Problem regarding admissibility of money credit on exports - Minutes on Point No. 7 of the Modvat Meeting held at Bombay on 7-5-1990 - Regarding - Central Excise - 11/91 CX.8

Problem regarding admissibility of money credit on exports - Minutes on Point No. 7 of the Modvat Meeting held at Bombay on 7-5-1990 - Regarding Circular No. 11/91 CX.8 Dated 21-2-1991 [From F. No. 263/4/91-CX.8] Government of India Central Board of Excise Customs New Delhi Subject : Problem regarding admissibility of money credit on exports - Minutes on Point No. 7 of the Modvat Meeting held at Bombay on 7-5-1990 - Regarding. I am directed to invite your attention to the minutes on Point No. 7 of the Modvat meeting held at Bombay on 7-5-1990 regarding admissibility of money credit on exports. Trade had suggested therein that Rule 57N may be amended so as to permit removal of semi-finished goods (meant for export after processing) under Rule 56B so that the requirement of paying duty at the time of removal of such products for processing and subsequently filing a refund claim for availing the Money credit on these goods, can be done away with. The matter has been examined by the Board. It is observed that the money credit scheme provides credit of sums of money specified by the Central Government unlike the Modvat Scheme which provides for credit of duty paid on inputs. Since the Money credit allowed has no relationship with the duty paid on inputs, no provisions have been made for refund of money credit allowed on inputs used in the final products cleared for export under bond and such credit can only be utilised towards the payment of duty of excise on similar final products cleared for home consumption on payment of duty. Board has therefore decided that there is no justification for extending the facility for refund to intermediate goods used in the final products cleared for export. Trade and field formations may be informed suitably. Receipt of this letter may please be acknowledged.