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TMI BlogEXPORT WITHOUT PAYMENT OF DUTYX X X X Extracts X X X X X X X X Extracts X X X X ..... ; (g) the Education Cess on excisable goods as levied and collected under Clause 91 read with Clause 93 of the Finance(No. 2) Act, 2004. (23 of 2004) Board vide Circular No. 807/4/2005-CX., dated 10th February, 2005 has clarified that Additional Duty of Excise or Special Additional Duty of Excise leviable under different sections of Finance Acts are not required to be paid for the goods exported under Bond. 1.2 Some important changes have been introduced under the present procedure, which are mentioned below and explained in detail subsequently: - (i) The concept of furnishing of a 'Letter of Undertaking' by a manufacturer-exporter has been introduced. The clearances for export by a manufacturer-exporter will be effected similar to clearances for home consumption after he furnishes the Letter of Undertaking. (ii) The merchant-exporters are required to file 'bond' in specified format. A manufacturer-exporter may also file bond and follow the 'bond-procedure' specified in the notification. (iii) Under bond procedure, the concept of 'self-debit' by the exporter has been introduced. The exporter need not go to the 'bond-accepting authority for a 'debit-certificate' before each r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning from the first day of the financial year. On A.R.E.1, certain declarations are required to be given by the exporter. These should be signed by the exporter or his authorised agent. The different copies of ARE.1 forms should be of different colours indicated below: Original White Duplicate Buff Triplicate Pink Quadruplicate Green Quintuplicate Blue 3.2 It will be sufficient if the copies of ARE.1 contain a color band on the top or right hand corner in accordance with above color scheme. 3.3 An invoice shall also be prepared in terms of rule ii of the said Rules. It should be prominently mentioned on top FOR EXPORT WITHOUT PAYMENT OF DUTY'. 3.4 The Letter of Undertaking is to be furnished in the Form UT-1 specified in Annexure-15 (See Part 7) to Notification No. 42/2001-Central Excise (N.T.), supra. Any manufacturer, who is an assessee under Central Excise Rules, 2002, shall furnish a Letter of Undertaking only to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over his factory from which he intends to export. The Letter of Undertaking should not be furnished to the Maritime Commissioner or any other officer authorized by the Board. A 'Letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Trading House, S Trading House, Trading House, Export House) and exporters registered with recognized Export Promotion Councils would be exempted from furnishing security and/or surety with the bond executed by them for export of goods without payment of duty unless they have come to the adverse notice of the Department. The bond shall be in a sum equal at least to the duty chargeable on the goods for the due arrival of export goods at the place of export and their export there from under Customs or as the case may be postal supervision. The officer, who will accept the bond, will also be responsible for discharging that bond upon furnishing proof of export by the exporter. 3.9 The bond shall not be discharged unless the goods are duly exported, to the satisfaction of the Deputy/Assistant Commissioner of Central Excise or Maritime Commissioner or such other officer as may be authorized by Board on this behalf within the time allowed for such export or are otherwise accounted for to the satisfaction of such officer, or until the full duty due upon any deficiency of goods, not accounted so, and interest, if any, has been paid "Maritime Commissioner" would mean the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last three years from the date under consideration; (ii) All the formalities required under Central Excise Act and rules made there under are regularly complied with by the exporter, especially regarding timely submission of proof of export and deposit of duty with interest in time where proof of export is not received within stipulated time frame; (iii) A self-attested copy of the proof of Status (Super Star Trading Houses, Star Trading Houses, Trading Houses and Export Houses) and merchant exporters registered with Export Promotion Councils from concerned authority (Ministry of Commerce and Industry - Directorate General of Foreign Trade) is submitted. 5.2 Other exporters shall be required to furnish surety equal to full bond amount or security equal to twenty five percent. (25%) of the bond amount, along with the bond. 5.3 The bond shall be furnished on non-judicial stamp paper of the value as applicable in the State in which bond is being furnished. 5.4 .Where export is effected by merchant-exporter, the bond has to be necessarily furnished. It is open for the manufacturer to furnish bond on behalf of the merchant-exporter. It is clarified that in such cases, the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the exporter (which should also reflect in the amount of bond). The compliance exporter in submitting the requisite documents towards 'proof of export' shall be another criterion. 6.2.1 The second part of CT-1 is very important. The exporter shall determine the description of goods for procurement from a particular factory or warehouse or an approved place of storage, quantum, value of procurement (provisional figures) and duty involved therein (provisional figures - but based on correct rate of duty and contracted transaction value). This 'duty' element will be debited provisionally. The exporter shall ensure that at the time of debit, sufficient credit is available at that point of time to cover the said debit. The provisional debit shall be converted into final debit within a period of seven days from the date of removal of goods on A.R.E.1, based on the 'duty payable' in Cleared for export reflected in the said A.R.E.1 and invoice. 6.2.2 The manufacturer shall record the clearance in his Daily Stock. Account indicating, inter alia, the invoice number/date, A.R.E.1 number/date r duty payable but foregone under rule 19. 6.3 The exporter has two optional procedures regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Certificate Scheme (DEEC), Duty Exemption Pass Book Scheme (DEPB) and claim for Drawback, the Superintendent of Central Excise shall also examine and seal the consignment and sign the documents in token of having done so. In exceptional cases, where the exporter has unblemished track record of compliance (Central Excise) and where there is non-availability of Superintendent of Central Excise due to leave, vacant post or other reasonable causes, the jurisdictional Deputy/Assistant Commissioner of Central Excise may permit examination and sealing by Inspector. All other types of export may be examined and sealed by the Inspector of Central Excise. 7.5 The Superintendent or Inspector of Central Excise, as the case may be, will verify the identity of goods mentioned in the application and also verify whether the duty self-assessed is appropriate and that the particulars of the duty payable have been recorded in the Daily Stock Account. If he finds that the declaration in ARE.1 and the invoices are correct from the point of view of identity of goods and its assessment to duty, he shall seal each package or the container ensuring that the goods cannot be tampered with after the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of the dispatch by central excise officers is purely optional and the option shall remain only with the manufacturer-exporters. (Circular No. 736/52/2003-CX. Dated 11.8.2003). For this purpose the owner, the working partner, the Managing Director or the Company Secretary, of the manufacturing unit-Exporter or a person (who should be permanent employee of the said manufacturer-exporter holding reasonably high position) duly authorised by such owner, working partner or the Board of Directors of such Company, as the case may be, shall certify on all the copies of the application (A.R.E. 1) that the description and value of the goods covered by this invoice/ARE-I/ARE-2 have checked by me and the goods have been packed and sealed with lead seal/one time lock seal having number _____ under my supervision. The exporter shall distribute the copies of A.R.E. 1 in the following manner: Original(First Copy)and Duplicate (Second Copy) Send to the place of export along with the goods Triplicate (Third Copy) and Quadruplicate (fourth Copy) Superintendent or Inspector of Central Excise having jurisdiction over the Factory or Warehouse within twenty four hours of removal of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht in the Customs area for export on an A.R.E. 1 are the same, which were cleared from the factory. The Customs authorities also examine the goods for Customs purposes such as verifying for certain export incentives such as drawback, DEEC, DEPB or for determining exportability of the goods. 12.4 For Central Excise purposes, the Officer of Customs at the place of export shall examine the consignments with the particulars as cited in the application (A.R.E. 1) and if he finds that the same are correct and the goods are exportable in accordance with the laws for the time being in force (for example, t are not prohibited or restricted from being exported), shah allow export thereof. Thereafter, he will certify on the copies of the A.R.E. 1 that the goods nave been duly exported citing the shipping bill number and date and other particulars of export and distribute in the following manner: (i) The officer of customs shall return the original and quintuplicate (optional copy for exporter) copies of application to the exporter and forward the duplicate copy of application either by post or by handing over to the exporter in a tamper proof sealed cover to the officer specified in the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Deputy/Assistant C of Central Excise from whose jurisdiction goods were cleared for export. 13.6 In case of non-export within six months from the date of clearance for export (or such extended period, if any, as may be permitted by the Deputy Commissioner of Central Excise or the bond-accepting authority) or any discrepancy, the exporter shall himself deposit the excise duties along with interest on his own immediately on completion of the statutory time period or within ten days of the Memorandum given to him by the Range/Division office or the Office of the bond-accepting authority. Otherwise necessary action can be initiated to recover the excise duties along with interest and fine/penalty. Failing this, the amount shall be recovered from the manufacturer-exporter along with interest in terms of the Letter of Undertaking furnished by the manufacturer. In case where the exporter has furnished bond, the said bond shall be enforced and proceedings to recover duty and interest shall be initiated against the exporter. 13.7 In case of any loss of document, the Divisional Officer or the bond accepting authority may get the matter verified from the Customs authorities at the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by a notification granting exemption based on value of clearances for home consumption, may be exempted from filing ARE.1 and Bond till they remain within the full exemption limit. The following simplified export procedure shall be followed in this regard by such units: - 2. Filing of declaration 2.1 Manufacturers exempted from payment of duty will not be required to take Central Excise Registration. They shall however, file a declaration in terms of Para 2 of Notification No. 36/2001-CE (NT) dated 2ó.6.2001, and obtain declarant code number [ that they are exempted from declaration, but for this procedure.] 3. Documentation 3.1 The clearance document will be as follows: (i) Such manufacturers are permitted to use invoices or other similar documents bearing printed Serial Numbers beginning from 1st day of a financial year for the purpose of clearances for home consumption as well as for exports. (The printing of Serial Numbers can be done by use of franking machine). The invoices meant for use during a month shall be pre-authenticated by the owner or partner or Director/Managing Director of a Company or other authorised person. (ii) The declarant's Code Number should be men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntaining serially numbered H Forms form or equivalent Sales Tax form. After the goods have been exported by the merchant exporters, the latter issues these forms to the manufacturers of the goods. The merchant exporters in turn have to account all these serially numbered forms to the Sales Tax Department by furnishing a proof that the goods have been exported out. These proofs are in the form of presentation of the Shipping Bill duly completed by the customs, bill of lading, foreign exchange remittance certificates etc. The liability of the manufacturers to the Central Sales Tax gets discharged only when they submit these forms to the Sales Tax Department. It is, therefore, seen that indirectly exports get accounted for through the issue of H-form or ST-XXII Form. Thus, photocopy of H-form or ST-XXII Form or any other equivalent Sales Tax form duly attested and stamped by the manufacturer or his authorised agent will be accepted for purpose of proof of export. It is clarified that this facility is available only in respect of the exempted units which undertake exports themselves or through merchant exporters directly from the unit itself This facility is not available for the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other premises as may be approved by the Commissioner of Central Excise. 3. Forms to be used 3.1 The exporter is required to file a general bond in the Form specified in the said notification (See Annexure-16 in Part 7) with such security or surety as may be specified by the concerned bond accepting authority. The bond shall be in a sum equal at least to the duty chargeable on the goods for the due arrival of export goods at the place of export (Land Customs Station) and their export there from under Customs supervision. The officer who will accept the bond, will also be responsible for discharging that bond upon furnishing proof of export by the exporter. 3.2 The bond shall not be discharged unless the goods are duly exported, to the satisfaction of the Deputy/Assistant Commissioner of Central Excise or Maritime Commissioner or such other officer as may be authorised by the Board in this behalf within the time allowed for such export or are otherwise accounted for to the satisfaction of such officer, or until the full duty due upon any deficiency of goods, not accounted so, and interest, if any, has been paid 3.3 Invoice in the Form specified in the said notification (See An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods has been duly received in freely convertible currency, as defined in the said notification. On receipt of such a certificate and on the satisfaction that the goods have been exported in terms of the bond, the bond accepting authority shall discharge the exporter of his liabilities under the bond. 4.2 Export to Nepal in bond against payment in Indian rupee 4.2.1 As an exception to the above category of export, capital goods, as defined in the said notification may be exported under bond directly from the factory of manufacture to Nepal against any global tender invited by His Majesty's Government of Nepal without payment of duty, for which payment is received in Indian currency. Such exports shall be subject to the following further conditions, namely: - (i) the exporter shall furnish a bond in specified Form before the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise or such other officer as authorised by the Board on this behalf; and (ii) the exporter shall furnish a certificate of remittances in specified Form from a bank in India showing that full payment for the goods has been duly received in Indian currency by the said bank; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised to place the order for supply of excisable goods to the specified Government of India Aided Projects in Nepal; 4.5 Export without payment of duty to Kurichu Hydro Electric Project and Tala Hydro Electric Project in Bhutan 4.5.1 Export of all excisable goods without payment Of duty to Kurichu Hydro Electric Project and Tala Hydro Electric Project in Bhutan shall be subject to the following conditions, namely: - (i) The exporter shall furnish a bond in Form in specified Form before the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory or warehouse from which the goods have to be cleared; (ii) The goods are supplied against one or more specified contract which have been registered with the Directorate General of Inspection, Customs and Central Excise in the following manner: (a) Every Project Authority specified in the notification (notification no. 45/2001-CE (N.T.), supra, desirous of obtaining supplies under benefits of this notification shall apply in writing to the Director General, Directorate General of Inspection (Customs and Central Excise) [referred to as DGICCE], 5th Floor, Drum Shape Building, I.P. Estate, New Delhi for registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement, reconcile both and, if satisfied, finalise the contract and close the entry in the register. 4.5.4 There should be a release order from the officer authorised by the General Manager of the concerned project authority covering he goods; 4.5.5 The exporter shall furnish a bond in the specified Form to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory or warehouse or the approved premises or from where the goods are removed for export to the specified project. 5. Export Procedure 5.1 Procedure at the place of despatch 5.1.1 Six copies of invoice shall be presented to the Superintendent or Inspector of Central Excise having jurisdiction over the factory, warehouse or any other approved premises along with the export goods; 5.1.2 In case of export for supplies to Government of India Aided Projects in Nepal and the Embassy Cooperative Store and Embassy Petrol Pump located in Nepal for the bonafide use of officers and staff of the Embassy in Nepal, the order from Project Implementation Authority shall also be presented; 5.1.3 the Superintendent or Inspector of Central Excise having jurisdiction over the factory, warehouse or any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e officer of customs in-charge of the land customs station shall make necessary entries in the register maintained at the land customs station and allow the goods to cross into the territory of Nepal or Bhutan and certify accordingly on each of the four copies of the invoice and indicate the running serial number in red ink prominently visible and encircled. In case the seals are not found intact, the officer of customs in charge of the land customs station may re-seal the containers with his own seal after satisfying himself as to the identity of the containers and the goods from the particulars shown on the invoice by opening and examining the goods, if necessary; 6.3 Distribution of invoices by Customs Officer: Original (First Copy) Hand over to the exporter or his agent along with the goods for presentation to the customs officer of Nepal or Bhutan. Duplicate and triplicate ( Second and third copy) Send to the Nepalese or Bhutanese Customs Officer in - charge of the check post through which the goods are to be imported into Nepal or Bhutan, as the case may be 6.4 Presentation of goods to Nepalese or Bhutanese Customs Officers: the goods are then to be produced before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, giving provisional credit or discharging the bond provisionally. 7.4 On receipt of the duplicate copy of invoice, duly endorsed by customs officer of Nepal or Bhutan from the customs officer in charge of land customs station, certifying export of the goods and after tallying the particulars with those in quadruplicate copy of the invoice make suitable entries in Bond Account and the obligation under the said bond will then be discharged. 7.5 In case of failure to export within six months from the date of removal from the factory or warehouse or any other approved premises, or shortages noticed, the exporter shall discharge the duty liability on the goods not so exported or shortage noticed along with twenty four per cent. Interest thereon from the date of removal for export without payment of duty till the date of payment of duty in terms of the bond. PART-V MISCELLANEOUS EXPORT PROVISIONS 1. Cancellation of Export documents 1.1 If the excisable goods cleared under A.R.E.1 are not exported for any reason and the exporter intends to divert the goods for home consumption, he may request in writing the authority who accepted the bond or letter of undertaking to allow cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods taken in to the stock in the factory; 2.2 The Superintendent of Central Excise will verify himself or though Inspector in charge of the factory, about the identity of such goods with reference to invoice, A.R.E.1 and the daily stock account in respect of 5% of intimations, within another 24 hours of receipt of intimation. 3. Re-import of exported goods for repairs etc. and subsequent re-export 3.1 It has been provided in the Notification 42/2001-Central Excise (N.T.), supra, that the exported excisable goods which are re-imported for carrying out repairs, re-conditioning, refining, re-making or subject to any similar process may be returned to the factory of manufacture for carrying out the said processes and subsequent re-export. It may be noted that 're-import and re-export' shall be governed by the provisions of the Customs Act, 1962. 3.2. So far Central Excise is concerned, the manufacturer shall maintain Separate account for return of such goods in a daily stock account and make s_ entry on the said account after goods are processed, repaired, reconditioned, refined or re-made. When such goods are exported, the usual export procedure shall be followed. 3.3 Any was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise (N.T.) dated 26.6.2001 [ hereinafter referred to as the 'said notification'] notified the conditions, safeguards and procedures for procurement of the excisable goods without payment of duty for the purpose of use in the manufacture or processing of export goods and their exportation out of India, to any country except Nepal and Bhutan. '1.2 It may be noted that in rule 19 of the said Rules and in said notification, expression 'export goods' has been used. This refers to excisable goods (dutiable or exempted) as well as non-excisable goods. Thus, the benefit of input stage rebate can be claimed on export of all finished goods whether excisable or not. 1.3 It may be also noted that materials, as defined in the said rule 19 may be used for manufacture or processing. In other words, any processing not amounting to manufacture (such as packing, blending etc.) will also be eligible for the benefit under said notification. 1.4 Removal without payment of duty of equipment and machinery in the nature of capital goods used in relation to manufacture or process of finished goods shall not be allowed. 2. Conditions and procedures 2.1 The conditions and procedure for manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of finished goods and countersign the application in the manner specified in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001; 2.2.2 It is clarified that for the sake of convenience and transparency, input output norms notified under the Export Import Policy may be accepted by Department unless there are specific reasons for variation. However, in case, the input output norms notified under the Export Import Policy does not include all materials used in export goods, the claim under this scheme should not be denied merely on that ground. 2.3. If for any reason the Deputy/Assistant Commissioner of Central excise is not satisfied with reference to the correctness of the consumption norms claimed by the applicant; especially where the product is being manufactured for f time in his jurisdiction, he may permit the manufacturing operations and verification of the consumption norms should be completed while the Process of manufacture is on. The verification should be completed before allowing the export of the goods as the manufacturer working under this Scheme is expected to declare the raw materials consumed in ARE-2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the factory of the manufacturer or processor; 5. Procedure for export 5.1 The goods shall be exported on the application in Form A.R.E. 2 specified in the Annexure-23 (See Part 7) and the procedures specified in the Notification No. 42/2001-Central Excise dated 26th June, 2001 shall be followed. (This amendment has been made vide notification No. 10/2004-CE (NT) dated 3rd June, 2004 and as per Board's Circular No. 805/2/2005-CX dated 11th January, 2005 is not applicable to clearances made prior to amendment of the said notification on 3.6.2004.) It is mentioned that in such cases, fresh A.R.E.1 is not required because export will be effected on A.R.E.2 itself. But the procedure specified in the aforementioned notifications relating to removals, distribution of documents at the place of despatch and place of export, acceptance of proof of export etc. shall be followed mutatis mutandis. 5.2 The Deputy/Assistant Commissioner of Central Excise should point out deficiency, if any within 15 days of filing of A.R.E.1 duly certified by Customs indicating actual export. Queries/ deficiencies shall be pointed out at one go and piecemeal queries should be avoided. 6. Accounts & Return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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