Export is a key area
of the economy. It is an important means of earning foreign exchange
and is thus vital for financing imports. The Central Excise department
attaches considerable importance to export. The law affords several
benefits of substantive nature as well as procedural nature. In
this Chapter, a passing reference has been made to the substantive
benefits. The procedure however, has been described in detail.
Benefits available in respect of goods exported
out of India.
The benefit in respect
of duties on inputs used in the manufacture of goods meant to be
exported as well as in respect of duty on the finished goods exported
is envisaged under the Central Excise law. These benefits are available
either in the form of rebate or the clearances of such inputs or
finished goods under bond. The scheme under which the benefits are
made available, is incorporated in Rule 12 and Rule 13 of the Central
Excise Rules, 1944. The benefit in respect of duties on inputs used
in the manufacture of goods exported, is available if the exporter
does not claim drawback under the Central Excise Duties Drawback
Rules, 1995. The rebate of duty in respect of inputs is also not
available if the credit of duty paid on inputs has been availed
Export under claim for rebate.
Under Rule 12 of the
Central Excise Rules, 1944, rebate on duty paid on the exported
goods or the duty paid on materials used in the exported goods,
notified for the purpose, is granted to the exporter subject
to the conditions laid down in the notifications. The various
notifications issued under Rule 12 are as given below
Notification NO. & Date
dated 22.9.94 (as amended)
Notified excisable goods for grant of rebate
dated 22.9.94 (as amended)
Notified material used in the manufacture
of exported goods for grant of rebate.
dated 22.9.94 (as amended)
Grant of rebate on castor oil and ground
nut oil exported without observing AR-4 procedure.
dated 22.9.94 (as amended)
Rebate of duty on excisable goods exported
as ships store
dated 22.9.94 (as amended)
Rebate of excise duty paid on mineral oil
products exported as stores to Aircraft on a foreign run.
desirous of exporting goods under claim for rebate can clear excisable
goods for export or materials for use in the manufacture of excisable
goods to be exported on payment of duty either through PLA or through
RG-23A pt.-II or RG-23C pt.-II and may subsequently claim the rebate
of duty paid, from the jurisdictional Assistant Commissioner or
the Maritime Commissioner, as the case may be, in accordance with
the provisions of Rule 189 of the Central Excise Rules, 1944.
of goods under bond without payment of duty.
Under Rule 13, the
following operations with regard to export are permissible :- (I)
export of excisable goods under bond ; (ii) utilisation of raw materials,
consumables, components etc. without payment of duty for the manufacture
of export goods and (iii) removal of excisable goods without payment
of duty for the manufacture of specified excisable goods to be exported
or for replenishment of duty paid materials used in the manufacture
of such export goods, already exported. The Central Govt. has notified
the excisable goods and materials to be used in the manufacture
of excisable goods to be exported, as per the notifications listed
50. Notification no. 47/94-CE (NT)
dated 22.9.94 (as amended) (exemption to inputs for manufacture
51. Notification no. 48/94-CE (NT)
dated 22.9.94 (as amended) (export in bond of all excisable goods);
52. Notification no. 49/94-CE(NT)
dated 22.9.94 (as amended) (movement of intermediate goods without
payment of duty for supply to manufacturers of export goods in
terms of advance intermediate licence scheme).
desirous exporting excisable goods under bond are required to execute
B-1(General Security/Surety) or B-16 (General Security/Surety) bond
under Rule 14 either with the jurisdictional Assistant Commissioner
or with the Maritime Commissioner and maintain a running bond account
with the Range Superintendent. The goods will be allowed to be cleared
for export under bond without payment of duty by debiting the amount
of duty in the running bond account. The credit in respect of duty
debited is made available on furnishing the proof of export of the
goods. The assessees desirous of obtaining materials for manufacture
of export products or in terms of advance licence under notification
no.49/94-CE (NT) dated 22.9.94 as amended, are required to follow
the Chapter X procedure.
The assessee has the
option to clear the export goods with or without sealing of the
consignment at the place of removal. In case he opts for factory
sealing, the goods would be examined at the factory. Otherwise,
the goods would be examined by the customs officer at the port of
and sealing of goods at the place of removal.
The assessee has to
file AR-4 application duly filled in, normally 24 hrs. in advance
with the jurisdictional Superintendent in six copies. The proper
officer after identification and verification of the goods with
AR- 4, and the duty payment particulars (in case the export is under
claim for rebate) or after debiting the running bond account or
against the specific bond, shall seal the consignment with the Central
Excise seal and make necessary endorsement of the same on the AR
4. The original duplicate and the 6th copy of
the AR-4 are thereafter handed over to the exporter. The exporter
desirous of exporting the goods in a container, are required to
obtain the permission of the proper officer and shall also present
the shipping bill duly processed by the customs authorities of the
port of exportation or the ICD as the case may be, along with the
AR-4 at the time of sealing of the container. The inspector supervising
the containers stuffing as well as the Range Superintendent
will make an endorsement on the body of the shipping bill.
The assessees opting
for sealing of their consignment or container are required to pay
the supervision charges in terms of the provisions of, and at the
rates prescribed in the Customs (Fees for rendering services by
Customs Officers) Regulation, 1968.
of goods without examination under Rule 187 A.
The assessee can clear
the export goods either on payment of duty under claim for rebate
or under bond under the cover of an invoice and shall send the original,
duplicate and six triplicate copies of the AR-4 with the consignment.
The triplicate and quadruplicate and quintuplicate copies of the
AR-4 shall be submitted to the Range Superintendent within 24 hrs.
of clearance of such consignment, after verifying the particulars
of duty paying or payable shall forward the triplicate copy to the
jurisdictional Assistant Commissioner of Central Excise or the Maritime
Commissioner as the case may be, either by post or on request handing
over the same to the exporter in a sealed cover. Quadruplicate copy
of the AR-4 is sent to Chief Accounts Officer and quintuplicate
copy is retained by the Range for record.
in respect of goods not exported directly under Rule 187 or 187A.
Where the goods are
not exported directly from the factory of the manufacturer, the
triplicate and quadruplicate copies of the AR-4 are sent by the
proper officer to the Superintendent having jurisdiction over the
factory of the manufacturer, who after verification, would forward
the triplicate copy to the Maritime Commissioner either by post
or by handing over to the exporter in a tamper proof sealed cover,
or the Assistant Commissioner of Central Excise having jurisdiction
over the factory, as the case may be. The quadruplicate copy is
sent to the Chief Accounts Officer by the Superintendent.
procedure for exempted units.
The exempted units
desirous of exporting their goods are required to file declaration
under notification no. 13/92- CE (NT) dated 14.5.92 as amended and
obtain declarants code number. The code number is mentioned in all
the clearance documents which are pre-authenticated by the manufacturer
or his authorised agent. In case of export through merchant exporter,
the clearance documents shall be marked Export through merchant
exporter and the merchant exporters export - import
Code number should also be mentioned. The exempted units are required
to maintain simple account of production and clearance and they
shall file a quarterly statement to the jurisdictional Range Superintendent
and also submit proof of export.
to be given on AR-4.
The exporter is required
to give the following information on the AR-4 form
31. running sl. No. of the AR-4 beginning
from each financial year;
32. scheme under which export has
been made, i.e. value based advanced licencing scheme/ quantity
based advanced licencing scheme/ under claim for duty drawback
33. whether the exported goods have
been manufactured availing/without availing Modvat credit under
Rule 57A; and
34. particulars of bond executed
or the duty debit particulars as the case may be.
by merchant exporters.
A merchant exporter
can export excisable goods either directly from the premises of
the manufacturer, with or without sealing of export consignment,
or through his premises under claim for rebate of duty or under
bond. In case of export under bond, the merchant exporter is required
to execute bond either with the jurisdictional Assistant Commissioner
having jurisdiction over the factory of the manufacturer or with
the Maritime Commissioner. The merchant exporter can execute consolidated
B-1 general bond with the Maritime Commissioner and obtain "Block
Transfers" from him along with attested copies of B-1 consolidated
bond executed for various ports or manufacturers and export the
goods under bond. The merchant exporter can also export goods on
manufacturers bond. He can also claim rebate of duty paid
on exported goods either from the Assistant Commissioner of Central
Excise having jurisdiction over the factory of the manufacturer
or from the Maritime Commissioner. The merchant exporter is also
required to take disclaimer certificate from the manufacturer as
well, in case he wants to avail the export benefits.
of Modvat credit under Rule 57F(13) of the Central Excise Rules,
Under Rule 57F(13)
an exporter can take Modvat credit on the inputs used in or in relation
to the manufacture of goods exported under bond and utilised the
same towards payment of duty on similar final products cleared for
home consumption or for export on payment of duty. Where for any
reason such adjustment is not possible, the credit can be refunded
in cash to the exporter, subject to such other conditions as provided
in the said Rule or in the notification no.85/87 (NT) dated 1.3.87
as amended issued under Rule 57F(13).
procedure to export to Nepal.
Export to Nepal is
governed by special procedure provided in notifications issued under
Rule 12 & 13. The procedure is as explained below
no. 47/94-CE(NT) dated 22.9.94 payment of rebate to His Majestys
Government of Nepal.
Goods for export to Nepal are to be cleared from
the registered factory on Nepal Invoice prepared in quadruplicate
and marked For Export to Nepal on payment of duty. The
Nepal Invoice is to be presented along with the goods to be exported
before the Central Excise officer. The Central excise officer shall
verify the goods and seal the packages with the Central Excise seal.
After making necessary endorsement on the Nepal invoice to this
effect, he will hand over the original copy of the invoice to the
exporter. Duplicate and triplicate copies of the Nepal invoice after
being put in a sealed cover are handed over to the exporter for
giving the same to the Customs officer incharge of the Land Customs
Station, mentioned on the invoice and through which the goods are
to be exported to Nepal. On arrival at the Land Customs Station,
exported goods are to be presented to the Customs officer along
with the original copy of the Nepal invoice and sealed cover containing
duplicate and triplicate copy of invoice. The Customs officer incharge,
after verification of the goods with the invoice makes an endorsement
on all copies of the invoice. The original copy is handed over to
the exporter and the duplicate and triplicate copies are sent directly
to the Nepalese Customs Officer incharge of the check post through
which the goods are to be imported into Nepal. The Nepalese Customs
officer will return the duplicate copy of the invoice after endorsement
regarding verification and allowing import into sNepal, to the Customs
officer incharge at Indian Land Customs Station who is to forward
the same to the Deputy Director of Inspection, Customs and Central
Excise, Nepal Wing, for grant of rebate to His Majestys Government
no. 51/94-CE(NT) dated 22.9.94 as amended procedure for export
to Nepal and Bhutan without payment of duty.
Export under bond without
payment of duty to Nepal and Bhutan is subject to the following
26. the payment for goods shall be
in freely convertible foreign currency; and
27. the importer shall open an irrevokable
letter of credit in favour of the exporter in India before the
export takes place, subject to certain conditions prescribed in
- The exporter is required to execute
a bond in Rule 13 before the Assistant Commissioner of Central
Excise having jurisdiction over the factory of the manufacturer
or any other place from where the goods are to be exported and
is to furnish a certificate in Appendix 1 to the said notification
from the Reserve Bank of India or any other bank duly authorised
to deal in foreign exchange showing that full payment has been
received. On receipt of the said certificate and on completion
of the conditions of the bond, the exporter shall be discharged
of his liabilities under the bond. Capital goods are permitted
to be exported to Nepal against any global tender invited by His
Majestys Government of Nepal and the payment for which is
received in the Indian currency, without payment of duty, subject
to the condition that the exporter executes a bond and furnishes
a certificate duly signed by the concerned Bank of India that
full payment has been received in Indian currency by the said
bank. On receipt of such certificate and on completion of the
conditions of the bond, the exporter is discharged of his liabilities
under the bond.
- The exporter is to follow the procedure
as provided in Appendix 2 to the said notification. The procedure
is explained below
- The exporter is to make 6 copies
of the invoice as prescribed in Annexure-A to the notification
and make the following declaration on the same:
- " I/we declare that the goods
entered herein are intended for export to Nepal/Bhutan in bond,
and shall not be diverted or delivered en route to any other country".
- The exporter shall present all the
6 copies of the invoice duly filled in along with the goods before
the proper officer of Central Excise. The proper officer after
verification of the goods and sealing them would make an endorsement
on all the copies of the invoices. The original copy of the invoice
is given to the exporter. Duplicate, triplicate and quadruplicate
copies under sealed cover are given to the exporter for delivering
the same to the Customs officer incharge of the Land Customs Station
through which the goods are to be exported. The quadruplicate
copy is forwarded to the Central Excise officer who has accepted
the bond and quintuplicate copy is retained by the proper officer.
On arrival at the Land Customs Station, the goods are presented
before the Customs officer incharge along with original copy of
the invoice and the sealed cover containing copies of invoices.
The Customs officer, after verification of the goods with the
invoices would make the endorsement on the invoice and hand over
the original copy to the exporter. The duplicate and triplicate
copies are sent directly to the Napalese or Bhutanese, as the
case may be, Custom officer incharge Land Customs Station through
which the goods are to be imported into Nepal or Bhutan. The Customs
officer incharge of Land Customs Station at Nepal or Bhutan will
return the duplicate copy of the invoice, after making an endorsement
thereon regarding verification and allowing of import into Nepal
or Bhutan, directly to the Customs officer incharge Land Customs
Station in India. The same is eventually forwarded to the Central
Excise officer incharge of the factory or warehouse from where
the goods were removed for export.
Proper marking of packages meant for export.
Rule 185 provides for
legible marking of export packages in ink or oil colour with a progressive
number commencing with the sr.no.1 for each calendar year and with
the exporters name and special mark, if any. Assessee seeking
exemption from the provisions of Rule 185 are to apply to the Assistant
Commissioner of Central Excise having jurisdiction over the factory.
In case the exporter
who has removed the goods for export under bond, fails to produce
proof of export before the proper officer in the manner provided
in the relevant notification issued under Rule 13, he shall be liable
to pay duty leviable on such goods upon written demand made by the
proper officer and shall also be liable to penalty equal to twice
the amount of duty and subject to a maximum of Rs.2000/- under Rule
14A. Penalty up to Rs.2000/- under Rule 14B can also be imposed
if the exporter removes excisable goods under bond on which duty
involved is more than bond amount or the balance in the running
bond account. Under both the Rules i.e. 14A and 14B, the proper
officer can also refuse to permit such offender further export of
excisable goods under bond.
for export of goods under bond ( except to Nepal and Bhutan ).
Please check whether
27. the goods intended for export
are permitted for export to the country to which exports are intended
to be made and their export is not prohibited under any law for
the time being in force;
28. the quantity of goods to be exported
has been ascertained well in advance of the date of export;
29. the duty involved on the goods
meant for export has been ascertained and appropriate bond covering
the duty element has been furnished;
30. the inspection and sealing of
the goods to be exported is desired in the factory or warehouse
or other point of storage and not at the point of export.
in case the answer is yes, then:-
i) whether prior
intimation of the intended export in the form AR-4 (in sixtuplicate)
properly filled, has been submitted to the jurisdictional range
Superintendent well in time i.e. at least 24 hrs. in advance;
ii) whether the goods
to be exported have been inspected by the Central Excise officer
and the packages containing such goods are properly sealed with
the Central Excise seal;
iii) whether the
packages in which the goods are to be exported are legibly marked
in ink or oil colour or in such other durable manner with the
progressive number commencing with number 1 for each calendar
year and with the exporters name and special mark, if any.
Iv) whether the description
of goods furnished in AR-4 corresponds the goods packed for export;
v) whether the particulars
of goods in AR-4 correspond to the particulars in the shipping
bill filed by the exporter;
vi) whether, on completion
of inspection, the invoice has been prepared and issued for removal
of goods in accordance with the AR-4 and bond amount and whether
the duty amount has been incorporated in the AR-4;
vii) whether after
inspection the packages of the goods intended for export, the
necessary endorsement has been made by the Central Excise officer
on the AR-4;
viii) whether original,
duplicate and sixtuplicate copies of the AR-4 have been received
from the Central Excise officer after proper endorsement.
If the examination of the goods is
desired at the point of shipment, then:-
5. whether the original, duplicate
and sixtuplicate copies of properly filled AR-4 along with the
invoice and the goods have been sent to the place of export;
6. whether the triplicate, quadruplicate
and quintuplicate copies of the AR-4 have been sent to the Range
Superintendent within 24 hrs. of the removal of the consignment;
7. whether the condition given in
iv), v) & vi) in para d A above have been complied with.
If required, the triplicate copy
of AR-4, duly endorsed has been obtained from the Central Excise
officer in a tamper proof sealed cover for delivery to the Assistant
Commissioner of Central Excise or Maritime Commissioner, as the
case may be.
1. the running bond account has been
maintained properly and all the relevant entries have been made
in the account;
2. the proof of export of a particular
consignment has been obtained within a period of 6 months from
the date of removal of the factory, warehouse or place of storage
and is sent to the Central Excise officer within the stipulated
period of 6 months.
Check list for export
under claim for rebate of duty.
In addition to observing
the points mentioned in the preceding check list, it must be checked
whether the AR-4 contains a specific declaration regarding the authority
with whom the rebate shall be filed.