A representation has been received from the Apparel Export Promotion
Council that certain Customs formations are following a practice of deducting
the value of hangers from the f.o.b. value of the hanger packed garments for the
purpose of allowing drawback even though the Customs Notification No. 16/2000
dated 1.3.2000 (vide Serial No.115), exempts hangers imported by bonafide
exporters, from both the basic Customs duty and the countervailing duty.
2. The issue has been
examined in the Board. It is observed that vide an earlier circular No.42/96-Cus
dated 12.8.96, it was clarified that drawback could be allowed under section 74
of the Customs Act, 1962, on the hangers imported on payment of Customs duty
when such hangers are re-exported along with ready-made garments provided the
value of the hanger is not included in the value of garments. For such benefit,
the hangers and ready-made garments are declared as two distinct commodities on
the Shipping Bill though for the sake of convenience and on the instructions of
the overseas buyers, the hangers have been packed along with the ready-made
garments.
3. It is
also clarified here while formulating the All Industry Rates of Drawback for the
ready-made garments, the duty incidence on account of hangers has not been
included. The hangers supplied along with the garments are either sourced
locally or they are imported. The local procurement in any case is against a
price while the imported hangers could have been supplied either free of charge
or against payment. In view of such different modes of procurement it is not
possible to lay down a uniform criteria to address the issue.
4. The Board has,
therefore, decided that -
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(a) |
where the hangers are imported duty free under notification
No.16/2000-Cus, dated 1.3.2000, and have been supplied free of charge,
their value should not be deducted from the value of the garments while
computing the drawback amount. However, if the hangers are imported on
payment basis, their value shall have to be deducted, no matter these were
imported duty free under notification No.16/2000-Cus. In such cases, a
suitable declaration should be obtained from the exporters; |
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(b) |
where hangers are locally procured, suitable deductions should be
made from the total value of the garments if the value of hangers is not
declared separately and deducted by the exporters; and |
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(c) |
where the hangers are imported on payment of duty, drawback under
section 74 can be availed separately by the exporters in terms of
Board’s earlier Circular No.42/96-Cus dated 12.8.96. If their value is
not separately indicated in the shipping bills, suitable amendment to the
declared f.o.b. value to arrive at the net f.o.b. value of the ready-made
garments exclusive of hangers, may have to be made. Proper verification as
to the identity of the goods and duty payment thereon has also to be done
before drawback under section 74 is disbursed. |
A suitable
declaration regarding the value/duty payment/exemption/procurement status of the
hangers supplied with the ready-made garments may have to be obtained to enable
action as above.
5. All pending claims of
the parties may be decided accordingly.
6. Suitable Public Notice
for information of the trade and standing orders for guidance of the staff may
kindly be issued on the above lines.
7. Receipt of the Circular may please be acknowledged.