Circular No. 407/40/98-CX dated 15/7/1998

Subject: Central Excise - Cash rebate of duty paid from "Deemed credit register" on processed fabrics - clarification

I am directed to say that it has been brought to the notice of the Board that the rebates are not being sanctioned to the exporters who paid duty from the "deemed credit" register" on the processed fabrics, especially where duty paid fabrics were used in the manufacture of made-up articles and rebate was claimed under the provisions of rule 12(1 )(b) of the Central Excise Rules, 1944.

2. The matter was examined by the Board. It has already been clarified by the Board earlier that cash rebate of the duty paid from RG-23A Part-11 as well as from RG 23C Part-11 are permitted. (Refer Circular No. 153/64./95-CX dated 12.10.95 and Circular No. 262/96/96-CX dated 6.11.96). The same principle will apply to the duty paid through the Deemed Credit Register.

3. In the case where the question of payment of rebate in respect of duty paid on fabrics and used in the manufacture of made-ups exported under provisions of Rule 12(1 )(b) is involved, it is found that w.e.f. 22.10.96, the All Industry Rate of Drawback was modified so as to cover the Central Excise Duty incident suffered on fabrics. In that case, such exporters who exported the goods (made-ups) under the claim of drawback, are not eligible for rebate under rule 12(l)(b). The Drawback Directorate by circular No. 49/96-Cus dated 22.10.96 had already clarified this position and the same was reiterated in the Board"s Circular No.343/59/97-CX dated 14.l0.97.

4. In view of the above it is clarified that cash rebate of the duty paid on processed fabrics from the "deemed credit register" are permitted provided drawback of such duty are not claimed.

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

F.No. 209/10/98-CX.6

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