Circular No. 74/97-Cus.
dated 30/ 12/ 97
F.No. 609/443 /97-DBK
Government of India
Ministry of Finance
Department of Revenue, New Delhi

Subject :  Grant of Drawback on the Export where Drawback Procedure has not been followed by the Exporters Relaxation of the conditions of Rule 11/ 12 of the Customs & Central Excise Duties Drawback Rules, 1971/ 1995.

   Attention is invited to this Ministry’s guidelines circulated under letters F.No. 602 /7/ 70-DBK dated 1.6.1970 and 28th June, 1973 on the above subject.

2.  Where a request is made by an exporter for conversion of ‘free goods’ shipping bill to drawback shipping bill or DEEC-cum-Drawback Shipping Bill, the Ministry has requested the Commissionerates to furnish a factual report in accordance with the instructions contained in Ministry letters mentioned above. On the basis of factual report, Central Government’s permission, where admissible, is being conveyed for conversion of such shipping bills.

3.  With the introduction of Drawback Rules 1995, and subsequent amendments thereof, the guidelines issued in 1970 / 1973 need to be revised. Further, experience has shown that factual reports being furnished by the Commissionerates do not cover all aspects in accordance with the prescribed guidelines and there is no uniformity in regard to interpretation of general guidelines. Keeping in view of the new Drawback Rules, as amended from time to time, and the need to standardise the application of these guidelines, the following aspects may please be specifically verified and reported in the factual report(s):

(a)    whether the shipping bills for which relaxation under Rule 11 of Drawback Rules, 1971 or Rule 12 of Drawback Rules, 1995 have been sought, have been fully co-related with the relevant DEEC Book/ Advance Licence.

(b)   in case of surrender of DEEC/ Pass Book as unutilised, whether the DGFT have issued any cancellation letter, or in case the licence has not been granted for any technical reasons, whether DGFT/ JDGFT have issued a rejection letter.

(c)    where the exports are against an application for Advance licence, and the licence is yet to be issued whether relevant shipping bills have been co-related with the relevant application/ DGFT Receipt Number allotted for Advance Licence.

(d)  In case the export goods are manufactured by a Supporting Manufacturer :

    (i)    Whether benefit of MODVAT Credit under Rule 57A, or rebate on the dutiable inputs under Rule 12(i)(b) / Rule 13(i)(b) of the Central Excise Rules, 1944, has been availed by the Supporting Manufacturer.

(ii)    Whether supporting manufacturer’s name appears on the relevant S/ Bill (s) or not.

    (e)    Where licence has been cancelled, or not issued, whether the exporter has claimed of the benefits of the conditions mentioned in the relevant Drawback Schedule/ Exemption Notification/ Public Notice
    (i)    Whether the examination of the goods has been carried out at the time of export, and if so, whether Test Report, where required, to establish the identity and;
    (g)  In case of scaling down or the value of the licence, exports have not been counted towards discharge of export obligation, whether the evidence in support thereto has been furnished by the exporter?

(h)  In case of export under DEEC, Whether the examination of goods has been done keeping in view the requirements of DBK Rules.

(i) Whether any input which has not been covered in Advance licence, though party applied for the same, has been obtained by paying import duty and used in the export product.

(j)  Whether the claim is otherwise in order and there is documentary proof to establish the extenuating circumstances seeking conversion of shipping bills.

4. The field staff may please be suitably guided to follow the above mentioned instructions strictly by issue of Standing Order.

5.  This Circular is being issued in supercession of the earlier instructions issued on this subject vide Ministry F.No. 602/ 7/ 70-DBK dated 1.6.1970 and 28th June, 1973.

(Sandeep Ahuja)
Under Secretary (Drawback)

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