Export of Excisable Goods - Under claim of rebate - Central Excise Practice Manual (OLD) - Central Excise

EXPORT OF EXCISABLE GOODS - UNDER CLAIM OF REBATE Export of excisable goods on payment of duty under claim for rebate of excise duty is governed by provisions of rule 18 of CE rules. Export of finished goods on payment of duty under claim for rebate Conditions and procedures for export of goods on payment of duty under claim for rebate to all countries except Nepal and Bhutan is contained in Notification No. 19/ 2004 - CE (NT). Conditions for export · Export should take place directly from factory or warehouse except as otherwise permitted. · Such goods must be exported within 6 months from the date of removal from the factory or warehouse or within such extended time as may be permitted. · The amount of refund shall not be less than Rs.500. · The market price at the time of exportation should not be less than the amount of rebate of duty claimed. · Rebate on excisable goods prohibited from export for the time being in force shall not be made. · The excisable goods supplied as ship's stores for consumption on board a vessel bound for any foreign port are covered by the notification mentioned above and are in such quantities as the commissioner of customs at the port of shipment may consider reasonable. Procedure for export on payment of duty under claim for rebate The duty payable shall be determined in the same manner as the goods cleared for home consumption. I. Procedure at the place of dispatch of goods i.e. at factory or warehouse or approved premises: A. Sealing and examination by excise officer - · Exporter has the following duties: i. To duly account export goods in the Daily Stock Account (DSA), in the ARE-1 Form and in the invoice prepared as per rule 11 of CE rules. ii. To inform Superintendent or Inspector of CE at least 24 hrs in advance about the intended time of removal so that examination and sealing at the place of dispatch can be done. iii. Prepare and present invoice and the 5 copies of Form ARE-1 to superintendent or Inspector of CE. · Superintendent or Inspector of CE has the following duties: i. Verify the goods and particulars of duty paid with reference to invoice and Form ARE-1. ii. After successful verification, he shall seal the consignment. iii. Endorse and sign each copy of application (Form ARE-1). iv. Distribute Form ARE-1 in the following manner: Ø Original, duplicate quintuplicate - to exporter Ø Triplicate - to the officer with whom rebate claim is to be filed either by post or by handling over to exporter in sealed cover. Ø Quadruplicate - to be retain for official records. · Examination report duly completed must accompany the export goods to the port/ airport of export. B. Self sealing and self-certification - Exporter can clear export consignment with self-sealing and self-certification. · Such sealing should be done under supervision of owner, or working partner, or managing director or company secretary or a person duly authorized by any of the above mentioned persons. · He shall certify on all copies of ARE-1 that goods have been checked by him and packed in his presence. · Exporter shall distribute the copies of ARE-1 in the following manner: Ø Original, duplicate quintuplicate - to the place of export along with goods Ø Triplicate quadruplicate - to superintendent or inspector within 24 hrs of removal of goods. · The superintendent or inspector shall verify the following details: i. Particulars of assessment, ii. Correctness of the amount of duty paid or duty payable, iii. Entry of duty paid or payable in Daily Stock account (DSA), iv. Invoice. · The superintendent or inspector after verification of the details has the following duties: i. Endorse and sign both triplicate and quadruplicate copies of ARE.1. ii. Send both ARE.1 copies to the rebate sanctioning authority by post or by handling over to the exporter in sealed cover. II. Procedure at place of export i.e. at port or airport or Inland container depot or customs freight station or land customs station: · Exporter shall present the export goods along with original, duplicate and quintuplicate (optional) copy of ARE-1 to the customs officer. · Customs officer has the following duties: i. He shall verify the goods with reference to ARE-1, ii. He shall also verify the goods for certain export incentives such as drawback, DEEC, DEPB or for determining exportability of the goods. iii. Allow export of goods, iv. Certify on the copies of ARE.1 that the goods have duly exported citing the shipping bill no. and date and other particulars, v. Distribute the ARE.1 Form in the following manner: Ø Original quintuplicate - to exporter Ø Duplicate - to the rebate sanctioning authority either by post or by handling over to the exporter in sealed cover. · In case of export by parcel post, exporter shall: i. Affix sufficient postage stamps to the duplicate application and ii. Present the documents along with the packages to the postmaster at the office of banking. Rebate claim of excise duty paid on finished goods exported · Exporter shall lodge claim with the original copy of ARE.1 with - i. The AC/DC of CE having jurisdiction over the factory of production or warehouse or ii. With the Maritime Commissioner (if he opts). · The application for claim must be submitted in the letter head of the exporter and filed with the following documents: i. Original copy of the ARE.1, ii. Invoice issued under rule 11, iii. Self-attested copy of shipping bill, iv. Self-attested copy of bill of lading, v. Disclaimer certificate (in case where claimant is other than exporter). · AC/DC shall sanction the rebate after comparing the duplicate copy of the ARE.1 received from customs with the original copy received from the exporter and that the triplicate copy received from CE officer. · In case rebate claim exceeds Rs.5 lakhs, it shall be pre-audited before claim is sanction. Rebate claim of excise duty paid on inputs used for export goods Rebate claim of excise duty paid on the material used in the manufacture or processing of goods exported out of India except Nepal and Bhutan is also admissible. Benefit of such rebate at input stage can be claimed in the following situations also-[Rule 18]: · On both excisable goods (dutiable or exempted) and non-excisable goods. · Processing not amounting to manufacture will also be eligible for such benefit. · All types of materials are eligible for rebate such as raw-materials, consumables, components, semi-finished goods, assemblies, sub-assemblies, intermediate goods, accessories, parts and packing material required for manufacture or processing. However, in the following situations rebate at input stage is not available: · If the amount of rebate is less than Rs.500. · If the market price of the goods is less than the rebate amount. · If finished goods are exported under claim for duty drawback. · If such facility is availed under Cenvat credit rules, 2002. · If finished goods are exported under a Value Based Advance License or a Quantity Based Advance License issued before 31-3-95. Conditions and procedures for claiming rebate on the material used in the goods which are finally exported is contained in Notification No. 21/ 2004 - CE (N.T). · Filing of declaration: - The manufacturer shall file a declaration with AC/DC giving the following details: Finished goods proposed to be manufactured, Rate of duty leviable, Manufacturing formula (giving proportion in which the materials are actually used and their quality) or a manufacturing process, Tariff classification, Rate of duty paid or payable on the material so used both in words and figures Separate statement of the input-output ratio may be given for each export product. · Verification by AC/DC: - AC/DC will verify the input-output ratio and if required he may call for samples of finished goods or inspect them in the factory. · Grant of permission: - On being satisfied AC/DC may permit the applicant for manufacture or processing and export of finished goods. i. Where the officer is not satisfied with the correctness of consumption norms, he may permit the manufacturing operations and verification will be completed while the process of the manufacture is on but before the export of goods. ii. Any change in consumption norms must be intimated to AC/DC and Range superintendent giving reference of permission granted. iii. Wherever AC/DC finds misuse of permission, he may withdraw the permission. · Procurement of Material: - The manufacture shall procure materials to be utilized in the manufacture of finished goods intended for export, directly from a registered factory in which goods are produced or from dealers registered for the purpose of Cenvat credit rules under invoice. · If the manufacturer desires to remove the materials as such or after partially processing to a place outside or any specified place, permission from AC/DC should be obtained on the condition, that after processing they are returned back for further processing or remove as such under bond without payment of duty. Any waste arising will be dutiable. · Export of finished product: - finished good will be exported under Form ARE.2 prepared in quintuplicate and not under Form ARE.1, removed either under claim for rebate or without payment of duty. [procedure as specified in Notification No. 19/2004-CE or 42/2001-CE] · Filing lodge for claim for rebate of duty paid on the material: - The claim will be filed to AC/DC of CE having jurisdiction over the factory with the following documents - Original copy of the ARE.2 duly endorsed by customs officer, Duplicate copy of ARE.2 received from the customs officer in a sealed cover, Duplicate copy of Invoice under which CE duty was paid or payable on goods cleared for export, Self-attested copy of shipping bill (export promotion copy), Self-attested copy of bill of lading/ Airway bill. Officer may point out deficiency (if any) in the claim within 15 days of lodging. · Disposal of claim: - The claim of rebate will be disposed of within a maximum of 2 months. · Other issues: - Manufacturer/ processor of export goods shall maintain the register containing details of goods exported and material purchased used in manufacture of goods to be exported on which claim for rebate is filed. Normally rebate of input stage duty shall be allowed to manufacturer/ processor-exporter where such inputs are used in manufacturing/ processing of export goods and cleared directly from the factory of manufacturer. However goods can be exported through merchant exporter also but his name should be mentioned in ARE.2 Form.