Export Procedure_Urgent, Central Excise

[CA. Varun Arora]

Dear Experts,

A manufacturer supplier wants to supply the goods to merchant exporter, Can supplier supply the same goods against a bond executed by the supplier not by merchant exporter because merchant exporter is not providing the same.

In this case which bond should be executed with the excise department and further to which jurisdiction i.e. supplier or merchant exporter.

is there any further documents needs to be submitted with excise department.

And further also if manufacturer supplier is having Annual regular LUT then also a fresh bond is required??

Thank you in advance..

Posts / Replies

[CS SANJAY MALHOTRA]

Dear Mr. Varun,

Manufacturer has the option to use his own Bond B-1 (Running Bond) for duty payment in case of Merchant Exports under the cover of ARE-1 to be supplied by Merchant Exporter. B-1 Bond is to be executed by Manufacturer with the office of Assistant Commissioner of Central Excise, which falls under its jurisdiction.

Further note that the LUT can't be used for duty payment for Merchant Exports.

Manufacturer to execute B-1 Bond and has to look into whether to submit the same with Security / Surety as applicable to him. If Manufacturer is holding Export House status, then B-1 Bond with surety is to be executed.

Manufacturer to ensure that the security equivalent to the duty amount should be taken from the Merchant Exporter to safeguard his financials. Merchant Exporter to provide the copy of ARE-1 (original & Duplicate alongwith the EP Copy of Shipping Bill duly attested, Copy of Bill of lading) to Manufacturer as a Proof of Export to further submit the same with Superintendent Central Excise, Chandigarh.

[CA. Varun Arora]

Thank you Sanjay Sir ..!!

Sir in this case while executing the bond by Manufacturer Whether hard cash/FD is required to be deposited in favour of Excise officer i.e. equivalent to duty involved in the consignment Or he can file the same with surety.

in whom name FD is to be opened , please suggest.

[CS SANJAY MALHOTRA]

Dear Varun,

B-1 Bond is required to be executed with the Assistant Commissioner of Central Excise of your jurisdiction. The same can be with security or with surety. (B-1 format is available in Central Excise Manual or can be extracted from cbec site)

If your Company has export house status, then Bond with surety clause is to be executed or Bond with Security is required.

Bond with Security means that the Bank Guarantee needs to be made as per the format prescribed under Central Excise Law and you can check for the same with your Range officer too as they validate the same and submit their report to Assistant Commissioner Central Excise Division. BG is executed in favour of President of India through Assistant Commissioner of Central Excise of your respective jurisdiction.

[CA. Varun Arora]

Thank you so much Sanjay Sir..