Export to Nepal without payment of Excise Duty

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nagendra kumar singh (Querist)
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21 March 2011 I need your help regarding following-
We have to export to Nepal exisable goods. Can we export without payment of excise duty under bond as per notification 45/2001-CE(NT) Dt 26.06.2001 in the following situation-
1. Name of Nepali importer is say XYZ
2.Said Nepali importer has given order to Indian Company- Usha International
3.Nepali importer has approached to his banker Nabil Bank Ltd. of Nepal for payment arrangement. Nabil Bank Ltd has taken Nepali currency from importer XYZ and given one cheque of 12,30,000 INR in the name of Usha International Ltd. drawn on Standard Chartered Bank, 19, N.S.Road,Kolkata(cheque is attached here with for kind perusal)
4.Usha International has deposited that cheque in the HDFC and that has been paid by Standard Chartered Bank, 19, N.S.Road,Kolkata in INR.
Your cooperation in this is highly solicited
Regards,
Nagendra
09836305344
For ready reference original text of notification no 45/2001 is given here below-
Export under bond to Nepal or Bhutan where payment is in freely convertible currency. – Export under bond to Nepal or Bhutan where payment is in freely convertible currency, shall be subject to following conditions, namely: -

the importer in Nepal or Bhutan, as the case may be, shall make full payment for the goods as evidenced by furnishing Foreign Inward Remittance Certificate from any bank authorized to deal with foreign exchange by Reserve Bank of India or shall open an irrevocable letter of credit in favour of the exporter in India, before the export takes place;.

condition (i) shall not apply if the excisable goods other than consumer goods, but excluding motor vehicles, are exported without payment of duty as:-

supplies to projects financed by any United Nations agency, the International Bank for Reconstruction and Development, International Development Association, the Asian Development Bank or any other multilateral agency of like nature;
to all diplomatic missions in Nepal or Bhutan provided the Indian Embassy or the Ministry of External Affairs certifies that the import is for the personnel of the diplomatic community;

the exporter shall furnish a bond in Form specified in Annexure-I before the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory, warehouse, or the approved premises or such other officer as authorized by the Board on this behalf, from where the goods are removed for export to Nepal, as the case may be, or Bhutan;
when the export is against an irrevocable letter of credit, the exporter shall furnish a certificate in Form as specified in Annexure-II from the Reserve Bank of India or any other bank authorized to deal in foreign exchange by the Reserve Bank of India, showing that full payment for the goods has been duly received in freely convertible currency. On receipt of such a certificate and on the satisfaction that the goods have been exported in terms of the bond referred to in sub-condition (iii), the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise or the such other officer as authorized by the Board on this behalf shall discharge the exporter of his liabilities under the bond;

Explanation ‘Freely convertible currency’ means Australian Dollars, Australian Schillings, Bahrain Dinars, Belgian Francs, Canadian Dollars, Danish Kroners, Deutsche Marks, European Currency Units (Euros), French Francs, Hongkong Dollars, Italian Lire, Japanese Yen, Kuwaiti Dinars, Malaysian Dollars, Netherlands Guilders, Norwegian Kroners, Pounds Sterling, Singapore Dollars, Swedish Kroners, Swiss Francs and U.S.A. sDollars (and includes Indian Rupees bought by the Asian Development Bank by payment to the Reserve Bank of India in foreign exchange).

P.Bashista

P.Bashista (Expert)
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22 March 2011 You will fall in the ambit of this notification only if your transaction currency would have been any of the free convertaible currency mentioned in the notification. As you have made payment to the Usha International in Indian currency you cannot fall in the ambit of this notification.
In regard to "and includes Indian Rupees bought by the Asian Development Bank by payment to the Reserve Bank of India in foreign exchange" the Napeli Bank should have made payment in foriegn currency to Usha International then only you could have fall in the ambit of this notification.