Circular No. 6/ 99-Cus.dated 17.2.99 has been issued to clarify that the DEPB rate for processed cotton made-ups other than grey' would be admissible for cotton made-ups made from yarn dyed fabric where the yarn dyed fabric has undergone any of the processes mentioned in that Circular, after weaving. However, representation has been received in the Board from Handloom Export Promotion Council indicating that it may not be possible for Custom Houses to implement this Circular, in view of their inability to ascertain whether the fabric used for manufacture of made-ups has undergone the processes specified in the said Circular No. 06/ 99-Cus.

2.      The issue has been examined and discussed with HEPC. It may mention that the list of processes specified in Circular No. 6/99-Cus. is fairly exhaustive and includes even very common processes like cropping and hydro-extraction, and the Custom Houses may have a genuine difficulty in identifying whether the fabric has actually undergone one or more of the specified processes.

3.      In view of this, it has been decided, in regard to exports from the handloom sector, that the exporters must necessarily mention the process, which the fabric has undergone after weaving, but before conversion into made-ups, on the shipping bill. Such shipping bills may first be submitted to Handloom Export Promotion Council, who may certify it to the effect that the goods covered by such shipping bills are made from fabric so processed. Only thereafter, such shipping bill may be submitted to the Custom House for noting.

4.      The Custom House should accept a shipping bill so certified by Handloom Export Promotion Council for export under DEPB Scheme to the effect that the made-ups being exported under such shipping bills are made out of the fabric which has undergone the process mentioned on the shipping bill and hence eligible for DEPB rate for processed cotton made-ups other than grey'. However, the Custom House will be free to challenge the veracity of the declaration on the shipping bill provided the Custom House is in a possession of certain documentary evidence/ data to dispute the declaration made by the exporter and certified by HEPC.