SSI Units and Export benefits - Central Excise Practice Manual (OLD) - Central Excise

SSI Units and Export benefits Exempted Small Scale Units on account of their turnover below prescribe limit, do not have to follow ARE-1 and Bond procedure till they remain within the full exemption limit. However they have to follow the following simplified export procedure: I. Simplified Export Procedure: 1. Manufacturers exempted from payment of duty will not be required to registered themselves with the Central Excise, however they have to file a declaration and obtain declarant code number to apply 'simplified procedure' and not just because they are exempted from declaration. 2. Clearances should be under own invoice of the SSI unit. They need not require to kept separate series of invoice for export as well as for home consumption. 3. The invoice should be machine serial numbered (or by franking machine) starting from 1 st day of the financial year i.e. from 1 st April every year. 4. Invoice should be pre-authenticated by the owner or partner or Director/Managing Director of a company or other authorized person. 5. Invoice should indicate: · name and address of buyer, · destination, description, · value, progressive total of total value of excisable goods cleared for home consumption since the beginning of financial year, · transport vehicle number, · date and time of removal of goods from the factory. 6. The invoice will be signed by the manufacturer or his authorized agent at the time of clearance. 7. If the export is direct, the manufacturer should mention at the top of invoice "FOR EXPORT" and his own Export-Import code no., if any. 8. If the export is through merchant exporter, the manufacturer should mention at the top of invoice- "EXPORTTHROUGH MERCHANT EXPORTER" and Export-Import code no. of such merchant-exporters. II. Records: 1. The SSI unit shall maintain a simple record production (i.e. quantity and value of production) and clearance. 2. Entries in production record should either be made: · at the close of the day or · at the beginning of next day before the commencement of the production. 3. Entries need not be made on days when there is no production or clearance of goods. III. Statement: The SSI units shall file a quarterly statement to the Jurisdictional Range Superintendent in the prescribed form containing the following particulars: 1. Name and address of the manufacturing unit 2. Range, Division and Commissionerate 3. Code number (wherever allotted) by the Central Excise Department 4. Financial year 5. The period (quarter for which statement is submitted) 6. Description, Quantity and value of goods cleared for home consumption during the quarter 7. Description, Quantity and value of goods cleared during the quarter: · for direct export · for export through merchant exporter 8. Progressive total of clearances for home consumption upto the quarter. 9. Details of value of clearances for which proof of export not received within 6 months. IV. Proof of export: The following documents should be submitted by the SSI units to the Range officer within 6 months, from the date of clearance of goods from the factory of production, as proof of export: - 1. In the case of Direct Exports by the manufacturer-Exporter - · Duly attested photocopy of shipping bill (export promotion copy) - bearing particulars and date of invoice, having endorsements on the reverse by the customs of the particulars of mate's receipt no., name of the ship/flight no., /vehicle no. by which the goods are exported out, date of export, EGM no./Airway Bill no. · Duly attested copy of bill of lading. · Foreign Exchange Remittance Certificates. 2. In case of export through Merchant-Exporter - · Duly attested Photocopy of H form or other equivalent sales tax form issued by the Merchant Exporter to the SSI manufacturer will be accepted as proof of export. This facility is available only where the export is taking place directly from the factory of SSI whether on his account or through merchant exporters and not for any supplies made to the domestic manufacturer who may or may not export finished goods. · Goods sold by the manufacturer to the merchant exporter which ultimately are exported are exempt from Central Sales tax. But the manufacturer can get off the liability of sales tax only when they submit the above forms to the sales tax department. V. Action taken on non-submission of 'Proof of Export' - If Range Superintendent finds that the clearances for home consumption and clearance for export where proof of exports have not been furnished within prescribed period of 6 months, when taken together turnover is likely to exceed the exemption limit of Rs.150lakhs, he should issue show cause notice for safeguarding revenue. But it will be enforced, only, after further 6 months (in addition to the previous 6 months), if proof of exports is not received in these further 6 months and they should take Central Excise Registration and follow the regular ARE-1 procedure. This procedure is also applicable to exporters of readymade garments. They do not have to follow ARE-1 procedure. Simplified Export Procedure is not applicable to the following: 1. Units availing facility of Cenvat Credit under Cenvat credit Rules, 2004. 2. Units claiming rebate of duty paid on raw materials under Rule 18. 3. Units manufacturing goods under bond under Rule 19(2) and removing under Advance Intermediate License.