Circular No. 238/72/96-CX dated 12/8/96

Government of India
Ministry of Finance Department of Revenue,
New Delhi

Subject: Problems faced by exporters of man-made fabrics/sarees in respect of rebate claims -Clarification

It has been represented to the Board that in respect of export of man-made (fabrics/sarees of the description mentioned at SI. No.5404 and/or 5503 of the current Drawback Schedule notified under Customs & Central Excise Duties Drawback Rules, 1995, the exporters are not getting full duty relief on the ground that drawback and rebate are not simultaneously available. They have stated that the All-Industry rate of drawback provides duty relief only to the extent of duties suffered at yarn stage, whether it is additional duty of customs or it is the Central Excise duties on yarn. The Central Excise duties paid at the processing stage remains unrebated. Therefore, full duty relief can be given only if rebate under Rule 12 of Central Excise Rules, 1944 is granted to them. It has been requested that a clarification similar to the one issued for Cotton Made-up articles (Circular No.209/43/96-CX.6 dated 9.5.96) may be issued allowing simultaneous availment of the facility of the rebate and drawback since no double benefit would accure to the exporters.

2. The matter has been examined by the Board.

3. The Drawback Directorate has reported that Central Excise duty payable at the processing stage of man-made fabrics/sarees has not been taken into account while fixing the All-Industry rates of drawback on export of man- made fabrics sarees falling under S.S. No.5404 or 5503 of the Drawback Schedule. Consequently, no double benefit will accure if rebate of excise duty paid at the processing stage is granted to the exporter of Man-made fabrics/Sarees. As such this case is similar to the case of Made-up articles regarding which clarification vide Circular No.209/43/96-CX.6 was issued and the same can be applied here, mutatis mutandis.4. In view of the above, it is clarified that rebate in respect of Central Excise . duty suffered on processing of man-made fabrics/sarees under Rule 12 of Central Excise Rules, 1944 is admissible even if the drawback in respect of SI.No.5404 & 5503 of the Drawback Schedule is being claimed by the exporter for the same export goods.5. The pending claims in this regard should be disposed of expeditiously.

Sd./
(P.K. Sinha)
Under Secretary (CX.6)

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