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Circular No. 6/99-Cus
dated 17/2/1999

F. No. 605/195/97-DBK
Government of India
Ministry of Finance
Department of Revenue, New Delhi

Reference as well as representations have been received in the Board regarding admissibility of made ups made out of yarn dyed fabrics for DEPB credit.

2. The issue has been examined in the Board. It is found that fabrics made out of “dyed yarn” may also undergo a number of processes, before they are exported in the form of made ups. After the fabrics have undergone some of such processes like bleaching, mercerising, dyeing, printing, water-proofing, shrink proofing, organdie processing or stentering, they are liable to Central Excise duty, just as processed fabrics woven out of grey yarn would be liable to Central Excise duty.  In addition, there are other processes like calendering, singeing, Padding, Back Filling. Cropping and Hydro-Extraction which the fabrics may undergo before they are converted/exported as made ups, but on which Central Excise duty is fully exempted vide Notification No. 42/95-CE dated 16.3.95.

3.  It follows, therefore, that cotton made-ups made from yarn dyed fabrics, where the “yarn dyed fabric” undergoes any one or more of the processes mentioned in the preceding para, before, export, are to be treated as cotton made-ups made from processed fabrics, and such made-ups only will be eligible for DEPB rated as “processed cotton made-ups other than grey” under Entries at S. Nos. 69 or 72 of DEPB rates for textile products.

4. This may be brought to the notice of the Trade by issue of suitable public notice.

(Sandeep Ahuja)
Under Secretary (DBK)

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