Central Excise

[Guest]

Hi All,

I am a new Merchant Exporter of Fabrics which is under duty charges, My annual trunover will be below Rs.20 lakh. How I have to get duty exemption certificate?

[KASTURI SETHI]

Sh. Kings Ji,

You may contact your jurisdictional Central Excise Range Officer. He is empowered to issue such

[Ganeshan Kalyani]

Sir, you must request the Officer accordingly. Thanks.

[CSSANJAY MALHOTRA]

Dear Querist,

Could you please specify the purpose of Duty Exemption Certificate. Merchant Exporters does not fall into Excise regime as if you fail to Export, your Bond with Excise authorities gets encashed.

My friends have shared their views to approach jurisdictional Excise officer. You may proceed ahead may be some concerns of non-issuance be there, hence better if you state the purpose.

[Guest]

Thanks to all for your response.

Hi Sanjay Ji,

I am a new Merchant Exporter (getting materials from third party), exporting fabrics from India. Since I will not cross threshold limit (Rs.90 lakh) this year, do I need to get excise exemption certificate to produce during customs check to get rid of excise charges..?

[CSSANJAY MALHOTRA]

Dear,

Custom can't ask for Duty Exemption Certificate as the liability is on manufacturer to pay required Excise Duty at the time of clearance of goods from factory. In case of export, duty is either debited from Bond or paid from CENVAT/Cash and later on taken as refund / rebate from Excise Office.

Merchant Exporter has to clear goods under his ARE-1 or manufacturers ARE-1 for Export. On the face of ARE-1, declaration is given as to non-availment of CENVAT facility.

Since you being not registered with Excise, hence Self -declaration is sufficient to Custom Authorities. If you have submitted Bond with Excise, then you have to make sure that the same is released after submission of required Export documents.

Further Fabric is tax free and you might be availing the same exemption for sourcing of goods from Third party and exporting further. Why should Custom call for Duty exemption certificate from you, fail to understand.

Merchant Exporters are not liable to duty until and unless the goods are not exported. In that scenario, either you deposit the duty or the bond will be encashed from dept. No such turnover criteria comes into play.

 

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

Thanks for your comprehensive and crystal clear reply to the query. Sir, I think the querist is inter-mingling SSI exemption based on turnover (When fabric is CE duty free ?) as a manufacturer with the clearance of Merchant Exporter. Is it not phobia ?

[CSSANJAY MALHOTRA]

Dear Sh. Kasturi ji,

Sir, you are 100% correct and am of the same view, hence trying to dig out the querist exact concern...

With your few words as straightway cited would make the querist understand better now....

[Guest]

Hi Sanjay Ji,

Thanks for such descriptive answer. I completely agree with Kasturi sir I got confused with SSI exemption based on turnover.
Sir can I proceed with my export business without excise registration.
Is ARE-1 mandatory I should provide for clearing goods

[KASTURI SETHI]

SSI Units export - Proof of export - Clarifications

Circular No. 648/39/2002-CX., dated 25-7-2002

Readymade garments manufacturer-exporters allowed drawback on self-declaration of non-availment of Cenvat

Circular No. 96/2003-Cus., dated 14-11-2003

 

[KASTURI SETHI]

Sh.M.Kings Ji,

When any product is fully exempted either by way of exemption notification or tariff rate, 'NIL', there is no Central Excise control over that unit manufacturing those goods.

[Guest]

Hi Kasturi sir,

Hearty thanks for giving such an elucidated explanations..

I got it very clear.. Now I will move ahead with full confidence.. :-)

[CSSANJAY MALHOTRA]

R/ Sh. Kasturi ji,

AI Summary

Excise liability on manufacturer: merchant exporters may use ARE 1 and self declaration for export clearance without separate duty certificates. Merchant exporters need not obtain a separate duty exemption certificate for export clearance; excise liability rests with the manufacturer, and non registered exporters may rely on self declaration. Goods for export must be cleared under ARE 1 with declarations on non availment of CENVAT. If a bond was furnished, it is encashed on failure to export or released after submission of export proof. Fully exempt or nil rated products fall outside routine excise control, and SSI turnover exemption for manufacturers is a separate issue not governing merchant exporter clearance.