Circular No. 294 dated 30^th January 1997

It has been represented to the Board that certain rebate claims are not being sanctioned to the merchant exporters who have purchased the goods, such as two-wheelers, from the depots of the manufacturers on the grounds that the condition specified in Notification No. 41/94-CE (NT)/dated 22.9.94 that the goods should be directly exported from the factory or warehouse, has not been complied with. Also, AR-4 has not been prepared consignment-wise. It has been stated that goods exported are easily identifiable, exports have been effected after due verification of the said goods and their duty paid character by Central Excise Officers, and the proof of payment of duty has been verified by the Central Excise Officers having jurisdiction over the manufacturer's factory.

2.     Representation has also been received to permit exports as ship stores, from the duty paid stock outside the place of manufacture, relaxing the condition of direct exports from the factory in terms of Notification No. 44/ 94-CE (NT) dated 22.9.94.

3.     The matter has been examined by the Board.

4.     It is found that there are certain goods, which can clearly be identifiable with the help of certain marks and/or numbers, and their duty paid character can be verified beyond doubt. For example, it is noticed that two-wheelers have special characteristics as each unit is marked with a unique engine number and chassis number by which it is possible to correlate the goods exported and payment of duty thereon.

5.     The requirement of preparing AR-4 consignment -wise is meant to facilitate verification of duty paid character of the goods by the Central Excise Officers having jurisdiction cover the manufacturers' factory and if it is possible otherwise, this requirement may not be insisted upon for past cases.

6.     It has, therefore, been decided that the cases where exporters submit the proof that goods have actually been exported to the satisfaction of the rebate sanctioning authority, and that where goods are clearly identifiable and co relatable with the goods cleared from factory on payment of duty, the condition of exports being made directly from the factory/ warehouse should be deemed to have been waived. Other technical deviations not having revenue implications may also be condoned.

7.     The pending claims should be settled expeditiously.

8.     However, in case of future exports [including the export as ship stores], to avail the aforesaid waiver from the condition of direct exports from the factory/ warehouse, the exporters will be required to follow the factory/ warehouse, the exporters will be required to follow the procedure prescribed in Circular No. 2/75 dated 22.1.75 [reiterated in Circular No. 18/92 dated 18.12.92], which is reiterated below with certain modifications:

8.1   An exporter, (including a manufacturer-exporter) desiring to export duty paid excisable goods (capable of being clearly identified) which are in original factory packed condition/ not processed in any manner after being cleared from the factory stored outside the place of manufacturer should make an application in writing to the superintendent of Central Excise incharge of the Range under whose jurisdiction such goods are stored. This application should be accompanied with form AR4 duly completed in Sixtuplicate, the invoice on which they have purchased the goods from the manufacturer or his dealer and furnish the following information:

(a)   Name of the exporter

(b)   Full description of excisable goods along with marks and/ or numbers.

(c)   Name of the manufacturer of excisable goods.

(d)   Number and date of the duty paying document prescribed under Rule 52A under which the excisable goods are cleared from the factory and the quantity cleared. (Photocopy of invoice/ duty paying document by submitted).

(e)   The rate of duty and the amount of duty paid on excisable goods.  

8.2   The AR4 form should have a progressive number commencing with Sl. No. 1 for each financial year in respect of each exporter with a distinguishing mark. Separate form should be made use of for export of packages/ consignments cleared from the same factory/ warehouse under different invoices or from the different factories/ warehouses. On each such form it should be indicated prominently that the goods are for export under claim of rebate of duty.

8.3   On receipt of the above application and particulars, the particulars of the packages/ goods lying stored should be verified with the particulars given in the application and the AR-4 form, in such manner and according to such procedure as may be prescribed by the Commissioner.

8.4   If the Central Excise Officer deputed for verification of the goods for export is satisfied about the identity of the goods, its duty paid character and all other particulars given by the exporter in his application and AR-4, he will endorse such forms and permit the export.

8.5   The exporter will have to pay the supervision charges at the prescribed rates for the services of the Central Excise Officer deputed for the purpose.

8.6      The disposal of different copies of AR-4 forms should be in the following manner:

i)     the original and duplicate copies are to be returned to the exporter for being presented by him alongwith his shipping bill, other documents and export consignment at the point of export.

ii)    Triplicate and quadruplicate copies to be sent to the Superintendent Incharge of the Range in whose jurisdiction the factory from which the excisable goods had been originally cleared on payment of duty is situated. That Superintendent will requisition the relevant invoice/ duty paying document which the manufacturer shall handover to the Superintendent promptly under proper receipt, and the Superintendent will carry out necessary verification, and certify the correctness of duty payment on both triplicate & quadruplicate copies of AR-4. He will also endorse on the reverse of manufacturers' invoice "GOODS EXPORTED - AR-4 VERIFIED", (and return it to the manufacturer under proper receipt.) He will forward the triplicate copy to the Maritime Commissioner of the port from where the goods were/ are exported. The quadruplicate copy will be forwarded to his Chief Accounts Officer. The Range Superintendent will also maintain a register indicating name of the exporter, Range/ Division/ Commissionerate indicating name of the exporter' godown, warehouse etc. are located and where AR-4 is prepared, AR-4 No. and date, description of items, corresponding invoice No. of the manufacturer, remarks regarding verification, date of dispatch of triplicate & quadruplicate copy.

iii)   the quintuplicate copy is to be retained by the Superintendent Incharge of the range from where the goods have been exported for his record.

iv)    the Sixtuplicate copy will be given to the exporter for his own record.

8.7   The goods, other than ship stores, should be exported within a period of six month from the date on which the goods were first cleared from the producing factory or the warehouse or within such extended period, (not exceeding two years after the date of removal from the producing factory) as the Commissioner may in any particular case allow, and the claim for rebate, together with the proof of due exportation is filed with the Assistant Commissioner of Central Excise before the expiry of period specified in Section 11B of the Central Excise Act, 1944 (1 of 1944).

8.8   The rebate will be sanctioned, if admissible otherwise, after following the usual procedure.

8.9   The Chief Account Officer of the Maritime Commissioner or the Internal audit Department, as the case may be, should conduct cent-percent-post-audit of the documents by the making a reference to the Chief Accounts Officer of the Commissionerate from where the goods had been originally cleared on payment of duty as per existing procedure.

9.     The above procedure will be subject to the provision of Rule 12 of Central Excise Rules, 1944 the notification issued thereunder and other instructions issued by the Board except as specifically provided for, herein before.