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OFFICE OF THE
COMMISSIONER OF CUSTOMS, |
PUBLIC
NOTICE NO. 116 /2001
Sub: Drawback on ready-made Garments - Deduction
from f.o.b. value on account of imported/indigenous hangers -
regarding.
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Government
of India, Ministry of Finance, Department of Revenue, New Delhi, Circular
No.5/2001-Cus. Vide F.No.609/74/2000-DBK dated 19.01.2001, is reproduced below
for the guidance of the importers, clearing agents and trading staff.
C11/79/2001-AP (PORT) (S. SANKARAVADIVELU)
CUSTOM HOUSE, CHENNAI-1. DY. COMMR. OF CUSTOMS (APPG)
DATE : 12.06.2001
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DRAWBACK CIRCULAR
NO.5/2001-CUS.
F.NO.609/74/2000-DBK
DATED 19.01.2001
A representation has been received from the Apparel
Export Promotion Council that certain Customs formations are following a
practice of deducting the value of hangers from the f.o.b. value of the hanger
packed garments for the purpose of allowing drawback even though the Customs
Notification No.16/2000 dated 1.3.2000 (vide Serial No.115), exempts hangers
imported by bonafide exporters, from both the basic Customs duty and the
countervailing duty.
2.
The issue has been examined in the Board. It is
observed that vide an earlier Circular No.42/96-Cus dated 12.8.96, it was
clarified that drawback could be allowed under section 74 of the Customs Act,
1962, on the hangers imported on payment of Customs duty when such hangers are
re-exported along with ready-made garments provided the value of the hanger is
not included in the value of garments. For such benefit, the hangers and
ready-made garments are declared as two distinct commodities on the Shipping
Bill though for the sake of convenience and on the instructionos of the
overseas buyers, the hangers have been packed along with the ready-made
garments.
3.
It is also clarified here while formulating the All
Industry Rates of Drawback for the ready-made garments, the duty incidence on
account of hangers has not been included. The hangers supplied along with the
garments aare either sourced locally or they are imported. The local
procurement in any case is against a price while the imported hangers could
have been supplied either free of charge or against payment. In view of such
different modes of procurement it is not possible to lay down a uniform
criteria to address the issue.
4.
The Board has, therfore, decided that :-
(a) where
the hangers are imported duty free under notification No.16/2000-Cus dated
1.3.2000 and have been supplied free of charge, their value should not be
deducted from the value of the garments while computing the drawback amount.
However, if the hangers are imported on payment basis, their value shall have
too be deducted, no matter these were imported duty free under notfication No.16/2000-Cus.
In such cases, a suitable declaration should be obtained from the exporters;
(b) where
the hangers are locally procured, suitable deduction should be made from the
total value of the garments if the value of hangers is not declared separately
and deducted by the exporters; and
(c) where
the hangers are imported on payment of duty, drawback under section 74 can be
availed separately by the exporters in terms of Board’s Circular No.42/96-Cus
dated 12.8.96. If their value is not separately indicated in the shipping
bills, suitable amendment to the declared f.o.b. value to arrive at the net
f.o.b. value of the ready-made garments exclusive ofo hangers, may have to be
made. Proper verification as to the identity of the goods and duty payment
thereon has also to be done before drawback under section 74 is disbursed.
A
suitable declaration regarding the value/duty payment/exemption/procurement
status of the hangers supplied with the ready-made garments may have to be
obtained to enable action as above.
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