Drawback Department
New Custom House,
Ballard Estate,
MUMBAI - 400 038.

Date : 28/3/2001

P.N. No.42/2001
IMP 1/2001
EXP 1/2001

PUBLIC NOTICE / STANDING ORDER

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 19.01.2001 vide F.No.609/74/99-DBK, Govt. of India, Ministry of Finance, Department of Revenue and Circular No.42/96 dated 12.08.96 on the above mentioned subject.

Representation from the AEPC regarding deduction of the value of hangers from the f.o.b. value of hangers 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 12.08.96, that drawback could be allowed under Section 74 of the Custom Act,1962, on the hangers imported on payment of Customs duty when such hangers are re-exported alongwith ready-made garments provided the value of the hangers is not included in the value of garments.

For such benefit, the hangers and ready-made garments are declared as to 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 alongwith 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 hanges supplied alongwith the garments of sourced locally or they are imported. The local procurement is against the 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 issues.

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, there 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, there value have to be deducted. In such cases, a suitable declaration should be obtained from the exporters.
   
   
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.
   
   
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 Circulars no.42/96-Cus dated 12.08.96.
   
   - If their value is not separately indicated in the shipping bills, suitable amentments 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 varification 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 are required to give relevant declaration regarding the value / duty payment / exemption / procured status of the hangers supplied with the ready made garments.

All drawback claims may be decided accordingly.

Sd/-
(S.P.S. PUNDIR)
COMMISSIONER OF CUSTOMS,
EXPORT PROMOTION


ATTESTED


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

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