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Circular No. 13/2000-Cus

F.NO. 607/30/99-DBK

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

New Delhi, the 22, February, 2000

Subject : EPCG (Zero duty) Scheme — scope of Notification No 29/97-CUS – clarified

It has been reported to the Board that exemption from 10% CVD under zero duty EPCG Scheme in terms of customs notification number 29/97-Cus. Dated 1.4.97 has been extended by some Custom Houses even to machines like knitting/dyeing/ compacting etc. i.e. machines which are used in the manufacture/processing of fabrics and not garments.

2. In terms of proviso to paragraph 1 of notification number 29/97-Cus. Dated 1.4.97,CVD exemption is, interalia, available only to machines which are used in the manufacture/processing of textile garments (including knitwears). Hence if a garment exporter imports machines which are not used for the manufacture/processing of garments, CVD exemption would not be available to such machines which process fabrics.

3.  It is therefore re-iterated that CVD exemption in terms of customs notification number 29/97 dated 1.4.97 (issued under Zero duty EPCG Scheme) should only be extended to machines which are directly used in manufacture/processing of textile garments (including knitwears). In past cases where such benefit has been wrongly extended, SCN-Cus-demands should be issued immediately. Cases of provisional assessment if any, should also be finalised on the above basis.

4.  Board should be kept apprised of the action taken in the matter.

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