Circular No. 176/10/96-Central Excise
Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject: Exports of fabrics after cutting and packing under claims of rebate – Regarding
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-a-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 vid 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-stantially 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 have 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.
