CAN WE AVAIL CT-FORM WITHOUT EXCISE REGISTRATION?, Central Excise

[ZIAULLAH THIRUVALLUR]

Dear Sirs,

I am looking at purchasing packaging material (which is excisable) to be used for packing product meant for export purpose .

I would not like to pay any Excise Duty towards the Packaging Material and, thereby, I am willing to obtain CT forms by executing CT bond with the Central Excise.

I would not like to pay any Security/Surety towards the CT Bond to be executed with the Central Excise which needs to be furnished in order to obtain the CT Forms.

Thereby, I am proceeding with obtaining a RCMC (Registration Cum Membership Certificate) with the EPC (Export Promotion Council) which gives me the benefit of obtaining CT Forms from Central Excise by executing CT Bond without any Security / Surety.

My only question is that can I obtain the aforesaid CT Forms without holding an Excise Registration.

I thank the Honourable Experts for supporting my query.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries.

Posts / Replies

[KASTURI SETHI]

No. Sir. This is my view. EPC is under Ministry of Commerce. Central Excise, Customs & Service Tax is under Ministry of Finance. Both have their own Rules & Regulations.

[Ganeshan Kalyani]

Sir in my view Excise registration will be required. Thanks.

[MUKUND THAKKAR]

Dear sir,

My only question is that can I obtain the aforesaid CT Forms without holding an Excise Registration.

In connection of query you can obtain the CT-1 from Excise dept. it is not necessary that you have holding the excise registration number. actual dept is asking any exporter to furnished bond to secure duty amount. if you registered with RCMC you need not furnished pay any Security/Surety to dept likes FD.

you will get it CT-1 certificate without holding excise registration.

[ZIAULLAH THIRUVALLUR]

Dear Sirs,

Thank you for your valued opinions.

Mr. Sethi, kindly look in to my primary question (can we avail CT-Form without Excise Registration), leave apart the RCMC-EPC issue.

I thank all the Honourable Experts for the valued dissemination of their knowledge over this Forum.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

[Kishan Barai]

Respected Ziaullah Thiruvallur Sir,

You can get CT-1 form even without excise registration, but according to me you need to opt for bond. I haven't come across any rule which allow us to escape from filing bond. It is only allowed for a person / unit having reg. under central excise to procure goods against LUT.

Is it really possible that against RCMC you can escape from filing bond ?

Please enlighten

I totally agree with KASTURI SETHI sir that "EPC is under Ministry of Commerce. Central Excise, Customs & Service Tax is under Ministry of Finance. Both have their own Rules & Regulations"

Please reply.

Thank you

[ZIAULLAH THIRUVALLUR]

Dear Mr. Barai,

Thank you for the input.

The bond cannot be exempted. The bond shall be furnished and executed in all means.

RCMC with the relevant EPC provides the privilege of furnishing a bond while the need for Security/Surety towards the said bond is waived off.

I request the Hon'ble Experts to please correct me if I am wrong as I am not a Practitioner / Consultant / Expert in these matters. I am just passing on the views of my Excise Consultant / Auditor.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

[KASTURI SETHI]

Dear Sir,

If we peruse prescribed pro forma of CT-1 and CT-2 i.e. ANNEXURES-17,17-A & ANNEXURE-28, there is column meant for mentioning Central Excise Registration No. in all the above Annexures and it is mandatory. Hence not possible to go without registration with Central Excise. The purpose of execution of bond and issuance of CT-1 & 2 certificates is to safeguard the revenue in the event of some mis-happening/eventuality.

For example : God forbid, if goods are exported and leave India and outside India some untoward incident happens and the said goods do not reach the destination, the exporter will not get foreign exchange. Here CT-1 and CT-2 issued after the execution of Bond, will safeguard the Govt. revenue. If No bond is executed, how the revenue will be safeguarded? How the jurisdictional Range Officer, in-charge of the factory will perform his role of safeguarding revenue without getting the assessee registered with the department ?

[CS SANJAY MALHOTRA]

Dear Friends,

Merchant Exporter registered with EPC are exempt from furnishing of security/ surety, BUT in any case Bond has to be furnished with the Department.

CIR NO.711/27/2003-CX, DT. 30/04/2003

Para 2 extracts:

Accordingly, it is clarified that specified categories of merchant exporters namely status holders (Super Star Trading House, Star Trading House, Trading House, Export House) and exporters registered with recognized Export Promotion Councils would be exempt from furnishing security and/ or surety with the bond executed by them for export of goods without payment of duty unless they have come to the adverse notice of the Department.

Further there is no need for Central Excise Registration in case of Merchant Exporters, only execution of Bond will suffice.

Views of Sh. Kasturi ji is also correct and applies to Manufacturers under Central Excise.

[CS SANJAY MALHOTRA]

Further to add that Mr. Ziaullah to check whether packing for his specific product amounts to manufacture and if yes, then follow the guidelines provided in Sh. Kasturi ji mail.

My submissions holds good if the material is exported as is and no process on the same is performed.

[ZIAULLAH THIRUVALLUR]

Dear Sirs,

My question is whether one needs to be Registered with Central Excise to avail CT Forms.

In my case, I am a manufacturer exporter.

I could infer from Mr. Malhotra that all manufacturer exporters need to be registered with Central Excise to avail CT Forms.

Thank you all for your great support.

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

[CS SANJAY MALHOTRA]

Dear Mr. Ziaullah,

Please elaborate when u say you are the manufacturer Exporter, is the same as a result of "packing activity" amounts to manufacture in case of your goods as per Notes to Central Excise Tariff Act or another way.....

If packing of goods amounts to manufacture in your case as per Tariff, then you have to take Excise Registration unless covered as SSI unit, for availing CT-1 forms.

Please do make a note that CT-1 will not entitle you to avail Drawback incentive on your Exports. Also it's difficult for one to establish correlation of packing material as an Input in Exported product.

Please have thorough review of all scenarios.

 

[ZIAULLAH THIRUVALLUR]

Dear Mr. Malhotra,

Thank you for highlighting the issue on a broader perspective.

Basically, we are looking at purchasing glass and plastic bottles (which are excisable commodities) for filling beverages meant for export. We are registered as an SSI Unit with the Govt. Of Tamilnadu.

For the time being, let's ignore whether or not it's possible to attain CT forms without providing a security/surety towards the bond which shall need to be furnished towards the CT forms.

My only question is whether we need to be registered with Central Excise to avail CT forms, bearing in mind the fact that we ar an SSI unit.

Thank you for your expertise.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

[CS SANJAY MALHOTRA]

Registration under Rule 9 of Central Excise Rules 2002 is required for following CT-1 procedure by the manufacturer of the goods.

[ZIAULLAH THIRUVALLUR]

Dear Mr. Malhotra,

Please excuse me to request more clarification on the subject matter.

Your last post says:

"Registration under Rule 9 of Central Excise Rules 2002 is required for following CT-1 procedure by the manufacturer of the goods".

In the above stated para, kindly clarify whether "Manufacturer" means the Seller Manufacturer (who actually creates the invoice by receiving the CT form from the buyer) or the Buyer who is a Manufacturer Exporter and who purchases the excisable goods and uses it as a raw material or packing material.

Please accept my sincere thanks for your valued time and support on the subject matter.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

0091-9003992330

0091-860830220

[CS SANJAY MALHOTRA]

Dear Mr. Ziaullah,

Manufacture in the present case is the Buyer who receives the goods. You may also refer to Central Excise Notification No. 20/2016- CE dated 01.03.2016 and in case of any clarity, please feel free to share with Experts in this forum.

[surya narayana]

Dear Mr. Ziaullah Thiruvallur,

As per my understanding, you want to procure packing material under CT1 in the capacity of a merchant exporter for packing your manufactured product meant for export with paying Central Excise duty.

For this my answer is "NO". Because,

A merchant exporter, can obtaining CT1 from the Excise Authority/Maritime Commissioner for exporting a Finished product from a manufacturer's premises on behalf of him. For this the Merchant exporter is not required to get himself registered with central Excise. But need have a IEC code and RCMC as a merchant exporter.

In your case the material what you are intended to procure is a packing material for packing your export product but not the finished product which is permissible for export under CT1.

However, if you want to procure the said packing material from the supplier without payment of duty, you have to procure the same by following the procedure prescribed under Removal of Goods (under concessional rate of duty)Rules,2016 from the manufacturer.

Hope your query is addressed

Best Regards

Suryanarayana

[ZIAULLAH THIRUVALLUR]

Dear Mr. Surya Narayana,

Thank you for your input.

From your input, I infer that when I am a Manufacturer Exporter and I intend to purchase the packing material utilized in manufacturing my goods, then I necessarily need to be registered with Central Excise in order to avail CT Forms.

Kindly correct me if I have inferred your input in a wrong manner.

You have stated that:

"In your case the material what you are intended to procure is a packing material for packing your export product but not the finished product which is permissible for export under CT1.

However, if you want to procure the said packing material from the supplier without payment of duty, you have to procure the same by following the procedure prescribed under Removal of Goods (under concessional rate of duty) Rules,2016 from the manufacturer".

I have just gone through the aforesaid rule and it says that goods can be purchased at concessional rate of duty by executing a bond against payment of security and monthly return in the form of a ledger has to be maintained / submitted. But, it does not mention anything about CT form or how the bond can be executed without any security in case of manufacturer exporters registered with the EPC.

I shall really appreciate of you can you please shed more light on this issue.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

[PARTHASARATHY V]

Dear Mr. Ziaullah,

For getting CT -1 or CT - 2 need not registered with Central Excise department. It can be obtained form the Jurisdictional Maritime commissioner or Divsional A C or DC who is acting as Maritime commissioner.

1. For getting CT certificate you have to provide Bond with Bank Gurantee.

2. If you are valid RCMC holder in any Export Promotional Council - BG will be waived.

Asper Chapter 7 procedure Condition No.2 to be fulfilled.

1. The goods shall be exported withing 6 months from the date on which these were cleared for export from the factory of the production or manufacture or warehosue or other approved premisess within such extended period AC / DC may allow.

2. When the export is from a place other than registered factory or warehose, the excisable goods are in original packed condition and identifiable as to their orgin.

Ref CBEC Mannual Page No.6.72 of RK Jain Excise Manual.

[surya narayana]

Dear Mr. Ziaullah Thiruvallur,

A manufacturer exporter can procure the goods under CT1 actually meant for export in the capacity of a Merchant Exporter only and not in the capacity of a manufacturer for which the Merchant Exporter need get himself registered as Merchant Exporter and obtain a RCMC to that extent from the respective Export Promotion Council.

Further, as already stated, only finished goods which can be exported as such from the premises of the manufacturer only can be permitted under CT1

In your case, the packing material which you are intended to procure without payment of duty is not a Finished Product and cannot be exported as such, CT-1 is not a right option in your case.

The best option in this situation available for you to suit your plan to procure the subject packing material without payment of duty, is to procure the same under the Removal of excisable goods (under concessional rate of duty) Rules,2016 which facilitate such duty free procurement of material subject to use in the intended purpose ((manufacture of goods for export - in your case) by giving a self certified declaration to your jurisdictiona AC/DC by executing the required Bond as per the provisions

Further, you are also aware, the simple way ( to avoid the procederal complexities under the above facility) would be to procure the said packing material with payment of duty and clear the export goods on payment of duty and claim rebate of such duty or the duty paid on the packing material used in such export consignment in terms of Rule 18 of CER,2002.

Best Regards

Suryanarayana

[raghunandhaanan r vi]

Sir,

I endorse the view of Mr. Suryanarayana.

There is no provision in the rule book that waive the requirement of registration to obtain CT1. Hence in my view

registration is mandatory

[Hasmukh Patel]

Dear All,

No registration with central excise is require for obtaining CT-1, but CT-1 is iuused only for finished goods export without payment of duty form factory gate of manufacturer. If you want to procure packing material for your finished goods CT-1 is not applicable for your case. You may procure your inputs-packing materila under concessional rate of duty ( without payment of duty under Annexure 45 procedure). Now after budget-2016 you can procure it with out any permission. You may submit simple declearaation ( Annexure-I) to Asst. / deputy commissioner of C.Excise & Custom.

[KASTURI SETHI]

Dear Sir,

Annexure-45 is prescribed application form under Central Excise (Removal of Goods at Concessional Rate of duty for Manufacture of Excisable Goods), Rules, 2001 which have been substituted with Central Excise (Removal of Goods at Concessional Rate of duty for Manufacture of Excisable Goods), Rules, 2016 vide Notification No.20/16-CE(NT) dated 1.3.16 effective from 1.4.16 and new prescribed application forms for intimation are Annexure-80 (Form I) and Annexure-81 (Form II).

 

 

[ZIAULLAH THIRUVALLUR]

Dear Experts,

Thank you for the excellent support provided on this forum.

As Expert - Mr. Suryanarayana stated the below:

"The best option in this situation available for you to suit your plan to procure the subject packing material without payment of duty, is to procure the same under the Removal of excisable goods (under concessional rate of duty) Rules,2016 which facilitate such duty free procurement of material subject to use in the intended purpose ((manufacture of goods for export - in your case) by giving a self certified declaration to your jurisdictional AC/DC by executing the required Bond as per the provisions."

My question:

Would it be possible to waive off the aforesaid bond / surety / security if I hold a valid RCMC from the Export Promotion Council?

Kindly clarify.

With Best Regards,

Engr. Ziaullah Thiruvallur

Director

M/s United Agro Food Industries

09003992330

08608302201

[PARTHASARATHY V]

Hello,

please refer sl.no.19 it is clearly stated., Bond can't be waived but if you have valid RCMC then BG can be waived

[vijay kumar]

Dear Mr.Ziaullah Thiruvallur,

As per Nofn.20/2016-CE(NT) dt.1.3.2016 para 4(5), a simple letter of undertaking (LUT) is sufficient without any BG (surety or security) provided the conditions therein are fulfilled. The relevant extract is given below:

"4.(5) The applicant manufacturer shall execute a general bond with surety or security:

Provided that it shall be sufficient to provide a letter of undertaking by an applicant manufacturer against whom no show cause notice has been issued under sub-section (4) or sub-section (5) of section 11A of the Act or where no action is proposed under any notification issued in pursuance of rule 12CCC of the Central Excise Rules, 2002 or rule 12AAA of the CENVAT Credit Rules, 2004."

You have to obtain central excise registration as per Para 2 of the above Notification.