Circular No.  705/21/2003-CX
8^th April, 2003.

F.No.209/12/2003-CX.6

Government of India

Ministry of Finance and Company Affairs

Department of Revenue

Central Board of Excise & Customs

Subject :    Simplified Central Excise Procedure for export of readymade garments – regarding.

            I am directed to refer to instructions contained in Part-III Chapter VII of Central Excise Manual prescribing Simplified Export Procedure for exempted units. This procedure inter alia envisages that the goods meant for export can be cleared on the invoices (instead of regular ARE-1) or other similar documents of the manufacturer-exporters containing particulars of description of goods, name and address of the buyer, destination, value, date and time of removal of goods, etc. Further, such persons are allowed to maintain a simple record of quantity and value of production and clearances.  This procedure is applicable to units which are fully exempted from payment of duty by a notification granting exemption based on value of clearances for home consumption.

2.         In this connection, representations have been received from the Association of exporters of readymade garments to extend the said procedure to readymade garment units which are primarily exporting almost all of their production but are now required to pay duty on rejects/wastes generated during the export production following exclusion of readymade garments (Chapter 61 & 62) from the purview of notification Nos. 8/2003-CE and 9/2003-CE both dated 01.03.2003. The Association has also brought to the notice of the Board the delay likely to take place in the grant of registration in view of the large number of units now seeking Registration on account of withdrawl of the SSI exemption benefits.

3.         Board has examined the matter.  It is observed that the Simplified Export Procedure is presently applicable to the exempted units. However, since the readymade garment manufacturers are primarily exporting almost all of their production and the clearances of rejects and waste to home consumption is minimal, it shall be in the interest of the exports to extend the Simplified Export Procedure to readymade garments sector. Accordingly, Board has decided to extend the Simplified Export Procedure to readymade garments sector (not to other sectors) by making the procedure applicable to such units which are primarily exporting and the clearances of waste and rejects for home consumption on payment of duty does not exceed 5% of their export turnover during the year. 

4.         As regards Registration of the said units, Board has decided that penal action on account of clearances of such units for home consumption on payment of duty pending grant of registration may not be initiated for the time being and in the intervening period formalities like declaration of stocks and record keeping, etc may not be subjected to mandatory requirements. In this regard reference may also be made to Board’s circular 703/19/2003-CX dated 25^th March, 2003 (F.No. B3/1/2003-TRU). While allowing this relaxation, the Board’s concern is that export clearances are not hampered on technical grounds.

5.         Board’s instructions contained in the Central Excise Manual as specified above, stands modified to the above extent.

6.         Trade and field formations may please be informed suitably.

7.         Receipt of the same may please be acknowledged.

8.           Hindi version will follow.

Vijay Mohan Jain

Under Secretary to the Government of India