Export Goods to sell in domestic market

[prabal mukherjee]

Dear Sir,

We have brought Iron Ore Pellet from X party, of Orissa under ARE-1 and CT-I to West Bengal for export. We have exported almost 90% of the cargo. But due to sudden fall in chinese market the buyer back-out to take the balance cargo and we got stuck with the balance cargo.

We have taken excise registration with a view that if we could sell the cargo in domestic market. We have found one buyer, please advise what is the exact procedure to sell the cargo in domestic market.

Much of help.

Thanks

Prabal Mukherjee

[YAGAY andSUN]

Dear Prabal,

Please refer para 2 (v) of Notification No. 42/2001-C.E.(N.T.) dated 20-06-2001 in this regard.

Cancellation of applications: (a) If the excisable goods are not exported, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise or Maritime Commissioner or such other officer as authorized by the Board on this behalf, as the case may be, to whom the bond or letter of undertaking has been furnished, may, on written request for cancellation of application, cancel said application and allow diversion of goods for consumption in India subject to the sub-Para (b);

(b) The exporter shall pay the duty as specified in the application along with interest at the rate of twenty four percent per annum on such duty from the date of removal for export from the factory or warehouse or any other approved premises till the date of payment of duty.

 

You may get CT-1 form modified from the Jurisdictional Authority and remaining quantity can be removed on payment of duty within India.

 

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

 

[Mahir S]

1) Issue a letter to the CT-1 issuing authority requesting for modification/issuance of NOC of the CT-1 issued to u, with reasons thereof.

2) Send back the dated acknowledged copy of the above said letter and modified/NOC copy of CT-1 to the Vendor alongwith the received ARE-1/Invoice copy.

3) Make payment of duty with interest for the part of goods not exported and clear the goods under domestic market. Enclose the payment challan and invoice copy of goods cleared with above documents.

4) The vendor shall submit the above documents and intimate the Range office about non-export of the part consignment and payment of duty thereon.

5) Also provide proof of export to the vendor for the goods already exported, who shall submit it to the Range officer.

6) After modification of the CT -1, you may take re-credit of the duty amount deducted from Bond Balance for such export.

[prabal mukherjee]

Dear Mr. Naveed S

Thanks a lot. But do the excise duty payment has to be done by both exporter and vendor?

Please let me know.

Thanks

[Mahir S]

Dear Mukherjee ji,

The duty is required to be paid either by the vendor or the exporter.

Since you have been registered with excise department, you can pay the duty/interest amount and follow the procedure mentioned in my above submission.

There are other 2 procedures also that you can follow in your case and in future : -

(i) If duty is to be paid by the vendor, then follow the procedure mentioned in my above submission except point no. 03.

(ii) The remaining goods not exported can be returned back to the original vendor by following the above procedure except point no. 03; instead enclose the invoice and L/R copy for return of goods.

Modification/obtaining NOC from the authority issuing CT-1 is of utmost importance in all above transactions. The CT-1 issuing authority shall guide you in the matter.

[prabal mukherjee]

Thanks a lot. well noted your advises.

[Mahir S]

Thanks and all the best..

AI Summary

Diversion of export goods to domestic market requires modified CT-1, payment of excise duty with interest, and notification. When export consignments remain unexported, the authority that accepted the bond may cancel the export application and permit diversion to the domestic market if the exporter pays the excise duty specified with interest from removal date. Obtaining modification or an NOC to the CT-1, producing ARE-1/invoice copies, making duty and interest payment, notifying the range office, and furnishing export proof for the exported portion are the operative steps. Either exporter or vendor may pay the duty and the exporter may seek re-credit of bond balances after payment.