Extension of Warehousing and Acceptance of LUT for Export Warehousing
for Status Holder Manufacturer Exporters
[CBEC Circular No. 976
dated 12th December 2013]
Sub: Extension of warehousing and acceptance of LUT in
place of Bank Guarantee for export warehousing for Status Holder Manufacturer
Exporters.
I am
directed to invite your attention to Circular No. 579/16/2001–CX dated
26.06.2001 and Circular No. 581/18/2001-CX dated 29.06.2001, which prescribe
conditions, procedures and safeguards applicable for storage in a warehouse
registered at such places as may be specified by the Board and export therefrom
regarding all excisable goods specified in the First Schedule to the Central
Excise Tariff Act, 1985.
2. Paragraph 6 of the Circular
No. 579/16/2001–CX dated 26.06.2001 contains provisions relating to “Period of
warehousing“. The provisions in clause (a) and clause (b) are not detailed and
therefore in pursuance of notification no 46/2001-CE (N.T.) dated 26.06.2001
and sub-rule (2) of rule 20 of the Central Excise Rules, 2002, it has been decided
to further elaborate the provisions by replacing the existing clause (a) and
clause (b) in paragraph 6 with the following new clause (a) and clause (b), to
read as follows :-
(a) Warehousing of goods shall
initially be allowed for a period upto six months,
which may be further extended by the Assistant /Deputy Commissioner, each
extension being for a period not exceeding six months, subject to the
verification that the goods have not deteriorated in quality. The maximum
period, for which goods may be left in the warehouse in which they are
deposited, or in any warehouse to which such goods have been removed, shall be
three years from the date on which such goods were first warehoused. Excisable
goods shall be deemed to be cleared for home consumption on expiry of the
warehousing period including the extensions granted, if any. Duty and interest
@ 24% per annum shall be charged on such deemed removal.
(b) If the registration of a
warehouse is revoked or suspended, the excisable goods lodged therein shall
either be cleared for home consumption on payment of duty and interest @ 24%
per annum or shall be removed to another warehouse without payment of duty.
3. Paragraph 3.2 and paragraph
4.2.1 of the Circular No. 581/18/2001-CX dated 29.06.2001 contain provisions
requiring an exporter to furnish security equal to 25% of the Bond amount for
availing the facility of export warehousing.
4. Reference has been received
in the Board that submission of BG (Bank Guarantee) leads to increase in
transaction cost and, therefore, manufacturer exporters who are also status
holders may be allowed to submit Letter of Undertaking (LUT) in place of BG. On
examination the problem has been found to be legitimate and, therefore, it has
been decided to amend paragraph 3.2 and paragraph 4.2.1 of the Circular dated
29.06.2001. Accordingly Board specifies
that these paragraphs be amended as follows:
(i) Paragraph 3.2:
After the words “backed by twenty five percent security of the bond
amount “ the words “in the manner as prescribed in paragraph 4.2“ shall be
added.
(ii) Paragraph
4.2.1: A proviso, as follows, shall be
inserted at the end of the paragraph.
Provided
that where the exporter is a manufacturer and a Status Holder with a clean
track record, the requirement to furnish security equal to 25% of the bond
amount shall be replaced by the requirement of furnishing an LUT initially for
a period upto six months which may be extended by a
further period not exceeding six months. Further extensions in the warehousing
period in terms of paragraph 6(a) of the Circular No. 579/16/2001-CX
dated 26.06.2001 shall be allowed to such
exporter only on furnishing security of 25% of the bond amount.
5. There is also a need to amend the terms “Super Star Trading House” or
“Star Trading House” used at paragraph 2(1) in the Circular No. 581/18/2001-CX
dated 29.06.2001 and to replace it with the current nomenclature. Accordingly
Board also specifies that paragraph 2(1) of the Circular be amended as follows:
Paragraph 2(1): In this paragraph dealing with Exporters, expression
“The exporters who have been accorded status of Super Star Trading House or
Star Trading House“ may be replaced with the
expression “The exporters who are Status Holder under FTP - 2009-14”. Export Warehousing facility would become available to all Status
Holders under FTP of 2009-14 due to this amendment.
6. The contents of this Circular
may be brought to the notice of the trade / exporters by issuing suitable Trade
/ Public Notices. Suitable Standing Orders / Instructions may be issued for the
guidance of the assessing officers. Difficulties faced, if any, in
implementation of the Circular may please be brought to the notice of the Board
at an early date.
F.
No. 201/14/2013-CX.6