Circular No. 26 dated 21^st May 1999

The Ministry have announced the new All Industry Rates of Drawback vide Notification No. 31/ 99-Customs (N.T.) dated 20.5.99. These rates will come into effect from 1.6.99. Till such time, the existing rates of drawback will continue to apply. A copy of the Press Note issued is enclosed highlighting the important changes made in the Drawback Table, which are as under.

1.      Drawback rate has been fixed for a new item "Tea (to the extent of indigenous proportion only)" to     compensate duty incidence ensuing from new Central Excise Levy on bulk tea.

2.      Specific drawback rate has been fixed on Naphtha, a new item.

3.      'Gasket' with 'Cork' as one of the ingredients has also been included at SS No. 45.04 to obviate any confusion in its classification at the field level.

4.      Drawback rate has been fixed on the new items 'Fancy Gloves made of Leather' and 'Carding Machine'.

5.      Drawback rate have been increased on 155 products on account of introduction of 10% surcharge on basic Customs duty on certain raw materials/ inputs.

6.      Rates of drawback on 193 products have been maintained at the same level.

7.      Rates on 489 products have been revised downwards to reduction in duty incidence consequent upon rationalisation of Central Excise duties in the recent Budget.

8.      Maximum value cap has been imposed on 131 products including Bicycle & Bicycle Parts, Pen & Pen Parts, Ready Made Garments, Brass Art wares and Brass Builder Hardware, Leather Products, Perfumed Aggarbatis, etc.

9.      To ensure smooth and accurate processing of drawback claimed in the EDI systems each rate has been assigned separate serial/ sub-serial number.

Commissioners are requested to closely monitor the drawback payments under the revised Headings and wherever any excessive variation of amounts being disbursed are noticed, the same may be immediately brought to the notice of the Ministry through a separate reference.

All the staff concerned may be advised to go through the changes effected in the All Industry Rates meticulously to avoid any possible error. Difficulty of any nature encountered in the implementation of the drawback rates and discrepancy of any sort observed may please be intimated to the undersigned by name either through Telex or Fax Message or by D.O. letter.

Your kind attention is also invited to the revised Customs & Central Excise Duties Drawback Rules, 1995, issued under Customs Notification No. 37/ 95-Customs (N.T.) date 26.5.99. The time-limit of 3 months mentioned in Rule 13(4) ibid has been revised to two months in consonance with amendment in this regard in Section 75A of the Customs Act, 1962.

The Changes effected may please be given wide publicity through issuance of suitable Public Notice especially keeping in mind the aspects highlighted in the Press Note. Suitable standing order may also be issued to inform the field officers and the staff concerned. Copies of annexure to the Public Notice, which are relevant for EDI System, are also being updated and sent separately.