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OFFICE OF THE
COMMISSIONER OF CUSTOMS, |
PUBLIC
NOTICE NO. 131 /2001
Sub: All Industry Rates of Drawback in respect of man-made fabrics
falling under Chapters 54, 55 and 58 of
the Drawback Table - regarding,
Government of India, Ministry of
Finance, Department of Revenue, New Delhi, Drawback Circular No.3/2001-Cus.
vide F.No.609/115/2000- DBK dated 10.01.2001, is reproduced below for the
guidance of the importers, clearing agents and trading staff.
C11/76/2001-AP (PORT)
(S. SANKARAVADIVELU)
CUSTOM HOUSE, CHENNAI-1.
DY. COMMR. OF CUSTOMS (APPG)
DATE : 29.06.2001
____________________________________________________________________________
Drawback Circular No.3/2001-Cus
F.No.609/115/2000- DBK dated
10.01.2001
Silk &
Rayon Textiles Export Pi-emotion Council and Indian Spinners’ Association have
represented to the Board that certain exporters of man-made power loom
processed fabrics are using the input - grey fabric imported i-nder Advance
Licence/DEEC Scheme and DFRC-cum Drawback Scheme and are availing Central
Excise allocations of All industry Rates of Drawback, available to such
man-made fabrics. This facility is being availed despite the fact that the
input 'grey fabric' does not suffer any Excise Duty/Countervailing Duly. Such a
practice has led to unintended accrual of drawback benefits.
2.
The issue has been examined in the Board, It Is clarified here that the All
Industry Rates of drawback for any export product are determined by taking into
consideration the duty incidence suffered on various inputs used in the
manufacture of such goods. The basic aim of allowing drawback is to relieve
these duties so that the export products become competitive in the
international market. Hence, only such export product are entitled to drawback
where the inputs suffer duties whether of customs or of central excise, Though,
General Note 2 to the Drawback -'table precludes admissibility of drawback to
the exports effected against the duty exemption schemes, the first proviso to
the said note allows extension of limited drawback rate to the extent of
central excise allocation for such exports effected against DEEC/Advance
Licence Scheme or the DFRC Scheme where the Countervailing duty is paid/payable
in cash.
3.
It is also clarified that the AH Industry Rate of Drawback for the man-made
fabrics falling under Chapters 54, 55 and 58. of the Drawback Table have been
.determined by taking into consideration the duty suffered on the inputs i.e.
yarn, dyes, chemicals and packing materials. All these rates are on "All
Central Excise basis is only the Central Excise duties and no Customs duties on
these inputs have been considered. While formulating these rates, me Central
Excise duty payable at the processing stage of me manufacture of these fabrics
has not been included/considered. This position is well known to the field
formations as well as the trade for, past many years. However, these
instructions were reiterated and also made applicable to DFRC Exports vide the
Ministry's earlier Circular No.98/2000-Cus dated 29.11.2000.
4.
In the Standard Input/Output Nouns obtaining in the Handbook of Procedures
(EXIM Policy) it is observed that certain norms indicate Fibre/Yarn/POY as an
input while others indicate Grey Fabric as an input against the resultant product
man-made fabrics. The exporters have also been issued Advance Licences and
DFRCs accordingly. Though Fibre/Yarn/POY are chargeable to Central Excise
duties, the Grey Fabric is exempted from the Central Excise levy. It is,
therefore, obvious that the exports of man-made fabrics against Advance Licence
or under DFRC Scheme which involve Grey Fabric as an input don't merit to be
extended drawback at the All Industry Rates fixed for the man-made fabrics in
the Drawback Table. These rates are applicable only to such exports of
processed fabrics against the Advance Licence /DEEC/DFRC Scheme where the input
used is POY/Fibre/Yarn,
5.
All the .past cases of export of man-made fabrics against Advance Licence/DEEC
Scheme and DFRC Scheme, where the input used is Grey Fabric, should be reviewed
and steps be taken to recover the drawback already sanctioned. For future
exports, the exporters may be directed to clearly declare on the shipping bills
the inputs used in the manufacture of such fabrics and the drawback be allowed
strictly only in such cases where the inputs like fibre/POY/yarn are duty paid
or where the duty would be payable on such inputs.
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