Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject : Value Based/ Quantity Based Advance Licences – Instructions regarding
In a recent study undertaken by the Directorate General of Inspection and Directorate General of Anti Evasion with regard to the procedure being followed in the field to prevent parties availing of the advance licensing route from getting double benefits, it has been noticed that the instructions issued by the Ministry from time to time on the subject have not been followed. As a result no checking appears to be done specially with regard to the benefits availed under rule 56A (since rescinded) and rule 57 A of Central Excise Rule 1944. It has further transpired that in some Custom Houses no steps have been taken to issue instructions to either the field formations or the trade in terms of the various instructions issued by the Ministry to prevent such double benefits
2. In this connection your attention is invited to the detailed instructions issued by the Ministry at the time of issue of Notifications No. 203-Cus / 92 and 204-Cus./92, vide circular No. 3/92 dated 1.6.92 and 4/ 92 dated 16.6.1992. These were followed by further instructions through Ministry’s Circular No. 6/94 dated 22.2.94 and 8/94 dated 3.5.94. these instructions, clearly indicated the declarations to be taken and the procedures to be followed by Customs as well as Central Excise formations in order to ensure that the double benefits are not availed by exporters working under these schemes. The instructions issued had clearly brought out the salient features separately for the VBAL and QBAL to ensure that the distinction between the two schemes are appreciated at the operational level.
3. The matter has been further examined in the Ministry and it has now been decided that in all cases of exports under the Duty Exemption Scheme the processing of shipping bill should be taken up only if:-
(a) the various declarations provided under Ministry’s circular No. 3 of 1992 and 4 of 1992 dated 1.6.92 and 16.9.92 respectively have been furnished with the sipping bill and,
(b) the shipping bill is accompanied by the AR-4 indicating clearly the scheme under which the
goods are being exported and incorporating the declaration with regards to availment of benefits of various Central Excise Rules and its certification by Central Excise Superintendent.
4. On the Excise side, the field formation should ensure that the Exporter exporting under Duty Exemption Scheme clearly indicate on the AR-4, the scheme (VBAL or QBAL) under which the export is proposed to be made and the certificate/ declaration envisaged in para 4 of Ministry’s Circular 6/ 94(DBK) (F.No. 605/ 6/94-DBK dated 22.2.94) and circular letter 8/ 94-DBK (F.No. 605/6/94 dt. 3.5.94) are being furnished by the Exporter. Even under the Self Removal Scheme the Exporter should be advised to make the necessary declaration in the AR-4.
5. The above instructions will also apply mutatis mutandis in the case of exports by merchant exporters and such cases AR-4 with declarations of the manufacturer of goods. certified by Central Excise Superintendent should be produced. Further if the exporter claims that goods have been manufactured either be himself or by another manufacturer (name/ address to be specified) not covered under Central Excise control then the shipping bill should be accompanied by a certificate from the Superintendent of Central Excise having teritorial jurisdiction of the factory to the effect that the unit is not manufacturing excisable goods and hence not availing the relevant benefits under the Central Excise Rules (OR) the unit is manufacturing non-dutiable goods and the benefit of the relevant Central Excise rules have not been availed of in the manufacture of the goods exported.
6. You may take immediate steps to issue suitable instructions to that field formations and Public Notices for the guidance of the trade keeping in view the above referred circulars of the Ministry and further modifications made under this letter. Copies of the same may be endorsed to this office and the DGIACCE.