D.F.A.
F.NO. S/10-108/2001 DBK
P.N.NO. 41/2001 Drawback Department
IMP 1/2001 New Custom House,
EXP 1/2001 Ballard Estate.
MUMBAI - 400 038.
Date:20.3.2001
28/3/2001
PUBLIC NOTICE NO.41/2001
- Sub:
- Drawback on Ready-made Garments Deduction from f.o.b. value on account
of imported/indigenous hangers.
Attention of all Officers/field formations/Trade is invited to Drawback Circular No. 5/2001-Cus dated 19.1.2001 vide
F.No. 609 /74/99-DBK, Govt. of India, Ministry of Finance, Department 0f Revenue and Circular No. 42/96 dated
12.8.96 on the above-mentioned subject.
Representation from the AEPC regarding deduction of the value of hangers from the f.o.b. value of hanger packed
garments for the purpose of allowing drawback has been examined by the board.
It is observed that clarification have been received from the Board earlier vide Circular 42/96 dated 12.8.96, that
drawback could be allowed under Section 74 of the Customs Act.1962, on the hangers imported on payment of
Customs duty when such hangers are re-exported along with ready-made garments provided the value of the
hanger is not included ill the value of garments.
For such benefit, the hangers and ready-made garments are declared as two distinct commodities on the Shipping
Bill though for the sake of convenience and on the instructions 0£ the overseas buyers, the hangers have been
packed along with the ready-made garments.
It is also clarified that the formulation of All Industry Rates of Drawback for Ready-made Garments does not include
the duty incidence on hangers.
The hangers supplied alongwith the garments are sourced locally or they are imported. The local procurement is
against a price while the imported hangers may have been supplied either free or charge or against
payment.
Further, as the hangers are procurred through different modes it is not possible to lay down a uniform criteria to
address the issue.
The Board has, therefore decided that : -
- Where the hangers are imported duty free under notification No. 16/2000-Cus dated 01-03-2000 and
have been supplied free of charge, their value should not be deducted from the value of the garments while
computing the (drawback. amount. However, if the hangers are imported on payment basis, their value shall have
to be deducted. In such cases a suitable declaration should be obtained from the exporters.
- I£ the hangers are locally procured, suitable deduction should be made from the total value of the garments if
the value of hangers is not declared separately and deducted by the exporters and
- where the hangers are imported on payment of duty, drawback under Section 74 can be availed separately by
the exporters in term of Board"s circular No.42/96-Cus dated 12.8.96.
-If their value is not separately indicated in the shipping bill, suitable amendment to the declared f.o.b. value to
arrive at the net f.o.b. value of the ready-made garments exclusive of hangers, may have to be made.
-Proper verification as to the identity of the goods and duty payment thereon also has to be done before drawback
under Section 74 is disbursed.
TO enable the above, the exporters should give relevant declaration regarding the value/duty payment/exemption/
procurement status of the hangers supplied with the ready-made garments.
All drawback claims may be decided accordingly.
(S.P.S. PUNDIR)
COMMISSIONER OF CUSTOMS,
EXPORT PROMOTION
MUMBAI.
F.NO. S/10-108/2001 DBK
ATTESTED BY
(A.K. CHAUDHARY)
DEPUTY COMMISSIONER OF CUSTOMS
DRAWBACK DEPARTMENT
MUMBAI