Circular No. 39/99-Custom Duty Dated 25/6/1999

F.No. 605/145/97-DBK

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

Subject : Extension of Brand Rate of Drawback Scheme to exports under DEPB Scheme – reimbursement of Additional Customs Duty (CVD) paid in cash on imported inputs and Excise duty paid on indigenous inputs in export goods – reg.

    Various representations have been received from Trade/Exporters that wherever final goods exported by them are liable to compounded levy of Central Excise duty, in such cases, the exporters are unable to avail of Modvat Credit ot additional customs duty (CVD) paid in cash on imported inputs, or excise duty paid on indigenous inputs, utilised in the production of export goods; and thus the duties suffered by them are not fully compensated to them at the time of export. Such situation presently pertains to steel re-rolling industry (Notification No. 33/97-CE dated 1.8.97 refers) and processed fabrics [(Notification No. 36/98-CE dated 10.12.98 and 44/98-CE (NT) dated 10.12.98 refer].

2. In view of the above, the issue has been examined in the Board and it has been decided that the exports made under DEPB Scheme of those products which cannot avail modvat credit of the additional duty of Customs )CVD) paid in cash on imported inputs, or excise duty paid on indigenous inputs, will be of Drawback against additional customs duty/excise duty suffered on inputs, on submission of proof of payment of duty. This will be applicable to exports of re-rolled steel products which are covered under Notification No. 33/97-CE dated 1.8.97 and processed fabrics, which are covered by Notification No. 44/98-CE(NT) dated 10.12.98.

3. Circular No. 68/97-Cus. dated 2.12.97 shall stand amended as above. Other provisions of that Circular shall be applicable to the products considered herein.