Circular No. 209/43/96-CX dated 9/5/96
Sub: Problems faced by the Exporters of Cotton Made-ups in respect of rebate claims -Representation from Cotton Textile Export Promotion Council -
It has been represented by the Cotton Textiles Export Promotion Council in their representation dated 8.4.96 that their member units are facing difficulties in exporting the cotton made-ups (bed sets, sheets, pillow cases, etc.) and that the same is adversely affecting the export. In this regard, it has been stated that whereas the drawback is claimed for the duty suffered on yarn, colours and chemicals while processing the fabrics, packing materials such as polybag, stiffener, sewing thread, printed shoe label and carton, the rebate is claimed only in respect of the excise duty paid on processed fabric and therefore there is no possibility of getting the relief twice by way of drawback as well as rebate.
2. The issue has been examined by the Board. The erstwhile rule 12(A) provided that no such rebate of duty in respect of excisable materials used in the manufacture of goods exported out of India shall be allowed if the exporter avails of drawback under the Customs and Central Excise Duties Export Drawback General Rules, 1960 in respect of such duty (emphasis given on "such duty"). Similar provisions have been made in the present rule 12(3) except that the expression "such duty" does not appear in the said rule, thereby raising the doubts in the minds of the field fotmations that the facility of rebate and drawback cannot be claimed inrespect of the same export goods.
3. Further, it is observed that while prescribing drawback rates in the Drawback Schedule, a specified provision is made by Note No. II under erstwhile Serial No. 2702 (now re-numbered at 6304) in the table for Drawback of Rates as stated below:
In case of the Cotton Made-up Articles covered under 2702 (2) and (5), the Drawback Rate specified therein will also be available even if the manufacturer avails of the facility of Rule 191A of Central Excise Rules, 1944 upto 30th September, 1994 or 12(1) (b) thereafter for claiming Rebate of Duty on the cotton fabrics used for the manufacture of Made-up Articles exported".
This indicates that the Customs & Central Excise Duties Drawback Rules under which the Drawback Schedule is prescribed, recognises the availability of the facility of rebate of duty as well as the drawback of duties on cotton fabrics. It is observed that both Central Excise Rules, 1944 and Customs & Central Excise Duties Drawback Rules, 1.971 have been promulgated u/s 37 of Central Excise & Salt Act, 1944. By harmonious construction of the two rules, it can be concluded that the rebate claim as well as drawback claim can be given simultaneously provided no double benefit is accrued to the exporter in respect of the same element of duty.
4. Moreover, it was not the intention of the Government to deny the benefit of rebate of the excise duty altogether where the same element of duty is not included in the drawback rate i.e. Central Excise duty paid on the processing of cotton fabrics used for the manufacture of cotton made-up articles exported.
5. In view of above, it is clarified that rebate introspect of duty element suffered on processing of cotton fabrics used for manufacture of Made-up articles exported is admissible in such cases.
6. The pending claims in this regard should be disposed of expeditiously.
7. It should also be ensured that no shipments of Cotton Made-up articles mentioned in Note-11 of SI No.6304 of the Drawback Schedule should be held up on the ground that the exporters are claiming both drawback and the rebate. In this regard, a declaration should be obtained from the exporters on the AR4/AR5 that they shall not claim any drawback in respect of duty for which they claim the rebate.
Sd/-
(P.K.Sinha)
Under Secretary (CX.6)
F.N0.209/62/95-CX.6Presented by eximkey.com