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Regarding exports of fabrics after cutting and packing under claims of
rebate
Circular
No. 176
dated 27th February 1996
It
has been brought to the notice of the -Board that rebate claims are not being
sanctioned where duty paid fairies were exported after cutting and packing.
2.
It has been reported that, in practice, the Divisional Assistant
Commissioners had been granting permissions for cutting and re-packing of duty
paid fabrics received in lump form, after proper identification vis-�-vis the
duty paid document. Supervision charges were also collected in such cases, which
indicate that the entire activity of cutting and re-packing was carried out
under Central Excise supervision. It has been reported that this practice was
similar to the procedure laid down under Rule 191A to export - except that in
this case duty paid fabrics were procured for cutting and packing from open
market purportedly under cover of duty paying documents, and AR4 forms were used
in place of AR5 forms prescribed under Rule 191A.
3.
To remove the genuine difficulties, Board had issued Instruction vide
Circular No. 155/66/95-CX dated 17.10.95 to grant the rebate where procedure
laid down under erstwhile Rule 191A was followed. The reference to observance of
the procedure under Rule 191A is unintended and unnecessary, since if the
procedure under rule 191A had been followed, there would not have been need for
any relaxation. This Circular had clearly mentioned that the Commissionerates
should ensure that genuine exporters are not put to any difficulty.
4.
The matter has again been examined by the Board. It is observed that
Proviso to sub-rule (1) of the erstwhile Rule 12 as well as the new Rule 12 of
the Central Excise Rules, 1944, empowers the Commissioners that if they are
satisfied that the goods have in fact been exported they may, for reasons to be
recorded in writing, allow or any part of the claim for such rebate even if all
or any of the conditions laid down in any notification issued under this rule
have not been complied with.
5.
With a view to obviate the difficulties, if has been decided by the Board
that rebate claims prior to 17.10.95 should not be rejected merely on technical
grounds - in such cases where -
(a)
the goods were subjected to cutting and re-packing with specific/general
permission of Assistant Commissioner,
(b)
cutting and re-packing was done under Central Excise supervision after
establishing the identity of goods with documents,
(c)
other substantial requirements of existing procedures were sub-statically
complied with. In case of any departure from the strict procedure, veracity of
the exports, identity of the goods, duty paid nature of the goods etc. can be
established by making a reference to the Central Excise Officer of the factory
of origin and/ or the Customs Officer and the port of export, as the case may
be, or by issuing a query memo to the exporter wherever necessary, to explain
any apparent discrepancy.
(d)
evidence is produced that the goods were actually exported.
(e)
any evidence of misuse of such permission, or discrepancies in respect of
value, quantity, description etc. are not noticed.
6.
For the period after the aforesaid date, detailed instruction has already
been issued vide Circular No. 155/66/95-CX dated 17.10.95.
7.
Rebate of duty may be allowed after suitably relaxing certain conditions
by the Commissioners or by any Officer to whom the power is delegated by him.
8.
In the above connection, Do letter of Member (CX) vide F.No.
209/63/95-CX.6 dated 19.2.96 may also be referred to for the guidance. Where any
exporters had come to an adverse notice, their past as well as future claims
should be got examined by a Senior Officer of the level of Additional
Commissioner and dealt with on merits.
9.
Field formations and trade may be informed suitably. The scrutiny of
pending claims should be got done on priority basis to ensure that no genuine
claims are delayed and the fraudulent claims are dealt with in accordance with
law after following the principles of natural justice.
10.
Where the post factor enquiries/ investigations as directed above reveals
that the goods exported were not duty paid goods, rebates if any sanctioned may
be recovered as provided in law. Such recovery shall be without prejudice to any
other action, which can be taken under law where so, warranted.
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