EXCISE EXEMPTION-DGFT

[HITENDRA DAVE]

We are going to supply  Under Noti.No.21/2002-Custom dated 01.03.2002  supplying to the above Nuclear Power Project are entitled for the Demed Export Benefits given in Para 8.3(a), (b) and (c) applicable for the Foreign Trade Policy  2009-2014 based on Project Authority  Certificate

(a) My question  is   Excise duty fully exmpted  or not?  and no need to reverse 6%

(b) If applicable how can we get Refund  from DGFT?  Whether can we show the Excise duty in Invoice.

[YAGAY andSUN]

Please check Rule 6 (6):- The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either-

(i)	cleared to a unit in a special economic zone; or to a developer of a special economic zone for their authorized operations ; or
(ii)	cleared to a hundred per cent. export-oriented undertaking; or
(iii)	cleared to a unit in an Electronic Hardware Technology Park or Software Technology Park; or
(iv)	supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No.108/95-Central Excise, dated the 28th August, 1995, number G. S R. 602 (E), dated the 28th August, 1995; or
(v)	cleared for export under bond in terms of the provisions of the Central Excise Rules, 2002; or
(vi)	gold or silver falling within Chapter 71 of the said First Schedule, arising in the course of manufacture of copper or zinc by smelting; or.
(vii)	all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under sub-section (1) of section 3 of the said Customs Tariff Act when imported into India and are supplied,—
	(a) against International Competitive Bidding; or
	(b) to a power project from which power supply has been tied up through tariff based competitive bidding; or
	(c) to a power project awarded to a developer through tariff based competitive bidding   If you find yourself eligible according to the above categories, then you are not required to reverse the amount under Rule 6.

[RAMESH PRAJAPATI]

Dear  Mr Hitendra Dave,

First of all, I would like to inform you that Notification No. 21/2002 -Cus has been superseded vide Notification No. 12/2012-Cus Dated 17.03.2012 and Project Authority Certificate is not a proper document for excise duty exemption. Secondly you can not claim customs exemption notification to avail excise duty benefit / exemption. Excise duty exemption is avaiable only on the basis of a notification issued under Section 5A of the Central Excise Act 1944. In your case, Notification no. 12/2012 CE can be claimed for excise duty exemption. If you pay excise duty on supplies made under deemed export category, refund of Terminal Excise is available under FTP [Chapter 8 of Foreign Trade Policy and Handbook of Procedure 2009-14]. If your supply is defined as deemed export in FTP , no need to reverse cenvat credit taken as per Rule 6 of cenvat Credit Rule 2004.  

Thanks.

Ramesh

AI Summary

Excise exemption: deemed exports can avoid cenvat reversal and permit refund under trade policy provisions. Rule 6 of the Cenvat Credit Rules lists exceptions where reversal is not applicable, including clearances to SEZs, 100% EOUs, supplies to international organisations or funded projects, export under bond, and supplies of customs-exempt goods against competitive bidding or to specified power projects; if eligible under these categories, reversal under Rule 6 is unnecessary. Notification No.21/2002-Cus was superseded by Notification No.12/2012-Cus, Project Authority Certificate is not a proper basis for excise exemption, and excise exemption must be claimed under a Section 5A notification. Deemed export classification under the FTP permits refund of Terminal Excise and avoids cenvat reversal.