Supplementary Agenda for the 89th meeting of the BoA for SEZs to be held on 22.04.2019

No. F.2/2/2019-SEZ Government of[India] Ministry of Commerce and Industry Department of Commerce

(SEZ Section)

Udyog Bhawan, New Delhi Dated the J 2’April, 2019

OFFICE MEMORANDUM

• Subject: Supplementary Agenda for the (89") Meeting of the Board of Approval on Special Economic Zones (SEZs) scheduled to be held on 22"! April, 2019 at 11.30 A.M in Room No. 108 Udyog Bhawan, New Delhi — Forwarding supplementary agenda thereof.

In continuation of this Department’s O.M of even number dated 5" April, 2019 the undersigned is directed to forward herewith the Supplementary Agenda for the gg" meeting of the Board of Approval for SEZs scheduled to be held on Pa April, 2019, for information and necessary action. Soft copy of the supplementary agenda has also been hosted on the website: www.sezindia.goy.in. The addressees located outside Delhi are requested to download the supplementary agenda from the above mentioned website.

2. The addressees are requested to make it convenient to attend the meeting.

ditya Narayan) Under Secretary to the Government of India Tel: 2306 2496

Email: aditya.n@nic.in

To

• I. Central Board of Excise and Customs, Member (Customs), Department of Revenue, North Block, New Delhi. (Fax: 23092628).

2. Central Board of Direct Taxes, Member (IT), Department of Revenue, North Block, New Delhi. (Telefax: 23092107).

3. Joint Secretary, Ministry of Finance, Department of Financial Services, Banking Division, Jeevan Deep Building, New Delhi (Fax: 23344462/23366797).

4. Joint Secretary, Department of Industrial Policy and Promotion, Udyog Bhawan, New Delhi.

5. Joint Secretary, Ministry of Shipping, Transport Bhawan, New Delhi. 6. Joint Secretary (E), Ministry of Petroleum and Natural Gas, Shastri Bhawan, New Delhi

6. Joint Secretary, Ministry of Agriculture, Plant Protection, Krishi Bhawan, New Delhi. 8. Ministry of Science and Technology, Sc ‘G’ & Head (TDT), Technology Bhavan, Mehrauli Road, New Delhi. (Telefax: 26862512)

7. Joint Secretary, Department of Biotechnology, Ministry of Science and Technology. 7" Floor, Block 2, CGO Complex, Lodhi Road, New Delhi - 110 003.

8. Additional Secretary and Development Commissioner (Micro, Small and Medium Enterprises Scale Industry), Room No. 701, Nirman Bhavan, New Delhi (Fax: 23062315).

9. Secretary, Department of Electronics & Information Technology. Electronics Niketan, 6, CGO Complex, New Delhi. (Fax: 24363101)

10. Joint Secretary (IS-I), Ministry of Home Affairs, North Block, New Delhi (Fax: 23092569)

11. Joint Secretary (C&W), Ministry of Defence, Fax: 23015444, South Block, New Delhi.

12. Joint Secretary, Ministry of Environment and Forests, Pariyavaran Bhavan, CGO Complex, New Delhi — 110003 (Fax: 24363577)

13. Joint Secretary & Legislative Counsel, Legislative Department, M/o Law & Justice, A-Wing, Shastri Bhavan, New Delhi. (Tel: 23387095).

14. Department of Legal Affairs (Shri Hemant Kumar, Assistant Legal Adviser), M/o Law & Justice. New Delhi.

15. Secretary, Department of Chemicals & Petrochemicals, Shastri Bhawan, New Delhi

16. Joint Secretary, Ministry of Overseas Indian Affairs, Akbar Bhawan, Chanakyapuri, New Delhi. (Fax: 24674140)

17. Chief Planner, Department of Urban Affairs, Town Country Planning Organisation, Vikas Bhavan (E-Block), I.P. Estate, New Delhi. (Fax: 23073678/23379197)

18. Director General, Director General of Foreign Trade, Department of Commerce, Udyog Bhavan, New Delhi.

19. Director General, Export Promotion Council for EOUs/SEZs, 8G, gf Floor, Hansalaya Building, 15, Barakhamba Road, New Delhi — 110 001 (Fax: 223329770)

22.Dr. Rupa Chanda, Professor, Indian Institute of Management, Bangalore, Bennerghata Road, Bangalore, Karnataka

23. Development Commissioner, Noida Special Economic Zone, Noida.

24. Development Commissioner, Kandla Special Economic Zone, Gandhidham.

25. Development Commissioner, Falta Special Economic Zone, Kolkata.

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26. Development Commissioner, SEEPZ Special Economie Zone, Mumbai. 27, Development Commissioner, Madras Special Economie Zone, Chennai 28. Development Commissioner, Visakhapatnam Special | Economic~~ Zone, - Visakhapatnam

27. Development Commissioner, Cochin Special Economic Zone, Cochin.

28. Development Commissioner, Indore Special Economic Zone, Indore. 31. Development Commissioner, Mundra Special Economic Zone, 4" Floor, C Wing, Port Users Building, Mundra (Kutch) Gujarat.

29. Development Commissioner, Dahej Special Economic Zone, Fadia Chambers, Ashram Road, Ahmedabad, Gujarat

30. Development Commissioner, Navi Mumbai Special Economic Zone, SEEPZ Service Center, Central Road, Andheri (East), Mumbai — 400 096

• 34, Development Commissioner, Sterling Special Economic Zone, Sandesara Estate, Atladra Padra Road, Vadodara - 390012

• 35. Development Commissioner, Andhra Pradesh Special Economic Zone, Udyog Bhawan, gn Floor, Siripuram, Visakhapatnam — 3
• 36. Development Commissioner, Reliance Jamnagar Special Economic Zone, Jamnagar, Gujarat

37. Development Commissioner, Surat Special Economic Zone, Surat, Gujarat

38. Development Commissioner, Mihan Special Economic Zone, Nagpur, Maharashtra

39. Development Commissioner, Sricity Special Economic Zone, Andhra Pradesh.

40. Development Commissioner, Mangalore Special Economic Zone, Mangalore.

41. Government of Gujarat, Principal Secretary, Industries and Mines Department Sardar 42. Patel Bhawan, Block No. 5, 3rd Floor, Gandhinagar — 382010 (Fax: 079-23250844), Government of Madhya Pradesh, Chief Secretary, (Commerce and Industry), Vallabh Bhavan, Bhopal (Fax: 0755-2559974)

Copy to: PPS to CS/PPS to AS (BBS) / PA to DS (SNS).

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----- Start of picture text -----<br> Supplementary Agenda for the 89" meeting of the Board of Approval to be held on<br>22" April, 2019 at 11.30 A.M. in Room No. 108 , Udyog Bhawan, New Delhi<br>----- End of picture text -----<br>

89.12 Request for extension of LoP for 3™ year

• e As per Rule 18(1) ofthe SEZ Rules, the Approval Committee may approve or reject a proposalfor setting up of Unit in a Special Economic Zone.

• ° Cases for consideration of extension ofLetter ofApproval (LoA)s i.r.o units in SEZs are governed by Rule 19(4) ofSEZ Rules.

• ¢ Rule 19(4) states that an LoA shall be validfor one year. First Proviso grants power to DCs for extending the LoA not exceeding 2 years. Second Proviso grants further power to DCs for extending the LoA 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.

• ¢ BoA can extend the validityfor a period ofone year at a time. e There is no time limit up to which the Board can extend the validity.

89.12 (i) Request of M/s. Lupin Ltd. in Indore SEZ for extension of Letter of Permission (LOP) beyond 11.04.2019 for one year upto 11.04.2020.

• e LOP issued on ( date ) : 12.04.2016 e Nature of business of the Unit : Manufacturing of Pharmaceutical Formulations — Metered Dose Inhalers (MDI) and Dry Powder Inhalers (DPI)

• e No of Extensions : Two by DC, Indore e Lop valid upto ( date) : 11.04.2019 . e Request : for further extension for one year, up to 11.04.2020

  • (a) Details of Business plan:

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----- Start of picture text -----<br> [2 | Landandsitedevelopment | S—C*idCOOSSC“‘CS(;COOC#”<br>|4 ElectricalPlant &alentInstallation,MachineryUtilities(includingand 143.86<br>----- End of picture text -----<br>

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(b) Incremental Investment made so far and incremental investment since last extension:

|so far ( Rs. in Cr) upto| last extension (Rs. in Cr)upto<br>28.03.2019<br>28.03.2019|
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|| 2 [civil<br>|<br>839839<br>S—S~S~*™<br>| 3 [Electrical [06 |<br>SC~*~“‘i‘iSSC“‘C(NC#@’<br>| 4 [Equipment [2046 |<br>S*~=«iOGSC“‘COC™C#C#@d’<br>| 5 [avaAcC [oT<br>C—“‘éitOSC‘“‘(SNSNNC#C#O<br>| 6 |Utility<br>0<br>—=*<br>| 7 |QCiInstruments[018 |<br>S~C~iBCC“‘C*S<br>| |<br>Total |<br>TSC—iDC“‘CON”SCO@S’|
|(b) Details of PhysicalProgress till date (28.03.2019):-|
|completion<br>year<br>completion of balance|
|work<br>| 1<br>[MainBuilding<br>[| 65% |<br>SHOOC~C~S<br>2<br>ee<br>| 3 [er<br>ot<br>35%@ OT<br>HSO™~—CSSCS<br>,|

Detailed reasons for delay:

by The unit was allotted plot no. M-1 admeasuring 50,039 sq. mtrs. of land in SEZ Phase II the the Developer against a separate LoA. However, owing to the change in business plan, out of allotted 50,039 sq. mtrs. of land, 36,035 sq.mtrs. was demarcated for the SEZ unit under the instant LoA dated 12.04.2016 and an additional land measuring 16,754 sq. mtrs. in Plot No. M- 3A was taken from the Developer. Therefore, the SEZ unit under the instant LoA is on plot nos.M-1 and M-3A comprises of 52,789 sq. mtrs. of land. The delay in apportionment of land resulted in delayed start of the project as there was delay in execution of the Bond-cum-LuT which could be executed only on 16.03.2018, pursuant to which the unit initiated procurement of goods and in the past 11 months have so far placed orders worth Rs.13,684 lacs in relation to the construction activity undertaken on the above plots. .

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Recommendation by DC

The instant request for extension of validity is beyond the 24 year of expiry of the original validity, and as per 2nd proviso of Rule 19(4) of SEZ Rules, 2006, the Development Commissioner may grant further extension ofone year 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. unit In this case, however, the requisite two third activities have not been completed as the photographsis still tounderDC, Indoreconstruction.SEZ. The unit had submitted the CA certificate and actual site

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• DC, Indore SEZ has recommended the request of extension of LOP for a further period of

• one year up to 11.04.2020 in view of the following:

  • (i) Unit has made expenditure of Rs.43.11 crores till 28.03.2019 and the construction activities are in full swing and are expected to be completed by November, 2019.

  • (ii) | The unit has expressed their commitment to commence production before 31.03.2020.

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The request is placed before BOA for its consideration.

Item No. 89.13 Proposal for setting up of an SEZ (one proposal)

89.13 (i) Request of M/s. Yash Technologies Pvt. Ltd. for setting up of an SEZ for IT/ITES at Plot No. 1, Scheme No. 166, Distt. Indore, Madhya Pradesh over an area of 5.719 hectares.

|The prescribed documents for setting up|ofnew SEZ for the consideration ofthe BoA and|ofnew SEZ for the consideration ofthe BoA and|ofnew SEZ for the consideration ofthe BoA and|
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|the status thereofas informed by DC, Indore are||as follows:-||
|[SIN[CondionDocomensrequied<br>[Sa<br>SS<br>Documents required for setting up ofSEZ in terms||||
|(i) |Completed FormA (with enclosures)||||
|a) Total Proposed Investments||:|Rs.199.54 crores|
|b) Incase of<br>FDI amount& Source oforigin:|||Nil|
|c) ProposedEmployment (inNos.)||:|Direct : 16200|
||||Indirect : 2048|
|d) Proposed Exports (inUS$)|:||Rs.2000 crores|
|(iii) |StateGovernment’s recommendation|||Industrial Policy & Investment Promotion|
||||Department ofGovt. ofMadhyaPradesh vide|
||||letter dated 08.04.2019 has recommended the|
|(iv) |Recommendation<br>for<br>National<br>Security<br>Clearance |DC, Indore has stated that the company<br>(NSC) from Ministry ofHome Affairs as per Rule 3 of| setting up SEZ is based in India and all the<br>SEZRules,2006<br>Directors are Indian nationals. However the||||
||||project<br>is coming up<br>in Indore and has|
||||approximity to Raja Rammanna Centre for|
||||Advanced Technology, which is a unit of|
||||Department of Atomic Energy, Otherwise|
||||also,<br>there<br>area<br>number<br>of<br>Defence|
||||installations<br>in Mhow, which<br>is adjoining|
||||Indore.<br>Accordingly,<br>National<br>Security<br>Clearance<br>may<br>be<br>obtained.<br>__Self|
||||declaration ofthe developer not received.|
|SEZRules, 2006:|||DC, Indore has stated that the minimum built|
|Fulfillment ofminimum land area requirement in terms | up area requirement is 50,000 sq. mtr. And||||
||||theDeveloperinitsproposalhasundertaken|

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|C.|Details to be furnished for issue of notification for|to have minimum built up area of50,000 sq.<br>mtr. forthe SEZ. Theminimum builtup area.<br>Undertaking ofthedevelopernotavailable.|
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||declaration ofan area as SEZ in terms of Rule 7 of||
||SEZ Rules, 2006:||
||Certificate from the concerned State Government or its||
||authorizedagency stating thattheDeveloper(s) have;||
|aT<br>(iii)|Irrevocable<br>rightstodevelopthesaidareaasSEZ<br>:<br>:<br>|thatthe saidareaisfreefromallencumbrances|The<br>Indore Development<br>Authority has<br>certified the legalpossession, freeholdrights<br>ofdeveloper and free from all encumbrances<br>vide letterdated 11.04.2019, Land allotment|
|(iv)|orderdated 13.03.2019 hasbeen provided.<br> |Where the Developer has leasehold right over the |Land isunder legalpossession<br>identified area, the lease shall be for a period not less<br>than twenty<br>years||
|(v)||The identified area shall be Contiguous, Vacant andNo|The Indore Development<br>Authority has<br>publicthoroughfare<br>certified that the area is contiguous, vacant<br>andthereisnopublicthoroughfare.||

Recommendation of DC:

DC, Indore SEZ has requested to place the proposal before the Board of Approval for consideration.

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Accordingly, the request is placed before BoA for its consideration.

89.14 Proposal of the unit for renewal of LoA for next five years. 89.14(i) Proposal of M/s Sameer Industries for renewal of LOA for next five years in terms of Rule 18(4) (d) of SEZ Rules 2006. M/s Sameer Industries had been issued LOA dated 23.09.1995 for “Manufacture of Recycled Items from imported scrap such as Mild Steel Scrap, Heavy Melting Scrap, Cast Iron Scrap, Copper, Brass, Aluminium and other Minor Metal Scrap, etc”. The unit commenced its production w.e.f. 01.07.1996. The unit was given permission for broad banding for “cleaving of rough diamonds” and “processing of cereals, oil seeds and agro products” from time to time. The renewal of LoA was due w.e.f. 01.11.2005 which was not considered for want of clearance from GPCB for consent and authorization. Gujarat Pollution Control Board issued the NOC on 24.10.2008. a In the 33" meeting of the BoA held on 02.06.2009, the extension of LoA was granted for period of five years viz. 31.10.2005 to 31.10.2010. Thus actually the validity left for operation of the unit was only for the period between 02.06.2009 to 31.10.2010. The unit again applied for further extension on 30.11.2010 which was rejected by BoA in its 44" meeting held on 14.01.2011 on the ground that there was no activity during the last five years. The request for renewal of the unit was deliberated in the 61“ meeting of the BoA held on 03.04.2014 keeping in

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view the certificate issued by GPCB which was valid upto 20.08.2014 and the positive NFE achieved by the unit in the previous block of five years as stated by DC, KASEZ. The Board after deliberations extended the validity of the LoP for a further period of two years from 03.04.2014 upto 02.04.2016 subject to the following conditions:-

• (i) The extension of LoP will be subject to further extension of their permission by GPCB beyond 20.08.2014.

• (ii) | The extension of LOP will be subject to fulfillment of all the conditions mentioned in (iii) GPCB’s permission and other usual conditions of LOP. The extension of LOP is only i.r.o. items and quantity indicated in the original LOP and no broad-banding of any other item shall be allowed.

bound manner.The Board also directed DoC to come up with the policy for such recycled items in a time

• Thereafter, the request of the unit for further extension of LoA was considered in the 71‘

• meeting of the BoA held on 22.06.2016 wherein the Board deferred the proposal and directed DC, KASEZ to verify the correct block of five years and verify the NFE performance of the unit during that period. The matter was again placed before the Board in its 72" meeting held on 12.08.2016 along with the details of NFE performance and correct block of five years. The Board, after deliberations extended the validity of the LoP for the remaining period of 5 year block till 02.04.2019 subject to the conditions recommended by DC, KASEZ i.e. (i) The extension of LoP will be subject to fulfillment of all the conditions mentioned (ii) in GPCB’s permission and other usual conditions of LoP. (iii) No broad banding of any other item shall be allowed. The pending export obligation of previous two years shall be achieved during next further period of three years.

• (iv) No import of any items falling under the schedule VI of new HW(MH&TM) Rules, 2016 w.e.f. 04.04.2016 which is prohibited for import shall be allowed.

Rule The unit has now requested for further renewal of their LoA for next five years. As per shall 19 (6A)(1) of SEZ Rules, the units which intend to renew the validity of Letter of Approval in submit, before two months from the date of expiry of the LOA, the completed application Form F1 alongwith requisite documents to DC. The unit has filed form F-1 for renewal of their LoA on 27.03.2019 i.e. after a delay of 54 days and the Development Commissioner has condoned the delay.

According to F-1, the annual performance of the unit in the F-1, the annual performance of the unit in the annual performance of the unit in the performance of the unit in the the unit in the unit in the the last block of five years block of five years of five years five years is as

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----- Start of picture text -----<br> under- to F-1, the annual performance of the unit in the F-1, the annual performance of the unit in the annual performance of the unit in the performance of the unit in the the unit in the unit in the the last block of five years block of five years of five years five years<br>(In Lakhs)<br>| value of Export Outgo Earnings<br>| 201415 342.60 659.70 «| 317.10<br>)2016-17042015-16 921.25 1129.00 —«d| S075<br>| 4647 iS<br>} 2017-18 296.16 [7062 —=«dYCSSti Sa<br>| 2018-19Total 2437.76836.71 |2622.5516.6 9 —~«dYSS~S—=i200«S848<br>----- End of picture text -----<br>

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The unit has shown projection for next five years as mentioned below-

||||In lakhs|
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|Export|Outgo|Earnings||
||—_Aryear [1109.00<br>_—_Styear_[1250.00|[900.00<br>[1000.00|[209.00 <br>|<br>350.00|J|

the unitFurther,is as under-in terms of criteria laid down under Rule 19 (6B) evaluation of performance of

• (i) _ Export performance of the unit in last five years as mentioned above. (ii) Employment generated- Presently, they employ around 33 (Men 30 + Women 3) unskilled and skilled labours. The employment will increase to 53 (Men 50 +

• (iii) Women 3) labours in the next block of five years. Instance of violation of applicable statutes related to the functioning of the unitNo such case noticed in the last five years. However, from the available records of Customs D&R Section of KASEZ, one case is pending against the unit in CESTAT with unconditional Stay granted by CESTAT vide S/17661769/WZB/AHD/2012 dated 21.08.2012 till disposal of appeal. Further, SCN dated 03.07.2017 was issued for negative NFE in block period 2006-11 and giving false information in their APRs, the case is presently under adjudication process.

• (iv) Cases of default, if any, of statutory payments- The unit has paid rental dues on (v) account of Lease Rent to KASEZ Authority till 31.03.2019. Undertaking of any activity not sanctioned or approved by the Development Commissioner — No such case noticed in the last five years.

of For the last five year block period of2014-2019, the said unit is NFE negative to the tune Rs. 184.83 lakhs as per renewal application submitted in Form F1 and for such shortfall of NFE, the unit has deposited Rs. 1.85 lakhs being 1% of the short fall in Govt. Account in terms of amended Rule 80 of the SEZ Rules which stipulates that “If an Special Economic Zone Unit, in case of bona fide default, fails to achieve the minimum specified Net Foreign Exchange or specified value addition, then such shortfall may be regularised after the Unit deposits an amount equal to one per cent. of shortfall in Free on Board Value.”.

Rule position : import(4)18. NoConsiderationproposal shallof beprop c o nsideredsalsfor settingfor - up of Unit in a Special Economic Zone Provided ofother usedgoodsfor recycling: the that extension of Letter ofApprovalfor an existing unit shall be decided by Board:

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Provided further that reconditioning, repair, and re-engineering may be permitted subject to the condition that exports shall have one to one correlation with imports and all the reconditioned or rapaired or re-engineered products and scrap or remnants or waste shall be exported and none of these goods shall be allowed to be sold in the Domestic TariffArea or destroyed;

Rules 12(6) & (7) of Hazardous and Other Wastes (Management and T Movement) Rules, 2016 dated 04.04.2016 stipulate that ransboundary (6) No import of the hazardous and other wastes specified in Schedule VI shall be permitted. (7) The export ofhazardous and other wastesfrom India listed in Part A and Part B of Schedule II and Schedule VI shall be with the permission ofMinistry ofEnvironment, Forest and Climate Change. In case of applications for export of hazardous and other waste listed in Part A ofSchedule III and Schedule VI, they shall be considered on the basis ofprior informed consent ofthe importing country.

Recommendation by DC

• next DC, KASEZ has forwarded the request of M/s Sameer Industries for renewal of LOA for five years beyond 03.04.2019 for placing before BOA in terms of Rule 18(4) (d) of SEZ

• Rules, 2006, with the following recommendations:(i) The extension of LoP will be subject to fulfillment of all the conditions mentioned in GPCB’s permission and other usual conditions of LoP. As the unit is importing sensitive items and as it has negative Net Foreign Exchange Earning, renewal of their LoA is not recommended.

• (ii) No broad banding of any other item shall be allowed, in case it is renewed. (iii) No import of any items falling under the Schedule VI of new HW (MH&TM) Rules, 2016 w.e.f 04.04.2016, as amended, which is prohibited for import shall be allowed.

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The request is placed before BoA for its consideration.

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RK

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