CENTRAL EXCISE DELHI-II : : Trade Notices

Subject: Decentralisation of the work relating to fixation of Brand Rate of

Drawback under Rule 6 and Rule 7 of the Customs & Central Excise

Duties Drawback Rules, 1995.

Trade and Industry are hereby informed that to obviate the delay in disbursal of drawback and to boost export facilitation, the Govt. has announced the decision to take the work of Brand Rate fixation right to the doorsteps of the exporters by delegating the works of Brand Rate fixation to the jurisdictional Commissionerate of Central Excise. Accordingly, starting from the 1st April, 2003, all applications for fixation of Brand Rate of drawback under Rule 6 and Rule 7 of the Customs & Central Excise Duties Drawback Rules, 1995 (as amended), are required to be filed (in duplicate) only under the Normal Scheme in the Headquarters Office of the Commissionerate of Central Excise having jurisdiction over the manufacturing unit in which the export goods are declared to have been manufactured. Two copies of the same may also be filed in the office of the Assistant / Deputy Commissioner of Central Excise having jurisdiction over the manufacturing Unit. The applications should be accompanied by the documents specified in the Check-List enclosed herewith.

2.. In order to gear up the system for discharging the new work at the this Commissionerate's level, the system devised is as under:

(a) Organisational Set-up: A Brand Rate Fixation unit headed by an Deputy Commissioner (Technical) alongwith requisite staff has been created in the headquarters of Central Excise Commisonerate Delhi II to handle all matters pertaining to Brand Rate fixation all matters relating to fixation of Brand Rate.

(b) Acknowledgement of receipt: In keeping with the Citizens’ Charter for the Customs & Central Excise Department, each application for fixation of Brand Rate of drawback shall be acknowledged by the Brand Rate Fixation Unit of this Commissionerate immediately after receipt indicating therein File Number of the Commissionerate in which the application is intended to be processed, FIFO Number assigned to the Brand Rate Application and telefax No. of the Additional Commissioner of Central Excise with whom the exporter may like to make correspondence in this regard. A specimen of such acknowledgement letter is enclosed.

( c ) Verification of data given in the application: The data given in Brand Rate Application will be verified by the Deputy Commissioner of Central Excise having jurisdiction over the manufacturing unit in which export goods are declared to have been manufactured. While verifying the data, the duty paying documents shall be defaced by the Verifying Officer to the extent of the Brand Rate claim.

(d) Fixation and approval of Brand Rate:

( i ) On receipt of the Verification Report from the Central Excise Divisions, the same shall be examined minutely by the Commissionerate keeping in view the relevant provisions of the Customs Act,1962 and the Central Excise Rules and in strict adherence to the Circulars & Guidelines which have been issued by this Ministry from time to time. After that the Brand Rate will be fixed by the competent authority. Brand Rate letters will be issued ( by Registered post/ Speed post) only after ensuring its correctness with regard to the description of the export goods, unit of drawback rate, Shipping Bill and post of export. List of Brand Rate applications and status thereof filed within a fortnight will be prominently displayed on the first day of the next fortnight in the Notice Board for information of the trade. The Brand Rates will also be communicated immediately by electronic mail ( E- Mail) after electronic connectivity is established with the Custom House of the port of export. References for issue of corrigendum in respect of description of the export item, addition or change of the port of export and Shipping Bill No. etc. will also be considered and disposed off.

(ii) Validity of Brand Rate letters: The Brand rate may be applied either in respect of specific Shipping Bills or for a period of time with a quantity restriction ( which is required to be fixed on the basis of the availability of the duty-paid inputs). Generally, the validity of the Brand Rate letters shall be up to one year. However, in respect of cases wherein Brand rate is calculated taking into account the All Industry Rate of Drawback admissible for any of the inputs, the validity of such Brand Rate letters shall be up to one month from the date on which the validity of the All Industry Rate ceases to be effective.

(iii) Port of Registration: In case of Brand Rate letters which are required to be issued for a period of time and the exporter intends to effect the shipment from more than one port of exports, the Brand Rate letters will also specify ( on the basis of the exporter’s request), the port of export for registration for ensuring that disbursement of Brand Rate of drawback does not exceed the quantity restriction specified in the Brand Rate letter.

(iv) Value Addition: Fixation of Brand Rate of drawback is, inter alia, subject to the satisfaction of Rule 8(2) of the Drawback Rules which stipulates that the f.o.b. value of the export goods should be more than the C.I.F. value of the imported inputs which are declared to have been utilised for manufacture of the export goods. A specimen of the calculation Sheet regarding the Value Addition is attached. In case of the corresponding Brand Rate letters which are issued for a period of time, the minimum F.O.B. value of the export item satisfying the condition may also be specified.

(v) Exports, which do not qualify Brand Rate: Exports under Duty Free Shipping Bills are not admissible for grant of Brand Rate. In such cases, prior conversion of Duty Free Shipping Bills to Drawback Shipping Bills by the competent authority is essential. Details of the procedure for conversion of the Shipping Bills from one export promotion scheme to another have been prescribed in this Ministry’s Circular No.6/2003-Customs dated 28.1.2003 ( F.No.609/176/2002-DBK), a copy of which is enclosed. Further as provided under Rule 8 of the Drawback Rules, Brand Rate of drawback is also not admissible in case the amount/rate of drawback is less than one per cent of the f.o.b. value or where the amount of drawback is less than five hundred rupees per shipment, subject to the conditions specified in the said Rule.

(vi) Brand Rate for exports made under DEPB-cum Drawback Shipping Bills: Brand Rate proposals for exports made under DEPB-cum-Drawback Shipping Bills shall be processed strictly on the basis of this Department’s Circular No.39-Customs/2001 dated 6.7.2001( copy enclosed).. As per this Circular, in such cases, only the CVD paid in cash for the imported inputs and Central Excise Duty paid for the indigenous inputs not mentioned in the inputs specified against the corresponding export good of the Standard Input Output Norm fixed by the Directorate General of Foreign Trade is reimbursable by way of Brand Rate of drawback provided benefit of CENVAT credit has not been availed.

(vii ) Enhancement of Quantity restriction: References for enhancement of quantity restriction of the export items specified in Brand Rate letters which are issued for a period of time will be considered by the Brand Rate Unit without insisting for verification by the concerned Central Excise Division. The merits of such references will be considered in case the exporter makes such references within the validity of the corresponding Brand Rate letter and substantiates procurement of additional duty paid inputs which are required for manufacture of the proposed enhanced quantity of export goods, on the basis of original duty paying documents. These duty paying documents will be defaced and returned to the exporter after retaining photo copies thereof in the Brand Rate file.

(viii) Time-Limit for filing Brand Rate application: As per the provisions of Rule 6 and 7 of the Customs & Central Excise Duties Drawback Rules, 1995(as amended), the Brand Rate applications are required to be filed maximum within a period of 60 days from the Let Export Date of the first Shipping Bill. Delay up to 30 days; i.e; up to 90 days from the Let Export Date may be generally condoned on receipt of the exporter’s application in this regard. In case the Brand Rate application is for a number of Shipping Bills or a period of time, Brand Rate will be fixed excluding only the Shipping Bill/period which stands time-barred.

Sometimes, various components/ vendor items of the export goods, like those in the Automobile Industry are manufactured in the jurisdictions of more than one Central Excise Commissionerate. In such cases, Brand Rate application is required to be filed within the stipulated period in the Headquarters of Central Excise Commissionerate having jurisdiction over the manufacturing unit wherein the finished/ final export goods are manufactured/ assembled. In such cases, the applicant is required to specify the components/ vendor items which are manufactured in the jurisdiction of other Central Excise Commissionerate and submit the requisite data subsequently in the Headquarters of the concerned Commissionerate of Central Excise having jurisdiction over the units wherein such components/ vendor items are manufactured. The Commissionerate in which the original Brand Rate application has been filed will get the data (pertaining to its Commissionerate) furnished in the application verified and fix the Brand Rate. This Brand Rate will be subsequently revised on the receipt of the Verification Reports in respect of the components/ vendor items from the concerned Central Excise Commissionerate.

3. Transitional arrangement : In view of this revised arrangement for fixation of Brand Rate of drawback starting from 1.4.2003, no fresh application from the exporter will be received in the Ministry of Finance and Company Affairs. In case of receipt of such applications/ Verifications, subsequent to this date, the same will be sent to the concerned Commissionerate of Central Excise under intimation to the exporter. However, references for issue of amendment and corrigendum in respect of Brand Rate letters issued by the Ministry up to 31st March 2003 are required to be sent to this Ministry. The Ministry also will continue to consider and dispose off all residual pendency relating to Brand Rate applications.

4. Grievances of the exporters with regard to the Brand Rate applications shall be promptly addressed. For redressal of outstanding grievances, the Chief Commissioner of Central Excise (DZ) will conduct Open House at the end of every month.

5. Problems or difficulty faced by the Trade and Industry in implementing the aforesaid decentralisation of Brand Rate fixation work may please be brought to the notice of Commissioner Central Excise, Delhi-II, C.R. Building, New Delhi for issue of suitable clarifications and for taking appropriate action.

6. .All the members of Trade and Industry are requested to give wide publicity of the contents of this Trade Notice amongst their trade

Authority: CBEC Circular No. 14-Customs/2003

dated 6^th March, 2003.

( ANITA SAHNI )

COMMISSIONER

CENTRAL EXCISE: DELHI-II