RULE 12. Rebate of duty

(1) The Central Government may, from time to time, by notification in the Official Gazette, grant rebate of

(a) duty paid on the excisable goods;

(b) duty paid on materials used in the manufacture of goods;

if such goods are exported outside India or shipped as provision or stores for use on board a ship proceeding to a foreign port, or supplied to foreign going aircraft to such extent and subject to such safeguards, conditions and limitations as regards the class or description of goods, class or description of materials used for manufacture thereof, destination, mode of transport and other allied matters as may be specified in the notification :

Provided that if the Commissioner of Central Excise or as the case may be Maritime Commissioner of Central Excise is satisfied that the goods have in fact been exported, he may, for reasons to be recorded in writing, allow, the whole or any part of the claim for such rebate, even if all or any of the conditions laid down in any notification issued under this rule have not been complied with.

Provided further that the rebate of duty paid on excisable goods cleared from factory for export shall also be admissible for that portion of duty paid for which refund has been granted in terms of the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 508(E), dated the 8th July, 1999 [32/99-Central Excise, dated the 8th July, 1999] or number G.S.R. 509(E), dated the 8th July, 1999 [33/99-Central Excise, dated the 8th July, 1999].

(Above IInd proviso has been inserted vide Finance Bill 2008 and period of effect - 08/07/1999 to 30/06/2001)

(2) Where the Central Government does not grant under clause (a) of sub-rule (1) either wholly or partially any rebate of duty paid on goods exported to a country outside India, it may, in order to promote exports or fulfil obligations arising out of any treaty entered into between India and the Government of that country provide, by notification in the Official Gazette, for payment to the Government of that country an amount not exceeding the duty paid on such goods which are exported out of India to that country .

(3) No rebate of duty in respect of excisable materials used in the manufacture of goods exported out of India under clause (b) of sub-rule (1) shall be allowed, if the exporter avails of drawback of the said duty under the Customs and Central Excise Duties Drawback Rules, 1995 or avails of credit of said duty under section AA of Chapter V of the Central Excise Rules, 1944.

Explanations. -In this rule, the expressions, - (i) "manufacture" includes the process of blending of any goods or making alterations or any other operation thereon;

(ii) "materials" includes raw materials, consumables (other than fuel)components, semi-finished goods, assemblies, sub-assemblies, inter-mediate goods, accessories, parts and packaging materials required for manufacture of export goods but does not include capital goods used in the factory in or in relation to manufacture of export goods.

(4) The provisions of this rule shall not apply to such excisable goods,export of which are prohibited under any law for the time being in force.

Note:- Please see Ntf. No. 07/2001-CE(NT), dated 01/03/2001) and Ntf. No. 21/2001-CE(NT), dated 30/04/2001)