EXPORT UNDER CLAIM FOR REBATE - CBEC Manual (OLD) - Central Excise

CHAPTER 8 EXPORT UNDER CLAIM FOR REBATE 1. Introduction 1.1 The conditions and procedure relating to export under claim of rebate are contained in Notification 19/2004-Central Excise (N.T.) dated 6th September 2004 and notification No. 20/2004-C.E. (N.T.) dated the 6th September, 2004 issued under rule 18 of the Central Excise Rules, 2002. 1.2. It is worth mentioning that as per the definition of the term 'refund' Section 11B of the Central Excise Act, 1944, refund includes 'rebate' of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India. Thus, the procedure specified in the said Rules and the notification issued there under are subject to section 11B of the said Act.. 2. Categories of exports 2.1 There are mainly three categories of exports : - (i) Export of all excisable goods to all countries except Nepal and Bhutan (ii) Export to Nepal and Bhutan; (iii) Export of tea to any country except Nepal and Bhutan. PART-I EXPORT TO ALL COUNTRIES EXCEPT NEPAL AND BHUTAN 1.1 Conditions relating to the said export are, as follows 1. Export of excisable to all countries except Nepal and Bhutan (i) It is essential that the excisable goods shall be exported after payment of duty, directly from a factory or warehouse. The condition of " Payment of duty" is satisfied once the exporter records the details of removals in the Daily Stock Account maintained under rule 10 of the said Rules, Whereas the duty maybe discharged in the manner specified under rule 8 of the said Rules, i.e. monthly basis. (ii) In certain cases, the board may issue instructions/ Procedures for exporting the duty paid goods from a place other than the factory or the warehouse. In this regard, a general permission has been granted in respect of goods where it is possible to correlate the goods and their duty paid character. (iii) The excisable goods shall be exported within six months from the date on which they were cleared for export from the factory of manufacture or warehouse. This date will be indicated on the ARE.1 and invoice issued for the purpose. However, the Commissioner of Central Excise has powers to extend this period, for reasons to be recorded in writing in any particular case. The exporter will be required to submit written request to the commissioner specifying the reasons why they could not export within the stipulated six months' period. The Commissioner could give his decision within seven working days of the receipt of the request. It should also be noted that such permissions should not be given in a routing manner. (iv) 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 Customer at the port of shipment may consider reasonable; (v) The market price of the excisable goods at the time of exportation should not be less than the amount of rebate of duty claimed for export; (vi) The rebate claim will be admissible only if the amount of rebate of duty admissible is five hundred rupees or more. (vii) The rebate of duty paid on those excisable goods export of which is prohibited under any law for the time being in force, shall not be made. 2. Forms to be used 2.1 ARE.1 is the export document (See Annexure-14 in Part 7), which shall be prepared in quintuplicate (5 copies). This is similar to the erstwhile AR.4. This document shall bear running serial number beginning from the first day of the financial year. On ARE.1, certain declarations are required to be given by the exporter. They should be read carefully and signed by the exporter or his authorised agent. The different copies of ARE.1 forms should be of different colours as indicated below. Original White Duplicate Buff Triplicate Pink Quadruplicate Green Quintuplicate Blue 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. 2.2 An invoice shall also be prepared in terms of rule 11 of the said Rules. 2.3 For filing rebate claim there is no specified form for filing claim of rebate. The same may be done by the exporter on their letterhead and filed with the requisite documents. 3. Procedure for clearance for export 3.1 The exporter has the option to adopt any of the procedures regarding the manner in which he may clear the export consignments from the factory or warehouse, namely:- (i) Examination and sealing of goods at the place of dispatch by a Central Excise Officer. (ii) Under self-sealing and self -certification. 4. Sealing of goods and examination at place of dispatch 4.1 The exporter is required to prepare five copies of application in the Form ARE-i, as per format specified in the Annexure-14 to Notification No. 19/2004-Central Excise (N.T.), dated 6-9-2004 (See Part 7). The goods shall be assessed to duty in the same manner as the goods for home consumption. The classification and rate of duty should be in terms of Central Excise Tariff Act, 1985 read with any exemption notification and/or Central Excise Rules, 2002. The value shall be the "transaction value" and should conform to section 4 or section 4A, as the case may be, of the Central Excise Act, 1944. It is clarified that this value may be less than, equal to or more than the F.O.B. value indicated by the exporter on the Shipping Bill. 4.2 The duty payable shall be determined on the ARE.1 and invoice and recorded in the Daily Stock Account and it should be paid in the manner specified in I rule 8 of the said Rules. 4.3 The exporter may request the Superintendent or Inspector of Central Excise having jurisdiction over the factory of production or manufacture, warehouse or approved premises for examination and sealing at the place of dispatch 24 hours in advance, or such shorter period as may he mutually agreed upon, about the intended time of removal so that arrangements can be made for necessary examination and sealing. 4.4 In case of exports under Duty Exemption Entitlement 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. Other types of export may be examined and sealed by the Inspector of Central Excise. 4.5 The Superintendent or Inspector of Central Excise, as the case may be, will verify the identity of goods mentioned in the application and the particulars of the duty paid or payable. If he finds that the declaration in ARE.1 and the invoices are correct form the point of view of identity of goods and its assessment to duty, and that the exporter has recorded the duty payable in Daily Stock Account, he shall seal each package or the container ensuring that the goods cannot be tampered with after the examination. Normally, individual packages should be sealed by using wire and lead seals arid an all-sides-closed container by using numbered One time Lock/Bottle seals or in such other manner as may be specified by the Commissioner of Central Excise by a special or general written order. Thereafter, the said officer shall endorse and sign each copy of the application in token of having such examination done and such examination report must accompany the export goods to the port/airport of export. 5. Distribution of documents (ARE.1) 5.1 Export from the factory or warehouse 5.1.1 In the case when export takes place from the factory of warehouse, the distribution of ARE.1 shall be, as follows: Original(first Copy) The said Superintendent of Central excise shall return to the exporter immediately after endorsements and signature. Duplicate ( Second Copy) The Superintendent of Central Excise shall return to the exporter immediately after endorsements and signature. Triplicate ( Third Copy) Sent to the officer with whom rebate claim is to be filed, either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in official records. Quadruplicate Retain for official records. Quintuplicate (Fifth Copy) Optional Copy- The said Superintendent or Inspector of Central Excise shall return to the exporter immediately after endorsements and signature. 5.2 Export from place other than factory or warehouse (including diversion of duty paid goods for export) 5.2.1 Where goods are not exported directly from the factory of manufacture or warehouse, the distribution of A.R.E.1 will be same as above except that the triplicate copy of application shall be sent by the Superintendent having jurisdiction over the factory of manufacture or warehouse who shall, after verification forward the triplicate copy in the manner specified above. 6. Dispatch of goods by self-sealing and self-certification 6.1 The facility of self-sealing and self-certification is extended to all categories of manufacturers-exporters subject to compliance with the existing procedure. 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-l/ARE-2 have been checked by me and the goods have been packed and sealed with lead seal/one time lock seal having number____ under my supervision 6.2 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. Quintuplicate ( Fifth Copy) Optional Copy- Send to the place of export along with the goods 6.3 The said Superintendent and Inspector of Central Excise shall verify the particulars of assessment, the correctness of the amount of duty paid or duty payable, its entry in the Daily Stock Account maintained under rule 10 of the said Rules (the manufacturer or warehouse owner will be required to present proof in this regard), corresponding invoice issued under rule 11. If he is satisfied with the particulars, he will endorse the relevant A.R.E. 1 and append their signatures at specified places in token of having done the verification. In case of any discrepancy, he will take up the matter with the assessee for rectification and also inform the jurisdictional Deputy/Assistant Commissioner. Once verification is complete and the A.R.E. 1 is in order, he shall distribute the documents (A.R.E. 1) in the following manner: Triplicate ( Third Copy) Send to the officer with whom rebate claim is to be filed, either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in officials records Quadruplicate( Fourth Copy) Send to the officers with whom rebate claim is to be filed either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in official records. 7. Examination of goods at the place of export 7.1 The place of export may be a port, airport, Inland Container Depot, Customs Freight Station or Land Customs Station. 7.2 The exporter shall present together with original, duplicate and quintuplicate (optional) copies of the application (A.R.E. 1) to the Commissioner of Customs or other duly appointed officer - normally goods are presented in the designated export shed. 7.3 The goods are examined by the Customs for the purposes of Central Excise to establish the identity and quantity, i.e. the goods brought 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. 7.4 For Central Excise purposes, the Officers 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 can be exported in accordance with the laws for the time being in force (for example, they are not prohibited or restricted from being exported), shall allow export thereof. Thereafter, he will certify on the copies of the A.R.E. I that the goods have been duly exported citing the shipping bill number and date and other particulars of export. 7.5 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 application, from whom exporter wants to claim rebate. However, where exporter claims rebate by electronic declaration on Electronic Data Interchange system of Customs, the duplicate shall be sent to the Excise Rebate Audit Section at the place of export. 7.6 The exporter shall use the quintuplicate copy for the purposes of claiming any other export incentive. 8. Sanction of claim for rebate by Central Excise 8.1 The rebate claim can be sanctioned by any of the following officers of Central Excise: - Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory of production of export goods or the warehouse; or Maritime Commissioner. 8.2 It shall be essential for the exporter to indicate on the A.R.E. 1 at the time of removal of export goods the office and its complete address with which they intend to file claim of rebate. 8.3 The following documents shall be required for filing claim of rebate: (i) A request on the letterhead of the exporter containing claim of rebate, A.R.E. 1 numbers and dates, corresponding invoice numbers and dates amount of rebate on each A.R.E. 1 and its calculations, (ii) original copy of the A.R.E.1, (iii) invoice issued under rule 11, (iv) Self attested copy of shipping Bill, and (v) self attested copy of Bill of Lading. (vi) Disclaimer Certificate [ case where claimant is other than exporter] 8.4 After satisfying himself that the goods cleared for export under the relevant A.R.E. 1 applications mentioned in the claim were actually exported, as evident by the original and duplicate copies of A.R.E. 1 duly certified by Customs, and that the goods are of 'duty -paid' character as certified on the triplicate copy of A.R.E. 1 received from the jurisdictional Superintendent of Central Excise (Range Office), the rebate sanctioning authority will sanction the rebate, in part or full. In case of any reduction or rejection of the claim, an opportunity shall be provided to the exporter to explain the case and a reasoned order shall be issued. 8.5 Where the individual rebate claim exceeds Rs. 5 lakh, they shall be pre-audited before these are disbursed. 9. Export by parcel post 9.1 In case of export by parcel post after the goods intended for export have been sealed, the exporter shall affix to the duplicate application sufficient postage stamps to cover postal charges and shall present the documents, together with the package or packages to which it refers, to the postmaster at the Office of booking. 10. Filing of rebate claims by electronic declaration and sanction thereof through Electronic Data Inter-change (EDL) 10.1 The new concept of filing of rebate claim and its sanction through EDI established by the Customs formations at different ports! Airports/ICDs/ CFSs has been incorporated in the new procedure. However, its implementation is dependent upon development of software and formats of electronic forms, administrative set-up at the places of exports for auditing such claims and putting in place the necessary hardware. The new process will also require to be tested. This may take some time. Accordingly, the provision has been made that this facility will be available at such places and from such time as may be specified by the Board. 10.2 For this purpose, the expression "electronic declaration" has been defined as the declaration of the particulars relating to the export goods, lodged in the Customs Computer System, through the data-entry facility provided at the Service Center or the data communication networking facility provided by the Indian Customs and Central excise Gateway (called ICEGATE) from the computer of the person authorized for this purpose. PART-II EXPORT TO NEPAL OR BHUTAN 1. Introduction 1.1 For export to Nepal, a different procedure has to be followed considering that the rebate is granted to the His Majesty's Government of Nepal based on Indo-Nepal Treaty. Currently, the procedure is specified only for exports through specified Land Customs Stations. There is no rebate procedure for Bhutan the rebate to Bhutan is disbursed by the Directorate General of Inspection in accordance with the provisions of the Indo-Bhutan treaty to His Majesty's Government of Bhutan. 2. Conditions of export 2.1 The conditions of export are similar to export to other countries pt for some minor variations. For clarity, these are explained below - i) It is essential that the excisable goods shall be exported after payment of duty, directly from a factory or warehouse. The condition of "payment of duty" is satisfied once the exporter records the details of removals in the Daily Stock Account maintained under rule 10 of the Central Excise Rules, 2002 (hereinafter referred to as the said Rules), whereas the duty may be discharged in the manner specified under rule 8 of the said Rules, i.e. monthly basis. (ii) In certain cases, the CBEC may issue instructions/procedures for exporting the duty paid goods from a place other than the factory or the warehouse. (iii) The excisable goods shall be exported within six months from the date on which they were cleared for export from the factory of manufacture or warehouse. This date will be indicated on the Nepal Invoice issued for the purpose. However, the Commissioner of Central Excise has powers to extend this period, for reasons to be recorded in writing hi any particular case. The exporter will be required to submit written request to the Commissioner specifying the reasons why they could not export within the stipulated six months' period. The Commissioner should give his decision within seven working days of the receipt of the request. It should also be noted that such permissions should not given in a routine manner. (iv) The goods can only be exported by land through any of the following land customs stations, namely, Sukhiapokhri, Panitanki, Jogbani, Jayanagar, Bairgania. Bhimnagar, Bitamore (Sursand), Raxaul, Sonauli, Barhrni, Nepalganj Road, Shohratgar (Khunwa), Jarwa, Katamiaghat, Gauriphanta, Banbasa, Jhulaghat, Dharchula, Naxalbari, Galgalia, Kunauli, Sonabarsa, Tikonia, or such other check-post as may be specified by the CBEC. 3. Nepal Invoice 3.1 The Format of 'Nepal Invoice' has been specified in the Annexure to the Notification No. 20/2004-Central Excise (N.T.), dated 6-9-2004 (See Annexure-21 in Part 7). 4 . Procedure for export to Nepal 4.1 The exporter is required to prepare five copies of Nepal Invoice. The goods shall be assessed to duty in the same manner as the goods for home consumption. The classification and rate of duty should be in terms of Central Excise Tariff Act, 1985 read with any exemption notification and/or the said Rules. The value shall be the "transaction value" and should conform to section 4 or section 4A, as the case may be, of the Central Excise Act, 1944. It is clarified that this value may be less than, equal to or more than the F.O.B. value indicated by the exporter on the Bill of Export. 4.2 The duty payable shall be determined on the Nepal Invoice and recorded in the Daily Stock Account, it should be paid in the manner specified in rule 8 of the said Rules. 4.3 The exporter may request the Superintendent or Inspector of Central Excise having jurisdiction over the factory of production or manufacture, warehouse or approved premises for examination and sealing at the place of dispatch 24 hours in advance, or such shorter period as may be mutually agreed upon, about the intended time of removal so that arrangements can be made for necessary examination and sealing. 4.4 In case of exports under Duty Exemption Entitlement 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 Assistant/Deputy Commissioner of Central Excise may permit examination and sealing by Inspector. Other types of export may be examined and sealed by the Inspector of Central Excise. 4.5 The Superintendent or inspector of Central Excise, as the case may be, will verify the identity of goods mentioned in the application and the particulars of the duty paid or payable. If he finds that the declaration in Nepal Invoice are correct from the point of view of identity of goods and its assessment to duty, and that the exporter has recorded the duty payable in Daily Stock Account, he shall seal each package or the container ensuring that the goods cannot be tampered with after the examination. Normally, individual packages should be sealed by using wire and lead seals and an all-side-closed container by using numbered One time Lock/Bottle seals or in such other manner as may be specified by the Commissioner of Central Excise by a special or general written order. Thereafter, the said officer shall endorse and sign each copy of the application in token of having such examination done. 4.6 The distribution of the Nepal invoice shall be, as follows: Original (First copy) Handover to the Exporter or his agent along with the goods, packages or container after sealing it. Duplicate (second copy) To be put in a sealed cover and given to the exporter or his agent by the Central Excise Officer for being handed over to the officer of customs In-Charge of the concerned land customs station Triplicate (Third copy) To be put in a sealed cover and given to the exporter or his agent by the Central Excise Officer for Customs In-Charge of the concerned land customs station. Quadruplicate (forth copy) To be retained by the Central Excise Officer; 4.7 The exporter or his agent shall then be free to remove the goods for export to Nepal, through the specified land customs stations. 5. Procedure at the land customs station 5.1 The exporter or his agent shall present the goods to the officer of Customs in-charge of the land customs station along with the original copy of invoice and the sealed cover containing duplicate and triplicate copies; 5.2 The said officer shall examine the goods with reference to the 1arations in the Nepal Invoice. Where the contents of all the copies of invoices and the packages, goods or container are satisfactorily identified with their seals in tact, the said customs officer shall make necessary entries in the register maintained at the land customs station and allow the goods to cross into the territory of Nepal. He may, to satisfy himself as to the identity of the packages, goods or containers from the particulars shown on the invoice, open container or packages and examine the goods, especially where the seals are broken; 5.3 He will also certify on each of the three copies of the invoice to this effect and simultaneously indicate the running serial number in red ink prominently visible and encircled against Item 3 on all the three copies of the invoice. 5.4 The customs officer should then deliver the original copy of the invoice duly endorsed to the exporter or his agent along with the goods for presentation to the Nepalese Customs Officer. 5.5 He shall also send, directly the duplicate and triplicate copies of the invoice to the Nepalese Customs Officer in-charge of the check post through which the goods are to be imported into Nepal; 5.6 The goods will then be produced before the Nepalese Customs Officer at the corresponding border check post along with the original copy of the invoice. The Nepalese Customs Officer, shall deal with the original copy as directed by His Majesty's Government of Nepal and return the duplicate copy, after filling up the required information at S.No.1 to 4 in the part meant for the Nepalese Customs and after endorsing his certificate of receipt of goods in Nepal directly to the officer of customs in-charge of the land customs station; 5.7 The officer in-charge of the land customs station shall forward the duplicate copy to the Deputy Director of Inspection, Customs and Central Excise, Nepal Refund Wing, New Delhi. For this purpose, the said officer in-charge of the land customs station should keep a note of the return of duplicate copies from the Nepalese Customs Officer and remind the exporter for such copies as have not been received. 6. Procedure to be followed by the Directorate General of Inspection, Customs and Central Excise ( Nepal Refund Wing), New Delhi 6.1 The Directorate General of Inspection, Customs and Central Excise (Nepal Refund Wing), New Delhi [ referred to as "the Directorate"] shall maintain separate registers for each Indian Border Customs Check Post. 6.2 The duplicate invoice will be entered in the respective registers showing the running serial number in the recapitulation statement register prescribed for the purpose. 6.3 At the end of every month he shall calculate the amount of rebate due in respect of all certificates of exports received during that month and shall prepare a consolidated statement to arrive at the amount of rebate due to His Majesty's Government of Nepal. 6.4 One copy of the recapitulation statement shall be forwarded to the Commissioner of Central Excise concerned for verifying the payment of rebate to Nepal Government and for issue of a post audit certificate in respect of the amount allowed as rebate against each invoice passed in that bill. In order to detect errors in the duty amount and quantity indicated. Internal Audit Department of the Commissioner concerned should check this factor by comparison with the recapitulation statement forwarded by the Directorate and the monthly return of the factories concerned. 6.5 Where any over payment is noticed the fact should be brought to the notice of the Directorate for making necessary adjustment. 6.6 One copy of the recapitulation statement shall be forwarded to His Majesty's Government of Nepal. 6.7 One copy of the recapitulation statement shall remain as office copy with the Directorate. 6.8 After receiving the recapitulation statement, the Commissioner will get a verification conducted that the concerned factories have actually paid the duty of excise against which the rebate is to be given and the Commissioner/PAO of that Commissionerate shall furnish a certificate to the Directorate to the effect that all the concerned factories have paid the amounts of duty as indicated in the Annexure to the recapitulation statement. 6.9 In case the Directorate does not receive the duplicate copy of the invoice from the Officer in-charge or the Indian Land Customs Station and the triplicate copy is not received by the Nepal Government, necessary check should be made with the officer in-charge of the Indian Land Customs Station concerned as to the whereabouts of the particular invoice. PART- III SPECIAL PROCEDURE FOR STORE FOR CONSUMPTION ON BOARD AN AIRCRAFT ON FOREIGN RUN 1. Introduction 1.1 A separate rebate procedure has been notified in respect of supplies of mineral oil products falling under Chapter 27 of the First Schedule to the Central Excise Act, 1985 (5 of 1986) exported as stores for consumption on board an aircraft on foreign run. 2. Conditions of rebate 2.1 Earlier, the rebate was limited, by notification, to all countries, which did not have land frontiers with India, except Pakistan, Bangladesh, Myanmar and Bhutan (though these countries have land frontier with India). But this facility was available by executive instructions to all countries, including the countries, which were not appearing in the notification for grant of this facility. The Government has decided to extend this facility to all countries, without any restrictions about the countries having land frontier. The supplies of ATF and other listed items (supplies to aircraft going to Nepal, Afghanistan and Bhutan) will be allowed in the same manner as it is allowed to supplies of ATF and other listed items to aircraft going to other foreign countries, including the payments or remittances. 2.2 The products as remain on board an aircraft after completion of an internal flight but prior to its reversion to foreign run, the rebate for which shall be granted without production of documents evidencing the payment of duty thereon. The proper officer of Customs shall certify in the manner specified by the Commissioner of Central Excise the quantity of products left on board for determining the quantum of rebate therefore. PART-IV MISCELLANEOUS 1. Time limit for disposal 1.1 The rebate sanctioning authority should point out deficiency, if any, in the claim within 15 days of lodging the same and ask the exporter to rectify the same within 15 days. All Queries/deficiencies shall be pointed out once Collectively and piecemeal queries should be avoided. The claim of rebate of duty on export of goods should be disposed of within a period of two months. 2. Supplementary Rebate Claim 2.1 The Supplementary Rebate Claim, if any, should be filed within the stipulated time provided under section 11B of the Central Excise Act, 1944 3. Entry of goods in another factory of the same manufacturer for consolidation and loading of consignment for export: 3.1 Goods removed on A.R.E.1 from one factory of a manufacturer may be allowed to enter in another factory of the said manufacturer ONLY for the purpose of consolidation and loading of goods in second or subsequent factory (ies) and export there from. For this facility the exporter shall be required to get his goods examined and sealed at each factory [the place of dispatch] by a Central Excise Officer. The packages loaded in the vehicle shall be in sealed condition in their original packing. Where goods are stuffed in a container, the container shall be sealed. The Central Excise Officer having jurisdiction over the second or subsequent factory (ies) shall supervise the opening of the seal truck/vehicle) belonging to the subsequent factory in vehicle or container and sealing of the container. 4. Cancellation of documents 4.1 After the goods are cleared for export on payment of appropriate duties of excise under claim of rebate but are not exported for any reason, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory or the warehouse, shall, on being requested by the exporter in writing, cancel the export documents and make necessary endorsements. Thereafter, the goods shall be treated as if these were cleared for home-consumption. The goods need not be brought back to the factory or warehouse. PART-V EXPORT UNDER CLAIM FOR REBATE OF DUTY ON EXCISABLE MATERIAL USED IN THE MANUFACTURE OF EXPORT GOODS 1. Introduction 1.1 The Government has, by Notification No. 21/2004-Central Excise (NT.) dated 6-9-2004 [hereinafter referred to as the 'said notification'] allowed rebate of whole of the duty paid on excisable goods, which are in fact materials or inputs for manufacture or processing of other goods, on their exportation out of India, to any country except Nepal and Bhutan, to be paid subject to the conditions and the procedure specified in the above-mentioned notification. 1.2 It may be noted that in rule 18 and in said notification, expression 'export goods' has been used. It refers 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 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. The expression 'material' shall mean all raw materials, consumables, components, semi-finished goods, assemblies, sub-assemblies, intermediate goods, accessories, parts and packing materials required for manufacture or processing of export goods. Rebate of Central Excise duty paid on equipment and machinery in the nature of capital goods used in relation to manufacture or process of finished goods shall not be allowed. 1.5 The benefit of input stage rebate cannot be claimed in any of the following situations: (i) where the finished goods are exported under Claim for Duty Drawback. (ii) where the finished goods are exported in discharge of export obligations under a Value Advance Licence or a Quantity Based Advance Licence issued before 31-3-95. (iii) where facility of input stage credit is availed under CENVAT Credit Rules, 2002. (iv) The market price of the goods is less than the rebate amount. (v) The amount of rebate admissible is less then Rs. 500/- 1.6 The claim for rebate should be filed within the time stipulated under Section 11B of the Central Excise Act, 1944. 2. Procedures and conditions to be followed 2.1 The manufacturer or processor shall file a declaration (See Annexure-24 in Part 7) with the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured or processed along with their rate of duty leviable and manufacturing/processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality. The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be exported. Where there are more than one export products, separate statement of the input-output ratios may be furnished for each export product. The consumption should be net of recycled materials. Where recoverable wastage are generated but not recycled but sold on account of its unsuitability, the same should be clearly reflected in the declaration. The declarant should also enclose, in case of a new product or in case where the manufacturer is not regularly manufacturing the export goods and clearing for home consumption or export, a write up of manufacturing process. 3. Verification and grant of permission 3.1 The Deputy/Assistant Commissioner of Central Excise shall verify the correctness of the ratio of input and output mentioned in the declaration filed before commencement of export of such goods, if necessary, by calling for samples of finished goods or by inspecting such goods in the factory of manufacture or process. If, after such verification, the Deputy/Assistant Commissioner of Central Excise is also satisfied that there is no likelihood of evasion of duty, he may grant permission to the applicant for manufacture or processing and export of finished goods. 3.2 It is clarified that for the sake of convenience and transparency, input output norms notified under the Export Import Policy may be accepted by the department unless there are specific reasons for variation. However, in case, r output norms notified under the Export Import Policy does not include materials used in export goods, the claim under this scheme should not be denied merely on that ground. 3.3 If for any reason the Deputy/Assistant Commissioner of Central not satisfied with reference to the correctness of the consumption norms claimed by the applicant, especially where the product is being manufactured for time in his jurisdiction, he may permit the manufacturing operations and the verification of the consumption norms should be completed while the process of manufacturing 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 the ARE-2 for claiming rebate. 3.4 The permission granted by the Deputy/Assistant Commissioner of Central Excise can be withdrawn at any time if any glaring misuse resulting into revenue comes to his notice. 3.5 Any change in the consumption ratio [ input output ratio] should be promptly intimated by the manufacturer to the Deputy/Assistant Commissioner a of Central Excise and the jurisdictional Range Superintendent giving reference of mission granted. If necessary, the Deputy/Assistant Commissioner of Excise may order fresh verification. 4. Procurement of material 4.1 The manufacturer or processor shall obtain the materials to be ... in the manufacture of the finished goods intended for export directly from the registered factory in which such goods are produced, accompanied by an invoice under rule 11 of the said Rules. 4.2 The manufacturer or processor may also procure materials from dealer registered for the purposes of the CENVAT Credit Rules, 2004 under invoices issued by such dealers. 5. Removal of materials or partially processed material for processing 5.1 The Deputy/Assistant Commissioner of Central Excise may permit a manufacturer to remove the materials as such or after the said materials have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory- (i) for the purposes of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture of the finished goods and return the same to his factory without payment of duty for further use in the manufacture of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or processor (ii) for the purpose of manufacture of intermediate products necessary for the manufacture or processing of finished goods and return the said intermediate products to his factory for further use in the manufacture or process of finished goods without payment of duty or remove the same, without payment of duty for export, provided that the waste, if any, arising in the course of such operation is also returned to the factory of manufacturer or processor; Any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor; 6. Procedure for export 6.1 The goods shall be exported on the application in Form A.R.E. 2 specified (See Annexure-23 in Part 7) and the procedures specified in Notification No.19/2004-Central Excise (NT.) dated 9th September 2004 or in Notfn. No. 42/2001-C.E. (N.T.), dt. 26-6-2001 shall be followed. In other words, the exporter has option to pay duty on finished export goods (if these are excisable) and claim rebate of such duty. He may also export the excisable goods without payment of duty. In both 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 dispatch and place of export, acceptance of proof of export/filing of claim etc. shall be followed mutatis mutandis . 6.2 The colour coding of A.R.E.2 will be as follows:- Original White Duplicate Buff Triplicate Pink Quadruplicate Green Quintuplicate Blue, 7. Presentation of claim of rebate 7.1 The claim for rebate of duty paid on materials used in the manufacture or processing of goods shall be lodged only with the Deputy/Assistant Commissioner of Central Excise having jurisdiction of the place approved for manufacture or processing of such export goods. The following documents shall be presented with the claim: - (i) Original copy of the ARE2 duly endorsed by the Customs Officer; (ii) Duly self-attested copy of Shipping Bill (Export Promotion Copy) (iii) Duly self-attested copy of Bill of lading! Air way bill (iv) Duplicate copy of the Central Excise Invoice under which Central Excise duty was paid/accounted as payable on goods cleared for export. [rebate of finished goods are also being claimed] (v) Duplicate copy of the ARE.2 received from the customs officer in a sealed cover (if obtained). 8. Communication of deficiency in claim 8.1 The Assistant Commissioner of Central Excise should point out deficiency, if any within 15 days of lodging of the claim and ask the exporter to rectify the same within 15 days. Queries/deficiencies shall be pointed out at one go and piecemeal queries should be avoided. The claim of rebate should be disposed of within a maximum period of two months. 8.2 Rebate of input stage duty shall be allowed to manufacturer (processor)-Exporter, as the case may be, where such inputs are used in the manufacture/processing of export goods and cleared directly from the factory of manufacture/processor. The manufacture/processor may export the goods directly himself or through merchant exporter where the goods are exported by merchant - exporter, his name shall be mentioned on ARE-2and other conditions prescribed in Notification No. 21/2004-C.E.9N.T),dt. 9 TH September 2004 should be fulfilled. 9. Accounts Returns 9.1 The manufacturer shall maintain register of duty paid materials brought to the factory for manufacture of finished goods for export under claim for input stage rebate and the account for finished goods manufactured and exported. Any officer duly empowered by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise in this behalf shall have access at all reasonable times to any premises indicated in the application. The applicant shall also permit the officer of Central Officer of Central Excise access to any records relating to the production, storage and export of goods. 10. Checks by Customs Officers 10.1 Samples will be invariably drawn by the Customs Officers for testing at the place of export in case the export goods are of sensitive nature considering that they are made from materials bearing high Central Excise Duty. 10.2 Customs officer responsible for making endorsement in A.R.E.2 carefully check that exports are not covered under any of the following: - The Duty Drawback Scheme - A Value Based Advance Licence issued prior to 31.03.95 - A Quantity Based Advance Licence issued prior to 31.03.95 PART-VI SPECIAL PROCEDURE FOR EXPORT OF TEA UNDER CLAIM OF REBATE 1. Introduction 1. In rule 18 of the Central Excise Rules, 2002 and Notification 21/2004- J Excise (K.T.) dated 6-9-2004; the expression "processing " has been used. It includes blending, packaging or any other operation. One problem which comes into the way is that the Notification No. 21 /2004-C.E. (N.T.), supra, provides for procurement of goods directly from the factory of manufacture and the open market procurement is allowed only where goods are in original packed condition and the invoices are issued by registered dealers. In case of tea, condition relating to open market purchase cannot be fulfilled. Accordingly, a special procedure has been framed for export of tea bought in auctions (on which duty is paid at specific rate), under claim of rebate are specified below: - 2. Procedure 2.1 The exports shall be made under the provisions of notification No. 21 /2004-C.E. (N.T.), dated 6-9-2004. Board's instructions in Part-I of this Chapter may be followed mutatis mutandis . 2.2 For the purpose of export of blended/packaged tea where such blending/packaging was/is done after purchasing bulk tea from the open market or in auctions, the condition of the aforesaid notification regarding procurement of materials (tea in this case), directly from the factory will be relaxed, provided: (i) Deputy/Assistant Commissioner of Central Excise is satisfied that the bulk tea contained in the blended/packaged tea has actually been exported and appropriate duty of excise has been paid. For this purpose, the copies ARE.2 together with Bill of Lading and Shipping Bill duly endorsed by the Customs at the place of export may be verified. (ii) in case of tea purchased in auctions, the brokers catalogue indicating the details of the invoices on which the bulk tea was removed from the factory for home consumption on payment of appropriate duty and the broker's contract relating to purchase of such tea is submitted along with rebate claim. (iii) in case tea is purchased other than in auctions, copies of relevant invoices evidencing payment of duty are submitted along with rebate claim. 2.3 It shall be ensured that exporters do not claim drawback as well as rebate under notification 21 /2004-C.E. (N.T.), supra, simultaneously.