F. No S/12-565/2001 DBK -
IMP. NO 43/02
EXP. NO 43/02

PUBLIC NOTICE NO. 97/2002 DATE 13.08.02

Subject: problems faced by Merchant exporter regarding availment of drawback on garments – regarding

Attention of all Exporters/CHAs and all other concerned is invited to Ministry’s Circular No 54/2001 Cus dated 19.10.2001 and 64/2001 Cus dated 19.11.2001, issued to address the specific problems of merchant manufacturer exporters of garments in claiming duty drawback and P.N. No 117/01 dated 23.10.2001.

2. In the Union Budget, 2001-2002 duty of central Excise was imposed on ready-made woven garments. Therefore, entries were created in the Drawback Table, 2001-2002 , with higher drawback rates for those cases where CENVAT facility was not availed. It was. However, represented by the Garment industry that majority of the garment exporters cleared the goods for export purposes and they were not paying any duty. Accordingly, garment exporters were given the facility of filing only declarations in terms of the above referred Circulars instead of furnishing CENVAT non-availment certificates, for claiming higher drawback. No such procedure was considered necessary for knitted garments as they were exempt form Central Excise levy.

3. This year, knitted garments too have been subjected to Central Excise duty. Therefore, as in case of woven garments, separate entries have been created in the Drawback Table, 2002-2003, for the case where CENVAT facility is availed and those cases where no such facility is availed. Certain trade bodies have brought it to the notice of the Board that the exporters of knitted garments are facing difficulties as the Customs Officers in the filed field formations have been insisting on the production of a certificate regarding non-availment of CENVAT facility. The trade has represented that the position of knitted garments is not different from the one obtaining in respect of woven garments as majority of knitted garments produced are cleared for exports. Hence, the question of availment of CENVAT facility in respect of exports does not arise. They have requested that for this reason these exports should be given the same facility as is availible to the woven garments.

4. The issue has been examined in the Ministry. In view of the position explained by the trade, it is felt that the knitted garments sector deserves the same treatment as given to the woven garment sector. Hence, it is clarified that the provisions of Circulars No. 54/2001 Cus and 64/2001 Cus would also be applicable to the knitted garments. These exporters may be granted higher drawback on production of the declarations as provided in Annexure-I and Annexure-II to this Circular.

5. Since, the central Excise levy on knitted garments has come into effect from 1.3.2000, all the exports effected on or after this date shall be eligible for this facility.

6. All the pending cases may be settled accordingly.

Sd/- (12.08.02)
(AHMED HUSSAIN)
COMMISSIONER OF CUSTOMS (EP)

Encl. Annexure I and II

F. No. S/10-565/2001 DBK

(Issued on the basis of Circular No. 43/2002- Customs dated 19.07.02 of Govt. of India, Ministry of Finance, Department of Revenue in F. No. 609/107/2001 DBK)

Attested By

(S. G. GAWDE)
DY. COMMISSIONER OF CUTOMS,
DRAWBACK DEPARTMENT MUMBAI

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