TMI BlogExport under Bond - Whether additional duty of excise levied under Additional Duty of Excise (Textile & Textile Articles) Act, 1978 is payable - Regarding.X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act") is being demanded on goods exported under bond under rule 13 of Central Excise Rules, 1944 causing undue hardship to exporters and it has, therefore, been requested to issue a suitable clarification. 2. In this connection, it has been reported that- a) The term "duty" has not been defined under Rule 13 and therefore as per Rule 2(v) of the Central Excise Rules, 1944, the term "duty" for the purpose of Rule 13, should refer only duty payable under Section 3 of the Central Excise Act, 1944. b) There is no specific exemption notification exempting additional duty of excise for the purpose of exports. c) Hon'ble Supreme Court in the case of Union of India v. Modi Rubber Ltd. [1986 (8) ECR 723 (SC)] has held that exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed that additional duty is covered by the expression "duty, both for the purpose of export under rebate and export under bond. 4. In view of above, it is clarified that no additional excise duty levied under the said Act is to be paid on goods exported under bond. 5. The pending issues may be finalised in view of the above. The present practice in the matter and the amount of additional excise duty involved in such exports under : (i) rule 12 and (ii) under rule 13 separately (for the period September '94 to March '95, April '95 - March '96 April '96 to November '96) may please be reported within a month. Sd/- (P.K. Sinha) Under Secretary (Cx.6) _________________________________________________________________ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which is cleared under a bond for export without payment of excise duty can be utlised towards other clearances for home consumption for which duty is chargeable. 4. It was advised by this Ministry on that occasion, that, under the rules as they stand, the answer is in the negative. The reason was that the words 'such materials' occurring in rule 56-A could not mean 'like materials'. In other words, as the rule a was then worded, it was legally permissible to adjust the proforma credit in respect of duty paid on component parts only against duty payable of finished excisable products manufactured out of those very component parts. In the cases under consideration, the finished excisable products having been exported under bond, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the inapplicability of proforma credit to finished products which are either exempted from the whole of duty or are chargeable to nil rate of duty. 8. The term 'exemption', as far as central excise duty is concerned, has a definite connotation in that such exemption will have to be attributable to a notification by the Central Government, as contemplated in rule 8 of the Central Excise Rules, 1944. Since the said rule empowers the authorisation of exemption of duty, the term 'exemption' as used in other provisions contained in the Rules will have to be taken to mean exemptions so granted by the Central Government under rule 8. 9. Obviously enough, in the present case, the exports under bond are duty-free not by virtue of any exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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