Circular No. 285/1/97-CX, dated 10/1/97
Subject: Reversal of Modvat credit and payment of interest where exports were effected under Value Based Advance Licence before 31.1.97 under Special Scheme
I am directed to enclose the text of the scheme announced by the Government to allow reversal of the Modvat credit availed by exporters in contravention of the conditions of the Value Based Advance Licensing Scheme, which has already been circulated by the Directorate of Drawback vide DOKNo.605/140/95-DBK dated 3.1.97. The conditions subject to which the benefit of the present scheme is being extended is set out in the enclosed text.
2. The quantification of the Modvat credit required to be reversed in such cases is to be done in the following manner :-
A = Modvat Credit to be reversed
B = Total value of exports under VABAL during the financial year, as declared in AR4
(Sec 4 Value)
C = Total credit availed in RG-23Axluririg the financial year on till inputs
D = Total value of goods cleared for home consumption during the financial year arrived" at under Section 4
FORMULA
BxC
A = -----
D+B
3. In addition to the above amount an interest® 20% on the amount of Modvat credit retained by such exporters for the period between the date of exports and the date of reversal has to be calculated arid deposited by them before 31.1.97 Under the Central Excise Head along with the amount of Modvat wrongly availed and calculated as above. Where credit has already been reversed, the exporters shall deposit the interest amount calculated in the manner prescribed above before 31.l.97 under the Central Excise Head.
4. Similar action should also be taken, mutatis-mutandis, for merchant exporters who declared the name of supporting manufacturers while applying for VABAL.
5. The Calculation Sheet regarding reversal and the amount of interest should also be submitted in the Office of the Jurisdictional Assistant Commissioner who will examine the correctness and intimate the same to the Commissioner i n the following format:-
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Name & address Sl. No. & date of Description of commodity
of the exporters AR4 / AR4A
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(1) (2) (3)
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Value of exports Amount of Modvat Amount of modvat credit
Credit required to be actually reversed
Reserved A. Amount
B. Particulars of debit entry
C. date
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(4) (5) (6)
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Amount of Interest Amount of interest Remarks
Required to be actually deposited with
Deposited particulars & date of TR6
Challans
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(7) (8) (9)
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6. The Commissioner of Central Excise should submit the particulars in the aforesaid format to Chief Commissioners of Central Excise who will prepare a consolidated report indicating clearly the defaulting units/manufacturers who have not reversed the credit and deposited the interest as stated above and forward his report by 15.2.97 to the concerned Commissioners of Customs for taking necessary actions for non-compliance with the conditions of Customs Notification by them under, intimation to the Board.
7. It should be ensured that certificates regarding reversal of Modvat in full or part and payment of interest due shall be issued only by an officer of the rank of Assistant Commissioner of Central Excise.
8. Earlier instructions regarding reversal related to .VABAL Scheme stand modified to the above extent.
Sd/-
(P.K. Sinha)
Under Secretary (CX.6)
F.No.209/48/96-CX.6
Presented by eximkey.com