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Circular No. 36/ 97-Cus.
dated 16/ 9/ 97
 
  F.No. 605/ 100/ 97- DBK
 
Government of India
Ministry of Finance
Department of Revenue, New Delhi
 
Subject :    Difficulties being faced by Garment Exporters at the time of logging of their exports in DEEC Book.

        Member (Customs) was  recently informed in a Meeting with Secretary (Commerce) and Secretary (Textiles) that Garment exporters are facing difficulties at the time of logging of their exports in DEEC Book on the following counts :-

    (i)    Establishing nexus between the technical Characteristics of the type of fabrics and other materials used in the export product.

    (ii)    Physical measurement of establish use of the entire quantity of fabric and raw material imported under Advance Licence.

2.    Instances of this type are being raised giving the impression that the staff in the Custom Houses are not a ware of or are not implementing, Board's instructions contained in Circular Nos. 4/ 93 dated 4.3.93, 1/ 94 dated 5. 1. 94 and 34/ 94  12.12.94 and Member (Customs) letter F.No. 605/ 373/ 96-DBK dated 16.1.97. These instructions clearly spell out that correct interpretation of the words "raw materials required for use", does not mean that raw materials must be physically incorporated. It was also clarified with the help of examples that inputs may be allowed even if they are not exactly those used in the export product but provided the inputs are commercially Known to be useable in the product exported.

3.    Further, it appears that at the stage of logging of Part- II of DEEC Book, the exporters have, in some cases, been asked to establish that the entire quantity of raw materials, mainly fabric, was used in the manufacture of Garment entered for export. Attention in this regard is invited of Exemption Notification Nos. 30/ 97 and 31/ 97 both dated 1.4.97 (QBAL). Para (V) of both the Notifications only requires that the exporter must discharge his Export Obligation by exporting the "resultant products" which are specifies in Part (E) of Duty Entitlement Exemption Certificate. The Part (E) specifies both, the quantity and FOB value of export product which has to be exported as also the quality and technical characteristic of the export product. So long as the exported product meets the requirements indicated in Part (E) of DEEC Book, Custom Houses should not go into any extraneous questions pertaining to the size of the Garment and utilisation of total quantity of fabric permitted for import in Part- 1-C of DEEC Book. The satisfaction of Assistant Commissioner at the stage of logging in not doubt with regard to the conditions specified in Exemption Notification, but it must be exercised without asking for information which goes beyond the ingredients specified in the Exemption Notification and in the format of DEEC Book appended to the Notification.

4.    Instructions may kindly be issued through suitable Standing Order, if necessary, so that the staff carries out the work of logging in a spirit which is in conformity with the intention of DEEC Scheme.

                                                                                                                                                                                                                             Sd/-
(Sunil Kumar)
Director (Drawback)