Customs Circular No. 54/2002, Dt. 27/08/2002

Wrong availment of DEPB/Drawback benefit in respect of exports where imports were made without payment of customs duty under notification No. 32/97-Cus. Dated 1.4.97-reg

Kind attention is invited to DOR Circular No. 26/2002-Cus. dated 16.5.2002 on the subject issue where customs field formations were alerted about cases involving unintended/double benefit in the form of duty free import of inputs under Customs Notification No. 32/97 and also involving availment of DEPB benefit at the time of export.

2. It is given to understand that some unscrupulous exporters have availed simultaneous benefits of duty free import of inputs in terms of 32/97-Cus. as well as duty drawback. Duty Drawback is available where the inputs gone into the manufacture of export product have suffered customs/excise duty. In cases where inputs are imported in terms of Notification No.32/97-Cus., no customs duty is paid. Hence, once the party has availed benefit of Customs Notification No.32/97, it becomes disentitled to AIR of Drawback.

3. Due care should be taken by Customs at the time of processing export consignments under Drawback Scheme so as to ensure that in cases where imports had taken place on availing the facility of Customs notification No.32/97, no AIR of drawback is extended. For the purpose of ease of identification of export consignments where benefit of customs notification No.32/97 was taken at the time of import, it should be made mandatory for the party to declare this fact on the body of the shipping bill alongwith details of materials imported free of duty under 32/97.

4. Customs field formations under your charge may also be asked to examine their records to ascertain the number of cases where exporters had availed simultaneous benefit of 32/97-Cus. and DEPB/Drawback benefit wrongly. Report for such cases may be sent in the following format:

S. No	Name of the Party	Name of Export Product	Bill of entry No. & date where benefit of 32/97 was availed	Exports where DEPB benefit was availed alongwith 32/97		Exports where Drawback benefit was availed alongwith 32/97.		Remarks
				S/B No	Declared Amount	S/B No	Declared Value

5. Suitable trade notice and standing orders for the guidance of trade and staff may respectively be issued.

6. Receipt of the Circular may please be acknowledged.

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

F. No.605/55/2002-DBK
Government of India, Ministry of Finance, Department of Revenue, New Delhi

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