Drawback on supplies made by DTA units to SEZ, issue of draw

CIRCULAR NO. 39/2010-CUSTOMS

F.No.602/02/2002-DBK

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Custom

*****

New Delhi, the 15^th October, 2010

All Chief Commissioners of Customs

All Chief Commissioners of Customs & Central Excise/ Central Excise

All Director Generals under CBEC,

All Commissioners of Customs, Customs (Preventive)

All Commissioners of Customs & Central Excise/ Central Excise

The Chief Departmental Representative of Customs, Excise & Service Tax Appellate Tribunal.

Sir/Madam,

Sub: Drawback on supplies made by DTA units to SEZ, issue of drawback cheque books by jurisdictional Commissioner of Customs to Central Excise Commissionerates-reg.

I am directed to invite attention to the Board circular No.43/2007-Cus dated 5th December, 2007 which clarified that the Specified Officer posted in an SEZ is the appropriate authority for granting drawback in respect of goods supplied from DTA units to Developers and units in SEZ except where the unit or Developer issues a disclaimer to the DTA supplier in which case the Commissionerate of Central Excise /Customs & Central Excise having jurisdiction over the DTA unit would sanction drawback. With regard to issue of cheque books for disbursal of drawback claims, the circular provided that the jurisdictional Commissioner of Customs in consultation with the Pay & Accounts Officer shall make arrangements for issue of authorization and drawback cheque books (wherever EDI facilities are not available for directly crediting the said amount to the Bank Accounts of the exporters).

2. It has been reported by Central Excise formations that this arrangement of obtaining authorization and cheque books from the jurisdictional Custom Houses causes delays and some of the divisions are facing difficulties in getting the cheque books issued from the PAOs of the custom houses. It has been suggested that since drawback is required to be disbursed in a time bound manner and has interest clause, the procedure may be modified so as to allow the Commissioner of Central Excise and Customs/ Central Excise to sanction and disburse drawback claims without having to approach the jurisdictional Commissioner of Customs for issue of authorization and cheque books.

3. The matter has been examined in consultation with the office of the Principal, Chief Controller of Accounts. The office of Principal, CCA has informed vide letter no. Coord/2(1)/39/Jamnagar(Cus)/57 dated 30.06.2010 that they have already issued instructions regarding banking arrangements for payment of refund/drawback cheques and the uniform accounting procedure to be followed in that regard vide letter No. Coord/2(8)/98/434 dated 13.06.2005 addressed to all the Commissioners of Customs/Central Excise. As per this instruction, the PAOs are already issuing cheque books to each Central Excise division for payment of refund/drawback claims. There is no need for issuing separate chequebooks for refund and drawback; the same chequebook can be used for making refunds and payment of drawback. The cheque issuing officer is required to submit separate List of Payment for Central Excise (0038) and Customs (0037) to their jurisdictional PAO. After receipt of such List of Payment, separate accounting head shall be maintained. Relevant extracts of letter Nos. Coord/2(1)/39/Jamnagar (Cus)/57 dated 30.06.2010 and Coord/2(8)/98/434 dated 13.06.05 are given below as Annexure.

4. In view of the above, the procedure laid down in the Board circular No. 43/2007-Cus dated 5th December, 2007 is hereby modified to the extent that the Commissioners of Central Excise or Customs and Central Excise, as the case may be, may issue authorization to Dy./Asstt. Commissioners of Central Excise posted in Divisions under them for the purpose of disbursing drawback to DTA units against disclaimers issued by SEZ units/developers. The cheque book issued by the Pay & Accounts Officer of the jurisdictional Central Excise or the Customs and Central Excise Commissionerate, as the case may be, to the Central Excise Division for making refunds may be used for disbursement of drawback and the accounting procedure as laid down in the Principal, CCA’s office letter No. Coord/2(8)/98/434 dated 13.06.2005 may be followed in this regard.

5. A suitable Public Notice for information of the trade and Standing Order for guidance of the staff may be issued. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.

Receipt of this Circular may kindly be acknowledged.

(Pramod Kumar)

Technical Officer (Drawback)

Annexure

1. Extract of letter No. Coord/2(1)/39/Jamnagar (Cus)/57 dated 30.06.2010 of Dy. Controller of Accounts, Office of the Pr. Chief Controller of Accounts, New Delhi to Drawback Division, CBEC.

We have already issued instructions for banking arrangement for payment of refund/drawback cheques & uniform accounting procedure thereon vide this office letter No. Coord/2(8)/98/434 dated 13.06.2005. As per this instruction the PAOs are already issuing cheque books to each division falling under their jurisdiction for payment of refund/drawback claims. There is no provision to issue separate cheque book for refund and drawback. Single cheque book is being used for refund as well as drawback purposes and the cheque issuing officer are required to submit separate List of payment for Central Excise (0038) and Customs (0037) to their jurisdictional PAO. After receipt of such List of Payment, separate accounting head will be maintained.

2. Extract of letter No. Coord/2(8)/98/434 dated 13.06.05 of Controller of Accounts, Office of the Pr. Chief Controller of Accounts, New Delhi to all the Commissioners of Central Excise/Customs under CBEC.

As per para 11 of the RBI’s Revised Memorandum of Instructions for collection and Accounting of Central Excise and Customs and other Dues and payments of refund, rebate and drawback etc. by branches of Public Sector Banks, one branch of the nominated bank located at each of the divisional headquarters of the Commissionerate will be selected for making payment of refund/drawback cheques issued by the authorized officer. The selected branch will prepare separate payment scrolls which will be sent to PAO through Focal Point Branch. Consequent upon bifurcation/trifurcation of the erstwhile combined Central Excise and Customs Commissionerates, the following arrangements have been made for payment of refund/drawback cheques.

1. One branch of the nominated bank located at each of the divisional headquarters of the Commissionerate may be selected on which cheques for refund/drawbacks will be drawn.

2. Particulars of officers authorized to issue refund/drawback cheques along with their specimen signatures and name and address of the selected branches of the nominated bank may be sent to the PAO.

3. The PAO will forward the specimen signatures and particulars of the authorized officer(s) to the selected branch of the nominated bank with the instruction to admit the cheques for payment.

4. In the case where change of nominated bank has taken place consequent upon reorganization of the Commissionerate, the officers concerned may be asked to surrender to the PAO the old cheque books issued to them and have the new cheque books issued for payment of refund/drawback.

5. In case of non availability of cheque books of the nominated bank the existing cheque book may be used by affixing rubber stamp in bold letters for particulars of the bank branch on which cheque will be drawn.

6. Printing of the new MICR cheque books for the concerned bank branch is likely to take time. In such cases, the possibility of using existing MICR cheque books containing code no. of earlier nominated bank, by the newly nominated bank by way of affixing stickers on it, is being ascertained from RBI separately.

7. The accounting procedure for payment of refund/drawback cheques will be as per instructions in Chapter VIII of Manual of Central Excise & Customs. The authorized officer issuing drawback cheques must ensure to send the weekly list of payments showing details of cheques, amount etc. together with paid vouchers to the PAO positively by 1^st working day of the following week (para 8.1.2 of the manual). Failure in submission of weekly list of payments together with paid vouchers in original will be treated as gross violation of the use of cheque drawing powers and will, therefore, result in withdrawal of cheque drawing powers. The authorizing authority (Commissioner of Customs) as well as the controlling officer (Development Commissioner SEZ) would be responsible to ensure timely submission of list of payments by drawing officer along with paid vouchers to the PAO.

***

The SEZ units are allowed to import and export through port, airport, land customs station, ICD, CFS, courier mode (as per courier rules) and post parcel. The software development units can import and export through data communication and telecommunication links. In the case of exports through data communication and telecommunication links, the SEZ units follow the same procedure and practice as is followed in case of EPZ/STP units. As for imports of software through above modes, the units are required to file the Bill of Entry within 24 hours of such import alongwith bank attested invoice and other relevant documents for obtaining notional 'out of charge'. The documents such as invoice etc. in respect of such import are required to be routed through the banks. The value of such software is certified by the Director of the STP/Development Commissioner of SEZ. Further, in case of such software imports, instructions issued by RBI, if any, are also required to be followed.

In case of imports, the Bill of Entry with specially stamped endorsement as "SEZ Cargo" is filed with the Assistant Commissioner/Deputy Commissioner of Customs in the SEZ for assessment. For procurement of goods from domestic sources by SEZ units, CT-3 certificates are issued to the units and against such CT-3, the goods including capital goods are procured from DTA without payment of duty. In both cases, i.e. both in respect of imported and domestically procured cargo, the goods are assessed on the basis of documents furnished by the units. Goods are not examined physically and ‘out-of-charge’ is given after verifying the marks and numbers on the packages only.

When the import consignments are required to be transhipped to a SEZ located at a station away from the place of import, the same is allowed under normal transit procedure. The unit files the Bill of Entry with the Assistant Commissioner/ Deputy Commissioner of Customs in-charge of the SEZ on the basis of the transit document.

In case of exports, the Shipping Bill alongwith relevant documents is filed with the Customs authorities in the Zone. As in the case of imports, the SEZ export cargo is not examined in routine and export is allowed on the basis of self-certification by the units. The units, after self-examination of the consignments, are required to submit the shipping bills to the Assistant Commissioner/Deputy Commissioner of Customs for "let export" order. After obtaining the "let export" endorsement on the shipping bill, the consignment is taken to the gateway port for export. At the gateway port also, the SEZ export consignment is not examined in routine. However, whether at the Zone or at gateway port or during transit of such cargo, the Customs authorities can examine the consignments when there is a specific information/intelligence. For this purpose, the orders of the Assistant Commissioner/Deputy Commissioner of Customs are required to be obtained.