Rule 19 of the Central Excise Rules, 2002 places following conditions and procedures for export of goods under bond without payment of duty. Let us see the conditions first:-
- Any goods may be exported without payment of duty from a factory of the manufacturer or producer or warehouse or any other premises, if it is approved by the Principal Commissioner or Commissioner.
- Any material may be removed without payment of the duty from a factory of the manufacturer or producer or warehouse or any other premises, for use in the manufacture or processing of goods which are exported, if it is approved by the Principal Commissioner or Commissioner.
- The export shall be subject to such conditions, safeguards and procedures which are specified by the board via a notification.
The CBEC via its Notification No. 42/2001-CE(N.T) dated 26-06-2001 has specified that the export to a place other than Bhutan shall be subject to the following conditions and limitations:-
♠ Furnishing of bond by the Exporter:-
A general bond shall be furnished in the Form B-1 to,
- the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having Jurisdiction over the factory, warehouse or such approved premises; or
- the Maritime Commissioner; or
- Officer which is authorised by the Board on this behalf.
The Bond shall be equal to the amount of duty chargeable on goods with such surety or security as officer may approve. The manufacturer- exporter has to furnish an annual letter of undertaking in lieu of a bond. It should be in the form UT-1. Exporters are also required to indicate on the ARE-1 which is an application form for export, the complete address of the authority before whom the bond is executed and to whom the documents are to be submitted for admission of proof of export.
♠ The goods should be exported within 6 months from the date on which these were cleared for export from the factory of the production or the manufacture or warehouse or other approved premises.
♠ When the export is from a place other than registered factory or warehouse, make sure that the excisable goods are in original packed condition and identifiable as to their origin.
♠ The other thing to consider is that the export of excisable goods which are charged to nil rate of duty or are wholly exempted from payment of duty, other than goods cleared by a 100% export oriented undertaking, shall not be allowed under this notification i.e. exempted goods cannot be exported under bond.
Now let us checkout the procedures,
The procedure for clearance of goods for export without payment of duty from the factory or warehouse is as follows:-
- The goods can be removed by the manufacturer-exporter without payment of duty only after furnishing the letter of undertaking.
- After furnishing the bond, a manufacturer shall obtain certificates in Form CT-1 which is generally issued by the Superintendent of Central Excise having jurisdiction over the factory or warehouse or approved premises. It can also be obtained from Maritime Commissioner or such other officer which are authorised by the board on this behalf.
- He may now procure excisable goods on the basis of such certificate as mentioned above, without payment of duty for export by indicating the quantity, value and duty involved therein.
- The exporter who has furnished bond shall ensure that the debit in bond account does not exceed the credit available therein at any point of time.
- Such general bond or letter of undertaking shall not be discharged unless the goods are duly exported, to the satisfaction of the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise or Maritime Commissioner or such other officer which are authorized by the board on this behalf, within the time allowed for such export or are otherwise accounted for to the satisfaction of such officer, or until the full duty due upon any deficiency of goods, not accounted so, and interest , if any, has been paid.
The above provisions are regarding export under bond without payment of duty to a place other than Bhutan.
(The above article is contributed by Dipesh Murarka having professional and academic interests in Accounts, Auditing and Taxation arenas. He can be approached at email@example.com)