Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Circular No. 976/10/2013-CX
New Delhi, the 12th December, 2103
To
All Chief Commissioners of Central Excise & Customs,
All Chief Commissioners of Central Excise,
All Directors General,
Sir / Madam,
Sub:- Extension of warehousing and acceptance of LUT in place of Bank Guarantee
for export warehousing for Status Holder Manufacturer Exporters – reg.
I am directed to invite your attention to
Circular No. 579/16/2001–CX dated
26.06.2001 and
Circular No. 581/18/2001-CX dated 29.06.2001, which prescribe
conditions, procedures and safeguards applicable for storage in a warehouse
registered at such places as may be specified by the Board and export therefrom
regarding all excisable goods specified in the First Schedule to the Central
Excise Tariff Act, 1985.
- Paragraph 6 of the
Circular No. 579/16/2001–CX dated 26.06.2001 contains
provisions relating to “Period of warehousing“. The provisions in clause (a) and
clause (b) are not detailed and therefore in pursuance of
notification no
46/2001-CE (N.T.) dated 26.06.2001 and sub-rule (2) of rule 20 of the Central
Excise Rules, 2002, it has been decided to further elaborate the provisions by
replacing the existing clause (a) and clause (b) in paragraph 6 with the
following new clause (a) and clause (b), to read as follows :-
(a) Warehousing of goods shall initially be allowed for a period upto six
months, which may be further extended by the Assistant /Deputy Commissioner,
each extension being for a period not exceeding six months, subject to the
verification that the goods have not deteriorated in quality. The maximum
period, for which goods may be left in the warehouse in which they are
deposited, or in any warehouse to which such goods have been removed, shall be
three years from the date on which such goods were first warehoused. Excisable
goods shall be deemed to be cleared for home consumption on expiry of the
warehousing period including the extensions granted, if any. Duty and interest @
24% per annum shall be charged on such deemed removal.
(b) If the registration of a warehouse is revoked or suspended, the excisable
goods lodged therein shall either be cleared for home consumption on payment of
duty and interest @ 24% per annum or shall be removed to another warehouse
without payment of duty.
- Paragraph 3.2 and paragraph 4.2.1 of the
Circular No. 581/18/2001-CX dated
29.06.2001 contain provisions requiring an exporter to furnish security equal to
25% of the Bond amount for availing the facility of export warehousing.
- Reference has been received in the Board that submission of BG (Bank
Guarantee) leads to increase in transaction cost and, therefore, manufacturer
exporters who are also status holders may be allowed to submit Letter of
Undertaking (LUT) in place of BG. On examination the problem has been found to
be legitimate and, therefore, it has been decided to amend paragraph 3.2 and
paragraph 4.2.1 of the Circular dated 29.06.2001. Accordingly Board specifies
that these paragraphs be amended as follows:
(i) Paragraph 3.2: After the words “backed by twenty five percent security of
the bond amount “ the words “in the manner as prescribed in paragraph 4.2“ shall
be added.
(ii) Paragraph 4.2.1: A proviso, as follows, shall be inserted at the end of the
paragraph.
Provided that where the exporter is a manufacturer and a Status Holder with a
clean track record, the requirement to furnish security equal to 25% of the bond
amount shall be replaced by the requirement of furnishing an LUT initially for a
period upto six months which may be extended by a further period not exceeding
six months. Further extensions in the warehousing period in terms of paragraph
6(a) of the
Circular No. 579/16/2001-CX dated 26.06.2001 shall be allowed to
such exporter only on furnishing security of 25% of the bond amount.
- There is also a need to amend the terms “Super Star Trading House” or “Star
Trading House” used at paragraph 2(1) in the
Circular No. 581/18/2001-CX dated
29.06.2001 and to replace it with the current nomenclature. Accordingly Board
also specifies that paragraph 2(1) of the Circular be amended as follows:
Paragraph 2(1): In this paragraph dealing with Exporters, expression “The
exporters who have been accorded status of Super Star Trading House or Star
Trading House“ may be replaced with the expression “The exporters who are Status
Holder under FTP - 2009-14”. Export Warehousing facility would become available
to all Status Holders under FTP of 2009-14 due to this amendment.
- The contents of this Circular may be brought to the notice of the trade /
exporters by issuing suitable Trade / Public Notices. Suitable Standing Orders /
Instructions may be issued for the guidance of the assessing officers.
Difficulties faced, if any, in implementation of the Circular may please be
brought to the notice of the Board at an early date.
- Receipt of this Circular may kindly be acknowledged.
Yours Faithfully,
(Pankaj Jain)
Under Secretary (CX)
F. No. 201/14/2013-CX.6