OFFICE OF THE COMMISSIONER OF CUSTOMS (EP)
NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI -400038.

F.No.S/10-108/2001 DBK
IMP 1/2001
EXP 1/2001

Date 28/03/2001

PUBLIC NOTICE NO. 39/2001

Sub :

Drawback on Readymade 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 of 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 readymade garments provided the value of the hanger is not included in the value of garments.

For such benefit, the hangers and readymade garments are declared as two distinct commodities on the Shipping Bill though for the sake of convenience and on the instructions of the overseas buyers, the hangers have been packed along with the readymade garments.

It is also clarified that the formulation of All Industry Rates of Drawback for readymade garments does not include the duty incidence on hangers. The hangers supplied along with 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 of charge or against payment.

Further, as the hangers are procured through different modes it is not possible to lay down a uniform criteria to address the issue.

The Board has, therefore decided that: -

1. 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 exporter.
   
   
2. If 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
   
   
3. Where the hangers are imported on payment of duty, drawback under Section 74 can be availed separately by the exporters in terms 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 readymade 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 readymade garments.

All drawback claims may be decided accordingly.

(S.P.S. PUNDIR)
Commissioner of Customs
Export Promotion

F.No.S/10-108/2001 DBK

ATTESTED


(A.K.CHAUDHARY)
DEPUTY COMMISSIONER OF CUSTOMS
DRAWBACK DEPARTMENT
MUMBAI