Duty free goods for manufacture of export goods – Bhutan and Nepal included
As per Rule 19 (2) of the Central Excise Rules, 2002 excisable goods can be procured without duty for manufacture of export goods. Subject to the conditions, safeguards and procedures prescribed by the Board by notification. And Board had issued Notification No. 43/2001-CE (N.T.) dated 26-6-2001 to prescribe the procedure and conditions. But this notification deals with only exports to countries other than Bhutan and Nepal. Notification No. 45/2001-CE (N.T.) dated 26-6-2001 prescribes the procedure for export to Nepal and Bhutan. But so far, there is no notification for getting the raw-materials for manufacture of goods exported to Nepal or Bhutan. That means if you are manufacturing goods for export to Nepal and Bhutan, you are not allowed to get the raw-materials without payment of duty. And if you are exporting to other countries and Nepal and if you have got raw-materials without payment of duty, for that part of the goods exported to Nepal your receipt of raw-materials without payment of duty was illegal.
The Board has now corrected the anomaly by amending Notification No. 43/2001. The words ‘except Nepal and Bhutan’ are omitted. Further two conditions are added that for exports to Nepal and Bhutan, the payment has to be received in freely convertible currency and the procedure as per Notification No. 45/2001 is followed. The Board deserves all praise for this suo-motto amendment.
Notification No. Dated 29-04-2005