Circular No. 63/98-Customs

Customs Dated 1/9/1998

F.No. 609/218/98 – DBK

Government of India

Ministry of Finance

Department of Revenue, New Delhi

Subject : Duty Drawback – All Industry Rate of Drawback effective from 2.9.98 – Instructions regarding.

        The Ministry has announced the new All Industry Rates of Drawback effective from 2.9.98 vide Notification No. 67/98 dated 1.9.98. A copy of the Press Note issued is enclosed1 highlighting the important changes made in the Drawback Table.

(1)  A cap/ maximum limit has been imposed on products having rate above 10%.

(2)  As the manufacturer-exporters are only entitled to 95% of Modvat credit, a provision has been made to compensate for the balance 5% credit to the manufacturer- exporters by providing  the Central Excise portion of all Industry Rates of Drawback equivalent to 5% of the total Central Excise allocation even where the Modvat has been claimed by them.

(3)  In the case of exports of handloom products/handicrafts, including handicrafts of brass artware, finished leather, grey fabric, and other products, which are unconditionally exempt from Central Excise duty, a provision has been made so as to dispense with the need to produce a certificate regarding non-availment of Modvat facility.

(4)  For handloom made-ups, a single rate has been extended to all types of made-ups so as to avoid periodic fixation of new varieties of made-ups during the year. This is done on the representation of the Handloom exporters Council.

(5)  The All Industry Rates of Drawback in the case of exports of garments from EOU/ EPZ units are being restored which were earlier deleted during review in Sept., 97.

(6)  In order to ensure smooth and accurate processing or drawback claims in the EDI System each rate has been assigned a separate Serial/ Sub serial number.

    Commissioners are requested to closely monitor the Drawback payments under the revised Headings and wherever any excessive variation of amounts being disbursed are noticed, the same may be immediately brought to the notice of the Ministry through a separate reference.

    All the staff concerned may be advised to go through the changes made in the all Industry Rates of Drawback carefully to avoid any possible error. Any difficulty in the implementation of the Drawback Rate may please be intimated to the undersigned by name either through Telex or Fax Message or by D.O. latter.

    As regards the need for production of a certificate by the exporter regarding availment or otherwise of Modvat under General note No. 11 of the said All Industry Rates of Drawback Notification, fresh instructions are being issued and the existing Circular on the subject is being superseded. A copy of the fresh circular is enclosed herewith.

    Your attention is also invited to the revised Customs and Central Excise (Duty Drawback) Rules, 1995, issued under Customs Notification No. 37/ 97- Customs and Central Excise (NT) which have already, been circulated to you. The changes made therein should also be kept in mind and brought urgently to the notice of the undersigned.

   Wide publicity to the changes made may please be given through issue of suitable Trade Notice specially keeping in mind the aspects covered in the Press Note. The field officers should also be suitably informed by issue of a standing order.

(S.P. Srivastav)

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