goods tendered for exports were
excisable, the manufacturers-exporters may be advised to file their brand rate
applications for drawback to the jurisdictional Assistant Commissioner of
Central Excise where the goods are manufactured. Similarly, merchant exporters,
exporting goods which excisable (whether dutiable or not) also be advised to
file the brand rate applications for drawback to the Assistant Commissioner of
Central Excise having jurisdiction over the factory where the export goods are
manufactured with a copy to the Commissioner of Central Excise having
jurisdiction over the said Assistant Commissioner for purpose of verification of
the drawback claims.
(b) All applications hitherto received by the Commissioners of Customs in
respect of such exporters/manufacturers falling in their jurisdiction, they will
arrange to complete the verification as hitherto being done. They should ensure
that all the verifications in respect of Brand Rate applications received upto
31.12.94 are caused to be verified and their reports sent within the specified
time limit of 30 days as advised in the Ministry"s letter of even number dated
15th September, 1994 and in any case not later than 31.3.95. However, where some
applications could not be verified by 31.3.95, the same should be completed at
the earliest by the Commissioner of Customs.
The reasons for the above change in the procedure in on account of the
enlargement of the Central Excise dutiable items and the extension of the MODVAT
Scheme to various inputs and as the various registers are required to be
maintained for purposes of account of raw materials, semi-processed goods and
finished goods for which excise control could be more effectively ensured,
Besides, it is noticed that many goods in the exempted sector have larger export
performance (example, leather goods, leather garments) and whose domestic
activity requires to be monitored. Further, if export of domestic goods are
subject to re-import, the present provision of Section 20 of Customs Act, 1962
gives them a duty free access on import so long as they do not avail any of the
other benefits indicated in that section. Consequently, when such goods enter in
the domestic scene, it is necessary for the Central Excise Officers to be aware
of such activity. Keeping in view the above changes and the need for monitoring
of industrial aactivity for excise duty collections, the above change in
procedure has been envisaged with effect from 1.1.95.
(c) Exporters should be advised to file a copy of Drawback Application to the
Drawback Directorate in the Ministry of Finance (Department of Revenue) with 3
sets of copies of the Drawback Application to the Assistant
Commissioner-in-charge of verification/Factory, and a copy to Commissionerates
Headquarters.
(d) As soon as Drawback Application is received, the Assistant Commissioner(s)
should fix the date for inspection by the officers, giving a notice of 7 to 10
days in writing to the factory before taking up the inspection.
While giving notice, nature of documents, registers/records, etc, required for
verification should be to the extent possible, indicated in the notice taking
into account the nature of data in DBK-IIA/DBK-IIIA. The inspection may be
spread over for 2 or 3 days.
(e) As soon as the Commissionerate Headquarters receives the Drawback
Application, instructions for completing the verification in four weeks should
be issued to the Assistant Commissioner with a copy to the party.
(f) Verification officers should as far as possible stick to the verification
schedule, and in case of any difficulty, inform the exporters(s)/factory of the
changes and fix firm dates for verification of data/records.
(9) If during verification it is found, some records could not be produced, a
written note should be issued to a responsible official in the management. If
such records are still not produced, they should be given, in writing, a time of
10 days for production of such documents/registers.
(h) In the meantime, rest of the verification should be completed, A list of
registers/records seen and verified by the Verifying Team should be made, and a
copy thereof under the signature of the Verification Officer heading the Team be
given to the management and acknowledgment taken from the factory authorities.
(i) Where the documents not produced are critical for verification of such data
in the factory itself, only then should another visit be paid to the factory. In
all other cases, such documents/registers can be checked as in the office.
(J) Statutory records maintained for Central Excise Law/Company Law may be
verified and relied upon.
(k) Generally, Verifying Officers should ensure that there should be more than
one attempt in calling for the documents and conducting the verifications.
(I) Verification Officers should finalise their detailed report and submit it to
the Assistant Commissioner within 7 days of completion of verification.
(m) If the exporter furnishes the documents/registers indicated in the
"deficiency memo issued by the Verifying Officers, subsequent to the despatch of
the report by the Verification Officers, the Assistant Commissioner should get
them re-checked by his staff through the verification team and prepare his final
Verification Report (FVR) and send two copies of FVR (with one set of DBK-I, IIA,
and III/IIIA Statements duly authenticated by the Verifying Officer) to the"
Commissioner, (Commissionerate head- quarters in Central Excise Formations) and
one copy of FVR plus DBK Statements duly authenticated to Director (Drawback),
Ministry of Finance (Department of Revenue), New Delhi.
(n) The exporter shall be informed by the Assistant Commissioner in respect of
deficiency if any in his claim as per the verification report and also of the
despatch of the Final Verification Report (FVR).
(0) On receipt of the FVR, the Commissioner"s office will scrutinise the report
and send the report within 7 days with his comments to the Director (Drawback),
Ministry of Finance (Department of Revenue) in terms of Board"s instructions in
Para 2(i) of letter F .No. 602/3/94-DBK dated 15.9.1994.
2. The following deficiencies have been noticed in the Verification Reports
received from the Commissionerates/Customs Houses. It may be ensured that the
required particulars are invariably shown in the Verification Report(s): -
(i) DBK-I, IIA;II&IIIA Statements must be signed/stamped by the Verifying
Officers.
(ii) Date of receipt of the application in the Commissionerate/Division/Regional
Office is not indicated in the Verification Report. This must be shown in the
FVR.
(iii) Letter seeking condonation of delay of late filing of drawback application
is not enclosed.
(iv) Attested photocopies of the Drawback copies of shipping bill/Export
promotion copy of the Shipping Bill or Bill of Lading is not enclosed.
(v) Where Bill of Entry is for several inputs of different values, relevant
Import Invoice must be enclosed.
(vi) Stock position of preceding three months prior to the date of first
shipment must be shown.
(vii) Where wastage on inputs is claimed, invoice showing sale-price of wastage
sold as scrap must be enclosed.
(viii) Where drawback of Central Excise duty/CY duty is claimed, Certificate of
non-availment of MODY A T must be enclosed.
(ix) Work-Sheet of value addition in case of imported inputs must be enclosed.
(x) Whether assessment of Bills of Entry/Central Excise Invoices is final or
provisional, must be indicated with reasons.
(xi) Where application is under DEEC Scheme, a copy each of Advance Licence and
DEEC Book (both parts) complete in all respect. must be enclosed.
(xii) Where morethan one item exported under one Shipping Bill, f.o.b. values
must be shown separately for each export item.
(xiii) In many cases there appears no difference between description of inputs
and the end-product export goods. The process of manufacture carried out and the
physical, technical and functional changes in the export goods must invariably
be indicated in a separate note.
3. Previous instructions issued on the subject which are inconsistent with the
instructions issued under this letter shall be deemed to be modified
accordingly.
4. The purpose of these instructions is to build a greater transparency in the
verification and minimise representations/disputes. These guidelines may please
be brought to the notice of all officers concerned and specially those dealing
with verification of data for the purpose of Brand Rate fixation.
Provisional Claim/Payment of Drawback
In respect of the items for which drawback rate is still to be determined and
the exporter has applied for such determination of the amount or rate of
drawback, the exporter may be granted drawback provisionally. Where the exporter
desires such payment, he may. After making an application under Rule 6(1)(a) of
the Drawback Rules for determination of drawback rate, apply under Rule 6(1)(b) in writing to the Central govt. that a provisional
amount be granted to him towards drawback on the export of such goods pending
determination of the amount of rates of drawback. Such applications be
accompanied with: -
(i) evidence of having filed the application for fixation of brand rate. This
evidence should be sent to drawback department of the concerned Custom House
within 6 months from the date of export failing which the case may be closed,
(ii) Photostat copy of brand rate letter for each shipping bill separately along
with declaration as stipulated in the Ministry"s brand rate letter if the rates
are already in existence or as soon as the brand letter is received. This should
be done after shipments of the goods.
(iii) where the brand rate is not fixed in the name of exporter, "No Objection
Certificate" from the party in whose name the brand rate is fixed.
Sanction
The Central Government may, after considering the application, authorise the
Commissioner of Customs at the Port from where the goods are exported, to pay
provisionally an amount not exceeding the amount claimed by the exporter in
respect of such exports under such conditions as he may impose upon the
exporter.
Conditions
The Commissioner of Customs may, for the purpose of allowing provisional payment
of drawback, require the exporter to enter into a general bond for such amount
and subject to such conditions, as the Commissioner of Customs may direct or to
enter into a bond for an amount not exceeding the full amount claimed by such
exporter as drawback in respect of a particular consignment and binding himself:
-
(i) to refund the amount so sanctioned provisionally if for any reason the
central government decides, not to allow drawback, or
(i) to refund the excess, if any, paid to him provisionally if the central
Government decides to allow a drawback.
Provided that when the amount or rate" of drawback payable on such goods is
finally determined, the amount provisionally paid to such exporter shall be
adjusted against the drawback finally payable and if the amount so adjusted is
in excess or falls short of drawback finally payable he shall repay to the
Commissioner of Customs the excess or be entitled to the deficiency, as the case
may be. The bond referred to above may be with such surety or security as the
Commissioner of Customs may direct.