Fixation of Brand Rate of Duty Drawback - Customs - D.O.F. No. 609/110/2005-DBK

D.O.F. No. 609/110/2005-DBK Dated 26-8-2005 Subject : Fixation of Brand Rate of Duty Drawback As you are aware, under the existing procedure for fixation of brand rate of duty drawback under Rule 6 and Rule 7 of Drawback Rules, 1995 applications are filed in the Headquarters of the Commissioners of Central Excise having jurisdiction over the manufacturing unit in which the export goods are declared to have been manufactured. The brand rates are fixed after verification of data by the lower formations regarding consumption of inputs, etc. This procedure is commonly known as the Normal Scheme for fixation of brand rate. 2. In recent months a plethora of representations have been received from trade and industry alleging inordinate delays in fixation of brand rates. Several Members of Parliament have also written to the Finance Minister on this issue. The thrust of the representation is that the work should be centralised in the Ministry and that the earlier practice of fixation of drawback under the Revised Simplified Scheme be reintroduced. 3. The matter has been examined in a full Board meeting held last week. The Board has observed that the work has been delegated to the field formations as a measure of trade facilitation, the objective being that the export benefits are made available to the exporters at their doorsteps. It was a conscious decision of the Government to decentralise the work and therefore, it will not be possible to revert to the earlier system of centralising the work in the Ministry. 4. However, for expeditious disposal of brand rate applications, it has been decided to extend the facility of Revised Simplified Scheme to a selected category of exporters, namely : (a) all exporters who have an export turnover (physical exports) of Rs. 5 crores in current or preceding financial year and having a good track record of three years of exports; (b) public sector undertakings; (c) Star Export Houses; (d) manufacturer-exporters registered with Central Excise, who have been exporting during the previous two financial years and have minimum export of Rs. 1 crore or more during the preceding financial year; (e) manufacturer-exporters registered with Central Excise, who have paid central excise duty of Rs. 1 crore or more during the preceding financial year. These are the five categories of exporters who are presently exempted from providing bank guarantee/cash security under Advance Licence and EPCG Schemes in terms of Circular No. 58/2004-Customs, dated 21-10-2004 [2004 (173) E.L.T. T4]. 5. The Revised Simplified Scheme is dealt with in Board's Letter F. No. 609/24/2002-DBK, dated 24-6-2002 (copy enclosed) [See 2002 (144) E.L.T. T64] and the same may be perused for details. The essence of the Scheme is that drawback rates are to be fixed without pre-verification of the date (which should be duly verified and certified by the applicant and Chartered Accountant/Chartered Engineer/Cost Accountant) and the exporter would be authorised by provisional brand rate letters to claim the drawback rate considered admissible from the concerned Customs House(s). The date submitted would be subject to post-facto checking by the Department for its authenticity and the rates fixed are also subject to revision on the basis of such post-facto verification. In case, after such post-verification, the data furnished in the applications are found to be incorrect, the corresponding brand rate letters will be revoked. Besides, the concerned exporters will be debarred from availing the benefit of the Revised Simplified Scheme for the next one year. 6. In the case of other exporters i.e. other than these five categories, the normal procedure for fixation of brand rate will apply. It has been decided that these exporters may be granted All Industry Rate in respect of applications filed under Rule 7 (Special Brand Rate) pending verification and fixation of brand rates. 7. In view of the importance and urgency of the matter, you may kindly launch a special drive for disposal of the pending claims immediately. In particular, you may ensure that provisional brand rate letters under the Revised Simplified Scheme are issued within a maximum period of 15 days in respect of brand rate applications which are completed in all respects and rejection letters are also issued in respect of incomplete applications within 15 days. The post-verification is required to be completed within two months of the receipt of brand rate application. As for fixation of drawback under the Normal Scheme, as per Board's instructions contained in Circular No. 14/2003-Cus., dated 6-3-2003 [2003 (152) E.L.T. T65], the verification of data regarding consumption of inputs is required to be completed within 15 days from the date of receipt of brand rate application in the Headquarters of the Central Excise Commissionerate and thereafter, the brand rate is required to be fixed within 10 days of receipt of the verification report. You may kindly ensure that these instructions are adhered to strictly. 8. The matter will be reviewed by the full Board after three months……..the meanwhile, I would request you to bestow personal attention ……..ensure that the pendency is reduced to the barest minimum and more importantly, no claim remains pending for over one month. 9. Suitable Public Notices for information of the Trade and Standing Orders for guidance of the staff may be issued. Difficulties faced, if any, in implementation of the instructions may be brought to the notice of the Board at once. Kindly acknowledge receipt of this letter.