Dealer rebate claim
This query is : Resolved
09 October 2013
dear sir,
any excise dealer can get duty drawback / rebate claim against export of goods.
10 October 2013
1. Introduction
1.1 The Government has, by Notification No. 41/2001-Central Excise (N.T.) dated 26.6.2001 [hereinafter referred to as the ‘said notification’] allowed rebate of whole of the duty paid on excisable goods, which are in fact materials or inputs for manufacture or processing of other goods, on their exportation out of India, to any country except Nepal and Bhutan, to be paid subject to the conditions and the procedure specified in the above-mentioned notification.
1.2 It may be noted that in rule 18 and in said notification, expression ‘export goods’ has been used. It refers excisable goods (dutiable or exempted) as well as non-excisable goods. Thus the benefit of input stage rebate can be claimed on export of all finished goods whether excisable or not.
1.3 It may be also noted that materials may be used for manufacture or processing. In other words, any processing not amounting to manufacture (such as packing, blending etc.) will also be eligible for the benefit under said notification.
1.4. The expression ‘material’ shall mean all raw materials, consumables, components, semi-finished goods, assemblies, sub-assemblies, intermediate goods, accessories, parts and packing materials required for manufacture or processing of export goods. Rebate of Central Excise duty paid on equipment and machinery in the nature of capital goods used in relation to manufacture or process of finished goods being shall not be allowed.
1.5 The benefit of input stage rebate cannot be claimed in any of the following situations:
(i) where the finished goods are exported under Claim for Duty Drawback.
(ii) where the finished goods are exported in discharge of export obligations under a Value Advance Licence or a Quantity Based Advance Licence issued before 31.03.95.
(iii) where facility of input stage credit is availed under CENVAT Credit Rules, 2001.
(iv) The market price of the goods is less than the rebate amount.
(v) The amount of rebate admissible is less then Rs. 500/-
1.6 The claim for rebate should be filed within the time stipulated under Section 11B of the Central Excise Act, 1944.
2. Procedures and conditions to be followed
2.1 The manufacturer or processor shall file a declaration (Annexure-24)with the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured or processed along with their rate of duty leviable and manufacturing/processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality. The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be exported. Where there are more than one export product, separate statement of the input-output ratios may be finished for each export product. The consumption should be net of recycled materials. Where recoverable wastage are generated but not recycled but sold on account of its unsuitability, the same should be clearly reflected in the declaration. The declarant should also enclose, in case of a new product or in case where the manufacturer is not regularly manufacturing the export goods and clearing for home consumption or export, a write up of manufacturing process.
3. Verification and grant of permission
3.1 The Deputy/Assistant Commissioner of Central Excise shall verify the correctness of the ratio of input and output mentioned in the declaration filed before commencement of export of such goods, if necessary, by calling for samples of finished goods or by inspecting such goods in the factory of manufacture or process. If, after such verification, the Deputy/Assistant Commissioner of Central Excise is also satisfied that there is no likelihood of evasion of duty, he may grant permission to the applicant for manufacture or processing and export of finished goods.
3.3 It is clarified that for the sake of convenience and transparency, input output norms notified under the Export Import Policy may be accepted by the Department unless there are specific reasons for variation. However, in case, the input output norms notified under the Export Import Policy does not include all the materials used in export goods, the claim under this scheme should not be denied merely on that ground.
3.4 If for any reason the Deputy/Assistant Commissioner of Central Excise is not satisfied with reference to the correctness of the consumption norms claimed by the applicant, especially where the product is being manufactured for the first time in his jurisdiction, he may permit the manufacturing operations and the verification of the consumption norms should be completed while the process of manufacture is on. The verification should be completed before allowing the export of the goods as the manufacturer working under this Scheme is expected to declare the raw materials costumed is the ARE-2 for claiming rebate.
3.5 The permission granted by the Deputy/Assistant Commissioner of Central Excise can be withdrawn at any time if any glaring misuse resulting into loss of revenue comes to his notice.
3.6 Any change in the consumption ratio [input-output ratio] should be promptly intimated by the manufacturer to the Deputy/Assistant Commissioner of Central Excise and the jurisdictional Range Superintendent giving reference of the permission granted. If necessary, the Deputy/Assistant Commissioner of Central Excise may order fresh verification.
4. Procurement of material
4.1 The manufacturer or processor shall obtain the materials to be utilised in the manufacture of the finished goods intended for export directly from the registered factory in which such goods are produced, accompanied by an invoice under rule 11 of the said Rules.
4.2 The manufacturer or processor may also procure materials from dealers registered for the purposes of the CENVAT Credit Rules, 2001 under invoices issued by such dealers.
5. Removal of materials or partially processed material for processing
5.1 The Deputy/Assistant Commissioner of Central Excise may permit a manufacturer to remove the materials as such or after the said materials have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory -
(i) for the purposes of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture of the finished goods and return the same to his factory without payment of duty for further use in the manufacture of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or process; or
(ii) for the purpose of manufacture of intermediate products necessary for the manufacture or processing of finished goods and return the said intermediate products to his factory for further use in the manufacture or process of finished goods without payment of duty or remove the same, without payment of duty for export, provided that the waste, if any, arising in the course of such operation is also returned to the factory of manufacturer or processor;
Any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor;
6. Procedure for export
6.1 The goods shall be exported on the application in Form A.R.E. 2 specified (Annexure-23) and the procedures specified in Notification No.40/2001-Central Excise (N.T.) dated 26th June, 2001 shall be followed. In other words, the exporter has option to pay duty on finished export goods (if these are excisable) and claim rebate of such duty. He may also export the excisable goods without payment of duty. In both cases, fresh A.R.E.1 is not required because export will be effected on A.R.E.2 itself. But the procedure specified in the aforementioned notifications relating to removals, distribution of documents at the place of despatch and place of export, acceptance of proof of export/filing of claim etc. shall be followed mutatis mutandis.
6.2 The colour coding of A.R.E.2 will be as follows:-
Original White
Duplicate Buff
Triplicate Pink
Quadruplicate Green
Quintuplicate Blue
7. Presentation of claim of rebate
7.1 The claim for rebate of duty paid on materials used in the manufacture or processing of goods shall be lodged only with the Deputy/Assistant Commissioner of Central Excise having jurisdiction of the place approved for manufacture or processing of such export goods. The following documents shall be presented with the claim: -
(i) Original copy of the ARE2 duly endorsed by the Customs Officer;
(ii) Duty self-attested copy of Shipping Bill (Export Promotion Copy)
(iii) Duly self-attested copy of Bill of lading/ Air way bill
(iv) Duplicate copy of the Central Excise Invoice under which Central Excise duty was paid/accounted as payable on goods cleared for export. [where rebate of finished goods are also being claimed]
(v) Duplicate copy of the ARE.2 received from the customs officer in a sealed cover (if obtained).
8. Communication of deficiency in claim
8.1 The Assistant Commissioner of Central Excise should point out deficiency, if any within 15 days of lodging of the claim and ask the exporter to rectify the same within 15 days. Queries/ deficiencies shall be pointed out at one go and piecemeal queries should be avoided. The claim of rebate should be disposed of within a maximum period of two months.
8.2 Only a manufacture or processor of finished goods who exports the goods can claim benefit of input stage rebate. Benefit of the input stage rebate shall not be extended where export are through merchant exporters.
9. Accounts & Returns
9.1 The manufacturer shall maintain register of duty paid materials brought to the factory for manufacture of finished goods for export under claim for input stage rebate and the account for finished goods manufactured and exported. Any officer duly empowered by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise in this behalf shall have access at all reasonable times to any premises indicated in the application. The applicant shall also permit the officer of Central Excise access to any records relating to the production, storage and export of goods.
10. Checks by Customs Officers
10.1 Samples will be invariably drawn by the Customs Officers for testing at the place of export in case the export goods are of sensitive nature considering that they are made from materials bearing high Central Excise Duty.
10.2 Customs officer responsible for making endorsement in A.R.E.2 shall carefully check that exports are not covered under any of the following:
- The Duty Drawback Scheme
- A Value Based Advance Licence issued prior to 31.03.95
- A Quantity Based Advance Licence issued prior to 31.03.95
1.1 The Government has, by Notification No. 41/2001-Central Excise (N.T.) dated 26.6.2001 [hereinafter referred to as the ‘said notification’] allowed rebate of whole of the duty paid on excisable goods, which are in fact materials or inputs for manufacture or processing of other goods, on their exportation out of India, to any country except Nepal and Bhutan, to be paid subject to the conditions and the procedure specified in the above-mentioned notification.
1.2 It may be noted that in rule 18 and in said notification, expression ‘export goods’ has been used. It refers excisable goods (dutiable or exempted) as well as non-excisable goods. Thus the benefit of input stage rebate can be claimed on export of all finished goods whether excisable or not.
1.3 It may be also noted that materials may be used for manufacture or processing. In other words, any processing not amounting to manufacture (such as packing, blending etc.) will also be eligible for the benefit under said notification.
1.4. The expression ‘material’ shall mean all raw materials, consumables, components, semi-finished goods, assemblies, sub-assemblies, intermediate goods, accessories, parts and packing materials required for manufacture or processing of export goods. Rebate of Central Excise duty paid on equipment and machinery in the nature of capital goods used in relation to manufacture or process of finished goods being shall not be allowed.
1.5 The benefit of input stage rebate cannot be claimed in any of the following situations:
(i) where the finished goods are exported under Claim for Duty Drawback.
(ii) where the finished goods are exported in discharge of export obligations under a Value Advance Licence or a Quantity Based Advance Licence issued before 31.03.95.
(iii) where facility of input stage credit is availed under CENVAT Credit Rules, 2001.
(iv) The market price of the goods is less than the rebate amount.
(v) The amount of rebate admissible is less then Rs. 500/-
1.6 The claim for rebate should be filed within the time stipulated under Section 11B of the Central Excise Act, 1944.
2. Procedures and conditions to be followed
2.1 The manufacturer or processor shall file a declaration (Annexure-24)with the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacture describing the finished goods proposed to be manufactured or processed along with their rate of duty leviable and manufacturing/processing formula with particular reference to quantity or proportion in which the materials are actually used as well as the quality. The declaration shall also contain the tariff classification, rate of duty paid or payable on the materials so used, both in words and figures, in relation to the finished goods to be exported. Where there are more than one export product, separate statement of the input-output ratios may be finished for each export product. The consumption should be net of recycled materials. Where recoverable wastage are generated but not recycled but sold on account of its unsuitability, the same should be clearly reflected in the declaration. The declarant should also enclose, in case of a new product or in case where the manufacturer is not regularly manufacturing the export goods and clearing for home consumption or export, a write up of manufacturing process.
3. Verification and grant of permission
3.1 The Deputy/Assistant Commissioner of Central Excise shall verify the correctness of the ratio of input and output mentioned in the declaration filed before commencement of export of such goods, if necessary, by calling for samples of finished goods or by inspecting such goods in the factory of manufacture or process. If, after such verification, the Deputy/Assistant Commissioner of Central Excise is also satisfied that there is no likelihood of evasion of duty, he may grant permission to the applicant for manufacture or processing and export of finished goods.
3.3 It is clarified that for the sake of convenience and transparency, input output norms notified under the Export Import Policy may be accepted by the Department unless there are specific reasons for variation. However, in case, the input output norms notified under the Export Import Policy does not include all the materials used in export goods, the claim under this scheme should not be denied merely on that ground.
3.4 If for any reason the Deputy/Assistant Commissioner of Central Excise is not satisfied with reference to the correctness of the consumption norms claimed by the applicant, especially where the product is being manufactured for the first time in his jurisdiction, he may permit the manufacturing operations and the verification of the consumption norms should be completed while the process of manufacture is on. The verification should be completed before allowing the export of the goods as the manufacturer working under this Scheme is expected to declare the raw materials costumed is the ARE-2 for claiming rebate.
3.5 The permission granted by the Deputy/Assistant Commissioner of Central Excise can be withdrawn at any time if any glaring misuse resulting into loss of revenue comes to his notice.
3.6 Any change in the consumption ratio [input-output ratio] should be promptly intimated by the manufacturer to the Deputy/Assistant Commissioner of Central Excise and the jurisdictional Range Superintendent giving reference of the permission granted. If necessary, the Deputy/Assistant Commissioner of Central Excise may order fresh verification.
4. Procurement of material
4.1 The manufacturer or processor shall obtain the materials to be utilised in the manufacture of the finished goods intended for export directly from the registered factory in which such goods are produced, accompanied by an invoice under rule 11 of the said Rules.
4.2 The manufacturer or processor may also procure materials from dealers registered for the purposes of the CENVAT Credit Rules, 2001 under invoices issued by such dealers.
5. Removal of materials or partially processed material for processing
5.1 The Deputy/Assistant Commissioner of Central Excise may permit a manufacturer to remove the materials as such or after the said materials have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory -
(i) for the purposes of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture of the finished goods and return the same to his factory without payment of duty for further use in the manufacture of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or process; or
(ii) for the purpose of manufacture of intermediate products necessary for the manufacture or processing of finished goods and return the said intermediate products to his factory for further use in the manufacture or process of finished goods without payment of duty or remove the same, without payment of duty for export, provided that the waste, if any, arising in the course of such operation is also returned to the factory of manufacturer or processor;
Any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured or processed in the factory of the manufacturer or processor;
6. Procedure for export
6.1 The goods shall be exported on the application in Form A.R.E. 2 specified (Annexure-23) and the procedures specified in Notification No.40/2001-Central Excise (N.T.) dated 26th June, 2001 shall be followed. In other words, the exporter has option to pay duty on finished export goods (if these are excisable) and claim rebate of such duty. He may also export the excisable goods without payment of duty. In both cases, fresh A.R.E.1 is not required because export will be effected on A.R.E.2 itself. But the procedure specified in the aforementioned notifications relating to removals, distribution of documents at the place of despatch and place of export, acceptance of proof of export/filing of claim etc. shall be followed mutatis mutandis.
6.2 The colour coding of A.R.E.2 will be as follows:-
Original White
Duplicate Buff
Triplicate Pink
Quadruplicate Green
Quintuplicate Blue
7. Presentation of claim of rebate
7.1 The claim for rebate of duty paid on materials used in the manufacture or processing of goods shall be lodged only with the Deputy/Assistant Commissioner of Central Excise having jurisdiction of the place approved for manufacture or processing of such export goods. The following documents shall be presented with the claim: -
(i) Original copy of the ARE2 duly endorsed by the Customs Officer;
(ii) Duty self-attested copy of Shipping Bill (Export Promotion Copy)
(iii) Duly self-attested copy of Bill of lading/ Air way bill
(iv) Duplicate copy of the Central Excise Invoice under which Central Excise duty was paid/accounted as payable on goods cleared for export. [where rebate of finished goods are also being claimed]
(v) Duplicate copy of the ARE.2 received from the customs officer in a sealed cover (if obtained).
8. Communication of deficiency in claim
8.1 The Assistant Commissioner of Central Excise should point out deficiency, if any within 15 days of lodging of the claim and ask the exporter to rectify the same within 15 days. Queries/ deficiencies shall be pointed out at one go and piecemeal queries should be avoided. The claim of rebate should be disposed of within a maximum period of two months.
8.2 Only a manufacture or processor of finished goods who exports the goods can claim benefit of input stage rebate. Benefit of the input stage rebate shall not be extended where export are through merchant exporters.
9. Accounts & Returns
9.1 The manufacturer shall maintain register of duty paid materials brought to the factory for manufacture of finished goods for export under claim for input stage rebate and the account for finished goods manufactured and exported. Any officer duly empowered by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise in this behalf shall have access at all reasonable times to any premises indicated in the application. The applicant shall also permit the officer of Central Excise access to any records relating to the production, storage and export of goods.
10. Checks by Customs Officers
10.1 Samples will be invariably drawn by the Customs Officers for testing at the place of export in case the export goods are of sensitive nature considering that they are made from materials bearing high Central Excise Duty.
10.2 Customs officer responsible for making endorsement in A.R.E.2 shall carefully check that exports are not covered under any of the following:
- The Duty Drawback Scheme
- A Value Based Advance Licence issued prior to 31.03.95
- A Quantity Based Advance Licence issued prior to 31.03.95
10 October 2013
Dear sir,
Thanks for your prpmpt reply.
Regards,
Mahadev
Thanks for your prpmpt reply.
Regards,
Mahadev
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