'Goods can be moved from factory without paying duty, for testing'

Don't want to miss the best from Business Standard?

We are an Export Oriented Unit. One of our foreign customers wants our goods to be tested and inspected by a nominated third party in Bangalore before exports. We want to export the goods from the premises of the third party directly, instead of bringing the goods back to our factory and then export. Can we do it and if so, how and under what specific provision?
As per Rule 16C of the Central Excise Rules, 2002, the Commissioner of Central Excise may, by special order and subject to such conditions as may be specified by him, permit a manufacturer to remove excisable goods manufactured in his factory, without payment of duty, for carrying out tests or any other process not amounting to manufacture, to any other premises, whether or not registered, and after carrying out such tests or any such other process may allow (a)…or (b) removal of such goods from the said other premises,…or without payment of duty for export, as the case may be. In this connection, the Central Board of Excise and Customs has issued Circular no. 844/2/2007-CX dated 31.01.2007 stating that to ensure uniformity in the conditions to be imposed by the Commissioner, the procedure prescribed under sub-rules (2), (3), (4) & (9) of rule 12AA of the Central Excise Rules, 2002 should broadly be followed in such cases.

However, proper records of receipt of goods, its use and nature of activities carried out, goods processed and cleared by the said other person or job worker would be maintained by the principal manufacturer and job worker. Further, any waste/scrap arising at the premises of the said other person/job worker while carrying out the test/other processes should either be cleared on payment of duties or it should be returned back to principal manufacturer. The value at which the principal manufacturer sells the final goods to the customer should be taken. Further, such permission should be given only in deserving cases and only for one financial year at a time.

We want to buy certain goods from a local party and export the goods to a foreign party. Can we make payment from our Exchange Earners Foreign Currency (EEFC) Account?

As per Para 3(v) of the Schedule to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000 (as amended), payment in foreign exchange to a person resident in India for supply of goods/services is permitted from EEFC account.

We are manufacturer/exporter of handcrafted furniture. Our clients insisted that we should generate our invoice in Indian rupees only. We are receiving funds in our bank account (ICICI Bank). Are we are eligible to claim drawback on exports when we get our export proceeds in Indian rupees?

The second proviso to Section 75 of the Customs Act, 1962, only says that the sales proceeds in respect of export goods on which drawback has been allowed must be received. It makes no mention about any currency.
Business Standard invites readers' SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in