Brand Rate Shipping Bills Claim

The following Public Notice was issued by the Commissioner of Customs (Export) Air Cargo Complex, Mumbai on 26th February 2010.

[Customs Public Notice No. 05 dated 26th February 2010]

Sub: Brand Rate Drawback claims – Disposal of older cases.

Attention of all Exporters, their Custom House Agents and Trade is invited to the fact that in many cases the exporters had filed drawback shipping bills indicating brand rate of drawback but have subsequently not come forward with brand rate letters from Central Excise authorities accompanied by requisite documents that would enable the processing of such claims. An upto date list of IEC-wise pending brand rate shipping bills is placed at website

2.  Accordingly, in November 2009, this Commissionerate issued individual letters to 78 exporters (accounting for 92% of pending brand rate Shipping bills) giving them the full list of their brand rate drawback shipping bills remaining from 01/01/2004 to 31/10/2009 and requested each such exporter to submit -

(i)   Letters of Central Excise Authorities fixing the Drawback Brand Rates.

(ii)  Such letter-wise statement showing Shipping Bill No. & date, description of export items, FOB value and quantity of export items for each export shipment affected through ACC, Mumbai (separate statement for each Drawback Rate fixation letter).

(iii) Attested copies of BRCs in respect of the Shipping Bills covered under respective Drawback Rate fixation letter.

3.  Despite reminder, a large majority of exporters have not responded. From responses of few exporters it is gathered that pending cases include those in which fixation of Brand Rate by Central Excise authorities was never applied for by the exporter. Certain exporters even requested that their brand rate shipping bills be processed for All Industry Rates. In some cases, exporters are awaiting brand rate fixation letters.

4.  In this context, it is seen that in terms of Rules 6 and 7 of Customs, Central Excise and Service Tax Duties Drawback Rules 1995, an application for fixation of Brand Rate has to be filed within 60 days, at best 90 days, from the date of “Let Export Order”. Thereafter, Central Excise authority is to follow Board’s Circular No.14/2003-Customs dated 6/3/2003 which provides that verification of data given in the application is to be carried out within 15 days from the date of receipt of the Brand Rate application in Central Excise Commissionerate. After that, the Brand Rates are required to be fixed within a period of 10 days from the date of receipt of the verification reports. Further, list of Brand Rate applications and status thereof filed within a fortnight is to be prominently displayed by Central Excise Commissionerate on the first day of the next fortnight on the Notice Board for information of the Trade. Moreover, even 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 are to be considered and disposed off within 3 days from the date of receipt by Central Excise Commissionerates.

5.  In other words, the entire process at the Central Excise Commissionerate is expected to end in a period of about 4 months from the date of ‘Let Export Order’. The data on Brand Rate claims sanctioned at Air Cargo Complex was analyzed. It was seen that between 01/01/2008 to 08/02/2010, the Brand Rate Drawback sanctioned (on the basis of brand rate letters plus requisite documents) were on an average, 218 days (i.e. 7 months) from date of Shipping Bill. As far as realization of foreign currency is concerned, the maximum period under law is 1 year. If one is reasonable and goes back, not 4 or 7 months but, 1 year, there are, as on 31/01/2009, a total of 8837 brand rate drawback shipping bills claims pending at Air Cargo Complex for which it may be taken that there is no logical reason for their continued pendency.

6. As already stated in some cases exporters responded with plea to sanction All Industry Rate instead of Brand Rate. This was examined. Brand rate application arises in two situations. One is when there is no amount or rate of drawback determined under AIR at all. In such cases All Industry Rate is itself zero. In other situations for AIR to be considered, exporter must make shipping bill wise request for conversion of their Brand Rate claim to All Industry Rate claim and exporter must simultaneously reclassify/declare the exported item(s) under the appropriate specific sub headings of AIR Drawback Schedule and state whether the claim is under ‘A’ category or ‘B’ category of AIR Schedule, and if under ‘A’ category, produce proof from Central Excise authorities about non-availment of Cenvat Credit in the manufacture of the export item. The rate/cap of drawback claimed, relevant to the particular period when export was made has also been claimed/declared by the exporter, shipping bill wise and proof of realization of export proceeds furnished. Unless this is undertaken by exporter, the AIR claim does not exist and cannot be processed. Thus, the following will be pre-condition to considering such request for conversion to AIR claim –

i)      Shipping bill-wise statement showing shipping bill no. & date, description of export items, FOB value of each export item, quantity of export items, classification of export item under appropriate drawback heading of drawback schedule & rate of drawback admissible on the export item during the period of export.

ii)     In case of the claim under “A” i.e. Drawback when Cenvat facility has not been availed in respect of export item, shipping bill-wise certificate from jurisdictional Central Excise authority for non availment of Cenvat facility.

iii)     Attested copies of BRCs of the Shipping Bills.

7. Keeping the overall facts in view, it has been decided to allow such exporters, as described in para 1 above, whose brand rate shipping bills are pending upto 31/01/2009, time till 20/03/2010 to submit the particulars/documents listed in para 2 or 6 hereinabove, complete in all respects, to the Drawback Section of Air Cargo Complex, Sahar. If received by 20/03/2010, the relevant cases shall be taken for further processing in normal course. Otherwise, the Brand Rate shipping bills upto 31/01/2009 shall be sanctioned for payment at zero rate. In these latter cases, the exporter wise list of shipping bills shall be subsequently placed on the website

8. Where the Brand Rate shipping bill is sanctioned as above for payment at zero rate, the exporters may file supplementary claims as provided under Rule 15 of Customs, Central Excise and Service Tax Duties Drawback Rules 1995 and within the time period specified therein alongwith particulars/documents listed in para 2 or 6 hereinabove.

9.  Difficulty faced in the implementation of this Public Notice may be brought to notice.

F. No. S/3-Misc-09/2010 DBK (EDI)ACC