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TMI BlogEXPORT WITHOUT PAYMENT OF DUTYX X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 (32 of 2003); (g) the Education Cess on excisable goods as levied and collected under Clause 91 read with Clause 93 of the Finance(No. 2) Act, 2004. (23 of 2004) Board vide Circular No. 807/4/2005-CX., dated 10th February, 2005 has clarified that Additional Duty of Excise or Special Additional Duty of Excise leviable under different sections of Finance Acts are not required to be paid for the goods exported under Bond. 1.2 Some important changes have been introduced under the present procedure, which are mentioned below and explained in detail subsequently: - (i) The concept of furnishing of a 'Letter of Undertaking' by a manufacturer-exporter has been introduced. The clearances for export by a manufacturer-exporter will be effected similar to clearances for home consumption after he furnishes the Letter of Undertaking. (ii) The merchant-exporters are required to file 'bond' in specified format. A manufacturer-exporter may also file bond and follow the 'bond-procedure' specified in the notification. (iii) Under bond procedure, the concept of 'self-debit' by the exporter has been introduced. The exporter need not go to the 'bond-accepting authority for a 'debit-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the erstwhile AR.4. This document shall bear running serial number beginning from the first day of the financial year. On A.R.E.1, certain declarations are required to be given by the exporter. These should be signed by the exporter or his authorised agent. The different copies of ARE.1 forms should be of different colours indicated below: Original White Duplicate Buff Triplicate Pink Quadruplicate Green Quintuplicate Blue 3.2 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. 3.3 An invoice shall also be prepared in terms of rule ii of the said Rules. It should be prominently mentioned on top FOR EXPORT WITHOUT PAYMENT OF DUTY'. 3.4 The Letter of Undertaking is to be furnished in the Form UT-1 specified in Annexure-15 (See Part 7) to Notification No. 42/2001-Central Excise (N.T.), supra. Any manufacturer, who is an assessee under Central Excise Rules, 2002, shall furnish a Letter of Undertaking only to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over his factory from which he intends to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity or surety as may be specified by the concerned bond accepting authority. Specified categories/merchant exporters namely status holders (Super Star Trading House, S Trading House, Trading House, Export House) and exporters registered with recognized Export Promotion Councils would be exempted 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. The bond shall be in a sum equal at least to the duty chargeable on the goods for the due arrival of export goods at the place of export and their export there from under Customs or as the case may be postal supervision. The officer, who will accept the bond, will also be responsible for discharging that bond upon furnishing proof of export by the exporter. 3.9 The bond shall not be discharged unless the goods are duly exported, to the satisfaction of the Deputy/Assistant Commissioner of Central Excise or Maritime Commissioner or such other officer as may be authorized by Board on this behalf within the time allowed for such export or are otherwise accounted for to the satisfaction of such officer, or until the ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered with recognized Export Promotion Councils provided that - (i) The exporter has not come to adverse notice of the Central Excise or Customs Department in last three years from the date under consideration; (ii) All the formalities required under Central Excise Act and rules made there under are regularly complied with by the exporter, especially regarding timely submission of proof of export and deposit of duty with interest in time where proof of export is not received within stipulated time frame; (iii) A self-attested copy of the proof of Status (Super Star Trading Houses, Star Trading Houses, Trading Houses and Export Houses) and merchant exporters registered with Export Promotion Councils from concerned authority (Ministry of Commerce and Industry - Directorate General of Foreign Trade) is submitted. 5.2 Other exporters shall be required to furnish surety equal to full bond amount or security equal to twenty five percent. (25%) of the bond amount, along with the bond. 5.3 The bond shall be furnished on non-judicial stamp paper of the value as applicable in the State in which bond is being furnished. 5.4 .Where export is effected by merchant-exporter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the proof of export and in case of any defaults by the exporter, to recover the sum and enforcing the bond. The certificate should be provided according to the volume of exports projected by the exporter (which should also reflect in the amount of bond). The compliance exporter in submitting the requisite documents towards 'proof of export' shall be another criterion. 6.2.1 The second part of CT-1 is very important. The exporter shall determine the description of goods for procurement from a particular factory or warehouse or an approved place of storage, quantum, value of procurement (provisional figures) and duty involved therein (provisional figures - but based on correct rate of duty and contracted transaction value). This 'duty' element will be debited provisionally. The exporter shall ensure that at the time of debit, sufficient credit is available at that point of time to cover the said debit. The provisional debit shall be converted into final debit within a period of seven days from the date of removal of goods on A.R.E.1, based on the 'duty payable' in Cleared for export reflected in the said A.R.E.1 and invoice. 6.2.2 The manufacturer shall record the clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehouse the duly completed examination report must accompany the export goods to the port/airport of export. (Circular No. 630/21 /2002-Cx., dated 27-3-2002). 7.4 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. All other types of export may be examined and sealed by the Inspector of Central Excise. 7.5 The Superintendent or Inspector of Central Excise, as the case may be, will verify the identity of goods mentioned in the application and also verify whether the duty self-assessed is appropriate and that the particulars of the duty payable have been recorded in the Daily Stock Account. If he finds that the declaration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers-exporters subject to compliance with the existing instructions. The Exporter shall however, endorse the certificate on ARE-1/ARE 2. Export goods, which are self- sealed by the manufacturer Exporter himself shall be subjected to examination norms at the part of export as prescribed by customs from time to time. It may, however, be noted that the procedure for examination and sealing of the goods at the place of the dispatch by central excise officers is purely optional and the option shall remain only with the manufacturer-exporters. (Circular No. 736/52/2003-CX. Dated 11.8.2003). 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-I/ARE-2 have checked by me and the goods have been packed and sealed with lead seal/one time lock seal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of export 12.1 The place of export may be a port, airport, Inland Container Depot, Customs Freight Station or Land Customs Station. 12.2 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. 12.3 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. 12.4 For Central Excise purposes, the Officer 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 are exportable in accordance with the laws for the time being in force (for example, t are not prohibited or restricted from being exported), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with them and the A.R.E.1 or its summary received directly from the place of export (hard copies or electronic summary or e-mail) within 15 days of the receipt. The Divisional Officer shall accept the proof of export or initiate necessary action in case of any discrepancy. 13.5 In case of other bond-accepting authority, their office will do this work. The bond-accepting authority shall accept the proof of export or initiate r action in case of any discrepancy. He will also intimate about the acceptance of proof of export or any other action to the Deputy/Assistant C of Central Excise from whose jurisdiction goods were cleared for export. 13.6 In case of non-export within six months from the date of clearance for export (or such extended period, if any, as may be permitted by the Deputy Commissioner of Central Excise or the bond-accepting authority) or any discrepancy, the exporter shall himself deposit the excise duties along with interest on his own immediately on completion of the statutory time period or within ten days of the Memorandum given to him by the Range/Division office or the Office of the bond-accepting authority. Otherwise necessary action can be initiated to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Head Office/factory is located (within the jurisdiction of the Commissionerate). in such case the exporter can procure the goods from a factory located anywhere in India. 14.3 For clarification, it is mentioned that the Deputy/Assistant Commissioner of Central Excise (Export) will not deal with the exports where the manufacturer-exporters are permitted to export by furnishing an Annual Undertaking (UT-I) in lieu of bond. PART-Ill SIMPLIFIED EXPORT PROCEDURE FOR EXEMPTED UNITS 1. Introduction 1.1 Units, which are fully exempted from payment of duty by a notification granting exemption based on value of clearances for home consumption, may be exempted from filing ARE.1 and Bond till they remain within the full exemption limit. The following simplified export procedure shall be followed in this regard by such units: - 2. Filing of declaration 2.1 Manufacturers exempted from payment of duty will not be required to take Central Excise Registration. They shall however, file a declaration in terms of Para 2 of Notification No. 36/2001-CE (NT) dated 2ó.6.2001, and obtain declarant code number [ that they are exempted from declaration, but for this procedure.] 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flight no., of the aircraft, vehicle no. - by which the goods were exported out, date of export, and EGM Number! Airway Bill Number (wherever applicable); (ii) Customs attested copy of Bill of lading; and (iii) Foreign Exchange Remittance Certificates. 4.1.2 In the case of export through Merchant-exporter the document prescribed by Sales Tax Department will be accepted as the proof of export. Sales made by manufacturer of the goods' to the merchant exporter which ultimately are exported are exempt from Central Sales Tax. The Sales Tax Department issues booklet to the merchant exporters containing serially numbered H Forms form or equivalent Sales Tax form. After the goods have been exported by the merchant exporters, the latter issues these forms to the manufacturers of the goods. The merchant exporters in turn have to account all these serially numbered forms to the Sales Tax Department by furnishing a proof that the goods have been exported out. These proofs are in the form of presentation of the Shipping Bill duly completed by the customs, bill of lading, foreign exchange remittance certificates etc. The liability of the manufacturers to the Central Sales Tax gets disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduction 1.1 The conditions and procedure for export to Nepal and Bhutan without payment of duty (under Bond) have been specified in Notification No. 45/2001-Central Excise (N.T.) dated 26.6.2001(hereinafter referred to as the 'said notification'). The term 'Exporter' has been used in this notification in general sense and hence, this notification is applicable to both Manufacturer-exporters and Merchant-exporters. 2. Places from where goods can be exported 2.1 Under the said notification, export can be made from any of the following places (i) the factory of production or manufacture, (ii) warehouse, or (iii) any other premises as may be approved by the Commissioner of Central Excise. 3. Forms to be used 3.1 The exporter is required to file a general bond in the Form specified in the said notification (See Annexure-16 in Part 7) with such security or surety as may be specified by the concerned bond accepting authority. The bond shall be in a sum equal at least to the duty chargeable on the goods for the due arrival of export goods at the place of export (Land Customs Station) and their export there from under Customs supervision. The officer who will accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtifies that the import is for the personnel of the diplomatic community; (ii) The exporter shall furnish a bond in Form specified in Annexure-16 (See Part 7) of the above-mentioned notification before the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory, warehouse, or the approved premises or such other officer as authorised by the Board on this behalf, from where the goods are removed for export to Nepal, as the case may be, or Bhutan; (iii) After the exports are effected the exporter shall furnish a certificate of remittances from the Reserve Bank of India or an authorised bank in India, showing that full payment for the goods has been duly received in freely convertible currency, as defined in the said notification. On receipt of such a certificate and on the satisfaction that the goods have been exported in terms of the bond, the bond accepting authority shall discharge the exporter of his liabilities under the bond. 4.2 Export to Nepal in bond against payment in Indian rupee 4.2.1 As an exception to the above category of export, capital goods, as defined in the said notification may be exported under bond directly from the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Aided Projects in Nepal and the Embassy Cooperative Store and Embassy Petrol Pump located in Nepal for the bonafide use of officers and staff of the Embassy in Nepal 4.4.1 Export in bond for supplies to Government of India Aided Projects in Nepal and the Embassy Cooperative Store and Embassy Petrol Pump located in Nepal for the bonafide use of officers and staff of the Embassy in Nepal shall be subject to the following conditions, namely: - (i) the exporter shall furnish a bond in specified Form to the Deputy/Assistant Commissioner of Central Excise; and (ii) the First Secretary (Economic), Embassy of India, Nepal, certifies the signature and stamp or seal of the person authorised to place the order for supply of excisable goods to the specified Government of India Aided Projects in Nepal; 4.5 Export without payment of duty to Kurichu Hydro Electric Project and Tala Hydro Electric Project in Bhutan 4.5.1 Export of all excisable goods without payment Of duty to Kurichu Hydro Electric Project and Tala Hydro Electric Project in Bhutan shall be subject to the following conditions, namely: - (i) The exporter shall furnish a bond in Form in specified Form b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application is in order the DGICCE shall make note of the amendments in the relevant entries. (d) The DGICCE shall forward copy of the amended contract and the amended list of items, if any, to the concerned Commissioner of Central Excise. 4.5.3 Finalisation of Contract (a) Each Project Authority shall submit a statement of supplies received on quarterly basis along with relevant invoices and other documents to the DGICCE within one month from the last date of the quarter. (b) The Commissioner of Central Excise to whom a registered contract has been forwarded shall forward a statement, after all the items covered under the contract have been exported, to the DGICCE. (c) The DGICCE shall, on receipt of the statement, reconcile both and, if satisfied, finalise the contract and close the entry in the register. 4.5.4 There should be a release order from the officer authorised by the General Manager of the concerned project authority covering he goods; 4.5.5 The exporter shall furnish a bond in the specified Form to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory or warehouse or the approved premises or from where the goods ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely, Sukhiapokhri, Panitanki, Jogbani, Jayanagar, Bairgania, Bhimnagar, Bitamore (Sursand), Raxaul, Sonauli, Barhni, Nepalganj Road, Shohratgar (Khunwa), Jarwa, Katarniaghat, Gauriphanta, Banbasa, Jhulaghat, Dharchula, Naxalbari, Galgalia, Kunauli, Sonabarsa, Tikonia, or such other check-post as may be specified by the Board; 6. Procedure at the Land Customs Station 6.1 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 the invoice and the sealed cover containing duplicate, triplicate and quadruplicate copies and obtain acknowledgement; 6.2 Where the contents of all the copies of invoices tally and the packages, goods or container are satisfactorily identified with their seals in tact, the officer of customs in-charge of the land customs station shall make necessary entries in the register maintained at the land customs station and allow the goods to cross into the territory of Nepal or Bhutan and certify accordingly on each of the four copies of the invoice and indicate the running serial number in red ink prominently visible and encircled. In case the seals are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory of exports. 7.2 The general procedure would be - the exporter shall submit the quadruplicate copy duly endorsed by the officer of customs in-charge of land customs station to the Central Excise officer who has accepted the bond along with bank certificate, evidencing receipt of payment in freely convertible currency (in Indian Rupee in particular category), within six months from the date of removal of the goods. It may be noticed that earlier, the above mentioned period has been extended from 'three' months to 'six' months, as compared to erstwhile notification. 7.3 The Central Excise officer will tal1y the particulars with quintuplicate copy of the invoice received from the Central Excise officer who has allowed clearance from the factory or warehouse or any other approved premises and make suitable entries in Bond Account Of the exporter, giving provisional credit or discharging the bond provisionally. 7.4 On receipt of the duplicate copy of invoice, duly endorsed by customs officer of Nepal or Bhutan from the customs officer in charge of land customs station, certifying export of the goods and after tallying the particulars with those in quadruplicate copy of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be asked. 2. Re-entry of the goods, cleared for export under bond but not actually exported, in the factory of manufacture. 2.1 The excisable goods cleared for export under bond or undertaking but not actually exported for any genuine reasons may be returned to the same factory provided — (i) such goods are returned to the factory within six months along with original documents (invoice and A.R.E.1); (ii) the assessee shall give intimation of the re-entry of each consignment in Form D-3 within twenty-four hours of such re-entry; (iii) such goods are to be stored for separately at least for 48 hours from the time intimation is furnished to Range Office or shorter period if verification is done by the Superintendent of Central Excise in the manner mentioned subsequently; and (iv) the assessee shall record details of such goods in the daily stock account and the goods taken in to the stock in the factory; 2.2 The Superintendent of Central Excise will verify himself or though Inspector in charge of the factory, about the identity of such goods with reference to invoice, A.R.E.1 and the daily stock account in respect of 5% of intimations, within another 24 hours of recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequent factory shall supervise the opening of the seal of container, loading of goods (duly sealed if these goods are to be loaded in open truck/vehicle) belonging to the subsequent factory in vehicle or container and sealing of the container. (iii) The exporter or the manufacturer shall pay the supervision charges. 5. Samples of export goods 5.1 The Central Excise Officer examining the consignment would draw representative samples wherever necessary in triplicate. He would hand over two sets of samples, duly sealed, to the exporter or his authorized agent, for delivering to the Customs Officer at the point of export. He would retain the third set for his records. The instructions and procedure for drawal of samples specified by the Board should be followed. PART-VI MANUFACTURE OF EXPORT GOODS IN BOND 1. Introduction 1.1 The Board has, by Notification No. 43/2001-Central Excise (N.T.) dated 26.6.2001 [ hereinafter referred to as the 'said notification'] notified the conditions, safeguards and procedures for procurement of the excisable goods without payment of duty for the purpose of use in the manufacture or processing of export goods and their exportation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count 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. 2.2 Verification of Input—output ratio and grant of permission 2.2.1 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 duty, he may grant permission to the applicant for manufacture or processing and export of finished goods and countersign the application in the manner specified in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001; 2.2.2 It is clarified that for the sake of convenience and transparency, inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 process; or (b) 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; (c) 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; 5. Procedure for export 5.1 The goods shall be exported on the application in Form A.R.E. 2 specified in the Annexure-23 (See Part 7) and the procedures specified in the Notification No. 42/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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