13. Constitution of Approval Committee.—(1) The Central Government shall,—
(a) in the case of existing Special Economic Zones, within six months from the date of
commencement of this Act;
(b) in case of other Special Economic Zones established after the commencement of this Act,
within six months from the date of establishment of such Special Economic Zone,
by notification, constitute a Committee for every Special Economic Zone, to be called the Approval
Committee to exercise the powers and perform the functions specified in section 14.
(2) Every Approval Committee shall consist of—
(a) the Development Commissioner—Chairperson, ex officio;
(b) two officers of the Central Government to be nominated by that Government—Members,
ex officio;
(c) two officers of the Central Government to be nominated by that Government to represent the
Ministry or Department dealing with revenue—Members, ex officio;
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(d) one officer of the Central Government to be nominated by that Government to represent the
Ministry or Department dealing with economic affairs (financial services)—Member, ex officio;
(e) two officers of the State Government concerned to be nominated by that State Government—
Members, ex officio;
(f) a representative of the Developer concerned—Special invitee.
(3) For the purpose of exercising its powers and performing its functions, the Approval Committee
may invite to its meetings, such persons as the Committee deems fit, whose assistance or advice it may
consider necessary.
(4) Every Approval Committee shall meet at such times and places as it considers necessary and shall
have the power to regulate its own procedure.
(5) One-half of the total Members of the Approval Committee shall form a quorum, and all the acts of
the Approval Committee shall be decided by a general consensus of the Members present:
Provided that in case the Approval Committee is unable to decide any matter by a general consensus,
such matter shall stand referred to the Board of Approval for its decision.
(6) No act of the Approval Committee shall be called in question on the ground merely of existence
of any vacancy in, or any defect in the constitution of, the Approval Committee.
(7) All orders and decisions of the Approval Committee and all other communications issued by it
shall be authenticated by the signature of the Chairperson or any other member as may be authorised by
the Approval Committee in this behalf.
(8) The term of office of an ex officio Member shall come to an end as soon as he ceases to hold
office by virtue of which he was so nominated.
14. Powers and functions of Approval Committee.—(1) Every Approval Committee may discharge
the functions and exercise the powers in respect of the following matters, namely:—
(a) approve the import or procurement of goods from the Domestic Tariff Area, in the Special
Economic Zone for carrying on the authorised operations by a Developer;
(b) approve the providing of services by a service provider, from outside India, or from the
Domestic Tariff Area, for carrying on the authorised operations by the Developer, in the Special
Economic Zone;
(c) monitor the utilisation of goods or services or warehousing or trading in the Special Economic
Zone;
(d) approve, modify or reject proposals for setting up Units for manufacturing or rendering
services or warehousing or trading in the Special Economic Zone [other than the grant of licence
under clause (e) of sub-section (2) of section 9] in accordance with the provisions of sub-section (8)
of section 15:
Provided that where the Approval Committee is unable to decide whether a particular process
constitutes manufacture or not it shall refer the same to the Board of Approval for decision;
(e) allow, on receipt of approval under clause (c) of sub-section (2) of section 9, foreign
collaborations and foreign direct investments (including investments by a person outside India) for
setting up a Unit;
(f) monitor and supervise compliance of conditions subject to which the letter of approval or
permission, if any, has been granted to the Developer or entrepreneur; and
(g) perform such other functions as may be entrusted to it by the Central Government or the State
Government concerned, as the case may be.
(2) The Approval Committee shall not discharge such functions and exercise such powers referred to
in sub-section (1) in relation to a Developer, being the Central Government, as may be specified, by
notification, by the Central Government:
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Provided that till such time, the Approval Committee is constituted, the concerned Development
Commissioner shall discharge all functions and exercise all powers of the Approval Committee.
15. Setting up of Unit.—(1) Any person, who intends to set up a Unit for carrying on the authorised
operations in a Special Economic Zone, may submit a proposal to the Development Commissioner
concerned in such form and manner containing such particulars as may be prescribed:
Provided that an existing Unit shall be deemed to have been set up in accordance with the provisions
of this Act and such Units shall not require approval under this Act.
(2) On receipt of the proposal under sub-section (1), the Development Commissioner shall submit the
same to the Approval Committee for its approval.
(3) 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):
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.
(4) Any person aggrieved by an order of the Approval Committee, made under sub-section (3), may
prefer an appeal to the Board within such time as may be prescribed.
(5) No appeal shall be admitted if it is preferred after the expiry of the time prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the
appellant satisfies the Board that he had sufficient cause for not preferring the appeal within the
prescribed time.
(6) Every appeal made under sub-section (4) shall be in such form and shall be accompanied by a
copy of the order appealed against and by such fees as may be prescribed.
(7) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of
being heard.
(8) The Central Government may prescribe,—
(a) the requirements (including the period for which a Unit may be set up) subject to which the
Approval Committee shall approve, modify or reject any proposal referred to in sub-section (3);
(b) the terms and conditions, subject to which the Unit shall undertake the authorised operations
and its obligations and entitlements.
(9) The Development Commissioner may, after approval of the proposal referred to in
sub-section (3), grant a letter of approval to the person concerned to set up a Unit and undertake such
operations which the Development Commissioner may authorise and every such operation so authorised
shall be mentioned in the letter of approval.
16. Cancellation of letter of approval to entrepreneur.—(1) 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.
(2) Where the letter of approval has been cancelled under sub-section (1), the Unit shall not, from the
date of such cancellation, be entitled to any exemption, concession, benefit or deduction available to it,
being a Unit, under this Act.
(3) Without prejudice to the provisions of this Act, the entrepreneur whose letter of approval has been
cancelled under sub-section (1), shall remit, the exemption, concession, drawback and any other benefit
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availed by him in respect of the capital goods, finished goods lying in stock and unutilised raw materials
relatable to his Unit, in such manner as may be prescribed.
(4) Any person aggrieved by an order of the Approval Committee made under sub-section (1), may
prefer an appeal to the Board within such time as may be prescribed.
(5) No appeal shall be admitted if it is preferred after the expiry of the time prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the
appellant satisfies the Board that he had sufficient cause for not preferring the appeal within the
prescribed time.
(6) Every appeal made under sub-section (4) shall be in such form and shall be accompanied by a
copy of the order appealed against and by such fees as may be prescribed.
(7) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of
being heard.
17. Setting up and operation of Offshore Banking Unit.—(1) An application for setting up and
operation of an Offshore Banking Unit in a Special Economic Zone may be made to the Reserve Bank in
such form and manner as may be prescribed.
(2) On receipt of an application under sub-section (1), the Reserve Bank shall, if it is satisfied that the
applicant fulfils all the conditions specified under sub-section (3), grant permission to such applicant for
setting up and operation of an Offshore Banking Unit.
(3) The Reserve Bank may, by notification, specify the terms and conditions subject to which an
Offshore Banking Unit may be set up and operated in the Special Economic Zone.
18. Setting up of International Financial Services Centre.—(1) The Central Government may
approve the setting up of an International Financial Services Centre in a Special Economic Zone and
prescribe the requirements for setting up and operation of such Centre:
Provided that the Central Government shall approve only one International Financial Services Centre
in a Special Economic Zone.
(2) The Central Government may, subject to such guidelines as may be framed by the Reserve Bank,
the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and
such other concerned authorities, as it deems fit, prescribe the requirements for setting up and the terms
and conditions of the operation of Units in an International Financial Services Centre.
19. Single application form, return, etc.—Notwithstanding anything contained in any other law for
the time being in force, the Central Government may, if required,—
(a) prescribe a single application form for obtaining any licence, permission or registration or
approval by a Developer, or an entrepreneur under one or more Central Acts;
(b) authorise the Board, the Development Commissioner or Approval Committee, to exercise the
powers of the Central Government on matters relating to the development of a Special Economic
Zone or setting up and operation of Units;
(c) prescribe a single form for furnishing returns or information by a Developer or an
entrepreneur under one or more Central Acts.
20. Agency to inspect.—Notwithstanding anything contained in any other law for the time being in
force, the Central Government may, by notification, specify any officer or agency to carry out surveys or
inspections for securing of compliance with the provisions of any Central Act by a Developer or an
entrepreneur, as the case may be, and such officer or agency shall submit verification and compliance
reports, in such manner and within such time as may be specified in the said notification.
21. Single enforcement officer or agency for notified offences.—(1) The Central Government may,
by notification, specify any act or omission made punishable under any Central Act, as notified offence
for the purposes of this Act.
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(2) The Central Government may, by general or special order, authorise any officer or agency to be
the enforcement officer or agency in respect of any notified offence or offences committed in a Special
Economic Zone.
(3) Every officer or agency authorised under sub-section (2) shall have all the corresponding powers
of investigation, inspection, search or seizure as is provided under the relevant Central Act in respect of
the notified offences.
22. Investigation, inspection, search or seizure.—The agency or officer, specified under section 20
or section 21, may, with prior intimation to the Development Commissioner concerned, carry out the
investigation, inspection, search or seizure in the Special Economic Zone or in a Unit if such agency or
officer has reasons to believe (reasons to be recorded in writing) that a notified offence has been
committed or is likely to be committed in the Special Economic Zone:
Provided that no investigation, inspection, search or seizure shall be carried out in a Special
Economic Zone by any agency or officer other than those referred to in sub-section (2) or sub-section (3)
of section 21 without prior approval of the Development Commissioner concerned:
Provided further that any officer or agency, if so authorised by the Central Government, may carry
out the investigation, inspection, search or seizure in the Special Economic Zone or Unit without prior
intimation or approval of the Development Commissioner.
23. Designated Courts to try suits and notified offences.—(1) The State Government, in which the
Special Economic Zone is situated, may, with the concurrence of the Chief Justice of the High Court of
that State, designate one or more courts—
(a) to try all suits of a civil nature arising in the Special Economic Zone; and
(b) to try notified offences committed in the Special Economic Zone.
(2) No court, other than the court designated under sub-section (1), shall try any suit or conduct the
trial of any notified offence referred to in that sub-section:
Provided that the courts, in which any suit of a civil nature in a Special Economic Zone had been filed
before the commencement of this Act, shall continue to try such suit after such commencement:
Provided further that the courts, in which any trial of any notified offence is being conducted before
the commencement of this Act, shall continue to conduct the trial of such offence after the
commencement of this Act:
Provided also that the courts competent to try any notified offence, before the commencement of this
Act, shall conduct the trial in respect of such offence after the commencement of this Act until the courts
have been designated under sub-section (1) and all such cases relating to such trials shall thereafter be
transferred to such courts so designated which shall conduct the trial from the stage at which such cases
were so transferred.
24. Appeal to High Court.—Any person aggrieved, by any decision or order of the court designated
under sub-section (1) of section 23, may file an appeal to the High Court within sixty days from the date
of communication of the decision or order of the courts so designated to him on any question of fact or
law arising out of such orders:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause
from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty
days.
Explanation.—In section 23 and in this section “High Court” means the High Court of the State in
which the Special Economic Zone is situated.
25. Offences by companies.—(1) Where an offence has been committed by a company, every
person, who at the time the offence was committed was in charge of, and was responsible to, the company
for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of
the offence and shall be liable to be proceeded against and punished accordingly:
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Provided that nothing contained in this sub-section shall render any such person liable to any
punishment provided for the offence, if he has proved that the offence was committed without his
knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence has been committed by a
company and it is proved that the offence has been committed with the consent or connivance of, or is
attributable to any neglect on the part of, any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall also be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of individuals;
and
(b) “director”, in relation to a firm, means a partner in the firm.