prpri Duty Drawback – Guidelines for Requirement / Acceptance of Certificate of Non-availment of Modvat Duty Drawback – Guidelines for Requirement / Acceptance of Certificate of Non-availment of Modvat

Circular No. 25/98-Customs
dated 20/4/1998

Government of India
Ministry of Finance
Department of Revenue, New Delhi

Subject : General Note No. 11 of Notification No. 22/97-Cus (N.T.) dated 30th May, 1997 – requirement of Certificates regarding the non-availment of Modvat facility – regarding.

In supersession of Circular No. 17/97- Cus dated 4.6.97 issued by the Directorate of Drawback, Deptt. of Revenue, Ministry of Finance, on the above subject, the following guidelines regarding requirement/acceptance of certificates of non-acailment of Modvat facility for the purposes of processing the drawback claims may be followed in future :-

(i) In the case of goods exported under Bond or claim for rebate of Central Excise duty, an AR-4 Form duly certified, or a certificate from the concerned Suptd. of Central Excise incharge of factory of production shall be produced to the Customs to establish that no Modvat facility has been availed for the goods being exported.

(ii) In respect of goods being exported without AR-4 Form, which are not unconditionally exempt from Central Excise duty or are dutiable,  the manufacturer- exporters under Central Excise control shall produce a certificate twice a year (once in the beginning of the Financial Year, i.e., First Quarter and once around January-March, i.e., Last Quarter) form the Asstt. Commissioner of Central Excise in whose jurisdiction the factory of production is located to the effect that no Modvat credit has been availed on any of the inputs used in the manufacture of export product clearly indicating the name of the manufacturer export and the export products instead of producing such certificate for each and every shipment.

For any new commodity (other than those mentioned in the certificates) a fresh certificate should be obtained by the manufacturer – exporters regarding non- availment of Modvat credit in respect of inputs used in the new commodity.

(iii) (a) Where the export goods being exported by the manufacturer – exporter are unconditionally exempt the from Central Excise duty, a self-declaration of the exporter regarding non-availment of Modvat may the accepted. However, in suitable cases, wherever necessary a certificate may be asked to be produced only once in a year.

(iii) (b) The Commissioner of Central Excise concerned shall also issue a Trade Notice listing the goods which are unconditionally exempt from Central Excise duty in respect of goods manufactured in his jurisdiction. The Customs Offices while processing the drawback  claims shall not insist on the production of a certificate regarding non- availment of Modvat where the export product figures in such lists of unconditionally exempt goods.

The Commissioners of Central Excise shall continuously monitor and update such lists of unconditionally exempt goods pertaining to their Commissionerates and endorse copies of such Trade Notices listing the unconditionally exempt goods to the Director General of Inspection and Director (Central Excise), CEEC for information and further necessary action, if any.

The DG (Inspection) may consolidate and suggest modification in such lists to the Board if any change is required during the financial year.

(iv) (a) Where the manufacturer-exporter is outside the excise control, a self-declaration of the manufacturer-exporter regarding non-availment of Modvat facility may be accepted. However, in suitable cases, wherever necessary, a certificate may be asked to be produced only once in a year and it should not be insisted upon with every Shipping Bill.

(iv) (b) Where the manufacturer- exporter is in the unorganised / cottage sectors, which are unregistered with the Central Excise, the certificate issued by the concerned Council/ Association in respect of non-availment of Modvat credit by their member-exporters specifying the export product, name and address of the manufacturer clearly, may also be accepted.

(v) In the case of merchant-exporter(s) where the name and address, including the factory address of the supporting manufacturer(s) from whom the export goods have been procured, have been declared in the Shipping Bills, duty accompanied by a certificate issued in favour of the declared supporting manufacturer by Central Excise Supdt., incharge of the factory of production to the effect that such manufacturer has not availed the Modvat on any of the inputs used in the manufacture of the export goods, in such cases the merchant exporters should not be asked to produce a separate certificate regarding non-availment of Modvat credit in his own favour.

(vi) In the case of merchant exporter who procures the export goods from the open market, the benefit of All Industry Rates of Duty Drawback shall be restricted to the Customs allocation only, if any. Export goods purchased from the market shall be treated as having availed the Modvat facility and are not entitled to the Central Excise allocation of the All Industry Rate of Drawback.

(Sunil Kumar)
Director (DBK)

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