Our client had supplied certain goods to various SEZ units during the last two to three years. Unfortunately, no bill of export was prepared for the same to claim incentives like Duty Drawback/DEEC benefits, etc. However, ARE1 is prepared and the same are duly endorsed by SEZ Customs. Even jurisdictional Central Excise Authority has admitted proof of exports against UT-1 on the basis of ARE1 endorsed by SEZ Customs. Now, is there any provision for condonation of the procedural lapse in non-preparation of bill of exports to claim incentives? Or can we prepare the bill of export now?
You cannot file the bill of export now for supplies already made. There is no provision allowing that. Secondly, you cannot get incentives such as duty drawback for supplies made to SEZ without filing a bill of export. The norms for examination of goods, the declarations to be filed, the documents to be verified and the scrutiny that the transactions undergo are quite rigorous when you file a bill of export claiming any benefits. When you want to send goods to SEZ without claiming any benefits (i.e., without filing a bill of export), the Customs do not examine the goods or transaction with the same severity. Once the goods have gone through without a bill of export, it is not possible for Customs to follow the disciplines required for assessment of the bill of export at a later stage.
We had imported certain raw materials duty free under Advance Authorisation issued as per Standard Input Output Norms. We manufactured the export goods using duty free goods, but as the buyer cancelled the export order, we could not export the goods. So, we opted to regularise the Advance Authorisation matter by payment of duty and interest. Later, we got an export order for the goods and exported the goods already manufactured and available in stock. We filed the drawback shipping bill and an application for fixation of brand rate. Our excise authorities say that we cannot get drawback, as the goods were manufactured from duty free inputs. Is their stand correct?
Although no duty was paid on the raw materials that you used in the manufacture of export goods at the time of manufacture, you had paid the duty on the raw materials before you exported the goods manufactured from the same raw materials. So, by the time you exported the goods, the raw materials that you actually used in the manufacture of export goods had acquired duty paid character and the final products that you exported had also acquired the character of goods manufactured from duty-paid inputs. Therefore, the drawback of duty actually paid on the raw materials actually used in the manufacture of export goods should not be denied to you.
As manufacturers without any past export performance, what is the extent of bank guarantee we have to furnish for import under advance licence?
As per CBEC Circular no. 58/2004-Cus dated 21.10.2004, you must furnish a bank guarantee for 15 per cent of the duty saved.
