CENTRAL EXCISE PROVISIONS FOR EXPORT INCLUDING THOSE BY MERCHANT EXPORTERS.
It provides for grant of rebate of duty paid on excisable goods and 'duty paid on materials used in the manufacturer of goods when such goods are exported' outside India subject to notified conditions and safeguards. The Commissioner of Central Excise or as the case may be, the Maritime Commissioner of Central Excise has been empowered to relax any of the conditions laid down in any notifications issued under this Rule while considering the rebate claim. [See Proviso to Rule 12(1)]. The definitions of the terms "manufacturer" and "materials" used in this Rule have been given wide connotation under the 'explanation' appended to the said Rule.
2. Rule 13:
It provides for export of goods in bond without payment of duty from a factory of manufacture or a warehouse and use of non-dutiable materials in the production of export goods. The Central Government has issued relevant notifications and prescribed certain safeguards, conditions and limitations as regards the class or description of the goods or description of materials used in the manufacture thereof, distribution, mode of transport and other allied matters as specified in the notification. Notification No.47/94-CE (NT) dated 22.9.1994 as corrected by corrigendum Notification No.781 (E) dated 26.10.1994, as amended and Notification No.48/94-CE (NT) dated 22.9.94 as corrected by corrigendum Notification GSR No.742 (E) dated 6.10.94 and Notification GSR No.781 (E) dated 26.10.94, as amended, are some of the Notifications issued under Rule 13.
Rules l85, 187, 187A, 187B and 189 prescribe the detailed procedure for export of excisable goods. The scheme of Self Removal procedure has also been introduced for export (except for the goods under physical control). It is now the option of the assessee either to clear the goods from the factory or the warehouse under AR.4 and intimate the fact of such clearance to the Range Superintendent or request the officer to examine and seal the goods and export the goods under official supervision.
4. Maritime Commissioners:
At present there are 7 Maritime Commissioners of Central Excise viz. Mumbai, Calcutta, Madras, Panaji, Visakhapattanm, Cochin and Kandla. In fact, the Commissioners of Central Excise have been designated as "Maritime Commissioners".
5. Running Bond Account:
Every Central Excise authority before whom a consolidated B1 general bond is executed shall maintain this account in the prescribed proforma. Suitable debit shall be made in the account whenever exports are allowed against the bond. Whenever any block transfer is made in favour of other Central Excise authority (example, another Maritime Commissioner), debit shall be made in this account on acceptance of the proof of export, the bond account shall be credited to the extent of the debit. The account shall also be credited after the block transfer is returned by the other authority.
6. Manufacturer Exporter and Merchant Exporter: -
"Manufacturer Exporter" means a person who manufactures goods and exports or intends to export such goods. "Merchant Exporter" means a person engaged in trading activity and exporting or intending to export goods.
Merchant Exporter can export the excisable goods either directly from the premises of the manufacturer, with or without sealing of the export consignments, or through his premises under claim for rebate or under bond.
7. Export by Merchant Exporters under bond for rebate of duty:
Where exports are by Merchant Exporter, a Disclaimer Certificate in favour of the Exporter should be taken on each copy of AR 4. The procedure under the Board's Circular No. 81/81/94-CX dated 2S.11.1994 shall, mutatis mutandis, apply to such exports by Merchant Exporters.
8. Export by Merchant Exporters under bond without payment of duty:
The procedure for export under Bond as laid down in Board’s circular No.87/87/94-CX.6 dated 26.12.94 may be referred to:
i. Merchant Exporter can export excisable goods under bond executed by manufacturer. In such circumstances, the manufacturer who has executed bond would be responsible for discharging all the liabilities antler Central Excise Law and Procedure. In such cases, application in form AR-4 will be in the name of the manufacturer, who executes the bond. Once the manufacturer permits the bond executed by him for exports by Merchant Exporters, it would be manufacturer's responsibility for accountal of export goods.
ii. Merchant Exporter himself can also execute a bond for export. Where he desires to export excisable goods manufactured in a factory or number of factories, he can execute a B.1 bond to cover a particular consignment or a consolidated B.1 general bond to cover a series of export consignment frown the same factory, before the Assistant/ Deputy Commissioner of Central Excise having jurisdiction over the factory.
Where the export is front a port, airport or post office falling within the jurisdiction of Maritime Commissioner of Central, the option is available to the Merchant Exporter to execute a particular bond or consolidated bond before the concerned Maritime Commissioner. In case of a particular B.1 bond, he should obtain an attested copy of the bond executed before the Maritime Commissioner and produce the same at the time of presentation of AR.4 to the Superintendent, Central Excise. Where consolidated B.1 general bond is executed, he shall inform Maritime Commissioner of his intention to export the goods and obtain a Certificate of provisional debit in the Running Bond Account. This Certificate will have to be produced by him before the Superintendent of Central Excise at the time of presentation of AR.4 for signature. In above situations, the exports are expected to be made through the Port of the Maritime Commissioner before whom the bond is executed. The relevant AR.4 has to be signed by both the Merchant Exporter and actual manufacturer.
3. Block Transfer of Bond Account:
In case of Merchant Exporters, they can execute B.1 general bond with a particular Maritime Commissioner. However, the goods may have to be exported from Port/Airport/Post Office under the jurisdiction of another Maritime Commissioner. In such cases, Merchant Exporter has to obtain "Block Transfer of Credit in Running Bond Account" in favour of Maritime Commissioner having jurisdiction over the Port/Airport/Post Office from which the goods are being exported. Intimation of such Block Transfer will also be given by Maritime Commissioner to Superintendent of Central Excise having jurisdiction over the factory/warehouse. Similarly, if the goods are to be exported from the Port/Airport/Post Office which is not under the jurisdiction of any Maritime Commissioner, the Merchant Exporter will have to obtain "Block Transfer of Credit" in "Running Bond Account" in favour of the Assistant/Deputy Commissioner having jurisdiction over the factory of manufacturer.
Once the Block Transfer Credit is made, it will be treated as if Merchant Exporter has executed bond for that amount. Proof of export will have to be submitted to the authority (i.e. Maritime Commissioner/Assistant Commissioner) in whose favour the "Block Transfer Credit" has been made and they will keep control over the bond monitoring proof of export. However, if the goods are not actually exported, action for recovery will have to be initiated by the Maritime Commissioner of Central Excise before whom bond has been executed.
4. Types of Bonds for Export:
There are six types of bonds for due despatch of goods for export:
B 1 (General Surety)
B 1 (General Security)
B 1 6(General Surety)
B16 (General Security)
Exporters have option to execute a general bond (B1 General) or bond (B1) to cover a particular consignment. For particular B-1 bond, amount of bond should be equal to at least the duty on the goods to be exported. For general B-1 bond, the amount of bond would be equal to the full duty on the exporter's estimate of the maximum quantity of the excisable goods likely to be in transit during the period between the clearance from the factory and acceptance of proof of export.
Rule 13 provides for execution of bond for a particular consignment while Rule 14 provides for export under a general bond - the consignments being despatched from time to time.
Bond in form B16 is a general bond (with surety/security) covering Rule 9B, 13, 14 and 192 for obtaining provisional assessment of goods under Rule 9B, for removal from time to time for export to a foreign country without payment of duty and for due accounting and disposal of excisable goods obtained without payment of the whole or part of duty for use in special industrial purpose under Chapter X of Central Excise Rules, 1944. The manufacturer exporter who has executed B-16 bond is not required to execute export bond to cover duty on goods exported without payment of duty.
3. Amount of Security or Bank Guarantee:
Manufacturer exporters may execute B-1/B-16 bond with 10% security/bank guarantee. Merchant exporters have to execute B-1 bond with 25% security/bank guarantee.
12. Earlier the following categories of exporters were not required to furnish any security or bank guarantee and they were required to give only the bond with surety.
a. Superstar trading houses
b. Star trading houses.
c. Trading houses.
d. Export houses.
e. Registered exporters (registered with relevant Export Promotion Council).
Vide Board's F.No.209/54/96-X.6 dated 31.12.1996 (Circular No. 284/118/96CX) it has been decided that bond may be taken without security/surety in case of the following categories of exporters:
a. Super Star Trading Houses
b. Star Trading Houses.
c. Export Houses.
d. Registered exporters (Registered with Export Promotion Council).
e. Manufacturers registered with Central Excise Department.
Subject to the condition that:
i. the exporters have not come to the adverse notice of the Department in the last three years.
ii. all the formalities required under Central Excise Acts and Rules related to exports are regularly complied with by the exporters.
iii. A copy of the registration-cum-membership certificate (RCMC), duly attested by the exporter is submitted.
This facility can be withdrawn without prior notice to any exporter if he comes to the adverse notice of the Department.
The criterion for recognition as Export House, Star Trading House or Super Star Trading House is either on the basis of FOB value or Net Foreign Exchange (NFE) earned on export of goods and services, including software exports (realised in freely convertible currency) during the last three licensing years or the preceding licensing year, whichever is opted by the exporter. Deemed Exports, However, shall not qualify for the purposes of recognition.
"Deemed Exports" means those transactions in which the goods supplied do not leave the country and the payment for the floods is received by the supplier in India (example supply of goods to units located in EPZ or to Export oriented Units etc).
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