A simplified brand rate fixation scheme has been put into effect vide letter F. No. 609/113/88- DBK dt. 11-10-88 as amended vide letters of even number dt. 1st of Oct. 1992 & 7th of Oct. 1992 by the Ministry of Finance. It is to supplement the existing scheme based on pre-verification of data. The Simplified Scheme has been extended to all sectors w.e.f. Jan 1, 1993.

Any exporter though eligible to the Simplified Scheme need not take advantage of it. The class of industries/exporters to which the Simplified Scheme is not applicable will continue to apply for brand rate fixation under the previous scheme based on pre-verification of data.

Eligibility

The revised simplified scheme as effective from Jan. 1, 1993 is applicable to following categories of manufacturers and exporters/products.

Manufacturer Exporters

(i) Manufacturer-exporters of all products having regular production of the items for which brand rate is sought.

(ii) The manufacturer-exporters should be a corporate body having a detailed accounting system, which is normally subject to statutory audit under the Company Law.

(iii) Manufacturer-exporters having registered as partnership firms who produce a Registration Certificate to this effect. Such firms should have been manufacturing export product for at least 2 years, and

(a) produce a certificate from the jurisdicional Asstt. Commission of Central Excise to this effect,

(b) produce a certificate from their bankers confirming the location of the manufacturing premises, their having an account for at least one year and that the bank is satisfied about the financial soundness of the applicant firm.

Such firms will also execute a bond and arrange post-verification of data within three months from the date of filing their application under the Simplified Scheme.

Manufacturers Exporting through Others

Manufacturers not directly exporting themselves but exporting through merchants of Export/Trading/Star Trading/Super Star Trading Houses will be eligible Simplified Brand Rate Fixation Scheme in respect of the specified products i.e., engineering goods, chemicals and electronic items, provided the application for fixation of the brand rate is filed by the manufacturer himself of those products against a disclaimer by the merchant-exporter However the Condition of their (manufacturers) being a corporate body having a detailed accounting system will hold good

Products

The scheme covers all products except in case of manufacturers exporting through merchant-exporters etc in such cases it will be applicable to only three product groups i.e. engineering items chemicals and electronic goods

Applicability

The facility of Simplified Scheme may be sought where -

(i) there is no All-Industry (A.I) rate i.e. for brand rate fixation or

(ii) through the A.I rate exists, the manufacturer- exporter is not satisfied with the same and claims a Special Brand Rate in terms of Rule 7 of the Drawback Rules

According to rule 7 it the existing rate of drawback is less than three-fourth (3/4th) of the duties paid on the materials or components used in the production or manufacture of the goods concerned he may make an application for fixation of appropriate amount or rate of drawback.

Shipment

Applications under the Simplified Scheme should be related to goods exported under a particular shipment. However, as at present, the exporter may apply for the same goods for a period of time if it is certified that the consumption pattern would be the same for successive shipments and the exporter has sufficient stock of the related inputs at the time of making the application, for their manufacture.

DEEC Cases

For goods of identical nature where consumption pattern or duties on inputs don"t change, particularly of shipments made under Advance Licence (DEEC) obligation cases, applications, for brand rate fixation should be made for shipments to be made for a period of time. Shipments under DEEC when sent over a period of time are generally of identical nature and exports will continue till the completion of export obligation.

The exporters working under the DEEC Scheme and desirous of claiming brand rate for the exports for unrebated duties should better file their applications for brand rate for the entire exports under the specified DEEC till its validity and not for individual shipments or limited periods taking care that the application is in time for the first shipment i.e. 60 days.

If, however the incidence of unrebated duties suffered on imports used for exports under DEEC shipments or otherwise varies from consignment to consignment (because of change in inputs or duties suffered thereon) individual consignmentwise application may not be avoidable.

Subsequent Shipments

For shipments other than those for which Brand Rate requests have already been made (either on individual consignment basis of on period of time basis) on which Brand Rate may have been granted or where the requests may still be under processing the exporter must make sure that a fresh application is made well within the time laid down as per Drawback Rules. Filing of fresh applications may be waived if consumption pattern/duty incidence etc., is certified to be indentical, and earlier applications show sufficient stock of input but a written request for brand rate for further shipments not covered by earlier request must be made in time. In the absence of any such timely applications/request on record, the exporters subsequent requests are bound to be rejected on consideration of limitation of time.

Rate and Amount of Drawback

No drawback is admissible where the amount or rate of drawback works out to less than 1%2 of the f.o.b. value of the product, except cases where the amount of drawback exceeds Rs. 500 per Shipping Bill. However, this condition of minimum 1% of f.o.b.value will not be applicable in case of postal exports and exports made against advance licences issued under Duty Exemption Scheme.

The f.o.b. value of the product should not be less than the total c.i.f. value of all imported materials used in the manufacture of that product. In other words, the value addition in respect of the particular product on which drawback has been claimed should not be negative.

No drawback is admissible if the present market value of the product is less than the amount of drawback due thereon.

No drawback is admissible if the total amount of drawback is less than Rs. 50/-.

In case of Special Brand Rates, 80% of the actual duties suffered by the exporter on the product should not .be less than the All Industry Rate of drawback available on the product.

Drawback of Anti-dumping Duty. The anti-dumping duty which is leviable under Sec. 9A of the Customs Tariff Act read with Sec. 12 of the Customs Act is rebatable as drawback in terms of Section 75 of the Customs Act. Drawback shall be admissible only where the inputs which suffered anti-dumping duty were actually used in the goods exported as confirmed by the verification conducted for fixation of brand rate. Hence, exporters should include the incidence of anti-dumping duty in their applications for fixation of brand rate/special brand rate.

Period for which Fixation can be Made

An exporter can apply for a brand rate, which would be valid for a period of time. No request for extension of the period should be made after 60 days from the expiry of the rate letter. Also see Chapter 11 for Extension of Brand Rate.

Shipping Bills

Where a brand rate application has been filed for one or more specific Shipping Bills, it is not possible to include more Shipping Bills by amending the application at a later stage. In case any shipping Bill has been left out of application, a new application covering that shipment should be filed within the prescribed period of 60 days/30 days, as the case may be.

Time Limit

Application must be submitted within the time limit as laid down in Rule 6/7 i.e. not later than 60 days of the date of export of any goods, for which brand rate is to be fixed. The delay can, however, be condoned for a period of 30 days under exceptional and genuine circumstances. This date will be the date on which "the let export order" is given. The applications received after 60/90 days can be relaxed further from 90 days to one year, in certain types of cases involving period of delay as listed in CBEC Circular No. 82/98.Cus dt. 29/10/98.

Applications for the grant of extension for delay in filing of the Drawback claim, are to be sent directly to the Directorate of Drawback. Ministry of Finance. Deptt. of Revenue, New Delhi, and not to the Commissioner of Central Excise.

Procedure

Application

Application for fixation of brand rate should be made in the prescribed proforma (Annexure\381 along with Statements DBK I, II, IIA, III and III-A (Annexure 37 to 41) and an indemnity bond (Annexure 39).

While one copy of the application is to be sent to the Deputy Secretary, Directorate 01 Drawback, Ministry of Finance (Deptt of Revenue" Jeevan Deep. Parliament Street, New Delhi-110001, two copies are to be submitted to the concerned Commissioner of Customs/Central Excise having jurisdiction over the factory.

Acknowledgement. Enclose with your application an acknowledgement showing the receipt of copy of application by the Commissioner of Central Excise Such evidence if not submitted along with brand rate application shall be furnished to the Directorate latest by one week of filing the brand rate application. No brand rates under the simplified scheme will be fixed till the evidence i.e. acknowledgement receipt is received from the exporter.

Signatures. The signature of the person signing on behalf of the company should invariably be attested by their banker.

Certifications

The Statements I, II, IIA, III and IIIA should be got certified as follows:

(i) Statement I of the application giving full details of wastages, by-products/co-products, with sale value thereof and consumption norms of the various inputs should be not only certified for its correctness by the Chief executive/production-in-charge of the applicant firm, but it should also be got certified by an independent Chartered Engineer qualified in the branch of engineering related to the export product. The certification of the Chartered Engineer should be in the form as given at the end of the Statement I. Where any material shown as wastage is being re-cycled or sold in the market, appropriate deductions will be made while arriving al the drawback rate

(ii) Statement II, IIA, III and IIIA, which give the details of stock and procurements of various materials imported and indigenous, used in the factory of production of the export product shall be got certified by an independent Cost Accountant/Chartered Accountant, who would also append the certificates as given at the end of these Statements. These Statements should indicate the numbers and dates of all Bills of Entry and Gate Passes and also the stock position three months prior to the date of exports. For example:

Date of Export- 1/12/93.
Stock Position -as on 1/9/93.

All procurements made within three months prior to the exports are to be shown in DBK-II in the case of imported inputs or in DBK-III in case of indigenous inputs, as the case may be:

(iii) Application under the Scheme should be related to goods exported under a particular shipment. However, as at present, the exporter may make application for the same goods for a period of time if it is certified that consumption pattern would be the same for successive shipments and the exporter has sufficient stock of the related inputs at the time of making the application, for their manufacture.

Indemnity Bond

The applicant should also send an indemnity bond (Annexure 39) bearing proper stamp binding himself to pay immediately the entire amount or such differential amount of drawback as may be determined by the Govt., if the data on post-facto verification is found to be incorrect in any respect requiring a withdrawal or change in the brand rate which may be issued on the basis of the data filed.

It need not be backed by any bank guarantee.

In case where the brand rate under the Simplified Scheme is to be fixed for a period of time the applicant should furnish the following information 1 in para 2 of Indemnity Bond.

S.No. Description of goods Details of S/Bills under which the goods exported
for which Brand Rate

sought S/BIII No. & date Qty/FOB value

Under this column details of The full Qty. to be exported
all shipments made should within the validity period of
be furnished and thereafter the brand rate letter and the
the following should be full FOB value of such
added "and all shipments to quantity to be indicated here.
be made upto..." (The date
upto which brand rate is
Sought).