Circular No. 79 dated 24^th November 1999

The Plastics Export Promotion Council on behalf of various exporters has represented that the Customs & Central Excise field formations are denying drawback to the above-mentioned articles under SS No. 63.01 and SS No. 63.02. They are, instead classifying these articles under Chapter 39 of the Drawback Table as General Articles of Plastic and allowing drawback according to the constituent material.

It may be recalled that the Central Board of Excise & Customs, in the wake of the Hon'ble M.P. High Court's Order in the case of M/s. Raj Packwell (1990 (50) EL T201) had issued directions under section 37-8 of the Central Excise Act, 1944 that HDPE/ Polypropylene tapes and strips of width not exceeding 5mm and sacks made therefrom shall be classified under Chapter 39 of the Central Excise Tariff. It was also directed that HDPE/ PP products made from HDPE/ PP strips and tapes of a width not exceeding 5mm, which are lossely described as fabrics or otherwise, woven from such strips/ tapes shall also be classified under Chapter 39 of the Central Excise Tariff. The Hon'ble Supreme Court vide its order dated 23/ 8/ 96 in the case of Collector v. Ravi Oberoi (Director) M/ s. Oberoi Enterprises, has also followed the above mentioned judgement of the Hon� able M.P. High Court.

In this context, it is clarified that the All Industry Rate of Drawback for fabrics, Tarpaulins and other made up articles made of plastic materials (other than reinforced plastic articles) was fixed in 1997 on the basis of specific data in respect of the inputs used in their manufacture and the duty incidence thereon. The drawback rate for these items was determined irrespective of whether the item would be classifiable under Chapter 39 or Chapter 63 of the Drawback Table. For the sake of harmony and in terms of the above-mentioned judgments/ Board's directions, these items were required to be mentioned in Chapter 39 as well as Chapter 63 of the Drawback Table. However, due to inadvertence, the goods have been mentioned only in Chapter 63 of the Drawback Table instead of finding mention in both Chapter 39 and 63.

In this regard, it is also clarified that in terms of proviso to General Note 10 to the Drawback, Table, unless the context otherwise requires, the scope .of the specified export products against a Sub-Serial No. in the Drawback Table is the same as such specified goods would have under the First Schedule to the Customs Tariff Act, 1975. It is, however, emphasised that in the case of these items, the context requires otherwise as the intention of the Govt. is to give drawback at the rate specified under SS Nos. 63.01 and 63.02, irrespective of the fact whether these are classifiable under Chapter 39 or 63 of the Drawback Table. The drawback claims of the parties may be settled accordingly.

This may be brought to the notice of the staff concerned and the Trade through issuance of suitable Standing Order and Public Notice. Also kindly acknowledge the receipt of this Circular.