Some representations have been received wherein exporters have pointed out difficulties in claiming drawback under section 74 of the Customs Act on hangers supplied free of charge by the foreign buyer of ready-made garments and cleared on payment of Customs duties. In such cases the exporters claim All Industry rate of drawback on garments in addition to drawback on hangers under section 74 of the Customs Act.

2.    The matter has been examined in the Ministry and it is clarified that there should not be nay objection in permitting drawback under section 74 of the Customs Act on hangers imported with ready-made garments provided hangers have not been used in India and have not undergone any change. Such drawback under section 74 can be allowed simultaneously with All Industry rate of drawback on ready - made garments provided value of hangers is not included in the value of garments. In such cases it would suffice it hangers and ready-made garments are declared as two distinct commodities on the Shipping Bill with separate value for claim of drawback under section 74 and section 75 of the Customs Act, even if for the sake of convenience hangers have been packed along with ready-made garments.