Circular No. 54/99-Cus
dated 25/8/1999

Government of India
Ministry of Finance
Department of Revenue, New Delhi

Subject: Admissibility of made-ups made out of yarn dyed fabrics for DEPB Credit.

    References have been received from the field on the subject issue, seeking clarifications on the scope of Board”s Circular Nos. 6/99-Cus. dated 17.2.99 and 10/99-Cus. dated 10.3.99 vis-a-vis DGFT”s Policy Circular No. 67 (RE-98)/98-99 dated 19.2.99.

2.    It is observed that DGFT”s Policy Circular No. 67 (RE-98)/98-99 dated 19.2.99 goes beyond the scope of Board”s Circulars mentioned above.  It is hereby clarified that the said circular issued by DGFT must be ignored, and all Custom Houses must follow Board”s above mentioned circulars.

3.  In regard to exports from Handloom Sector, Circular No. 10/99 ibid provides for certification of the respective shipping bills by Handloom Export Promotion Council (HEPC).

4.  For exports of made ups made from processed yarn dyed fabrics (i.e. where the fabric is made from dyed-yarn) from other than handloom sector, the following decisions have been taken :- i)   The processed fabric is invariably liable to central excise duty, and would be cleared by manufacturer exporters against an AR-4/ AR-5 form.  In such cases, Custom Houses may admit the shipping bills under DEPB Scheme.

(ii)  In other cases, i.e. where the goods are exported by merchants and are not accompanied by AR-4/ AR-5 form, some processes like printing are capable of being determined by a visual examination.  Such printed fabrics can be regarded as processed fabrics before they were converting it into “made-ups”, the shipping bills may also be admitted under DEPB Scheme.
5.  For cases which are not covered under the preceding two paras, Commissioner of Customs may require exporters to furnish with the shipping bills a test report to establish that the fabric was subjected to any of the prescribed processes.

(Sandeep Ahuja)
Under Secretary (DBK)

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