Jinu,

I hope there is delay for reply to your query,

please refer to the below, which shows that drawback is permissible for advance license, Hence if you are paying central excise duty the same you can get rebate.

It shows that modvat can be availed ,Modvat is now cenvat, so you are eligible to get rebate, take this to central excise and consult with them to get their views.

Advance License Scheme

Advance License

An advance licence is granted for the import of inputs without payment of basic customs duty. Such licences shall be issued in accordance with the policy and procedure in force on the date of issue of the licence and shall be subject to the fulfillment of a time-bound export obligation, and value addition as maybe specified. Advance licences maybe either value based or quantity based.

As per the latest amendments to the EXIM Policy, the facility of Back to Back Inland Letter of Credit has been introduced, to enable an Advance Licence holder to source his inputs from domestic suppliers.

Value based advance license

Under a value based advance licence, any of the inputs specified in the licence maybe imported within the total CIF value indicated for those inputs, except inputs specified as sensitive items.

Under a value based advance licence, both the quantity and the FOB value of the exports to be achieved shall be specified. It shall be obligatory on the part of the licence holder to achieve both the quantity and FOB value of the exports specified in the licence.

Amendments to the Advance License Scheme

The Advance License Scheme has been expanded and liberalised with the amendments made to the EXIM Policy, announced on 31st March 1995.

• Modvat credit can be taken on inputs which go into the manufacture of export products, under the Advance License Scheme.
• Expansion of the concept of Advance Intermediate License, which hitherto was only quantity based to value based.
• Advance licenses can now be transferred after the export obligation has been fulfilled, and the bank guarantee or LUT redeemed.
• Drawbacks are permitted in respect of duty paid materials, which are imported or indigenous.
• Import of mandatory spares upto 5% of the CIF value of the license is now allowed.
• The list of sensitive items has been pruned. Flexibility has also been granted to the exporter for using the unutilized CIF value of sensitive items for importing non-sensitive items.

On the 1st of March, 1995, the Engineering Products Export (Replenishment of Iron and Steel Intermediates) scheme was announced as an alternative to the International Price Reimbursement Scheme, which was withdrawn in April 1994. Under the new scheme, primary steel producers would be able to import intermediates like coal and fuel, using advance licences, and then provide steel to engineering exporters at international prices.

Thanks and Regards

Sunil