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Difficulties in clearance of intermediate goods duty free for use in
export goods where said intermediate goods and the export goods are manufactured
within the same factory
Circular
No. 303
dated 11th March 1997
Representations
have been received by the Board stating that the facility of duty free
clearances of the intermediate goods for the manufacture of export goods are
being denied on the ground that Chapter X procedures comprising of inter alia,
namely - inbond manufacture of export goods, maintenance of separate storage/
accountal, etc. could not be followed by a unit manufacturing intermediate goods
and the export goods in the same unit.
2.
Issue has been examined by the Board.
3.
Board had clarified vide its circular No. 229/63/96-CX dated 8.7.1996
that merely because certain provisions of Chapter X viz. generation of CT-3
cannot be followed in cases of intermediate goods which are being manufactured
within the factory premises for the manufacture of export goods, the facility of
clearance of said intermediate goods without payment of duty cannot be taken
away.
4.
It is observed that provisions of Chapter X procedure are applicable
mainly to the cases where intermediate goods are obtained from outside and the
requirement of issue of CT-3 certificate, execution of Bond, separate storage/
accountal of receipt and disposal of such intermediate goods are with a view to
ensure their use for specified purpose.
5.
Keeping in mind the Chapter X procedures cannot be followed mutatis
mutandis where intermediate goods and export goods are manufactured in the same
factory and also that denial of duty free clearance will cause undue hardship to
exporters, Board in of the view that duty free clearance of intermediate goods
under the provisions of Rule 13 should not be denied merely on the ground that
Chapter X procedure could not be followed subject to the conditions that the
Assistant Commissioners of Central Excise are satisfied from the documents/
records available with the manufacturer exporter that the intermediate goods
cleared for the manufacture of export goods have been used for the said purpose
only.
6.
The aforesaid instructions are being issued as the export facilitation
measure and should be followed scrupulously so that the exporters are not put to
undue hardship.
7.
Pending cases may be disposed of accordingly
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