CHAPTER 8

EXPORT UNDER CLAIM FOR REBATE

Part-I

Export to all countries except Nepal and Bhutan
1. Export of excisable goods (other than mineral oils supplied as ship stores toaircraft on the foreign run) to all countries except Nepal and Bhutan

1.1 Conditions relating to the said export are, as follows:

(i) It is essential that the excisable goods shall be exported after payment ofduty, directly from a factory or warehouse. The condition of “payment ofduty” is satisfied once the exporter records the details of removals in theDaily Stock Account maintained under rule 10 of the said Rules, whereasthe duty may be discharged in the manner specified under rule 8 of thesaid Rules, i.e. on fortnightly or monthly basis, as the case may be.

(ii) In certain cases, the Board may issue instructions/procedures for exportingthe duty paid goods from a place other than the factory or thewarehouse. In this regard, a general permission has been granted inrespect of goods where it is possible to correlate the goods and their dutypaid character.

(iii) The excisable goods shall be exported within six months from the date onwhich they were cleared for export from the factory of manufacture orwarehouse. This date will be indicated on the ARE.1 and invoice issued forthe purpose. However, the Commissioner of Central Excise has powers toextend this period, for reasons to be recorded in writing in any particularcase. The exporter will be required to submit written request to theCommissioner specifying the reasons why they could not export within thestipulated six months’ period. The Commissioner should give his decisionwithin seven working days of the receipt of the request. It should also benoted that such permissions should not given in a routine manner.

(iv) The excisable goods supplied as ship’s stores for consumption on board avessel bound for any foreign port are covered by the notificationmentioned above. in such quantities as the Commissioner of Customs atthe port of shipment may consider reasonable;

(v) The market price of the excisable goods at the time of exportation shouldnot be less than the amount of rebate of duty claimed;(vi) The rebate claim will be admissible only if the amount of rebate of dutyadmissible is five hundred rupees or more.

(vii) The rebate of duty paid on those excisable goods export of which isprohibited 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 (Annexure-14), which shall be prepared inquintuplicate (5 copies). This is similar to the erstwhile AR.4. This document shall bearrunning serial number beginning from the first day of the financial year. During this year,for the sake of continuity, the serial number, as started from 1.4.2001, may continue. Thestationary for AR.4 Form may be used with modified name “ARE.1” during this financialyear. On A.R.E.1, certain declarations are required to be given by the exporter. Theyshould be read carefully and signed by the exporter or his authorised agent. The differentcopies of ARE.1 forms should be of different colours 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 righthand 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. Thesame may be done by the exporter on their letterhead and filed with the requisitedocuments.

3. Procedure for clearance for export

3.1 The exporter has two optional procedures regarding the manner in which he mayclear the export consignments from the factory or warehouse, namely: -

(i) Examination and sealing of goods at the place of despatch by aCentral Excise Officer.

(ii) Under self-sealing and self-certification

4. Sealing of goods and examination at place of despatch

4.1 The exporter is required to prepare five copies of application in the Form ARE-1,as per format specified in Annexure-I to Notification No. 40/2001-CE(N.T.),dated 26.6.2001. The goods shall be assessed to duty in the same manner as the goodsfor home consumption. The classification and rate of duty should be in terms of CentralExcise Tariff Act, 1985 read with any exemption notification and/or Central Excise (No.2)Rules, 2001. The value shall be the “transaction value” and should conform to section 4or section 4A, as the case may be, of the Central Excise Act, 1944. It is clarified that thisvalue may be less than, equal to or more than the F.O.B. value indicated by the exporteron the Shipping Bill.

4.2 The duty payable shall be determined on the ARE.1 and invoice and recorded inthe Daily Stock Account it should be paid in the manner specified in rule 8 of the saidRules.

4.3 The exporter may request the Superintendent or Inspector of Central Excisehaving jurisdiction over the factory of production or manufacture, warehouse orapproved premises for examination and sealing at the place of despatch 24 hours inadvance, or such shorter period as may be mutually agreed upon, about the intendedtime of removal so that arrangements can be made for necessary examination andsealing.

4.4 In case of exports under Duty Exemption Entitlement Certificate Scheme (DEEC),Duty Exemption Pass Book Scheme (DEPB) and claim for Drawback, the Superintendentof Central Excise shall also examine and seal the consignment and sign the documents intoken of having done so. In exceptional cases, where the exporter has unblemishedtrack record of compliance (Central Excise) and where there is non-availability ofSuperintendent of Central Excise due to leave, vacant post or other reasonable causes,the jurisdictional Deputy/Assistant Commissioner of Central Excise may permitexamination and sealing by Inspector. Other types of export may be examined andsealed by the Inspector of Central Excise.

4.5 The Superintendent or Inspector of Central Excise, as the case may be, will verifythe identity of goods mentioned in the application and the particulars of the duty paidor payable. If he finds that the declaration in ARE.1 and the invoices are correct from thepoint of view of identity of goods and its assessment to duty, and that the exporter hasrecorded the duty payable in Daily Stock Account, he shall seal each package or thecontainer 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-sides-closed container by using numbered One time Lock/Bottle seals or in such othermanner as may be specified by the Commissioner of Central Excise by a special orgeneral written order. Thereafter, the said officer shall endorse and sign each copy of theapplication in token of having such examination done;

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, thedistribution of ARE.1 shall be, as follows:

Original (First Copy)	The said Superintendent or Inspector of Central Exciseshall return to the exporter immediately afterendorsements and signature
Duplicate (Second Copy)	The said Superintendent or Inspector of Central Exciseshall return to the exporter immediately afterendorsements and signature.
Triplicate (Third Copy)	Sent to the officer with whom rebate claim is to befiled, either by post or by handing over to the exporterin a tamper proof sealed cover after posting theparticulars in official records.
Quadruplicate (Fourth Copy)	Retain for official records
Quintuplicate (Fifth Copy)	Optional copy - The said Superintendent or Inspectorof Central Excise shall return to the exporterimmediately after endorsements and signature.

5.2 Export from place other than factory or warehouse (including diversion of dutypaid goods for export)

5.2.1 Where goods are not exported directly from the factory of manufacture orwarehouse, the distribution of A.R.E.1 will be same as above except that the triplicatecopy of application shall be sent by the Superintendent having jurisdiction over thefactory of manufacture or warehouse who shall, after verification forward the triplicatecopy in the manner specified above.

6. Dispatch of goods by self-sealing and self-certification

6.1 Self-sealing and self-certification is a scheme where the exporter who is amanufacturer or owner of a warehouse, may remove the goods for export from hisfactory or warehouse without examination by a Central Excise Officer. This procedure willalso be permitted in the cases where a merchant-exporter procures the goods directlyfrom a factory or warehouse. In both cases, the manufacturer of the export goods orowner of the warehouse shall take the responsibility of sealing and certification. For thispurpose the owner, the working partner, the Managing Director or the CompanySecretary, of the manufacturing unit of the goods or the owner of warehouse or a person(who should be permanent employee of the said manufacturer or owner of thewarehouse holding reasonably high position) duly authorised by such owner, workingpartner or the Board of Directors of such Company, as the case may be, shall certify onall the copies of the application (A.R.E. 1) that the goods have been sealed in hispresence.

6.2 The exporter shall distribute of 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 withthe goods
Triplicate (Third copy) and Quadruplicate(Fourth copy)	Superintendent or Inspector of CentralExcise having jurisdiction over the factoryor warehouse within twenty four hours ofremoval of the goods
Quintuplicate (Fifth copy)	Optional copy - Send to the place ofexport along with the goods

6.3 The said Superintendent and Inspector of Central Excise shall verify the particularsof assessment, the correctness of the amount of duty paid or duty payable, its entry inthe Daily Stock Account maintained under rule 10 of the said Rules (the manufacturer orwarehouse owner will be required to present proof in this regard), corresponding invoiceissued under rule 11. If he is satisfied with the particulars, he will endorse the relevantA.R.E. 1 and append their signatures at specified places in token of having done theverification. In case of any discrepancy, he will take up the matter with the assessee forrectification and also inform the jurisdictional Deputy/Assistant Commissioner. Onceverification 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 claimis to be filed, either by post or by handingover to the exporter in a tamper proofsealed cover after posting the particulars inofficial records
Quadruplicate (Fourth copy)	Send to the officer with whom rebate claimis to be filed, either by post or by handingover to the exporter in a tamper proofsealed cover after posting the particulars inofficial records

7. Examination of goods at the place of export

7.1 The place of export may be a port, airport, Inland Container Depot, CustomsFreight 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 otherduly 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 toestablish the identity and quantity, i.e. the goods brought in the Customs area for exporton an A.R.E. 1 are the same which were cleared from the factory. The Customsauthorities also examine the goods for Customs purposes such as verifying for certainexport incentives such as drawback, DEEC, DEPB or for determining exportability of thegoods.

7.4 For Central Excise purposes, the Officers of Customs at the place of export shallexamine the consignments with the particulars as cited in the application (A.R.E. 1) and ifhe finds that the same are correct and the goods are exportable in accordance with thelaws for the time being in force (for example, they are not prohibited or restricted frombeing exported), shall allow export thereof. Thereafter, he will certify on the copies of theA.R.E. 1 that the goods have been duly exported citing the shipping bill number anddate and other particulars of export.

7.5 The officer of customs shall return the original and quintuplicate (optional copyfor exporter) copies of application to the exporter and forward the duplicate copy ofapplication either by post or by handing over to the exporter in a tamper proof sealedcover to the officer specified in the application, from whom exporter wants to claimrebate. However, where exporter claims rebate by electronic declaration on ElectronicData Inter-change system of Customs, the duplicate shall be sent to the Excise RebateAudit Section at the place of export.

7.6 The exporter shall use the quintuplicate copy for the purposes of claiming anyother 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 CentralExcise:-Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factoryof production of export goods or the warehouse; orMaritime Commissioner.

8.2 It shall be essential for the exporter to indicate on the A.R.E. 1 at the time ofremoval of export goods the office and its complete address with which they intend tofile 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 datesamount 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 [in case where claimant in 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 originaland 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 thejurisdictional Superintendent of Central Excise (Range Office), the rebate sanctioningauthority will sanction the rebate, in part or full. In case of any reduction or rejection ofthe claim, an opportunity shall be provided to the exporter to explain the case and areasoned order shall be issued.

8.5 Where the individual rebate claim exceeds 5 lakh rupees, they shall be pre-auditedbefore these are disbursed.

9. Export by parcel post

9.1 In case of export by parcel post after the goods intended for export have beensealed, the exporter shall affix to the duplicate application sufficient postage stamps tocover postal charges and shall present the documents, together with the package orpackages to which it refers, to the postmaster at the Office of booking.

10. Filing of rebate claims by electronic declaration and sanction thereof throughElectronic Data Inter-change (EDI)

10.1 The new concept of filing of rebate claim and its sanction through EDI establishedby the Customs formations at different ports/airports/ICDs/CFSs has been incorporated inthe new procedure. However, its implementation is dependent upon development ofsoftware and formats of electronic forms, administrative set-up at the places of exportsfor auditing such claims and putting in place the necessary hardware. The new processwill also require to be tested. This may take some time. Accordingly, the provision hasbeen made that this facility will be available at such places and from such time as maybe specified by the Board.

10.2 For this purpose, the expression ‘electronic declaration” has been defined as thedeclaration of the particulars relating to the export goods, lodged in the CustomsComputer System, through the data-entry facility provided at the Service Centre or thedate communication networking facility provided by the National Informatic Centre,from the authorised person’s computer.

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