Subject : Difficulties in availing All Industry Rate of Drawback for the exports made before 2.5.95 in terms of Advance Licence issued on or after 1.4.95 Under Customs Notification 79/95-Cus and 80/95 – Cus both dated 31.3.95.
In the Import and Export Policy 1992-97, w.e.f. 1/4/1995, an addl. duty of Customs (C.V.D.) was imposed on all imports made under the DEEC Scheme in terms of para 47 of the Policy. Therefore, for all imports made under DEEC Scheme, i.e. whether against Quantity Based Advance Licence of value Based Advance Licence, issued on or after 1.4.1995 the exporter is required to pay addl. Customs duty in terms of Customs Notification No. 80/95 dated 31.3.95 and 79/95 dated 31.3.95 respectively
2. For the addl. Customs duty so paid, manufacturer exporter can get a credit/ refund under Modvat rules on the export of the goods. But where exporter does not want to opt for Modvat route, he may avail of the existing All Industry Rate of Drawback to the extent of “C.Ex. allocation”. In this connection, attention is invited to note 2(bbb) of Drawback Public Notice 4/95 dated 2.3.95. The same facility is also extended under new Duty Drawback Rules 1995 in terms of ‘General Note’ 2(b) of Drawback / PN – 5/95 dated 15th June, 1995 amending drawback rules w.e.f. 16.6.1995.
3. A doubt has been raised by some Commissioners of Customs that where the export has already been made prior to 1.4.95 and corresponding Quantity based Advance Licence/ Value Based Advance Licence is issued on or after 1.4.95, whether the rate announced under Drawback-PN-4/95 dated 2.5.95 will be applicable on such exports because rate announced in a Public Notice is effective from the date of issue. In their view, the rate announced vide Draw back- PN-4/95 dated 2.5.95 will be applicable on such exports because rate announced in a Public Notice is effective from the date of issue. In their view, the rate announced vide Drawback /PN-4/95 dated 2.5.1995 and under “General Note” 2(b) of Drawback/ PN – 5/95 dated 15.6.95 will not be applicable where licence is issued on or after 1.4.1995. This view has been examined and the following clarification may be noted.
4. In order to cover such situation as stated in para 3 the Central Government has issued a Customs Notification No. 33/94 (NT) dated 10.7.96. Therefore, “the rates of drawback announced in terms of General Note 2(b) of the Public Notice of the Ministry of Finance Department of Revenue No. Drawback PN – 5/95, dated 15th June, 1995, shall apply in respect of the exports made before 2nd May, 1995, if such exports were made in discharge of export obligations either in terms of Notification No. 79/95-Cus. dated 31st March, 1995, 1995, or in terms of Notification No. 80/95- Cus. dated the 31st March, 1995.
5. The Central Government has also granted a general relaxation for conversion of all such free shipping Bills into drawback shipping Bills, for which a necessary legal provision exists in terms of Rule 15 of Customs & Central Excise Duties Drawback Rules, 1995.
6. The content of this letter may be brought to the notice of all concerned by issuing Trade Notice / Public Notice.
