Agenda for Approval Committee meeting for SEZ Pune Cluster to be held on 09 February 2024 — 08-8midc-phaltan-sez

SEEPZ SPECIAL ECONOMIC ZONE ANDHERI (EAST), MUMBAI.

AGENDA FOR

MEETING OF THE APPROVAL COMMITTEE FOR SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR ENGINEERING SECTOR AT PUNE OF MIDC-PHALTAN- SEZ.

DATE : 09.02.2024

TIME : 04.00 P.M.

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MEETING OF THE APPROVAL COMMITTEE FOR SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR IT/ITES AT PUNE, UNDER THE CHAIRMANSHIP OF DEVELOPMENT COMMISSIONER, SEEPZ-SEZ ON 09.02.2024

INDEX

Agenda Item No.

Subject

Agenda Item No. 01 :- Confirmation of the Minutes of the meeting held on 10.08.2023 Agenda Item No. 02 :- Monitoring of Performance for M/s. Cummins India Ltd.(F.Y 2022-23) Agenda Item No. 03 :- Monitoring of Performance for M/s. Cummins Technology India Pvt Ltd.(F.Y 2022-23)

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GOVT. OF INDIA, OFFICE OF THE ZONAL DEVELOPMENT COMMISSIONER, SEEPZ – SEZ (PUNE CLUSTER) **************

AGENDA NOTE FOR CONSIDERATION OF THE APPROVAL COMMITTEE

a. Proposal: Monitoring of the performance of M/s. Cummins India Ltd, a Manufacturing unit located at MIDC Phaltan, Satara, for FY 2022-23 of 2nd block period

b. Specific Issue on which decision of Approval Committee is required: Monitoring of the performance of the unit FY 2022-23 of 2nd block period, in terms of Rule 54 of SEZ Rules, 2006

c. Relevant provisions: -

As per Rule 54 of SEZ Rules, 2006

“Performance of the Unit shall be monitored by the Approval Committee as per the guidelines given in Annexure appended to these rules”.

I. Performance as compared to projections: FY 2018-19 to FY 2022-23 i. Approved Projections

2018-19 2019-20 2020-21 2021-22 2022-23 TOTAL FOB Value of Exports 764.85 490.03 476.42 500.27 525.29 2756.90 FE Outgo 277.03 194.02 170.79 69.54 79.54 790.92 NFE 487.82 296.01 305.66 430.73 445.75 1965.98

II.Performance as compared to projections: FY 2022-23

                                                                                   (Rs. In crores) 

Year Export F.E. OUTGO

Projected

Actual Raw Material (Goods/Services) C.G. import Other outflow Projected Actual Projected Actual Actual 2022-23 525.29 913.99 124.24 216.57 4.84 0 15.63 Total 525.29 913.99 216.57 4.84 0 15.63

III. Cumulative NFE achieved: FY 2022-23
(Rs. in crores) Year Cumulative NFE Achieved Cumulative % NFE Achieved 2022-23 2318.46 68.44% File No.S-SEZ-MONT0MIDP/1/2022-JDCP

(IV) Employment Achievement (Direct): FY 2022-23

The Unit has achieved employment of 936 employees (Men-428, Women- 40, Indirect Employment -468) in 5TH year of the 2nd block period.

d. Other Information:

LOA No. & Date SEEPZ-SEZ/NEWSEZ/MIDC- PHALTAN/01/2011-12/MONTG Location of Unit Plot NO. B-2, SEZ Industrial Area- Phaltan, Village- Nandal Surwadi, Taluka- Phaltan, Dist.: Satara-415522 Validity of LOA 07.07.2023 Item(s) of manufacture/ Services Manufacturing Sector (Generating Set 75KVAto 375 KVA Generator, Internal Combustion Piston Engines) Date of commencement of production 08.07.2013 Execution of BLUT 24.02.2022 Outstanding Rent dues NA Labour Dues NA Validity of Lease Agreement 95 years from 03.09.2011 Pending CRA Objection, if any NA Pending Show Cause Notice/ Eviction Order/Recovery Notice/ Recovery Order issued, if any NA a. Projected employment for the block period b. No. of employees as on 31.03.2022 503

936 Area allotted (in sq. ft.) 1569410.43 Sq. ft (145803 Sq.M) Area available for each employee per sq.ft. basis (area / no. of employees) 6379.72 Sq. ft Investment till date

Building 63.69 crores Plant & Machinery 46.72 crores

Quantity and value of goods exported under Rule 34 (unutilized goods) NA Value Addition during the monitoring period NA Whether all the APRs being considered now has been filed well within the time limit, or otherwise.

If no, details of the Year along with no of days delayed to be given.

Yes

The unit has proposed to Exit from the SEZ due to their revised business Plans.

Vide PUC, the Specified Officer has submitted a report vide letter dated 24.01.2024 in the prescribed format along with point-wise reply to the discrepancies as follows: -

A. Details of year wise export as per the prescribed format: a. Export
(Rs. In Cr.)
Year/ Period Figures as per APR Figures as per Softex /SB / Customs Records Difference if any Reason for Difference/Remark (1) (2) (3) (4) (5) 2022- 23 913.99 912.71 1.28 An amount of Rs.1.28 Cr. pertains to Foreign Exchange Gain.

b. Import i. (Capital Goods including procurement done on IUT (from SEZ, EOU, STPI, EHTP) basis.

                                                                                           (Rs. In 

Cr.)
Year/Pe riod Figures as per APR Figures as per Customs Records / Bond Register Difference if any Reason for Difference/Remark 2022-23 0 0 0 NA

Import ii. Raw material (Rs. In Cr)

Year/ Period Figures as per APR (RM Imported ) Figures as per Customs Records / Bond Register Difference if any Reason for Difference/Remark (1) (2) (3) (4) (5) 2022- 23 216.57 23.84 192.73

1. An amount of Rs.192.73 Cr. pertain to procurement under Bill of Export (under drawback scheme) from DTA unit for supply of I.C. Engines, (Based on Goods Receipt Note) which is included as import in APR (Due to non-availability of separate column for procurement under Bill of Export in APR) but does not reflect as import in NSDL data.

(C) BLUT 1 Value of BLUT Executed (Duty foregone) (including for CG / Raw Material / Services)

Value of Additional BLUT executed • Year: Date of acceptance • BLUT amount: TOTAL value of BLUT Executed Capital Goods (Rs. In Cr) RM

& Services (in Rs. In Cr.) Date

of acceptance 12.00

21-11- 2011 1.00

30-11- 2012 1.75

24-05- 2013

14.50 07-09- 2013

72.50 19-05-

Total BLUT amount Rs 775.38 Cr.

2014

671.13 24-11- 2021 2.50

24-11- 2021 17.25 758.13 Total 2 Total Duty Foregone on goods & services procured (Category-wise BLUT value utilized

separately

for imported and indigenous goods and services) This should be based on BLUT worksheet which provides for estimated value and duty foregone separately for each category of procurement.

(Fig in Cr.)

Year Import Duty Forgon e (in Rs.)

Importe d Services duty forgone (in Rs.) Indigenou s Goods Duty Forgone (in Rs.) Indigenou s Services Duty Forgo Ne (in Rs.) Total (in Rs.) 2022 -23 7.65 1.29 62.64 5.04 76.62

(d) Employment made as on date –March 2023 (As on end of block period / year up to which monitoring is being done) As per MPR Men- 428 Women- 40 Indirect Employment- 468

(e) Details of pending Foreign Remittance beyond Permissible period, if any (as on 31.03.2022)

To cross-check the same and verify whether necessary permission from AD Bank / RBI has been obtained. As per the guidelines contained at Sr. No. 9 of the Circular No. FEMA23(R)/2015-RB dated January 12, 2016 Amended up to September 10, 2021 issued by Regulations, 2015 Act, RBI has Authorized the AD Bank to grant extension to the exporter for realization of the pending foreign exchange amounting to Rs. 3 Cr. beyond the specified time. Accordingly, the unit has approached their AD Bank for seeking extension to which the said AD bank (Bank of America) has informed that the request for extension has been taken on record. No pending foreign remittance has been written-off or proposed for write-off as per the financial record of the

SO, to certify that the same has been verified

unit. (f) Whether all softex has been filed for the said period. If no, details thereof.

SO, to also check whether unit has obtained Softex condonation from DC office / RBI and if approved, whether they have filed such pending Softex.

NA (g) Whether all Softex has been certified, if so till which month has the same been certified. If not, provide details of the Softex and reasons for pendency. NA (h) Whether unit has filed any request for Cancellation of Softex NA (i) Whether any Services provided in DTA / SEZ/EOU/STPI etc. against payment in INR in r/o IT/ITES Unit during the period. If yes, details thereof (year wise details to be provided) NA (j) SO, to verify and certify whether the unit has updated the BLUT ledger Module in SEZ Online.

Up-loading of the BLUT Module on SEZ online Portal Kept in abeyance as per office order No. 02/2023 dated 16- 03-2023. (k) Has the unit cleared any DTA sale of capital goods– Rs 0.29 Cr.

Capital Goods procured duty free in DTA against payment of Duty, or otherwise? Full details to be provided along with value of assets and duty discharged

Duty Paid – 0.05 Cr.

(l) Is the unit sharing any of their infrastructure with other units or are utilizing infrastructure of another unit in the same or other SEZ? If so, details thereof, including the details of the unit with whom the sharing is being made, and the payment terms If approval for sharing of common infrastructure has been obtained from UAC / DC office, the date of UAC / Approval letter to be indicated No such case noticed. (m ) Whether all DSPF for services procured during the said monitoring period under consideration has been filed by the unit and whether the same has been processed for approval by the SO Office.

As per the record, DSPF filed on SEZ Online System, by the unit, have been processed and approved. (n) Whether unit has filed all DTA procurement w.r.t. the goods procured by them during the monitoring period for the relevant period. If no, details thereof As per the record, DTA filed on SEZ Online System, by the unit, have been processed and approved. (o) Details of the request IDs As per the record on SEZ Online, no Out of Charge is

pending for OOC in respect of DTA procurement on the date of submission of monitoring report pending. (p) Has the unit set up any cafeteria / canteen / food court in unit premises? If yes, whether permission from UAC / DC office has been issued, or otherwise office has been issued, or otherwise

Whether unit has availed any duty paid goods / services for setting up such facility?

If yes, whether unit has discharged such duty / tax benefit availed? details to be given including amount of duty / tax recovered or yet to be recovered Yes, permission has been granted by the Development Commissioner, vide letter SEEPZ-SEZ/NEW-SEZ/MIDC- PHALTAN/03/2011-12/VOL-II/09999 Dated- 09.05.2016

No such case noticed.

No such case noticed. (q) Whether any violation of any of the provisions of law has been noticed / observed by the Specified Officer during the period under monitoring No such case noticed

e. ADC’s observations: • The Unit has achieved export revenue of Rs. 913.99 crores as against projected export of Rs. 525.29 crores i.e. 173.99% in 5TH years of the 2nd block period. • The unit has achieved positive cumulative NFE of Rs 2318.46 crores i.e. 68.44% in the 2nd Block period i.e. during the FY 2018-19 to FY 2022-23. • Approval Committee may like to monitor the performance of the Unit for the last year i.e., FY 2022-23 of the 2nd block period, in terms of Rule 54 of SEZ Rules, 2006.

GOVT. OF INDIA, OFFICE OF THE ZONAL DEVELOPMENT COMMISSIONER, SEEPZ – SEZ (PUNE CLUSTER)

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AGENDA NOTE FOR CONSIDERATION OF THE APPROVAL COMMITTEE

a) Proposal: Monitoring of the performance of M/s. Cummins Technologies India Pvt. Ltd., a Manufacturing unit located at MIDC Phaltan, Satara, for FY 22-23- of 2nd block period b) Specific Issue on which decision of Approval Committee is required: Monitoring of the performance of the unit for FY 2022-23 of 2nd block period, in terms of Rule 54 of SEZ Rules, 2006 c) Relevant provisions: - As per Rule 54 of SEZ Rules, 2006 “Performance of the Unit shall be monitored by the Approval Committee as per the guidelines given in Annexure appended to these rules”. (I) Performance as compared to projections: FY 2018-19 to FY 2022-23 (i) Approved Projections 2018-19 2019-20 2020-21 2021-22 2022-23 TOTAL FOB Value of Exports 547.34 574.70 603.44 633.61 665.29 3024.38 FE Outgo 252.97 264.49 276.61 290.12 304.29 1388.48 NFE 294.37 310.21 326.83 343.49 361.00 1635.90 (II) Performance as compared to projections: FY 2022-23

(Rs. In crores) Year Export F.E. OUTGO Projecte d Actual Raw Material (Goods/Services) C.G. import Other outflow Projected Actual Projected Actual Actual 2022-23 665.29 1533.10 3393.75 1171.85 18.40 3.08 11.08 Total 665.29 1533.10 1171.85 18.40 3.08 11.08 (III) Cumulative NFE achieved: FY 2022-23
(Rs. in crores) Year Cumulative NFE Achieved Cumulative % NFE Achieved 2022-23 1764.93 32.23% File No.S-SEZ-MONT0MIDP/2/2022-JDCP

(d) Other Information:
LOA No. & Date SEEPZ-SEZ/NEWSEZ/MIDC- PHALTAN/03/2011-12/2815

dt. 20.02.2012 Location of Unit Plot No. B-31, MIDC-Phaltan (SEZ) area, village-Surawadi, Tal. Phaltan, Dist : Satara-415522 Validity of LOA 15.09.2023 Item(s) of manufacture/ Services Manufacturing

Sector

(Internal Combustion

Engines,

Internal Combustion Engines, Spare Parts, Components and Accessories) Date of commencement of production 16.09.2013 Execution of BLUT 24.02.2022 Outstanding Rent dues NA Labour Dues NA Validity of Lease Agreement 95 years from 03.02.2012 Pending CRA Objection, if any NA Pending Show Cause Notice/ Eviction Order/Recovery Notice/ Recovery Order issued, if any NA a) Projected employment for the block period b) No. of employees as on 31.03.2022 527 615 Area allotted (in sq. ft.) 1722225.67 Sq. ft (160000 Sq.m) Area available for each employee per sq.ft. basis (area / no. of employees) 2800.36 Sq. ft Investment

till date Building 166.73 crores Plant & Machinery 390.67 crores Quantity and value of goods exported under Rule 34 (unutilized goods) NA Value Addition during the monitoring period NA Whether all the APRs being Yes

considered now has been filed well within the time limit, or otherwise. If no, details of the Year along with no of days delayed to be given. Vide PUC, the Specified Officer has submitted a report vide letter dated 24.01.2024, in the prescribed format along with point-wise reply to the discrepancies as follows: - (a)Export
(Rs. In Cr)
Year/P eriod Figures as per APR Figures as per Softex /SB / Customs Records Difference if any Reason for Difference/Remark (1) (2) (3) (4) (5) 2022- 23 1533.10 1540.54 -7.44

1. An amount of Rs. -2.64 Cr. pertain to Invoices raised in March 2022, which

were not considered

in

APR figures, but the related export shipping bills were affected in April-2022, as such the same were considered

in

NSDL figures. APR figures are being taken as per sales ledger, which is based on Invoice date. 2. Free of Cost goods amounting to Rs -3.39 Cr. were exported and thus considered in NSDL figures but

same

are

not considered in APR figures as there is no Foreign Currency inflow. 3. An amount of Rs. -0.94 Cr. pertains to Re- Export invoices raised during year, which were Not considered in APR figures. 4. An amount of Rs. -0.47 Cr. pertains to Cancelled Shipping Bill, which is not considered in APR.

Diff = (1=2+3+4) (b)Import (i) (Capital Goods including procurement done on IUT (from SEZ, EOU, STPI, EHTP) basis. (Rs. In Cr.)
Year/Period Figures as per APR Figures as per Customs Records / Bond Register Difference if any Reason for Difference/Remark 2022-23 3.08 7.76 -4.68

1. An amount of Rs. -4.68 Cr pertain to procurement import On Free of Cost/Re- Import

(Not Considered for APR Figure, But Import Value reflected in NSDL

Report

for Customs Clearance. Import (ii) Raw material

(Rs. In Cr.)
Year/Period Figures as per APR (RM Imported) Figures as per Customs Records / Bond Register Difference if any Reason for Difference/Remark (1) (2) (3) (4) (5) 2022-23 962.13 699.01 263.12

1. An amount of Rs. 263.12/- Cr pertain to procurement under Bill of Export (under drawback

scheme) from DTA unit for supply of I.C. Engines, which is included as import in APR (Due to non-availability of separate column for procurement under Bill of Export in APR) but does not reflect as import in

NSDL data BLUT 1 Value of BLUT Executed (Duty foregone) (including for CG / Raw Material / Services) Value of Additional BLUT executed

Year: Date of accepta nce

BLUT amount : TOTAL value of BLUT Executed Capital Goods (Rs. In Cr) RM & Services (in Rs. In Cr.) Date

of acceptance 82.00

22-05-2012 3.80

10-04-2013 2.40

25-04-2013 0.80

06-09-2013

23.00 08-08-2013

150.00 07-07-2017 27.50

24-02-2022 1630.63 24-02-2022 116.50 1803.63 Total Total BLUT amount Rs 1920.13 Cr. 2 Total

Duty Foregone on goods

& services procured (Category-wise BLUT

value utilized separately for imported and indigenous goods

and services) This should

be based on BLUT worksheet which provides for estimated value and duty foregone separately for each category of procurement. Year Import Duty Forgon e (in Rs.) Import ed Service s duty forgon e (in Rs.) Indigen ous Goods Duty Forgone (in Rs.) Indigen ous Services Duty Forgo Ne (in Rs.) Total (in Rs.) 2022- 23 257.20 1.87 160.69 76.61 496.37 Fig in Cr

(d) Employment made as on date –March 2023 (As on end of block period / year up to which monitoring is being done) Men: 318 Women: 94 Indirect Employment: 203 Total: 615 (e) Details of pending Foreign Remittance beyond Permissible period, if any (As on 31st March, 2023) To cross-check the same and verify

whether

necessary permission from AD Bank / RBI has been obtained. As on date, no amount pending for recovery. No pending foreign remittance has been written-off or proposed for write-off as per the financial record of the unit. (f) Whether all Softex has been filed for the said period. If no, details thereof. SO, to also check whether unit has obtained Softex condonation from DC office / RBI and if approved, whether they have filed such pending Softex. NA (g) Whether all Softex has been certified, if so till which month has the same been certified. If not, provide details of the Softex and reasons for pendency. NA (h) Whether unit has filed any request for Cancellation of Softex NA (i) Whether any Services provided in DTA / SEZ/EOU/STPI etc. against payment in INR in r/o IT/ITES Unit during the period. If yes, details thereof (year wise details to be provided) NA (j) SO to verify and certify whether the unit has updated the BLUT ledger Module in SEZ Online. Up-loading of the BLUT Module on SEZ online Portal Kept in abeyance as per office order No. 02/2023 dated 16-03-2023. (k) Has the unit cleared any Capital Goods procured duty free, in DTA No such case noticed.

against payment of Duty, or otherwise? Full details to be provided along with value of assets and duty discharged

(l) Is the unit sharing any of their infrastructures with other units or are utilizing infrastructure of another unit in the same or other SEZ? If so, details thereof, including the details of the unit with whom the sharing is being made, and the payment terms If approval for sharing of common infrastructure has been obtained from UAC / DC office, the date of UAC / Approval letter to be indicated No such case noticed. (m) Whether all DSPF for services procured

during

the

said monitoring

period

under consideration has been filed by the unit and whether the same has been processed for approval by the SO. DSPF filed on SEZ Online System, by the unit, has been processed and approved. (n) Whether unit has filed all DTA procurement w.r.t the goods procured by them during the monitoring period for the relevant period. If no, details thereof As per the record, DTA filed on SEZ Online System, by the unit, have been processed and approved till date. (o) Details of the request IDs pending for OOC in respect of DTA procurement on the date of submission of monitoring report As per the record on SEZ Online, no Out of Charge is pending. (p) Has the unit set up any cafeteria / canteen / food court in unit premises? If yes, whether permission from UAC / DC office has been issued, or otherwise office has been Yes, permission has been granted by the Development Commissioner, vide letter SEEPZ-SEZ/NEW-SEZ/MIDC-PHALTAN

/ 03/2011-12/VOL-II/09999 Dated- 09.05.2016

issued, or otherwise Whether unit has availed any duty paid goods / services for setting up such facility? If yes, whether unit has discharged such duty / tax benefit availed? details to be given including amount of duty / tax recovered or yet to be recovered No such case noticed. No such case noticed. (q) Whether any violation of any of the provisions of law has been noticed / observed by the Specified Officer during the period under monitoring No such case noticed (e) ADC’s observations:  The Unit has achieved export revenue of Rs. 1533.10 crores as against projected export of Rs. 665.29 crores i.e. 230.44 % in 5th year of the 2nd block period.
 The unit has achieved positive cumulative NFE of Rs 1764.93 crores i.e. 32.23% in the 2nd Block period i.e. during the FY2018-19 to FY 2022-23.  Approval committee may like to monitor the performance of the Unit for FY 2022-23 for 2ndblock period, in terms of Rule 54 of SEZ Rules, 2006.