Circular No. 102/2000-Cus dt. the 1st December, 2000

Sub:

Eligibility of All Industry Rate (AIR) of Drawback to goods exported under DFRC Scheme during 1.4.2000 to 31.5.2000

In terms of the EXIM Policy 2000-2001 announced on 31.3.2000, Duty Free Replenishment Certificate (DFRC) Scheme had come into operation with effect from 1.4.2000 and exports made under it were, inter-alia, eligible for AIR of Drawback equivalent to the Central Excise Duty portion in respect of inputs imported and cleared on payment of CVD, provided no cenvat was availed. Circular Nos. 33/2000-Cus dated 2.5.2000 and 42/2000-Cus dated 12.5.2000 refer in this regard. Suitable enabling provision was also incorporated in General Note 2(b) to Notification No. 41/2000-Customs (NT) dated 1.6.2000 for this purpose.

2. Doubts have been raised about the eligibility of AIR to exports made under DFRC Scheme during the period 1.4.2000 to 31.5.2000 because General Note 2(b) to the earlier AIR notification No. 31/99-Customs (NT) dated 20.5.1999, which would be applicable to exports effected during the said period, has not been amended suitably.

3. The issue has been examined in Board. The primary objective of AIR notification No. 41/2000-Customs dated 1.6.2000 was to revise the AIR of Drawback with effect from 1.6.2000 on account of revision of duty rates announced in 2000-2001 Budget. Since the DFRC Scheme had come into operation on 1.4.2000, while announcing the new AIR of Drawback, General Note 2(b) to the aforesaid notification was also suitably amended. The intention of the Government was however, to extend all benefits of DFRC Scheme for exports made under it after 1.4.2000. Simply because General Note 2(b) to the earlier AIR notification No. 31/99-Customs (NT) dated 31.5.99 was not amended should not be a ground for denial of aforesaid benefit to exports made under DFRC Scheme during 1.4.2000 to 31.5.2000.

4. It is clarified that exports made during 1.4.2000 to 31.5.2000 under DFRC Scheme would be eligible for AIR of Drawback equivalent to Central Excise duty portion (on the CVD paid on imported inputs) at the rates specified in the Table to earlier notification No. 31/99-Customs (NT) dated 31.5.99 provided no MODVAT (now Cenvat) was availed.

5. This may be brought to the notice of the staff concerned and the trade by issuing suitable standing order and Public Notice respectively.

6. The receipt of this Circular may please be acknowledged.

Sd/-
(R.K. Talajia)
Senior Technical Officer (DBK)

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