Buying of raw materials without excise for export

A manufacturer of export goods can get his inputs without payment of central excise duty under rule 19(2). Input-output ratio should be informed to AC/DC, goods can be procured without payment of duty by following procedure prescribed under the central excise rule. However, instead of giving bond or gurantee, a simple letter of undertaking can be given. Final product can be exported through merchant exporter also.

Rule 19 (2) of Central Excise Rules talks about Export without payment of duty. For getting raw material without payment of duty, one should go for Rule Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. 

Arunkumarji,

I absolutely agree with the Rule 19(2) and Removal of goods at Concessional rate of duty rules.

My question is - are these rules applicable only to last supplier in the supply chain of final export? or are they applicable to the whole export supply chain?

i.e. raw material supplier-->manfacturer-->merchant exporter-->final buyer outside India.

Please guide me if in the above chain manufacturer can any how take benefits of exemption on excise paid on raw materials?

@ Gautam

the procedure is applicable for 1-2-3 basis only where the manufactureer is 2, factory of manufacture is 1 and overseas buyer or SEZ is 3 

as the bond is executed by factory of manufacture, for zero rated or concessional rate of duty, and every abc is not permitted to get such bond and maintain the bonded premises for seperate storage of such goods. so the chance of on transit leakage and pilferage of such goods is high, hence the whole duty liability is on the 2 to maintain the process and in case of failure he is only liable to pay the duty.

@ Gildor -

Sirji,

Please make it simple. Is it applicable in the case I just wrote above? Yes or no?

the process is possible only in case of ONE manufacturer cum exporter , ONE supplier factory ( no dealer)

if its more then one then not possible, 

Raw materials producing factory >> Manufacturer cum exporter of final goods >> Physical export or suply to SEZ 

No other option is available, even no dealer can be engaged in between.