CHAPTER 8

EXPORT UNDER CLAIM FOR REBATE

Part-II

Export to Nepal or Bhutan
1. Introduction

1.1 For export to Nepal, a different procedure has to be followed considering thatthe rebate is granted to the His Majesty’s Government of Nepal based on Indo-NepalTreaty. Currently, the procedure is specified only for exports through specified LandCustoms Stations. There is no rebate procedure for Bhutan.

2. Conditions of export

2.1 The conditions of export are similar to export to other countries. For clarity, theseare explained below: -

(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 Central Excise (No.2)Rules, 2001 (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. on fortnightly or monthly basis, as the case may be.

(ii) In certain cases, the CBEC may issue instructions/procedures forexporting the duty paid goods from a place other than the factory or thewarehouse.

(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 Nepal Invoice issued for thepurpose. 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 market price of the excisable goods at the time of exportation shouldnot be less than the amount of rebate of duty claimed.

(v) The rebate claim will be admissible only if the amount of rebate of dutyadmissible is five hundred rupees or more.

(vi) 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.

(vii) The whole or that part of duty as is granted as rebate to the exporter is notallowed as rebate to His Majestys Government of Nepal.

(viii) The goods can only be exported by land through any of the followingland customs stations, 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 specifiedby the CBEC.

3. Nepal Invoice

3.1 The Format of ‘Nepal Invoice’ has been specified in the notification no. 40/2001-CE(N.T.) dated 26.6.2001 (Annexure-21). It is similar to the erstwhile formexcept minor modifications such as incorporating “duty paid or payable” in place of“duty paid” so as to attune it with the Fortnightly Payment System.

4. Procedure for export to Nepal

4.1 The exporter is required to prepare five copies of Nepal Invoice. The goods shallbe assessed to duty in the same manner as the goods for home consumption. Theclassification and rate of duty should be in terms of Central Excise Tariff Act, 1985 readwith any exemption notification and/or the said Rules. The value shall be the “transactionvalue” and should conform to section 4 or section 4A, as the case may be, of the CentralExcise Act, 1944. It is clarified that this value may be less than, equal to or more than theF.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 theDaily 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 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 Assistant/Deputy 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 Nepal Invoice are correct from the point ofview of identity of goods and its assessment to duty, and that the exporter has recordedthe duty payable in Daily Stock Account, he shall seal each package or the containerensuring 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-closedcontainer by using numbered One time Lock/Bottle seals or in such other manneras may be specified by the Commissioner of Central Excise by a special or generalwritten order. Thereafter, the said officer shall endorse and sign each copy of theapplication in token of having such examination done;

4.6 The distribution of the Nepal invoice shall be, as follows:Original (First copy) Hand over to the Exporter or his agent along with thegoods, packages or container after sealing it.

Original(First Copy)	Handed over 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 orhis agent by the Central Excise Officer for being handedover to the officer of Customs In-Charge of the concernedland customs station
Triplicate(Third Copy)	To be put in a sealed cover and given to the exporter orhis agent by the Central Excise Officer for being handedover to the officer of Customs In-Charge of the concernedland customs station
Quadruplicate(Fourth 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 toNepal, 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-chargeof the land customs station along with the original copy of invoice and thesealed cover containing duplicate and triplicate copies;

5.2 The said officer shall examine the goods with reference to the declarations in theNepal Invoice. 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 said customsofficer shall make necessary entries in the register maintained at the land customs stationand allow the goods to cross into the territory of Nepal. He may, to satisfy himself as tothe identity of the packages, goods or containers from the particulars shown on theinvoice, open container or packages and examine the goods, especially where the sealsare broken;

5.3 He will also certify on each of the three copies of the invoice to this effect andsimultaneously indicate the running serial number in red ink prominently visible andencircled against Item 3 on all the three copies of the invoice.

5.4 the customs officer, then deliver the original copy of the invoice duly endorsed tothe exporter or his agent alongwith the goods for presentation to the Nepalese CustomsOfficer.

5.5 He shall also send, directly the duplicate and triplicate copies of the invoice tothe Nepalese Customs Officer in-charge of the check post through which the goods areto be imported into Nepal;

5.6 the goods will then be produced before the Nepalese Customs Officer at thecorresponding border check post along with the original copy of the invoice. TheNepalese Customs Officer, shall deal with the original copy as directed by His MajestysGovernment of Nepal and return the duplicate copy, after endorsing his certificate ofreceipt of goods in Nepal directly to the officer of customs in-charge of the land customsstation;

5.7 the officer in-charge of the land customs station shall forward the duplicate copyto 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 shouldkeep a note of the return of duplicate copies from the Nepalese Customs Officer andremind the exporter for such copies as have not been received.

6. Procedure to be followed by the Directorate General of Inspection, Customs andCentral Excise (Nepal Refund Wing), New Delhi

6.1 The Directorate General of Inspection, Customs and Central Excise (Nepal RefundWing), New Delhi [hereinafter referred to as “the Directorate”] shall maintain separateregisters for each Indian Border Customs Check Post.

6.2 The duplicate invoice will be entered in the respective registers showing therunning 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 inrespect of all certificates of exports received during that month and shall prepare aconsolidated statement to arrive at the amount of rebate due to His MajestysGovernment of Nepal.

6.4 One copy of the recapitulation statement shall be forwarded to theCommissioner of Central Excise concerned for verifying the payment of rebate toNepal 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 theduty amount and quantity indicated. Internal Audit Department of the Commissionerateconcerned should check this factor by comparison with the recapitulation statementforwarded 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 ofthe Directorate for making necessary adjustment.

6.6 One copy of the recapitulation statement shall be forwarded to His MajestysGovernment of Nepal.

6.7 One copy of the recapitulation statement shall remain as office copy with theDirectorate.

6.8 After receiving the recapitulation statement, the Commissioner will get averification conducted that the concerned factories have actually paid the duty ofexcise against which the rebate is to be given and the Commissioner/PAO of thatCommissionerate shall furnish a certificate to the Directorate to the effect that all theconcerned factories have paid the amounts of duty as indicated in the Annexure to therecapitulation statement.

6.9 In case the Directorate does not receive the duplicate copy of the invoice fromthe Officer in-charge of the Indian Land Customs Station and the triplicate copy is notreceived by the Nepal Government, necessary check should be made with the officerin-charge of the Indian Land Customs Station concerned as to the whereabouts of theparticular invoice.

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