Circular No. 475/41/99-CX
dated 2/8/1999
Government of India
Ministry of Finance
Department of Revenue,
Central Board of Excise & Customs, New Delhi

Subject : Rebate of Excise duty paid on processed textile fabrics notified under section 3A of the Central Excise Act, 1944 – Clarification on certain issues –

It has been brought to the notice of the Board that after the new levy under section 3A of the Central Excise Act, 1944
production), the exporters of such goods were not aware as to what procedure should have been followed. Few exports were effected by indicating / writing on export documents (AR-4, Export Invoice, etc.) that the exports were under bond. Different phrases were used with the intention that any scheme as may be announced by the Government could not enable them to get the export benefits under the Central Excise Rules. The question arises whether rebate claims in such cases should be allowed.

2. Another doubt has arisen whether merchant-exporters can file claims of rebate or the independent processors can alone file the rebate claims.

3. The Board has examined the matter. It is correct that the exporters were uncertain about the procedure they were required to follow immediately after the new levy under section 3A was imposed on processed textiles fabrics, especially during the period 16.12.98 to 15.2.99. But in such cases, all goods stand duty paid, once they are processed in the factory of an Independent Processor and cleared for export. The question of export under “bond” does not arise. The indication/writing on the export  documents (such as invoices, AR4 etc.) – “exports under bond” or any other phrase does not vitiate the rebate  claims. It has, minor deviations subject to the condition that the goods in question are actually exporter and the duty was paid by the independent processors”  factory.

4. Regarding the question whether merchant-exporters can file claims of rebate, it is stated that there is no bar on the merchant-exporters to file rebate claim with the Assistant/Deputy commissioner (Divisional Officer) having jurisdiction over the factory of independent processor from which the goods were exported. The Division Office already gets monthly Return, which gives the values of the different components of the formula specified the determining the quantum of rebate per unit. The merchant exporters can obtain these figures from the factory concerned to prepare their calculation sheet for filing a rebate claim or supplementing a rebate claim already filed.

5. For the purpose of verification of the rebate claims, concerned Divisional Office should determine the rate of rebate, by applying the formula, for each  independent processing factory under his jurisdiction, for each month, on the basis of the RT-12 Return pertaining to a month of such factory. A claim from a merchant-exporter can easily be verified by applying the rate of rebate relating to a particular month to the quantity of processed textile fabrics manufactured and exported during that month.

(P K Sinha)
Under Secretary (CX.6)

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