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Exported less quantity than ct1/bond executed

Rajesh Kumar K (Finance Manager) (50 Points)

31 August 2016

D/All,

One of my client who is a Merchant exported recently exported one 20ft container. The product is dutiable, hence executed bond (CT1) for removing goods from Manufacturer's Godown to Port. Out of the 1000 Cartons we could only accomodate 900 cartons and the balance 100 cartons returned (Debit note) to the manufacturer. Only submitting ARE1 in proof of the completion of exports to the authority who issued CT1, they asked for the Duty of the balance 100 Cartons. We are exporting the balance quantity in the next consignment scheduled on 15-Oct-2016. Do we have to pay duty? Can we hold Goods upto 6 months? Whats the Central Excise proceudre in those situations?

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6 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 31 August 2016

from the point of CT-1 no issue, but from the point of ARE-1, short shipment, means goods sold on way, you had to bring the goods back in factory premises,

if the goods are lying in duty free zone of customs then immediately obtain a certificate from customs that the parts of consignment covered under ARE-1 ref are lying in customs zone, and awaiting shipment , failing which excise payment can not be denied.

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Rajesh Kumar K (Finance Manager) (50 Points)
Replied 01 September 2016

To whom should I give letter? From authority issued CT1, Superintendent of Mfg's godown situated or Customs authority where the goods are kept at present?

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 01 September 2016

goods issued 1000 pcs under cover of ARE-1, but only 900 got exported, so where the balance 100 gone, if not exported then duty is payable, thats the simple logic of Excise department

in your ARE-1 , customs has endorsed paased 900 pcs, while the front page covers 1000 pcs, so the deficit of 100 pcs stays there, under such situations , usualy immediately at the time of loading the assesee has to split the ARE-1 in 900+100 under knowledge of their juridictinal R/O, and offer the 900 pcs ARE for export, and keep the 100 pcs ARE-1 pending ( 180 days time limit is there for export, from the date of clearance)

however the assesee failed to maintain the procedure, now if the remaining 100 pcs are lying with customs then obtain a certificate from customs that part of the specified ARE-1 (quantity 100 nos ,value .......) is lying with them, subject to get loaded with next consignment, and confirming that the goods are lying in their custody.

the assesee has to communicate this certificate to CT-1 issuing authority , VIA their Range office,

at the time of next shipment ( in oct 2016) a fresh ARE-1 would be needed for 100 pcs, giving reference of old ARE-1 and invoice, with R/O endorsement, on the basis of customs certificate submitted, ..............when the balance 100 pcs would get shipped, and ARE-1 is endorsed by customs, the old ARE-1 of 1000 pcs would get mached, which no short shipment

as the process is not followed on the date of mismatch, the juridiction of maritime commissioner will be helpful to steady and allow the case, because the assesee premises and customs port both comes under his juridication.

Rajesh Kumar K (Finance Manager) (50 Points)
Replied 07 September 2016

Thank you sir.

The party changed the ARE1 and mentioned only 900 cartons. Hence no question of mismatch of quantiy in ARE1. He has obtained CT1/Bond for 1000 cartons. Can we hold it for next shipment?

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 07 September 2016

party changed the ARE-1 ? is it in juridiction of party ? as the 3rd and 4th copy of ARE1 is to be submitted to R/O at the time of clearance, or within 24 hrs of clearance,

if the same is maintained, than CT-1 is partly used and R/O will look the matter and issue the non utilization certificate for remaining quantity.