Circular No.13/2000-Cus date 22nd February,2000

EPCG (Zero duty) Scheme
-CVD Exemption only to Machines Directly used for Garments and Knitwear and not for Fabrics

Subject: Exemption from 10% CVD to under Zero duty EPCG Scheme to fabric processing machines- regarding,

Sir,

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 inter alia, 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 garment, 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 machine which are directly used in manufacture/processing of textile garment. (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 of theabove basis.

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

5. Receipt of the Circular may kindly be acknowledged.

6. Suitable public notice for the information of the trade and' standing order for guidance of the staff may be issued.

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

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