. Bajaj Holdings Pvt. Ltd.
(iv) Category IV- Where partly the equity is held by State Government or one of its organisations by virtue of the State Government’s requirement

As per said Instruction, cases not covered in these guidelines would be decided by Board of Approvals.

Besides, one more category i.e. Category V has been added by BOA vide its 35" meeting held on 11.08.2009 which reads as under:“Category V- Where at least 51% equity is held by the original developer, i.e. where the controlling interest of the original developer continue to be there”’.

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‘From the above, it is noticed that after effecting shareholding change in terms of court approved Scheme of Demerger and Arrangement, there has been change in shareholding, therefore insofar as Instruction No. 21 is concerned, the proposal is seen to be covered under Category —II] of said Instruction and Category-V decided by BoA on 11.08.2009.

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Recommendation of DC:

Development Commissioner, NSEZ has recommended the proposal.

(iii) | Proposal of M/s. Grand Canyon SEZ Pvt. Ltd., Co-developer of IT/ITES SEZ of M/s. ASF Insignia SEZ Pvt. Ltd. at Village Gwal Pahari, Gurgaon (Haryana) for change of shareholding pattern of the company — regarding.

M/s. Grand Canyon SEZ Pvt. Ltd. had been granted LOA dated 12" July, 2016, as a Co-developer of the IT/ITES SEZ of M/s. ASF Insignia SEZ Pvt. Ltd. located at Village Gwal Pahari, Tehsil-Sohna, Distt- Gurgaon (Haryana) for “Undertaking Operation & maintenance of infrastructure existing in the identified SEZ area admeasuring 3.739 acres namely Grand Canyon SEZ Building with built up space of 1420198 Sqft. comprising Ground floor + 17" floor each in Block-A, B, C, D and E and 3 level Basements, a part of the ASF Insignia SEZ as a ‘Co-developer’. (That is operation & maintenance of infrastructure existing in the “Identified SEZ Area” and / or further development / redevelopment of the identified SEZ area and it’s Operation & Maintenance pursuant to sanction of further authorized operation)”. Details of shareholding pattern of the company are given below: Shareholding pattern before transfer: S.No. | Name of Shareholder Number of shares | % of shareholding ASF Insignia SEZ Pvt. Ltd. | 9999 99.99% ASF Buildtech Pvt. Ltd. 0.01% aee a 100% | Shareholding pattern after transfer (as on 12.05.2017): S.No. | Name of Shareholder Number of shares | % of shareholding M/s. ASF Insignia SEZ Pvt. Ltd. | 448534 22.73% M/s. ASF Buildtech Pvt. Ltd. 1525183 71.27% |, |eeTotals 0 sri? 100%

Reason for change in shareholding:

The co-developer has informed that that pursuant to Clause 6.1, Clause 6.2 & Clause 7.2 of the Scheme of Demerger approved by the Hon’ble Delhi High Court and the worthy BoA, M/s. JP Morgan India Property Mauritius Company II and M/s. ASF Buildtech Pvt. Ltd. were allotted 22.73% and 77.27% equity shares respectively in the co-developer,. M/s. Grand Canyon SEZ Pvt. Ltd., as given below, in table form :-

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----- Start of picture text ----- S. No. |Name of Shareholder Number of shares | % of shareholding 1. | M/s. JP Morgan India Property | 448534 22.73% Mauritius Company II M/s. ASF Buildtech Pvt. Ltd. 1525183 71.27% | ||Toth: [1973717] 100% ----- End of picture text -----

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Further, co-developer has informed that M/s. JP Morgan India Property Mauritius Company II has transferred the shares held by it in M/s. Grand Canyon SEZ Pvt. Ltd., in favour of M/s. ASF Insignia SEZ Pvt. Ltd. (an ASF Group Company) on 12.05.2017 resulting in change in shareholding pattern of M/s. Grand Canyon SEZ Pyt. Ltd.

In this regard, the co-developer has submitted following documents:-

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(i) Details of shareholding pattern of the company prior to 12.05.2017 & w.e.f. 12.05.2017 duly certified by Chartered Accountant.
(ii) Copy of Form MGT-14 filed in ROC towards transfer of shares.
(iii) An Undertakings from M/s. ASF Buildtech Pvt. Ltd. (major shareholder) regarding seamless operation of the co-developer’s activity of SEZ commensurate with provisions of SEZ Act 2005 & SEZ Rules, 2006.
(iv) Copy of Share Purchase Agreement dated 24.03.2017 signed between M/s. ASF Insignia SEZ Pvt. Ltd., M/s. JP Morgan India Property Mauritius Company II, and M/s. Grand Canyon SEZ Pvt. Ltd.

As per Clause 2.3 of Share Purchase Agreement M/s. ASF Insignia SEZ Pvt. Ltd. (Purchaser) shall pay to M/s. JP Morgan India Property Mauritius Company II (Seller) an amount of Rs.81,58,83,346/- in consideration of purchase of 448534 share of the codeveloper company.

(i) Category I —Where there is mere change in name and no change in share holding pattern of the original developer.
(ii) Category If — Where approval is transferred to a 100% SPV or a wholly owned subsidiary (WOS) of the developer company,

(iii) Category III- De-merger in terms of a Court decision in respect of M/s. Bajaj Holdings Pvt. Ltd.
(iv) Category IV- Where partly the equity is held by State Government or one of its organisations by virtue of the State Government’s requirement

As per said Instruction, cases not covered in these guidelines would be decided by Board of Approvals. ,

Besides, one more category i.e. Category V has been added by BOA vide its 35" meeting held on 11.08.2009 which reads as under:-

“Category V- Where at least 51% equity is held by the original developer, i.e. where the controlling interest of the original developer continue to be there”.

From the above, it is noticed that after effecting shareholding change in terms of court approved Scheme of Demerger and Arrangement, there has been change in shareholding, therefore in so far as Instruction No. 21 is concerned, the proposal is seen to be covered under Category —III of said Instruction and Category-V decided by BoA on 11.08.2009.

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Recommendation of DC:

Development Commissioner, NSEZ has recommended the proposal. (iv) Proposal of M/s. ASF Insignia SEZ Pvt. Ltd., Developer of IT/ITES SEZ at Village Gwal Pahari, Gurgaon (Haryana) — Proposal for change of shareholding pattern of the company — regarding.

M/s. ASF Insignia SEZ Pvt. Ltd. had been granted Formal Approval on 26.07.2007 for setting up of IT/ITES Special Economic Zone. DOC had notified 19.3028 hectare of area of this SEZ at Vill. Gwal Pahari, Tehsil Sohna, Distt. Gurgaon (Haryana) vide Notification dated 17.12.2007 & subsequent Notification dated 27.08.2010. The SEZ is operational.

Details of shareholding pattern of the company are given below:

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----- Start of picture text ----- Shareholding pattern before transfer: S. No. Name of Shareholder Table-1Number of shares % of shareholding Promoter: M/s. ASF Buildtech Pvt. 483528 60.18% Ltd. 2: Investor: JP Morgan India Property 320000 39.82 %™ * CE EEE Mauritius Company II). ER 100% Shareholding pattern after transfer (as on 12.05.2017): Table-2 S. No. Name of Shareholder ~ Number of % of shareholding shares M/s. ASF Buildtech Pvt. Ltd. 971438 79.02% 2: M/s. Kings Canyon SEZ Pvt. 257925 20.98% Ltd. |Totals| 1229363 100.00% Reason for change in shareholding: BoA ‘The developer has informed that vide letter dated 29.11.2008 they had informed to towards shareholding pattern of the company post FDI Investment of Rs.160 Crores proposed to be made by JP Morgan India Property Mauritius Company II, and accordingly shareholding of the developer company was expected to be as per Table-1 above. ----- End of picture text -----

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The developer has further informed that pursuant to aforesaid intimation, DOC vide its letter dated 29.01.2009 had communicated that BoA in its meeting held on 15.01.2009 had noted the equity proposed to be held by the promoter is 60.18% and the balance (39.82%) is to be held by the investor. Further, BoA decided that in case the shareholding of the promoter falls below 51%, prior approval of the BoA must be taken.

share Further, the developer has informed that in the meanwhile basedon stipulation of the subscription agreement and shareholders agreement entered into between the promoter (ASF Buildtech Pvt. Ltd.) & M/s. JP Morgan India Property Mauritius Company II, amongst other, certain share warrants issued to the Promoter entity (ASF Buildtech Pvt. Ltd.) were

redeemed_upon achieving of relevant milestones, and consequently the equity holding of _ promoter entity increased from 60.18% to 74.78% and the shareholding of Investor reduced from 39.82% to 25.22% between the approval of BoA held on 15.01.2009 and 12.05.2017. However, intimation for this change had not been given by the developer. The developer has informed that the entire equity shares held by M/s. JP Morgan India Property Mauritius Company II (310000 equity shares) has now been purchased by the promoters (i.e. ASF Buildtech Pvt. Ltd. purchased 52075 shares) and its Affiliated (i.e. m/s. Kings Canyon SEZ Pvt. Ltd. purchased 257925 shares) and pursuant to this purchase of shares the revised shareholding pattern of the company, w.e.f. 12.05.2017 is as per Table-2 above.

In this regard, the developer has submitted following documents:-

(i) Details of shareholding pattern of the company prior to 12.05.2017 & w.e.f. 12.05.2017 Shareholding pattern duly certified by Chartered Accountant.

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(ii) Copy of Form MGT-14 filed in ROC towards transfer of shares.
(iii) Copy of Share Purchase Agreement dated 24.03.2017 signed between Kings Canyon SEZ Pvt. Ltd., JP Morgan India Property Mauritius Company II & ASF Insignia SEZ Pvt. Ltd. and copy of Share Purchase Agreement dated 24.03.2017 signed between ASF Buildtech Pvt. Ltd., JP Morgan India Property Mauritius Company II & ASF Insignia SEZ Pvt. Ltd.
(iv) An Undertakings from M/s. ASF Buildtech Pvt. Ltd. (major shareholder) regarding seamless operation of the developer’s activity of SEZ commensurate with provisions of SEZ Act 2005 & SEZ Rules, 2006.

Here it is mentioned that two co-developers namely M/s. Kings Canyon SEZ Pvt. Ltd. & M/s. Grand Canyon SEZ Pvt. Ltd. have been approved in.this SEZ by BoA in terms of scheme of demerger and arrangement between ASF Insignia SEZ Pvt. Ltd. and Kings Canyon SEZ Pvt. Ltd. and Grand Canyon SEZ Pvt. Ltd. approved by Hon’ble High Court of New Delhi vide Order dated 10.12.2015. Simultaneously, these two co-developer have also separately intimated about changes in shareholding w.e.f. 12.05.2017.

As per Clause 2.3 of Share Purchase Agreement, M/s. Kings Canyon SEZ Pvt. Ltd. (Purchaser) shall pay to M/s. Morgan India Property Mauritius Company II (Seller) an amount of Rs.156,01,88,325/- in consideration of purchase of 257925 share of the developer company, and M/s. ASF Buidtech Pvt. Ltd. (Purchaser) shall pay to M/s. Morgan India Property Mauritius Company II (Seller) an amount of Rs.31,50,01,675/- in consideration of purchase of 52075 share of the developer company.

DOC vide Instruction No.21 dated 16.07.2009 has issued guidelines for change of - name/transfer of In-principle or Formal approval issued to a SEZ Developer/approved Codeveloper to its subsidiary or SPV in the following categories:-

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: (i) Category I— Where there is mere change in name and no change in share holding pattern of the original developer.
- (ii) Category If — Where approval is transferred to a 100% SPV or a wholly owned __ subsidiary (WOS) of the developer company,
- (iii)CategoryHoldings Pvt.IJ- Ltd.De-merger— in terms of a Court decision in respect of M/s. Bajaj

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(iv)Category I[V- Where partly the equity is held by State Government or one of its organisations by virtue of the State Government’s requirement As per said Instruction, cases not covered in these guidelines would be decided by Board of Approvals. Besides, one more category i.e. Category V has been added by BOA vide its 35" meeting held on 11.08.2009 which reads as under:“Category V- Where at least 51% equity is held by the original developer, i.e. where the controlling interest of the original developer continue to be there”.

The instant proposal of the developer is seen to be covered under Category-V of the above categories, as major shareholding (79.02%) of the developer still remains with the Promoter (M/s. ASF Buildtech Pvt. Ltd.). ,

Recommendation of DC: Development Commissioner, NSEZ has recommended the proposal. (Vv) Request of M/s Manyata Promoters Pvt. Ltd. developer of Manyata Embassy Business Park SEZ for change in shareholding pattern.

The above mentioned developer was granted LoP on 16.06.2006 to set up sectorspecific Special Economic Zone for IT/ITES at Outer Ring Road, Bangalore, Karnataka. The SEZ was notified on 16.11.2006. As of March, 2017, they have madea total investment of Rs.2,800 crore for the development of the SEZ and presently about 34 units are operating in the developed area of approx. 6.5 million Sq.ft., which cumulatively provide direct and indirect employment to over 1,00,000 employees with total export earnings of the units being over Rs. 45,000 crore since inception. _

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The developer vide their letter dated 24 July, 2017 has submitted an application for approval for change in their shareholding pattern. Details of shareholding pattern of the company are given below: —

Shareholding pattern before transfer

Name ofshareholder	No. of	% ofshareholding
	share held
BRE Mauritius Investments	4,18,794	36.97
Ltd.(Blackstone Group)
Embassy Office Parks Pvt. Ltd.	7,10,974	62.77
SugunaReddy	2,930
	11,32,698	100.00

Share holding pattern after transfer

Name of shareholder | No. of shares | % of shareholding held Embassy Office Parks 7,27,539 64.23 Real Estate Investment

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Embassy Office Parks 4,05,159 35:77 Pvt. Ltd.* *Embassy Office Parks Pvt. Ltd. is proposed to be held directly by the EOP REIT as a 100% subsidiary of the EOP REIT.

Recommendation by DC, CSEZ:

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It is recommended that the proposal may be placed before the BOA for consideration.

The request of the developer is submitted for consideration of BoA.

(vi) Request of M/s. Platinum Holdings Pvt. Ltd. (Chennai) Developer of Sector Specific SEZ for IT/ITES at Abu Garden, OMR Road, Navalur, Chennai, Thiruvallur District, Tamil Nadu for Revocation of cancellation of formal approval.

(a) M/s. Platinum Holdings Pvt Ltd., Developer vide letter dated 14.06.2017 has requested for retaining & reviving their SEZ Operations. They have reasoned that M/s. True Living Spaces Pvt. Ltd.(a company forming part of Ozone Group), has shown interest in acquiring 99% stake in their company subject to the approval of the formal approval and transfer of shares (from M/s Platinum Holdings Pvt. Ltd. to M/s. True Living Spaces Pvt. Ltd.) by BOA. In the same letter, the developer has substantiated their request for revocation by stating that the Ozone group is already in negotiation with many IT companies and one such company (TCS) has assured to lease upto 60% of the building. M/s. Platinum Holdings Pvt Ltd., in their application dated 14.6.2017 has also quoted as precedent a similar case of M/s. Mikado Realtors Pvt Ltd., whose approval/notification was cancelled during the same BOA meeting and subsequently revoked and condoned for the delay; also the validity of their formal Approval was extended up to 29.10.2017. This office had examined the quoted precedent of M/s Mikado Realtors and the complete details are attached herewith.

(b) Request of M/s. Platinum Holding Pvt. Ltd for further extension of the validity period of formal approval, granted for setting up of IT/ITES,SEZ at Navalur, Chennai beyond 05.05.2016.

Name of the developer : M/s. Platinum Holding Pvt Ltd

Sector : ITATES .

Location : Navalur, Chennai

Extension : Formal approval to the developer was granted on 06.11.2006. The developer has been granted 5 extensions, last extension was granted upto 05.05.2014. The developer has requested for further extension upto March 2018.

Present Progress:

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(a) Details of business Plan:-

Proposed Investment(Rs. in Crores)

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----- Start of picture text ----- (b)S.No.IncrementalTypeinvestmentof Cost since lastTotalextension:-Investment Incremental 7 - made so far investment (Rs. In (Rs. In Crores) up to- crores) since last -- extension (c) Details of physical progress till date:- S.No | Authorized activity % % Completion | Deadline for completion duringone yearlast balancecompletion workof _. 1 11 Lakh Square feet of 90% 10% Already completed civil structure including 2 level basement and a service Block with three floors from now plumbing from now 4 from now i acca AP ca Lifts Procurement | 20% Within 4-5 months 5 being done, from now all lifts will erection and be fully operational - , testing is happening STP civil Work 100% Already completed — ; STP Machinery to be 7 DG Sets 50% 20% Withinorderedcommissioned 3-4and months all | - the remaining DGs will be procured and 7 all the DGs will be Operational ----- End of picture text -----

Detailed Reasons for delay:

: Though 90% of the construction is over, the developer was not able to complete their project due to adverse market conditionand global recession.

Recommendation by DC

Development Commissioner MEPZ SEZ has recommended the request of extension of LOA for period up to (date) 31.03.2018.

The request is placed before BOA for its consideration.

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(ce) Request of M/s. Platinum Holding Pvt Ltd., a unit in Navalur SEZ, for transfer of shares exceeding 50% to another entity.

The above mentioned unit was granted LoP on 06.11.2006 for (nature of activities authorized operations.

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----- Start of picture text ----- Details of shareholding pattern of the company are given below: Shareholding pattern before transfer: Name of shareholder No. of shares held. | % of shareholding Mr. Menakuru Sukumar 14990 74.95 Reddy Mr. S S M Ahmed Hussain 5000 Mrs.Menakuru Malathy 10 0.05 Reddy ----- End of picture text -----

Shareholding pattern after transfer:

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----- Start of picture text ----- Name of shareholder No. of shares held | % of shareholding True living spaces Pvt. ltd. 19990 ----- End of picture text -----

Recommendation by DC:

Development Commissioner MEPZ SEZ has recommended the proposal.

7 The request of the developer is submitted for consideration of BoA.

(vii) Further extension of the validity period of formal approval, granted for setting up of eight SEZs by M/s. Navi Mumbai SEZ Pvt. Ltd. as under:.

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----- Start of picture text ----- | 8. | M/s. Navi Mumbai SEZ Pvt. Ltd (ITITES C, Ulwe) | 21.11.2016 | ----- End of picture text -----

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This is regarding extension of the validity period of formal approval, granted for setting up of eight SEZs by M/s. Navi Mumbai SEZ Pvt. Ltd. (NMSEZ) for further period of three months.

. meeting heldIt mayon 3™be recalledJuly, 2017that forearlierfurthereightextensionproposalsof formalfrom M/s.approvalNMSEZinter-aliacame requestbefore themade78"byBoA the Government of Maharashtra vide mail dated 30.06.2017. The Board was apprised that extension of the validity of the formal approval up to 26" February, 2016 in respect of two of the eight above SEZs (Sl.No. IV & V) were approved by the BoA in its 65" meeting held on I gf May,

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2015 with the condition that the Developer shall furnish necessary clarifications to the State Government of Maharashtra on the issues raised by it. Further, the Board had earlier extended the validity of the formal approval in respect of three of the above eight SEZs (Sl. No II, Ill & VI) up to 29" January, 2016 & 2° January, 2016 with the condition that the Developer shall submit a clear-cut development plan and action plan of the SEZ and approval of the State Government ofMaharashtra within that time-frame. DC, Navi Mumbai SEZ was directed to verify the expenditure claimed by the developer to have incurred for the development of these SEZs alongwith progress made on ground. The Board was also apprised that the PAC and CAG had observed that M/s Navi Mumbai SEZs in Maharashtra were granted routine extensions even though the Developer had not complied with the conditions attached to the approval. The Board further noted that neither the Developer nor the Government ofMaharashtra had come forward with concrete development plans. It was informed that a letter no BOA-2017/CR 78/Ind-2 dated 30.6.2017 has been received from Shri Sanjay Degaonkar, Joint Secretary, Industries, Energy& Labour Department, Government of Maharashtra stating that Government of Maharashtra is in receipt of application from NMSEZ for extension of 8 SEZs and Government ofMaharashtra, CIDCO and NMSEZ are in process of resolving certain operational and regulatory issues. The process may take some more time and hence, therefore the Government of Maharashtra requested that the case may be deferred. In view of the fact that the issue has been pending since 2015, the Board after deliberations, decided to allow the Government ofMaharashtra up to 30.08.2017 to resolve the operational and regulatory issues with the developer and inform the Board of its decision by that date failing which the SEZs would automatically stand de-notified (F/XX). DC NMSEZ vide mail dated 06.09.2017 has stated that the Government of Maharashtra vide letter No. BOA-2017/CR-78/Ind-2 dated 29" August, 2017 has requested that the State Government (UDD), CIDCO and NMSEZ are in process of resolving certain operational and regulatory issues. CIDCO has informed that the matter is now referred to Advocate General of State to seek his legal advise on issues which may take some more time/months. Therefore, Government of Maharashtra has requested that the BoA is requested to consider one more deferment of three months for listing of the said item.

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The request of the Government of Maharashtra is placed before the BoA for consideration.

Item no. 79.6 Appeals before BoA (3 Appeals).

(i) Appeal of M/s. Sampan Tradex Pvt. Ltd. requesting for setting up of new unit in NSEZ against order dated 18.07.2017 passed by UAC, NSEZ. Gist of order appealed against M/s. Sampan Tradex Pvt. Ltd. has proposed to set up a new unit in NSEZ to undertake manufacturing & export of plain gold jewellery, studded gold jewellery, polka/kundan gold jewellery with projected exports of Rs. 15859.51 lakhs and NFE earnings worth Rs. 994.87 lakhs over a period of five years and applied for issue of new Letter of Approval to the NSEZ Authority. The Approval Committee vide letter dated 18.07.2017 has rejected the proposal on the basis of submission of project report by M/s. Sampan Tradex Pvt. Ltd. Further, the unit have not only deliberately misrepresented factual position regarding

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their manufacturing capabilities but also did not have any experience in the field of manufacturing of gold jewellery.

Contents of Appeal

had directedIt was thatinformeda teamthatfrom ApprovalNSEZCommitteeshall undertakein its earlierphysicalmeetinginspectionheld onof06.06.2017the DTA operations of the applicant. Accordingly, a team from NSEZ visited the address of the company in Karol Bagh, Delhi on 04.07.2017. The team in its inspection report stated as under:-

“The applicant firm is not involved in manufacturing process. They procure jewellery from Karigars based in Karol Bagh after giving them pure gold which is only 1-2 kgs per month as was accepted by the Karigars before them. There were no premises owned or rented by the said firm for manufacturing process which proves that they are a trading unit. Further, applicant has never exported any goods till date.

It was also informed that as per balance sheet submitted by the applicant, total revenue from operation during last three assessment years 2016-17, 2015-16 & 2014-15 are Rs. 160 crores, Rs. 155.99 crores and Rs. 43.57 crores respectively. However, as per ITRs income for last three years are Rs. 4.22 lakhs, Rs. 5.73 lakhs and Rs. 1.63 lakhs respectively only.”

“The company has been engaged in business with many high profile companies in Gems & jewellery sector which includes selling the products made by the company or preparing the product as per requirement of the clients. It has also been claimed that the company has State of Art factory equipped with machineries of best standards to ensure its dominant infrastructure capability in Gems & jewellery manufacturing. Each factory is a Centre of excellence, combining traditional skills with the latest international standards in manufacturing.”

The Director, M/s. Sampan Tradex Pvt. Ltd. had appeared before the Approval Committee. He informed that they do manufacturing through job-work based on requirement of orders. He accepted that the information given in the project report regarding the manufacturing facility was wrong. He also mentioned that their substantial sale proceeds are from trading of cloths. In view of above, the Approval Committee did not agree with the proposal of M/s. Sampan Tradex Pvt. Ltd. for setting up of new unit in NSEZ and rejected the same in termsRule of 15(3)Position of SEZ Act, 2005 and Rule 18 of SEZ; Rules, 2006. The Section 15(3) of SEZ Act, 2005 provide that the Approval Committee may, either approve the proposal without modification, or approve the proposal with modifications subject to such terms and conditions as it may deem fit to impose, or reject the proposal in accordance with the provisions of sub-section (8):

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Provided that in case of modification or rejection of a proposal, the Approval Committee shall afford a reasonable opportunity of being heard to the person concerned and after recording the reasons, either modify or reject the proposal.

The appeal is placed before the BoA for consideration (Annexure-1).

(ii) Appeal of M/s. Shri Lal Mahal Ltd. (SLML), a unit in NSEZ against order dated 23.05.2017 passed by UAC, NSEZ.

M/s. Shri Lal Mahal Ltd. has been issued an LoA dated 22.02.2010 for manufacturing and export of jewellery made from gold and precious stones. The unit commenced its export production w.e.f. 08.05.2012 and accordingly LoA was valid upto 07.05.2017.

Gist of order appealed against

Adjudication of Notice dated 14.03.2017 issued to the unit in the wake of report of DRI about Diversion of duty free imported gold and contravention of provisions of SEZ Act, 2005, SEZ Rules 2006, Conditions of LoA and conditions of Bond-cum-LUT was placed before the Approval Committee in its meeting held on 03.05.2017. The Approval Committee on the basis of the above facts came to the following ; conclusion:-

: (1) In repost of issues being examined by the DRI and the investigations being carried out by DRI, view will be taken by DRI, as considered appropriate. The decision of the Approval Committee under Section 16(1) of SEZ Act will not come in the way of DRI proceedings in any manner. (ii) This action of the Approval Committee under Section 16(1) of SEZ Act shall be independent of any action which may be taken by any authority under any Act, Rules, Regulations etc. (iii) It has been categorically established from the information made available by NSEZ Customs that on 5 different occasions the gold has not been brought back within 120 days (even if submission of the representative that 120 days is . permitted is accepted). It has also been categorically established by NSEZ Customs that no further extension has been sought by the firm nor any ms extension has been granted by NSEZ Customs for returning the goods back to the unit. This fact has also been clearly admitted by the representative that goods were notbrought back within 120 days and no extension has been taken by the firm. Hence, it has been established beyond doubt that Rule 42(1)(h) of . SEZ Rules 2006 has been violated persistently since the violation has taken place on more than one occasion, i.e. on 5 occasions, and it has taken place in different time period. Goods were removed on 5 different occasions between 26.05.2016 to 26.07.2016 and 120 days expired between 23.09.2016 to 22.11.2016. Gold to the extent of 196 kg has still not been brought back to the unit. The entrepreneur clearly has persistently contravened the provisions of Rule 42(1)(h) of SEZ Rules and terms and Condition No. (i) & condition no. (x) of LoA dated 22.02.2010 and Bond-cum-LUT.

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Condition No. (i): You shall export the goods manufactured as per provisions of the Special Economic Zones Act, 2005 and Rules made there under for a period of five years from the date of commencement of production. For this

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purpose, you shall execute the Bond-cum-legal undertaking as prescribed under the Special Economic Zones Rules, 2006. Condition No. (x): You shall abide by the provisions of Special Economic Zones Act, 2005 and the rules and orders made there under.”

(iv) The unit has consistently failed to submit APRs within stipulated time. The unit has not submitted APR for the year 2015-16 till date despite repeated reminders. under:In the light of above observations/conclusion, the Approval Committee decided as (i) To cancel the LoA dated 22:02.2010 issued to M/s. Shri Lal Mahal Ltd., forthwith, under Section 16(1) of SEZ Act 2005 and in terms of condition No. (xiii) of LoA dated 22.02.2010. Condition No. (xiii) of LoA dated 22.02.2010 is as under:“If you fail to comply with the conditions stipulated above, this letter of Approval shall be cancelled as per the provisions of the Special Economic Zones Act, 2005 and the rules and order made there under.” -No further import & export will be allowed to the unit. Accordingly, no further extension in the validity of LoA shall be given. (ii) | NFE/achievement of value addition will be calculated as per SEZ Rules/FTP and in case unit has failed to achieve positive NFE/prescribed value addition, suitable action in terms of Rule 54 of SEZ Rules, 2006 and Foreign Trade (Development & Regulation) Act, 1992 may be taken.

(iii) | The unit shall complete exit formalities under Rule 74 of SEZ Rules, 2006. (iv) In respect of issues being examined by the DRI and the investigations being carried out by DRI, view will be taken by DRI, as considered appropriate, and the decision of the Approval Committee under Section 16(1) of SEZ Act 2005 will not.come in the way of DRI proceedings, in any manner.

(v) This action of the Approval Committee under Section 16(1) of SEZ Act shall be independent of any action which may be taken by any authority under any Act, Rules, Regulations ete. import &Th e xport UACwillther b e foreallowed.cancelled the LoP dated 22.02.2010 and directed: that no fully

Contents of Appeal

The director of SLML who was handling the gold division was unwell the Approval Committee went against the principles of natural justice by deciding not to give further time of 4 weeks as sought on the behalf of the company to give an appropriate and details reply to the Show Cause Notice of NSEZ.

The impugned order incorrectly records purported answers as given by Shri Gupta, which has been relied to pass the impugned order. Y

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To pass the impugned order without effective hearing of the company, in the facts and circumstances of the case, is unfair and unjust. The documents pertaining to export-import of the gold had been seized by the DRI during their search and seizure operations and had not been returned back to SLML thus how it was possible for the company to reply properly to the issues raised in the NSEZ Show Cause Notice.

The Approval Committee failed to appreciate that due to ongoing investigation of the DRI the employees who dealt with the company’s gold division operation during the period under notice were not available

DRI, Noida Unit after Search and Seizure operations conducted at offices and unit of the company had failed to issue the Show Cause Notice within the stipulated period of six months.

The Gold taken out by SLML for manufacturing by its sub-contractor M/s. Polaris Overseas Pvt. Ltd. was not brought back in the NSEZ within 7 days for which the permission was taken the specified officer of the Customs failed to issue any notice to the SLML seeking their explanation of not bringing back the gold within the allowed time period.

The company during its tenure of LoA has never been involved in any alleged activities on the basis of which their license should be cancelled by the Approval Committee.

The NSEZ customs officers had taken. 2.572 KG of gold as sample during August 2016 which had not been returned back to the unit and this quantity of gold was not accounted for in the balance of stocks of gold available at the unit.

The 15.829 KG of gold jewellery belonging to the unit was seized from the CWC and was found to be of higher carat then the declared has not been accounted for in the balance of stocks available at the unit.

Rule Position

The unit has grossly misused the provisions of Section 26 of the SEZ Act, 2005, Rule 25, 34 and 35 of the SEZ Rules, 2006. Section 16(1) [Cancellation of letter of approval to entrepreneur] states that the Approval Committee may, at any time, if it has any reason or cause to believe that the entrepreneur has persistently contravened any of the terms and conditions or its obligations subject to which the letter of approval was granted to the entrepreneur, cancel the letter of approval:

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Provided that no such letter of approval shall be cancelled unless the entrepreneur has been afforded a reasonable opportunity of being heard.

The appeal is placed before the BoA for consideration.

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(iii) __Appeal of M/s. Prestige Polymers Pvt. Ltd., a unit in NSEZ against order dated 12.07.2017 passed by UAC, Indore SEZ. M/s. Prestige Polymers Pvt. Ltd. has been granted LoA dated 12.01.2016 for the authorized operations i.e. trading of various items namely metal (ferrous and non-ferrous) in all forms; Machines, Rolling Machines and Parts thereof, electrical machines and motors; All type of chemicals; various type of readymade garments, made-ups and fabrics and accessories thereof; etc. Subsequently, upon the request of the notice, the UAC approved the broad-banding activity by addition of manufacturing activity viz. “Assembly of Electrical/Electronic goods such as mobile phones, LED panels etc.

Gist of order appealed against

Indore SEZ vide its order dated 12.07.2017 (Annexure-2) on the basis of decision of Approval Committee, the UAC observed that there are reasons to believe that the unit has persistently contravened the terms and conditions of LoA dated 12.01.2016; provision of SEZ Act, 2005 and SEZ Rules 2006 and any order to avoid any further misuse of SEZ scheme and consequent loss to the public exchequer cancelled the LoA. As per the condition of aforesaid above LoA, the unit inter-alia was required to export the goods to be traded/manufactures, as per the provisions of SEZ scheme for a period of five years from the date of commencement of production, and for this purpose the notice had executed a Bond-Cum-legal Undertaking on from H prescribed under Rule 22 of SEZ Rules, 2006 for Rs. 100.00 crores only with commitment to comply with the conditions contained therein. As per the conditions of aforesaid LoA and BCLU, the unit was required to achieve positive NFE cumulatively for a period of 5 years from the date of commencement of production.

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On the basis of specific information received from DRI Indore Regional Unit that the unit involved into illicit import and distribution of goods in the DTA under the guise of the LoA issued to it. The Specified Officer informed that the notice has claimed undue drawback by mis-declaring the goods and failed to submit the requisite proof of export, bank realization certificates and other related documents and therefore drawback amounting to Rs. 1,22,78,0008/- is recoverable from the unit. On the basis of the incidences reported, a Notice dated 21.09.2016 and Addendum Notice dated 07.10.2016 was served upon the notice in terms of section 16(1) of the SEZ Act, 2005 by the UAC affording a reasonable opportunity of being heard and present their defence/explanation before the Committee as to why LoA dated 12.01.2016, as amended, issued to the unit should not be cancelled in the light of incidences brought to the notice of the UAC. The unit was heard by the UAC on 31.01.2017.

Subsequently, UAC again served a consolidated Notice dated 22.03.2017 also containing the incidences contained in the Notice dated 21.09.2016 and Addendum Notice dated 07.10.2016, along with all the relied upon documents, was served upon the unit. The UAC observed that there are reasons to believe that the unit has persistently contravened the terms and conditions of LoA dated 12.01.2016; provisions of SEZ Act, 2005 and SEZ Rules 2006, and accordingly in order to avoid any further misuse of the SEZ scheme and consequent loss to the public exchequer decided that it is expedient in the public interest to cancel the LoA issued to the notice and therefore in terms of the provisions laid down in section 16(1) of SEZ Act, 205, the LoA dated 12.01.2016 is hereby cancelled with immediate effect.

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' Contents of Appeal . ~

The appellant in its appeal dated 11.08.2017 (Annexure-3) has stated that the unit has applied to the DC, Indore SEZ for permission for setting up of SEZ unit in Indore SEZ. The LoA was issued to the appellant and permitted them for various operations related to trading and, extended all facilities, entitlements, admissible under provisions and rules of SEZ Act, 2005 in regard to Metal, Machines, all types of chemicals, various types of readymade garments, electrical goods, electronic goods, stationery items and printed materials etc. Further, the appellant requested for the broad banding of the LoA by addition of manufacturing activity in the approved trading unit in Indore SEZ and this was considered and approved on the meeting held on 18.02.2016 and the assembly of electrical electronic goods such as mobile phone, LED panels etc. were approved and duly informed vide letter dated 18.02.2016. In continuation of the LoA dated 12.01.2016, as per the statutory requirement the applicant has furnished a BCLU on 18.02.2016 amounting to Rs. 100 crores to the DC before commencing and undertaking of the authorized operation of SEZ unit in the ISEZ. place andTheduring appellantthe hadsame startedhad madth e irsome authorizedimportactivity(duty foregone), from 03.03.2016export andfromDTA the allottedsale on payment of applicable duties from the said unit and vide their letter dated 13.04.2016. DC, _ ISEZ on the basis of allegation/information provided by DRI has suspended the LoA vide their interim communication dated 09.09.2016 and directed the Specified Office to prevent the company from doing their authorized operation from the notified place. Subsequently, ADC, ISEZ vide letter dated 21.09.2016 under Section 16(1) of the SEZ Act, 2005 has issued a Show Cause Notice to the appellant asking while the LoA dated 12.01.2016 issued to the appellant should not be cancelled i.r.o. the allegations made by DRI on their letter dated 08.09.2016.

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; Rule Position

Section 16(1) [Cancellation of letter of approval to entrepreneur] states that the Approval Committee may, at any time, if it has any reason or cause to believe that the entrepreneur has persistently contravened any of the terms and conditions or its obligations subject to which the letter of approval was granted to the entrepreneur, cancel the letter of approval:

Provided that no such letter of approval shall be cancelled unless the entrepreneur has been afforded a reasonable opportunity of being heard.

The appeal is placed before the BoA for consideration.

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