As soon as goods are ready for dispatch to the port of shipment, exporter has to apply to the central excise authority for excise clearance of the cargo. The exporter has, now an option to remove the goods with inspection by the central excise or remove the goods without inspection. For this, exporter has to apply to the jurisdiction Range Superintendent of central excise in the prescribed form ARE-1, in sixtuplicate.
For inspection, exporter has to give advance notice of 24 hours to the range superintendent. The inspection may be made by the range superintendent or excise inspector, nominated by the superintendent of excise. After inspection, they seal the goods and give excise clearance. In case, goods are inspected by the excise authorities and seals are not broken, the customs authorities may not inspect the goods at the port. If goods are removed by the exporter, without the inspection by excise authorities, customs conduct inspection of goods at the port.
As a matter of policy to encourage exports, exporters are exempted from payment of central excise duty on thy, final product. Where exemption is not possible, refund of excise duty is made. Exporter has option to export under rebate or export under bond. In respect of excise duty paid on inputs, refund is made through Cenvat Credit or Duty Drawback.
In case of export under rebate, excise duty has to be paid first by the exporter and once the export transaction is completed, refund of excise duty paid can be claimed. In case of export under bond, excise duty need not be paid, but bond has to be executed by the exporter in the prescribed format, as approved by Controller of Central Excise, by producing security or surety, at least to the amount equivalent to the amount of excise duty chargeable on the goods.