excise warehouse, ssi icsi professional

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CHAPTER 6

EXPORT, WAREHOUSE, SSI

EXPORT UNDER CLAIM OF REBATE

REBATE OF DUTY [RULE 18]

According to Rule 18 of the Central Excise Rules, 2002 the Central Government may, by a notification grant rebate of (i) Duty paid on such excisable goods which are exported out of India, or (ii) Duty paid on materials used in the manufacturing or processing of such goods. The rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation: "Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft.

CONDITIONS AND LIMITATIONS FOR GRANT OF REFUND:

Rebate of the whole of the duty paid on all excisable goods, falling under First Schedule to Central Excise Tariff Act, 1985, exported to any country other than Bhutan, is granted subject to the conditions and limitations, specified hereunder:

(i) The excisable goods shall be exported, after payment of duty, directly from a factory/warehouse except as otherwise permitted by the CBEC by a general or special order;

(ii) The excisable goods shall be exported within 6 months from the date on which they were cleared for export from the factory of manufacture or warehouse or within such extended period as the Commissioner of Central Excise may, in any particular case, allow;

(iii) The excisable goods supplied as ship's stores for consumption on board a vessel bound for any foreign port are in such quantities as the Commissioner of Customs at the port of shipment may consider reasonable;

(iv) The rebate claim by filing electronic declaration shall be allowed from such place of export and such date, as may be specified by the Board in this behalf;

(v) The market price of the excisable goods at the time of exportation is not less than the amount of rebate of duty claimed;

(vi) The amount of rebate of duty admissible is not less than Rs 500; (vii) The rebate of duty paid on those excisable goods, export of which is prohibited under any law for the

time being in force, shall not be made. (viii) In case if a manufacturer is availing area‐based exemption and exporting goods there from, no rebate

of duty shall be admissible. ************************************


PROCEDURE FOR EXPORT OF GOODS ON PAYMENT OF DUTY UNDER CLAIM FOR REBATE

(1) Goods to be exported under self sealing or sealing by Excise Officer. (2) Procedure at the place of dispatch

(A) Sealing and examination at the place of dispatch by Central Excise Officer: (i) Goods to be presented for examination and sealing with application to Central Excise Officer

along with four copies of ARE‐1. (ii) Verification & Sealing of packages by the Central Excise Officer. (iii) Distribution of copies of application : The four copies of ARE‐1 shall be dealt with in the

following manner‐ (a) The said Superintendent or Inspector of Central Excise shall return the original and duplicate

copies of application to the exporter; (b) The triplicate copy of application shall be

Sent to the officer with whom rebate claim is to be filed; or Sent to the Excise Rebate Audit section at the place of export, in case rate is to be claimed by electronic declaration on Electronic Data Inter‐change system of Customs;

(c) EXPORT BY POST: In case of export by parcel post after the goods intended for export have been sealed, the exporter shall affix to the duplicate application sufficient postage stamps to cover postal charges and shall present the documents, together with the package or packages to which it refers, to the postmaster at the office of booking.

(3) Presentation of claim for rebate to Central Excise

(a) person to whom claim of rebate to be made: Claim of the rebate of duty paid on all excisable goods shall be lodged along with original copy of the application to‐ (i) the AC/DC having jurisdiction over the factory of manufacture or warehouse; or (ii) as the case may be, the Maritime Commissioner.

(b) Sanction of Rebate: The AC/DC having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received with the original copy and with the triplicate copy if satisfied, he shall sanction the rebate either in whole or in part.

(4) Cancellation of export documents: If the excisable Bills are not exported, the AC/DC shall cancel the export documents.

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DOCUMENTS REQUIRED FOR FILING THE CLAIM FOR REBATE

(i) A request on the letterhead of the. exporter containing claim of rebate, ARE‐1 numbers and dates, corresponding invoice numbers and dates on each ARE‐1 and its calculations;

(ii) Invoice issued under Rule 11; (iii) Self attested copy of Shipping Bill; (iv) Self attested. copy of Bill of Lading; (v) Disclaimer certificate (in case where the claimant is not the exporter); (vi) Original copy of the ARE‐1.


CIRCUMSTANCES OF EXPORT OF GOODS TO NEPAL OR BHUTAN WITHOUT PAYMENT OF DUTY

The export can be made under any of the following circumstances ‐ (1) Export under bond to Bhutan, where payment is in freely convertible currency. (2) Export in bond of petroleum oil, liquified petroleum gas and lubricant products to Nepal. (3) Export in bond for supplies to Government of India aided projects in Nepal and the Embassy Co‐

operative store and Embassy Petrol Pump located in Nepal for the bonafide use of the officers and staff of the Embassy in Nepal.

(4) Export of all excisable goods without payment of duty to Kurichu Hydro Electric Project Tala Hydro Electric Project, Punatsangechhu‐I Hydro Electric Project, Punatsangchhu‐Il Hydro‐Electric Project and Mangdechhu Hydro‐Electric Project in Bhutan.

PROCEDURE FOR EXPORT OF GOODS TO NEPAL OR BHUTAN WITHOUT PAYMENT OF DUTY

(1) Procedure at the place of dispatch (i). Six copies of invoice to the Superintendent or Inspector of Central Excise along with the export goods; (ii). the order from Project Implementation Authority shall also be presented; (iii). The Superintendent or Inspector of Central Excise verify the identity of goods with reference to

description mentioned in the invoice and the particulars of the duty payable but for export, and seal, and endorse each copy of the export invoice in token of having such verification and examination done by him;

(iv). the goods shall be delivered to the exporter or his agent, together with the original copy of the invoice, duly completed and registered.

(v). The exporter or his agent shall then be free to remove the goods for export to Nepal through the Land Customs Station indicated on the respective invoices;

(vi). The quintuplicate copy shall be forwarded to the AC/DC who has accepted the bond; and (vii). The said Superintendent or Inspector of Central Excise shall retain the six tuplicate copy of the

invoice. (2) Procedure at Land Custom Station

(a) The exporter or his agent shall present the goods to the officer of customs in‐charge of the Land Customs Station along with the original copy of the invoice and the sealed cover containing duplicate, triplicate and quadruplicate copies and obtain acknowledgment;

(b) Where the contents of all the copies of invoices tally and the packages, goods or container are satisfactorily identified with their seals intact, the officer of customs in‐charge of the Land Customs Station shall make necessary entries in the register maintained at the Land Customs Station and allow the goods to cross into the territory of Nepal or Bhutan and certify accordingly on each of the four copies of the invoice;

(c) The officer of customs, then, deliver the original copy of the invoice duly endorsed to the exporter or his agent along with the goods for presentation to the Customs Officer of Nepal or Bhutan. He shall also send, directly the duplicate and triplicate copies of the invoice to the Nepalese or Bhutanese Customs Officer in‐charge of the check post through which the goods are to be imported into Nepal or Bhutan, as the case may be;

(d) The goods are then to be produced before the Nepalese or Bhutanese Customs Officer, as the case may be at the corresponding border check‐post along with the original copies of the invoice. The Nepalese or


Bhutanese Customs Officer shall deal with the original and triplicate copies of the invoice as directed by his Majesty's Government of Nepal or Bhutan and return the duplicate copy, after endorsing his certificate of receipt of goods in Nepal or Bhutan, as the case may be, directly to the officer of customs in‐charge of the Land Customs Station in India;

(e) The officer of customs in‐charge of the Land Customs Station shall forward the duplicate copy to the Central Excise Officer in charge of the factory or warehouse from which the goods were removed for export without payment of duty.

In case of Failure To Export Within Six Months from the date of removal from the factory or warehouse or any other approved premises, or shortages noticed the exporter shall discharge the duty liability on the goods not so exported or shortage noticed along with 18% p.a. interest thereon.

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PROCEDURE IN RESPECT OF EXPORTED GOODS SUBSEQUENTLY RE‐IMPORTED AND RETURNED TO THE FACTORY Exported excisable goods which are re‐imported for carrying out repairs, reconditioning, refining, remaking or subject to any similar Process may be returned to the factory of manufacturer for carrying out the said processes and subsequent re‐export. (i). The manufacturer shall maintain separate account for return of such goods in the Daily Stock Account

and shall make suitable entry in the said account after the goods are processed repaired, reconditioned, refined or remade.

(ii). Such re‐import and re‐export shall be governed by the provisions of the Customs Act, 1962. (iii). Any waste or refuse, arising as a result of the said processes, shall be removed from the factory after the

Payment of appropriate duty or destroyed, after informing the proper officer in writing at least 7 days in advance and after observing such conditions and procedure as may be specified by the Commissioner of Central Excise.

(iv). Thereafter, the duty payable on such waste or refuse may be remitted by the said Commissioner of Central Excise.

RE‐ENTRY OF THE GOODS CLEARED FOR EXPORT UNDER BOND BUT NOT ACTUALLY EXPORTED The excisable goods cleared for export und.er bond or undertaking but not actually exported for any genuine reasons may be returned to the same factory provided,

(i) such goods are returned to the factory within 5 months with original documents like invoice and ARE‐1.

(ii) the assessee shall give intimation of re‐entry of each consignment in Form D3 within twenty four hours of such re‐entry;

(iii) such goods are to be stored separately at least for forty eight hours from the time intimation is furnished to the Range Office or shorter period, if verification is done by the Superintendent of Central Excise or through Inspector in charge of factory, about the identity of such goods with reference to the invoice, ARE‐1 and Daily Stock Account in respect of 5% of intimations, within another 24 hours of receipt of intimation.

(iv) the assessee shall record details of such goods in Daily Stock Account and taken in the stock in the factory.

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WAREHOUSING

[Rule 20] Removal of excisable goods from a factory to a warehouse or from one warehouse to another warehouse is allowed under Rule 20 of the Central Excise Rules, 2002. (1) Removal of goods to warehouse ‐ without payment of duty: The Central Government may by notification,

extend the facility of removal of any excisable goods from the factory of production to a warehouse, or from one warehouse to another warehouse without payment of duty.

(2) Conditions to be fulfilled: The said facility shall be available subject to such conditions, including penalty and interest, limitations, including limitation with respect to the period for which the goods may remain in the warehouse, and safeguards and procedure, including in the matters relating to dispatch, movement, receipt, accountal and disposal of such goods, as may be specified by the Board.

(3) Consignee liable to pay duty: The responsibility for payment of duty on the goods that are removed from the factory of production to a warehouse or from one warehouse to another warehouse, shall be upon the consignee.

(4) Consignor liable if goods not received in warehouse: If the goods dispatched for warehousing or re‐warehousing are not received in the warehouse, the responsibility for payment of duty shall be upon the consignor.

RELEVANT WAREHOUSING PROVISIONS

(1) Procedure in respect of excisable goods removed from a factory or a warehouse: (i). The Consignor shall prepare an application in quadruplicate in specified form for removal of goods from

a factory or a warehouse to another warehouse. (ii). The consignor shall also prepare an invoice in respect of the goods proposed to be removed from his

factory or warehouse. (iii). The consignor shall send the original, duplicate and triplicate application and duplicate invoice along

with the goods to the warehouse of destination. (iv). The consignor shall send quadruplicate copy of the application to the Superintendent‐in‐charge of his

factory or warehouse within twenty‐four hours of removal of the consignment. (v). On arrival of the goods at the warehouse of destination the consignee shall, within twenty‐four hours of

the arrival of goods, verify the same with all the three copies of the application. The consignee shall send the original application to the Superintendent‐in‐charge of his warehouse, duplicate to the consignor and retain the triplicate for his record.

(vi). The Superintendent‐in‐charge of the consignee shall countersign the application received by him and send it to the Superintendent‐in‐charge of the consignor.

(vii). The consignor shall retain the duplicate application duly endorsed by the consignee for his record.

(2) Failure to receive a warehousing certificate (a) The consignor should receive the duplicate copy of the warehousing certificate duly endorsed by the

consignee, within 90 days of the removal of the goods. (b) If the warehousing certificate is not received within 90 days of the removal or such extended period as

the Commissioner may allow, the consignor shall pay appropriate duty leviable on such goods. (c) weekly reminders must be issued to the Superintendent‐in‐charge of the consignee. (d) If despite such reminders, the original warehousing certificate is not received within a further period of

60 days of the expiry of the 90 days period, then the Superintendent‐in‐charge of the consignor shall inform his AC/DC who shall either secure a satisfactory proof of the goods having been duly received by


the consig4ee or ensure that the duty of excise due on the goods not received at destination is recovered from the consignor.

(3) Accountal of goods in a warehouse (a) The registered person of the warehouse shall maintain a register showing all entries into and removals

of the goods from his warehouse and shall indicate the value, quantity of the goods removed, their marks and numbers as well as the rate of duty and amount of duty involved.

(b) The first and last pages of the register should be pre‐authenticated by the owner of the warehouse or his authorised agent.

(4) Responsibility of the Registered Person (a) Responsible for due reception of the goods into the warehouse and delivery there‐from, including their

safety during the period they are lodged in the warehouse. (b) Responsible for the payment of penalty or interest leviable in respect of the goods which are

warehoused as per the provisions of the Central Excise Act and the rules made there‐under. (5) Period of warehousing

(a) Any goods warehoused may be left in the warehouse in which they are deposited, or in any warehouse to which such goods have been removed, till the expiry of three years from the date on which such goods were first warehoused.

(b) If the registration of a warehouse is revoked or suspended, the excisable goods lodged therein shall either be cleared for home consumption on payment of duty or shall be removed to another warehouse without payment of duty.

(6) Warehouse to store goods belonging to the registered person (a) The warehouse shall be used solely to store excisable goods belonging to the registered person of the

warehouse alone. (b) The Commissioner of Central Excise having jurisdiction over the warehouse may permit storage of

excisable goods along with the excisable goods belonging to another manufacturer. (c) The Commissioner of Central Excise having jurisdiction over the warehouse may permit the registered

Person of the warehouse to store duty paid excisable goods or duty paid imported goods along with non‐duty paid excisable goods in the warehouse.

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EXPORT WAREHOUSING Eligibility

The facility for export warehousing is available to the exporters who have been accorded status of Super Star Trading House or Star Trading House, the foreign departmental stores of repute and the automobiles manufacturers who have signed Memorandum of Understanding with Directorate General of Foreign Trade in the Ministry of Commerce and Industry.

Where any goods are diverted to home consumption from the warehouse, interest shall be charged at the rate of 24% P.a.

The exporter shall furnish a general Bond (B‐3) backed by 25% security of the bond amount.

Registration The exporter shall make a written request, along with application, for registration to the Commissioner; the commissioner may forward application to the Jurisdictional Superintendent of Central Excise through the Jurisdictional AC/ DC within seven working days of the receipt of the application.

The registration certificate containing registration number will be issued by the Jurisdictional Superintendent of Central Excise immediately on receipt.

Execution of Bond


Every registered exporter shall execute before the AC/DC general bond in Form B‐3 alongwith security equal to 75% of the bond amount.

A Running Bond Account will be opened.

PROCEDURE FOR REMOVAL OF GOODS AT CONCESSIONAL RATE OF DUTY FOR MANUFACTURE OF EXCISABLE GOODS

(A) Application [Rule 2] The Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 shall apply to a manufacturer who intends to avail of the benefit of a notification issued under Section 5A(1) of the Central Excise Act, 1944 granting exemption of duty to excisable goods (subject goods) when used for the purpose specified in that notification.

(B) Application by the manufacturer to obtain the benefit [Rule 3] (1) Application by manufacture to AC/DC in 4 copies: (2) Separate application for each supplier. (3) The manufacturer shall execute a general bond with surety or security. (4) The bond shall be for such amount as considered appropriate by the said Assistant Commissioner or

Deputy Commissioner, to cover the recovery of duty liability estimated to be involved at any given point of time.

(5) Application to be countersigned by AC/DC certifying therein that the said person has executed a bond to his satisfaction in respect of end use of the subject goods and indicate the particulars of such bond.

(6) Distribution of copies by AC/DC to the Jurisdictional Range Superintendent of the manufacturer of the subject goods, two copies shall be handed over to the manufacturer and one copy shall be retained, by the said Assistant Commissioner or Deputy Commissioner.

(C) Procedure to be adopted by recipient of subject goods [Rule 5]: The manufacturer receiving subject goods has to give information to the concerned authorities and has to maintain proper records relating to such goods and submit a Quarterly Return to the AC/DC by 10th of the following month.

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SSI EXEMPTION

The provisions contained for exemption available for SSI units are,‐

(1) Eligibility to claim exemption: Any unit whose value of clearances of excisable goods for home consumption does not exceed Rs. 400 lakhs in the preceding financial year is entitled for SSI exemption in the current year.

(2) Clearances of finished goods for home consumption upto Rs 150 lakhs & clearances of intermediate goods for captive consumption ‐100% exempt from excise duty: (a) first clearances for home consumption upto an aggregate value not exceeding Rs. 150 lakhs made on or

after 1st April of financial year; and (b) all clearances of the specified goods which are used as inputs for further manufacture of any specified

goods within the factory bf production of the specified goods. (3) Restriction as to CENVAT credit

Cenvat credit can be availed on inputs used in manufacture of,‐ (i). Specified excisable goods after clearances of Rs. 150 lakhs of such goods, (ii) Specified excisable goods which are not eligible for benefit of such notification (iii) Non specified excisable goods.


(4) Notification not to apply to Nil rated goods/exempt goods. (5) A manufacturer has the option not to avail the SSI exemption and instead, Pay the normal rate of duty on

the goods cleared by him which cannot be withdrawn during the remaining part of the financial year. (6) Clubbing of clearances for qualifying limit of Rs. 400 lakhs:

(a) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances and not separately for each factory;

(b) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances and not separately for each manufacturer.

(7) Exclusions while computing Rs. 150 lakhs clearances clearances, which are exempt from the whole of the excise duty leviable; clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption;

Captive consumption. (8) Exclusions while computing Rs. 400 lakhs clearances

(a) clearances of excisable goods without payment of duty ‐ (i) to a unit in a free trade zone; or (ii) to a unit in a special economic zone; or (iii) to a100% export oriented undertaking; or (iv) to a unit in an Electronic Hardware Technology Park or Software Technology Park; or (v) supplied to the United Nations or an international organization for their official use or supplied to

projects funded by them, on which exemption of duty is available. (b) clearances bearing brand name/trade name of another person, which are ineligible for exemption. (c) clearances of specified goods, which are used as inputs for further manufacture of any specified goods

within the factory of their production. (d) clearances by job‐worker, which are exempt from the whole of the excise duty leviable.

(9) While calculating the eligibility limit of Rs. 400 lakhs for SSI exemption the value of exempted goods (other then exports) will be included in the aggregate value of clearances of all excisable goods for home consumption.

(10) In the following exceptional situations, small scale exemption is available to the excisable goods bearing brand name of another person – (a) Manufacturers of components/parts of any machinery/equipment/appliances for use as original

equipment in the factory (b) Goods bearing the brand name of KVIC/NSIC/SSIDC etc. (c) Goods manufactured in Rural Area. (d) Goods under Heading 4820 or 4821. of the First Schedule. (e) Specified goods are in the nature of packing materials and are meant for use as packing material by or

on behalf of the person whose brand name they bear.

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