CHAPTER 7

EXPORT WITHOUT PAYMENT OF DUTY

Part-V

Miscellaneous Export Provisions
1. Cancellation of Export documents

1.1 If the excisable goods cleared under A.R.E.1 are not exported for any reason andthe exporter intends to divert the goods for home consumption, he may request in writingthe authority who accepted the bond or letter of undertaking to allow cancellation ofapplication, and diversion of goods for consumption in India. He will be permitted to doso if he pays the duty as specified in the application along with interest at the rate oftwenty four percent per annum on such duty from the date of removal for export fromthe factory or warehouse till the date of payment of duty. The permission shall begranted within 3 working days. Since duty assessment on A.R.E 1 has to be done innormal course, there will not be any need for re-assessment by the Department or theassessee unless there are reasons to believe that the assessment was not correct. Afterthe duty is discharged, the exporter may take credit in his running bond (where bond isfurnished) on the basis of letter of permission, invoice and TR-6 Challans on which duty ispaid. He shall record these facts in the Daily Stock Account

1.2 If the exporter, after clearing the goods for export without payment of duty,intends to change the destination or buyer or port/place of export, he may do soprovided he informs the bond/LUT accepting authority in writing about the changes andmakes necessary changes in all the copies of A.R.E.1 and the invoices. If he intends to cancel the original export documents and issue fresh ones, the same may be doneunder permission and authentication by bond/LUT accepting authority who will ensurethat the serial no. and date of the initial documents are endorsed on the freshdocuments. In such cases, if bond was furnished for single consignment, fresh bond maynot be asked.

2. Re-entry of the goods, cleared for export under bond but not actually exported, inthe factory of manufacture.

2.1 The excisable goods cleared for export under bond or undertaking but notactually exported for any genuine reasons may be returned to the same factoryprovided –

(i) such goods are returned to the factory within six months along withoriginal documents (invoice and A.R.E.1);

(ii) the assessee shall give intimation of the re-entry of each consignment inForm 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 thetime intimation is furnished to Range Office or shorter period if verificationis done by the Superintendent of Central Excise in the manner mentionedsubsequently ; and

(iv) the assessee shall record details of such goods in the daily stock accountand taken in the stock in the factory;

2.2 The Superintendent of Central Excise will verify himself or though Inspector incharge of the factory, about the identity of such goods with reference to invoice, A.R.E.1and the daily stock account in respect of 5% of intimations, within another 24 hours ofreceipt of intimation.

3. Re-import of exported goods for repairs etc. and subsequent re-export

3.1 It has been provided in the Notification No. 42/2001-CE(N.T.), supra, thatthe exported excisable goods which are re-imported for carrying out repairs, re-conditioning,refining, re-making or subject to any similar process may be returned to thefactory of manufacture for carrying out the said processes and subsequent re-export. Itmay be noted that ‘re-import and re-export’ shall be governed by the provisions of theCustoms Act, 1962.

3.2 So far Central Excise is concerned, the manufacturer shall maintain separateaccount for return of such goods in a daily stock account and make suitable entry onthe said account after goods are processed, repaired, re-conditioned, refined or re-made.When such goods are exported, the usual export procedure shall be followed.

3.3 Any waste or refuse arising as a result of the said processes shall be removed fromthe factory on payment of appropriate duty or destroyed after informing the properofficer in writing at least 7 days in advance and after observing such conditions andprocedure as may be specified by the Commissioner of Central Excise and thereuponthe duty payable on such waste or refuse may be remitted by the said Commissioner ofCentral Excise.

4. Entry of goods in another factory of the same manufacturer for consolidation andloading of consignment for export:

4.1 Goods removed without payment of duty for export on A.R.E.1 from one factory(hereinafter referred to as ‘the first factory’) of a manufacturer are allowed to enter inanother factory of the said manufacturer (hereinafter referred to as the ‘subsequentfactory’) ONLY for the purpose of consolidation and loading of goods manufactured insubsequent factory and export therefrom subject to following conditions: -

(i) The exporter shall be required to get his goods examined and sealed ateach factory [the places of despatch] by a Central Excise Officer.

(ii) The export goods shall be brought under cover on invoice and A.R.E.1 inthe subsequent factory in original packing and duly sealed by CentralExcise Officers. In case goods are stuffed in a container, Central ExciseOfficer shall duly seal the container in the first factory and the sealing ofeach package shall not be insisted upon. The Central Excise Officerhaving jurisdiction over the subsequent factory shall supervise the openingof the seal of container, loading of goods (duly sealed if these goods areto be loaded in open truck/vehicle) belonging to the subsequent factoryin 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 representativesamples wherever necessary in triplicate. He would hand over two sets of samples, dulysealed, to the exporter or his authorized agent, for delivering to the Customs Officer atthe point of export. He would retain the third set for his records. The instructions andprocedure for drawl of samples specified by the Board should be followed.

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