Some salient points for export without payment of duty are given. For all other details, please refer to current Central Excise Manual.

Some important changes have been introduced under the present procedure, which are mentioned below

  1. The concept of furnishing of a `Letter of Undertaking' by a manufacturer-exporter has been introduced. The clearances for export by a manufacturer-exporter will be effected similar to clearances for home consumption after he furnishes Letter of Undertaking. The merchant-exporters are required to file `bond' in specified format. A manufacturer-exporter may also file bond and follow the `bond-procedure' specified in the notification.
  2. Under bond procedure, the concept of `self-debit' by the exporter has been introduced. The exporter need not go to the `bond-accepting authority for a `debit-certificate' before each removal.
  3. The procedure of `acceptance of proof of export' has been simplified. The concept of "Self-credit" based on the copy of A.R.E.1 duly certified by Customs authorities at the place of export is being introduced.
  4. In each Commissionerate of Central Excise, there will be an officer designated as `Deputy / Assistant Commissioner of Central Excise (Exports)' whose functions will be similar to the Maritime Commissioners.
  5. Number of copies of `application for Removal (A.R.E1)' has been reduced compared to AR-4. This will be further reduced after completion of compute networking in the Department enabling `on-line verification' of exports.

Categories of exports

There are two categories of export without payment of duty

  1. Export of finished goods without payment of duty under bond or undertaking.
  2. Export of manufactured / processed goods after procuring raw material without payment of duty under bond.



An exporter shall furnish bond in Form B-1 and obtain certificate in Form CT-1. A manufacturer-exporter may furnish annual Letter of Undertaking (no CT-1 is required in this case). The export shall be subject to the following conditions.

  1. The goods shall be exported within six months from the date on which these were cleared for export from the factory of the production or the manufacture or the manufacture or warehouse or other approved premises within such extended period as the Deputy/Assistant Commissioner of Central Excise or Maritime Commissioner may in any particular case allow;
  2. When the export is from a place other than registered factory or warehouse, the excisable goods must be in original packed condition and identifiable as to their origin;
Forms to be used

ARE.1 is the export document for export clearance, which shall be prepared in quintuplicate (5 copies). This is similar to the erstwhile AR.4. This document shall bear running serial number beginning from the first day of the financial year.

Original               White

Duplicate               Buff

Triplicate               Pink

Quadruplicate       Green

Quintuplicate       Blue

An invoice shall be prepared in terms of rule 11 of the said Rules. It should be prominently mentioned on top "FOR EXPORT WITHOUT PAYMENT OF DUTY"

The obligation of the manufacturer flows from statutory requirement of exporting the goods within six months or such extended period as the Deputy/Assistant Commissioner of Central Excise may allow.

Procedure for clearance from the factory or warehouse A Manufacturer-exporter who has furnished a Letter of Undertaking will prepare the export documents (A.R.E.1 and invoice under rule 11) for clearance from his factory or production.

A Merchant-exporter who has furnished a bond shall be provided sufficient number of certificates (CT-1), duly signed/certified, in multiples of 25 copies, normally covering a period of one to three months, depending upon the track record of compliance by the exporter. The `bond accepting authority' shall be responsible for verifying and accepting the proof of export and in case of any defaults by the exporter, to recover the sum and enforcing the bond. The certificate should be provided according to the volume of exports projected by the exporter (which should also reflect in the amount of bond). The compliance of the exporter in submitting the requisite documents towards `proof of export' shall be another criterion.

The second part of CT-1 is very important. The exporter shall determine the description of goods for procurement from a particular factory or warehouse or an approved place of storage, quantum, value of procurement (provisional figures) and duty involved therein (provisional figures - but based on correct rate of duty and contracted transaction value). This `duty' element will be debited provisionally. The exporter shall ensure that at the time of debit, sufficient credit is available at that point of time to cover the said debit. The provisional debit shall be converted into final debit within a period of seven days from the date of removal of goods on A.R.E.1, based on the `duty payable' in goods cleared for export reflected in the said A.R.E.1 and invoice.

The manufacturer shall record the clearance in his Daily Stock Account indicating, inter alia, the invoice number/date, A.R.E1 number/date and duty payable but foregone under rule 19.

The exporter has two optional procedures regarding the manner in which he may clear the export consignments from the factory or warehouse or any other approved premises, namely :-

  1. Examination and sealing of goods at the place of despatch by a Central Excise Officer.
  2. Under self-sealing and self-certification.