794/CBDT. - Income Tax - 794/CBDT

INSTRUCTION NO. 794/CBDT Dated : November 20, 1974 Under the Customs Act, 1962 and the Central Excise and Salt Act, 1944, exporters are entitled to get drawback of excise/customs duties and rebate of excise duties in respect of goods exported. In this connection, the Customs and Central Excise Duties Drawback Rules, 1971 and Rules 12 and 12-a of the Central Excise Rules, 1944 are relevant. 2. Whereas drawback is the repayment of duty chargeable on any imported materials or exciseable materials used in the manufacture of goods exported, a rebate of excise duty is the repayment of the excise duty initially charged (if charged) on the manufactured product. 3. The Central Excise and Customs authorities already have instructions to furnish to the IT Department particulars of (i) adjudication cases involving imposition of fine and /or penalty aggregating over Rs.10,000; (ii) refunds exceeding Rs.1 lakh granted to the Central Excise assessees; and (iii) refunds of customs duty of over Rs.10,000. The Board are advised that items (ii) and (iii) cover only refunds arising out of erroneous assessments or unauthorised realisations, etc. and do not cover drawbacks/rebate. As the latter are admissible in respect of a large number of goods exported, forwarding of information in respect thereof to the ITOs on the lines on which information regarding refunds is forwarded, would entail enormous work for the Custom Houses and Central Excise Collectorates and, as such, it would not be feasible to do so. 4. While dealing with the income-tax case of an exporter, it is necessary to find out the amount of excise and customs duty drawbacks/excise duty rebate allowed to him in order to verify that these are duly accounted for. All the ITOs assessing exporters may, therefore, be advised to call from the assessees full particulars thereof. Where considered necessary, the particulars thus obtained may be test-checked by collecting information directly from the concerned officers under the Collectors of Central Excise and Customs. The Special Investigation Branches should also be instructed to cover this source of information. Every year, in a few selected cases of exporters, the Special Investigation Branches should on their own collect complete information regarding duty drawback etc. received collect complete information regarding duty drawbacks etc. received during a specified period and pass it on to the ITOs concerned for verification; a record being kept in the Special Investigation Branches of the items of information extracted, transmitted and results of verification. 5. The Collectors of Central Excise and Customs are being advised to render the necessary co-operation and assistance to the IT Department in this regard.