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Circular No. 1042/30/2016 - CX

F, No. 354/25/2016 — TRU (Pt.-D
Government of India
Ministry of Finance
(Department of Revenue)
Tax Research Unit
kkk
New Delhi, the 26" July, 2016
To,
Principal Chief Commissioners / Chief Commissioners of Central Excise (All);
Principal Chief Commissioners / Chief Commissioners of Customs & Central Excise (All);
All Director Generals of Customs, Central Excise & Service Tax
Madam / Sir,
Subject: Export related procedural simplifications - excise duty on articles of
jewellery falling under heading 7113 - regarding
In this year’s Budget, central excise duty of 1% without input and capital goods tax
credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113
of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government
had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to
interact with Trade & Industry on issues relating to procedure and compliance relating to
excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016,
which has been accepted by the Government.
2, In this context, pending finalisation of the procedure for exports, in consultations with
the Department of Commerce and trade and industry, -
(i) There shall be no requirement for taking central excise registration by a manufacturer
or principal manufacturer or a jeweller, who exports 100% of articles of jewellery
manufactured by him or got manufactured by him on job work basis, subject to the
following conditions that:
a) the manufacturer or principal manufacturer or a jeweller, as the case may be,
gives a bank guarantee for excise duty payable of articles of jewellery [over and
above the bank guarantee for customs duty on gold and VAT payable on articles
of jewellery] with the nominated agency/authorised bank;

b) in case of default in fulfilment of his export obligation, the manufacturer or
principal manufacturer or a jeweller, as the case may be, shall take central excise
registration;
c) either the manufacturer or principal manufacturer or a jeweller, as the case may
be, shall pay the excise duty on the articles of jewellery sold to the domestic
buyers on first sale basis or the nominated agency/bank shall release bank
guarantee equal to excise duty payable on the articles of jewellery [provided the
customs duty on gold content in the jewellery and VAT payable on such articles
of jewellery has been paid by the manufacturer or principal manufacturer or a
jeweller or bank guarantee equivalent to that has been released by the nominated
agency / authorised bank]; and
d) incase there are no sales to domestic tariff area for subsequent return cycles, such
unit will file nil return for such return cycles.
(ii) Exporters may continue to export articles of jewellery, as provided by the circular no.
1021/9/2016-CX dated 21.03.2016, on self-declaration and submission of Letter of
Undertaking [LUT] to customs without the need to get such LUT ratified by the
jurisdictional central excise authorities, till the detailed procedures in this regard are put in
place.
3. Hindi version will follow. Trade Notice/Public Notice may be issued on the above
lines.
4. Difficulties faced, if any, in implementation of this Circular may be brought to the
notice of the Board.
AY ih
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oe Sehgal)
Under Secretary to the Government of India