Circular No. 305/21/97-CX dated 18/3/97
Subject: Reversal of credit in VBAL cases - Whether Certificate can be issued to merchant exporters
It has been brought lo the notice of the Board that certain Central Excise formations have issued certificates to merchant exporters who had exported the goods under Value Based Advance Licence (VBAL) to the effect that they have not availed the modvat facility. These certificates have been issued indicating that since the said merchant exporters were not registered with the certificate - issuing Central Excise formation, the question of availing modvat credit in their jurisdiction do not arise.
2. The matter has been examined by the Board.
3. Attention is drawn to Board"s Circular No. 116/27/95-CX dated 6th April, 1995 (F.No. 209/6/95-CX.6), wherein it has been provided that where an exporter requests for certificate regarding non-availment of modvat credit, a certificate may be issued by the Range Superintendent on the body of exports copy of AR-4/AR-4A or on a copy thereof attested by the Range Officer after necessary verification of range records including RG-23A records and RT-12 return as well as Range"s copy of AR-4/AR-4A. Such certification on AR-4/AR-4A obviously envisages a situation where an exporter is either "manufacturer-exporter" or "merchant exporter whose supporting manufacturer falls in the jurisdiction of the concerned Range office". The merchant exporters who buy the goods from the market and export cannot identify the manufacturers and therefore they are precluded from issue of any such certificate from the Range Office
of Central Excise.
4. Attention is also drawn to the Scheme for permitting reversal of mod vat credit availed by the exporters of goods under VBAL Scheme in contravention of the conditions of Customs notification No. 203/92-Cus circulated by Circular No. 285/1/97-CX dated 10.1.97 wherein relaxation has been denied to such merchant exporters who had not declared the details of their supporting manufacturers.
5. In view of the above, it is clarified that no certificate regarding non-availment of modvat credit should be issued by the Central Excise formations to the merchant exporters who had not declared the details of their supporting manufacturers in the manner prescribed under the Duty Exemption Scheme.
Sd/-
(P.K.Sinha)
Under Secretary (CX.6)
F.N0.209/15/97-CX.6
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