Circular No. 39 dated 25^th June 2001

Attention is invited to Board�s Circular Nos. 68/ 97-Cus. Dated 2.12.97 and 39/ 99-Cus. Dated 25.6.99 (both issued from F.No.605/ 145/ 97-DBK in terms of which facility of brand rate of Duty Drawback Scheme was extended to exports made under DEPB Scheme against DEPB-cum-Drawback shipping bills subject to conditions specified in the said two Circulars.

2. Certain doubts have arisen in regard to the types of cases where under the facility of both DEPB as well as Brand Rate of Drawback will be admissible. It has been observed that Exim Policy provisions are very clear and indicate that exports made under DEPB Scheme shall not be entitled for Drawback. However, the additional customs duty paid in cash on inputs under DEPB can be claimed for adjustment/ relief by way of Modvat Credit or Duty Drawback as per rules of DOR. Under duty exemption schemes, facility of drawback for duties paid if any was extended only for inputs not covered by SION or inputs not permitted under Advance licences to avoid unintended benefit. It is accordingly clarified that facility of Brand Rate of Drawback for export made under DEPB Scheme against DEPB-cum-Drawback shipping bills shall be allowed only in the following situations:

(a)   where the additional duty of customs has been paid in cash on inputs imported under DEPB Scheme used in export products & no MODVAT (CENVAT) has been availed for such additional duty paid; and

(b)   Where excise duty is paid on indigenous inputs not specified in relevant SION, but used in export product and no MODVAT (CENVAT) has been availed for such excise duty paid.

3.      Brand rate of drawback in such cases shall be considered irrespective of whether the export product is dutiable/ excisable or not.

4.      Circular Nos.68/ 97-Cus. Dated 2.12.97 and 39/ 99-Cus dated 25.6.99 shall stand corrected to the extent mentioned above in the preceding paragraphs and other conditions of the said two Circulars shall continue to apply.

5.      All pending brand rate applications for exports made under DEPB Scheme against DEPB-cum-Drawback shipping bills may be processed/ disposed of accordingly.

6.      Decisions in respect of past exports made against DEPB-cum-Drawback shipping bills, where brand rate of drawback has already been granted, shall be examined separately and suitable instructions shall follow.

7.      Suitable instructions/ Standing Order may be issued for the guidance of trade/ field staff.

8.      Receipt of this Circular may please be acknowledged.