The units--which will now have more operational flexibility--will be able to clear these materials for manufacture of finished goods for export and sale in the domestic tariff area (DTA), subject to post-audit, according to a circular issued by the Central Board of Excise and Customs (CBEC).

The circular says "all movements from and to the EOUs like clearance of raw materials/components to the job workers' premises, return of the goods from the job workers' premises, clearance to other EOUs, export and sale in the DTA can be made by EOUs themselves by recording each transaction in the prescribed records".The sanctioned cost recovery officers shall examine the records of the EOUs and transactions at least once a month.

The chief commissioner of customs may order specialaudit of EOUs by a cost accountant nominated by him in this regard. Cost audit may be employed as a tool to check the correctness of raw material, quantity used, finished goods produced etc.

Before giving his approval, the chief commissioner may form a panel of CAs, fix the rate of the charges to be received by the said CA. The names of the CAs and the details of the charges may be pre-notified at regular intervals. The CBEC has also permitted movement of goods, free of duty, from one EOU to another or to software technology parks/electronic hardware technology parks and for export. The rewarehousing certificate on transfer of the goods from one EOU to another shall be obtained by post and shall be cross-checked occasionally with the superintendent in charge of the next unit to see whether the goods have been actually received by the unit or not. To achieve economies of scale, EOUs resort to various cost cutting measures like combining purchase of raw materials with other units, despatch of goods in thesame conveyance with other units or setting up common user facilities.The circular says such arrangements may be allowed subject to proper and easy accounting of duty-free materials and capital goods used therein. However, it must be ensured that all movements of goods are recorded in a proper register.

President of confederation of EOUs R Veeramani has welcomed the government's move saying that the confederation has been insisting on minimising physical controls and relying more on document control and post-audit facilities.