25th November, 2002
Government of India
Ministry of Finance & Company Affairs
Department of Revenue
Central Board of Excise & Customs
I am directed to refer to Board’s Circular No.581/18/2001-CX dated 29.6.2001 relating to export warehousing procedure and to say that representations have been received from trade seeking clarifications and suitable guidelines on the following points:
i) Procedure for export to Nepal from export warehouse;
ii) Direct export of goods after further processing by merchant exporters
2. Regarding (i) above, it has been represented that the said Circular does not prescribe any procedure for export directly from warehouse to Nepal when the transaction is made in Indian rupees as the said Circular states that the procedure for clearance from warehouse shall be governed by Notification No.42/2001-CE (NT) dated 26.6.2001 which does not apply to exports to Nepal. Regarding (ii) above, it has been represented that presently, there is no provision of clearance of goods for exports directly from the premises of the job worker in the case of merchant exporters.
3. The above issues have been examined. Regarding (i) above, Board has observed that if the goods are cleared for export on payment of duty, same is allowed in respect of all countries subject to following the procedure laid down in the relevant notification. Further, the facility of clearances (for export) from export warehouse to Nepal on payment of duty is also available when the transaction is in Indian Rupees. Normally, such removals would be treated as domestic clearances and subject to payment of interest as per paragraph 10 of the said Circular. However, since the goods are ultimately exported and the rebate of duty is given to HMG Nepal, Board has decided to relax this condition and allow the exporter to clear the goods on payment of duty without interest. Accordingly, it is clarified that exports may be allowed directly from the export warehouses to Nepal on payment of duty even when the transactions are done in Indian Rupees and no interest is liable to be paid on the duty paid on such export transactions.
4. Regarding (ii) above, Board observes that denial of facility of clearance of goods directly from the premises of job worker in the case of merchant exporters increases the cost of transactions. In this connection, as in terms of rule 4 (6) of Cenvat Credit Rules, 2002, the clearance of finished goods for export directly from the job workers’ premises has already been provided, Board is of the view that this facility can be extended to merchant exporters who procure goods for export from the export warehouse on the strength of CT-I certificate furnished by the exporter. Accordingly, it is clarified that goods can be cleared directly from the job workers’ premises to export warehouses of merchant exporters for export subject to fulfillment of procedure prescribed by the Commissioner.
5. Trade and field formations may be informed suitably.
6. Receipt of this Circular may be acknowledged.
7. Hindi version follows.