| Date: |
19-12-1995
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| Notification No: |
Customs Circular No 130/1995
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| Issuing Authority: |
Indian Customs
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| Type: |
Circular
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| File No: |
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| Subject: |
Eligibility of drawback where ad valorem rates subject of a maximum limit in quantity terms have been prescribed
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Eligibility of drawback where ad valorem rates subject of a maximum limit
in quantity terms have been prescribed
Circular No. 130 dated 19th
December 1995
Rules 7(A) of
Customs & Central Excise Duties Drawback Rules, 1971- Rule 8 of the Customs and
Central Excise Duties Drawback Rules, 1995.
Representations
have been received from the exporters of Cotton Power loom made-ups (bed sheets)
under S.S. No. 6305 (Old 2702(5)) of the Drawback Table where exporters' claim
for drawback have not been allowed by the Customs Houses on the ground that
drawback at the specific rate of Rs. 4.35 per piece works out to less than Rs.
5000/-per Shipping Bill as also less than 2% of the F.O.B. value. The cases
pertain to the period when Rule 7(A) of 1971 Rules/ Rule 8 of 1995 Rules
debarred determination of drawback where amount of drawback was less that than
2% of F.O.B. value of export except where the amount of drawback per shipment
was Rs 5000/- or more. The said limit of Rs. 5000/- has since been reduced to
Rs. 500/- by Notification No. 52/95-Customs & Central, Excise (NT) dated
18th September 1995. The exporters have represented that once rate of 2% of
F.O.B. has been specified in the Drawback Table, the eligibility of
drawback even if total amount payable on the basis of maximum rate per piece
specified works out to less than Rs. 5000/-or 2% of the F.O.B. value, is not
affected.
2. The
matter has been examined by the Ministry. The rates specified under S.S.No. No.
6305(Old 2702(5)) is 2% of the F.O.B. value, which is subject to a maximum
limit of Rs. 4.35 per piece. The specific rate under the S.S. No. No. 6305 (Old
2702(5)) is not repeat not the rate of drawback but maximum limit above which
the amount of drawback is not to be paid. Thus for all legal purposes the rate
of drawback has already been determined at 2% of the F.O.B. value and therefore
exporters are eligible to claim drawback at the said rate which after
calculation has to be limited to the amount calculated at the rate of Rs. 4.35
per piece - where 2% of the F.O.B value is in excess of the amount calculated at
Rs. 4.35 per piece. Since in such cases drawback rate @ 2% of the F.O.B. value
has already been determined by Central Government as specified in the Drawback
Table, the limit of Rs. 5000/- per shipment, (since reduced to Rs. 500/- per
shipment) shall not be applicable. All pending cases may therefore be disposed
of accordingly.
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