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Regarding reversal of Modvat credit and payment of interest where exports
were effected under Value Based Advance Licence before 31.1.97.under Special
Scheme
Circular
No. 285 dated 10th January 1997
I
am directed to enclose the text of the scheme announced by the Government to
allow reversal of the Modvat credit availed by exporters in contravention of the
conditions of the Value Based Advance Licensing Scheme, which has already been
circulated by the Directorate of Drawback vide DOKNo.605/140/95-DBK dated
3.1.97. The condition subject to which the benefit of the present scheme is
being extended is set out in the enclosed text.
2.
The quantification of the Modvat credits require to be reversed in such
cases is to be done in the following manner: -
A
= Modvat Credit to be reversed
B
= Total value of exports under VABAL during the financial year, as declared in
AR4 (Sec 4 Value)
C
= Total credit availed in RG-23Axluririg the financial year on till inputs
D
= Total value of goods cleared for home consumption during the financial year
arrived' at under Section 4
FORMULA:
A= BxC/ D+B
3.
In addition to the above amount an interest @ 20% on the amount of Modvat
credit retained by such exporters for the period between the date of exports and
the date of reversal has to be calculated arid deposited by them before 31.1.97
Under the Central Excise Head along with the amount of Modvat wrongly availed
and calculated as above. Where credit has already been reversed, the exporters
shall deposit the interest amount calculated in the manner prescribed above
before 31.l.97 under the Central Excise Head.
4.
Similar action should also be taken, mutatis-mutandis, for merchant
exporters who declared the name of supporting manufacturers while applying for
VABAL.
5.
The Calculation Sheet regarding reversal and the amount of interest
should also be submitted in the Office of the Jurisdictional Assistant
Commissioner who will examine the correctness and intimate the same to the
Commissioner i n the following format: -
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Name
& address of the exporters
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Sl.
No. & date of AR4 / AR4A
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Description
of commodity
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Value
of exports
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Amount
of Modvat credit required to be reserved
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Amount
of Modvat credit actually reversed
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Amount
of interest required to be deposited
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Amount
of interest actually deposited with particulars & date of TR6
Challans
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Remarks
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A.
Amount
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B.
Particulars of debit entry
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C.
Date
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6.
The Commissioner of Central Excise should submit the particulars in the
aforesaid format to Chief Commissioners of Central Excise who will prepare a
consolidated report indicating clearly the defaulting units/ manufacturers who
have not reversed the credit and deposited the interest as stated above and
forward his report by 15.2.97 to the concerned Commissioners of Customs for
taking necessary actions for non-compliance with the conditions of Customs
Notification by them under, intimation to the Board.
7.
It should be ensured that certificates regarding reversal of Modvat in
full or part and payment of interest due shall be issued only by an officer of
the rank of Assistant Commissioner of Central Excise.
8.
Earlier instructions regarding reversal related to VABAL Scheme stand
modified to the above extent.
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