Un registered marchant exporter under central excise.

[Narendra Soni]

Dear Experts,

Kindly suggest in the below case:-

"A" is Manufacturer.

"B" is Marchent exporter- who is not registered with central excise.

"B" made a contract with "A" to produce good & export directly from the factory of "A" to the buyer of "B".

1. How "A" can despatch the goods without payment of duty from his factory.

2.Who can execute B-1 Bond.

3.How can CT-1 will be arranged by "B" OR it is not required.

4.Can "A" use his own advance authorisation to fulfill obligation in this export.

Please provide reply with proper Rule/notification with procedure .

Remind-"B" is nor registered with central excise department.

[CSSANJAY MALHOTRA]

Dear Mr. Soni,

Please refer to Issue ID 109842. Similar to your query.

Note that Advance Authorisation benefit is based on "Actual User Condition" and is available to person who has imported goods as he has to fulfill Export Obligation.

[Narendra Soni]

Thanks Mr.Sanjay.

Please suggest for the below only:-

3.How can CT-1 will be arranged by "B" OR it is not required when "B" is not registered with central excise department.

4.There is no movement of Raw material or finished goods between both the parties.

"A" Manufactures goods from his own imported raw material, and used his own Advance authorisation for fulfill EO against it.hence actual user condition will fulfill.

[CSSANJAY MALHOTRA]

Dear Mr. Soni,

Do take up with Mr. A so that he may use his bond, but you must supply him with the copy of ARE-1 duly stamped by you.

If above is not agreed upon, CT-1 has to be arranged at B's end and for this B's has to register with Central Excise, Execute Bond with them against which CT-1 will be issued.

If Mr. A has imported and manufactured material, then his Advance Authorization will be mentioned on Shipping Bill and Mr. A can use his Bond against ARE-1 given by Mr. B.

Mr. B to ensure that the name of Mr. A shall be mention as Supporting Manufacturer besides his AA on Shipping Bill.

[Mahir S]

Yes Sir, and further to add that if A uses his B1 Bond , then A shall be liable for submission of Proof of export.

[CSSANJAY MALHOTRA]

Dear Mr Mahir,

Yes, agree with you. Thanks

AI Summary

Unregistered merchant exporter: manufacturer may use its bond for duty free dispatch but bears proof of export liability.
If the merchant exporter is unregistered, the manufacturer may dispatch goods duty free using the manufacturer's bond and the merchant's duly stamped ARE 1, but the manufacturer will be liable for submission of proof of export. Alternatively the merchant must register, execute the bond and obtain CT 1. If the manufacturer has used imported inputs under an Advance Authorisation, he may utilise that authorisation by noting it on the shipping bill and being named as supporting manufacturer.