Contents

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PREFACE
The Ministry of Finance has announced the revised All Industry Rates of Duty Drawback 2005-06 vide notification No-36/2005-Cus (NT) dated 2.5.2005. These rates have come into force with effect from 5.5.2005. The revised drawback rates have been determined on the basis of certain broad parameters including, inter alia, the prevailing prices of inputs, standard input/ output norms (SION) published by DGFT, share of imports in the total consumption of inputs and the applied rates of duty. As education cess is being collected as duties of excise/customs, the element of education cess has been factored in the drawback rates. The incidence of duty on HSD/Furnace Oil has also been factored in the drawback calculation. A significant feature of the new Drawback Schedule is that barring a few exceptions the rates on all export products have been expressed in ad valorem terms in lieu of earlier specific rates, i.e. Metric Tonne /kg etc. The associated drawback caps have, however, been fixed in specific items, i.e. weight or piece, as the case may be. The new Drawback Schedule is now fully aligned with the HS Nomenclature at the four digit level. While for major export items the drawback rates have been worked out at four digit/six digit/eight digit level, for others a mixed classification, based on precedent and convenience, has been used for prescribing the drawback rates. In several cases, a residual entry has been created so that no export item is left out from a particular heading. Moreover, as a measure of simplification and to avoid repetition of entries, in the new Schedule the format of the Table has been changed to show the drawback rates separately, i.e. when CENVAT facility has not been availed and when CENVAT facility has been availed. The latter entry denotes the Customs portion of drawback only whereas, the former entry denotes the Central Excise and Customs portion put together. The difference between the two is Central Excise portion of drawback. Incorporating revised All Industry Drawback Rates w.e.f. 5.5.2005, recent changes and other relevant material, we are now presenting 44th revised edition Nabhis Duty Drawback, 2005-06. The Chapters on Fixation of all Industry and Brand Rates have been updated and revised. Specimen of filled application forms and DBK Statements have been provided for enhancing the utility of the book. Payment of Drawback and Interest as well as recovery of excess or erroneous drawback and interest are other two important areas for which two chapters have been provided incorporating revised interest rates on delayed payment/refund of drawback. Digest of important cases on duty drawback has been updated enabling the exporters to have legal understanding of various drawback matters. A list of cases cited in the book has been separately provided for ready reference. A separate chapter incorporating text of relevant extracts from Kelkar Committees Final Report on Drawback/DEPB Scheme has been given in the Book. Besides, index to paragraph headings and index to notifications, public notices and circulars have also been provided. The revised rates of Duty Drawback which came into force with effect from 5.5.2005 have been incorporated along with General Notes. Clarifications issued by the Drawback Department, in respect of various items appearing in the All India Rate Schedule, and on general notes, have also been provided at appropriate places.

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Contents

The new drawback rates as announced by the Govt. have been carefully and diligently composed, proof read and printed so as to give errorless information with authenticity & accuracy. The book has been compiled and edited on the basis of relevant and authentic information provided by the concerned authorities, export promotion councils, notifications, report from newspapers, monthly bulletins etc. and accordingly the reference numbers have been included wherever necessary. We are thankful to S/Shri V.V. Jain, Narender K. Jain and Dr. Karunesh Singhal for their valuable suggestions and guidelines for further improvement of this edition. We are also thankful to Shri R.K. Jain, Centax Publication (P) Ltd. for his valuable cooperation in bringing out this Book. It is hoped that the book shall serve its purpose at best and the readers will be benefited to the maximum extent. Readers will appreciate that though every care has been taken to present most up-todate and authentic information, yet some errors or omissions may have crept in inadvertently. The publisher and editors are not responsible for any such error or omission nor they are liable for any damages due to unintended mistakes. Suggestions for enhancing the utility and further improvement of future editions are, however, welcome which may please be sent in writing only. PUBLISHER

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CONTENTS
INDEX TO CIRCULARS, NOTIFICATIONS & PUBLIC NOTICES LIST OF CASES CITED IN THE BOOK ALPHABETICAL INDEX OF PARA HEADINGS
1. BASIC KNOWLEDGE & LAW RELATING TO DUTY DRAWBACK

(XV)-(XVII) (XVIII)-(XIX) (XX)-(XXII)

1 - 20 1 2 2 3 3 3 3 4 4 5 6 6 6 6 6 7 7 7 7 7 8 9 10 10 10 11 11 12 12 12 12 13 14 15 15 16 16 16 16 16 16 17 17 17

BASIC KNOWLEDGE Why Duty Drawback ? Taxes Rebated under Drawback Eligibility of Drawback on the Element of SAD Factoring of 2% Education Cess in Brand Rates and Special Brand Rates of Duty Drawback determined under Rule 6 and Rule 7 of the Customs & Central Excise Duties Drawback Rules, 1995 Administration of Duty Drawback Scheme Yashwant Sinha Committee : Single Document Rule Adopted to Cut Transaction Cost of Exporters Medium Term Export Strategy 2002-07 recommendations for Calculation of Duty Drawback Kelkar Committee Recommendations regarding Drawback and DEPB Scheme Saumitra Chaudhuri Committee on Formulation of All Industry Rates of Duty Drawback 2005-06 LAW RELATING TO DUTY DRAWBACK Section 74 : Drawback Allowance on Re-export of Duty Paid Goods Explanatory Notes to Section 74 : Scope : Meaning of Capable of being easily identified : Export must be under Drawback Shipping Bill : Valuation : No Appeal lies against Board's discretion to grant Extension : Drawback on depreciated value in case of used goods Notifications under Section 74 : Gum Arabic, Gum Benjamin not easily identified : Drawback in respect of Goods taken into use after Importation : Drawback u/s 74 of Customs Act in respect of re-exported goods Section 75 : Drawback on Imported Materials used in the Manufacture of Goods which are exported Explanatory Notes to Section 75 : Scope and Applicability : Admissibility of Drawback Claim : Meaning of Export : Power of Central Government to allow Drawback Notifications under Section 75 : Drawback of Duty on Zip Fasteners : Drawback on Tin Plate used for Manufacture of Containers : Drawback of Duty on Tin Plate used for Manufacture of Hurricane Lanterns : Drawback on Imported Material used in the Goods to be Exported : Delegation of Powers to Appraisers to Sanction Drawback under Section 75 of the Customs Act, 1962 subject to Percentage Checks by Assistant Collectors : Drawback on Specified Goods of Chapters 58 and 63 to be allowed from 16.6.1995 : Drawback rates notified on 15.6.1995 also applicable for exports made before 2.5.1995 in certain circumstances Section 75A : Interest on Drawback Notification issued under Section 75A : Monthly Statement showing the receipts, disposal and pendency of drawback claims Section 76 : Prohibition and Regulation of Drawback in certain cases Explanatory Notes to Section 76 : Market Price of the goods Notifications under Section 76 : Drawback on Goods Exported in Vessels of less than 1000 Tons : Ban on Drawback on Stores Taken on Ships of less than 200 Tons

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: Admissibility of Drawback on Ship Stores : Ban on Drawback of Duty on goods exported to Burma, Nepal, Bhutan etc. : The Capital Goods Section 76-I : Drawback on Goods admitted to a Special Economic Zone Circulars issued under Section 76-I : Admissibility of Duty Drawback to the Supplies effected by DTA Units to Special Economic Zones Amendment of Customs and Central Excise Duties Drawback Rules, 1995 to delegate powers to the Commissioners of Customs for conversion of Shipping Bills to Drawback Shipping Bills Drawback Rules, 1995 Customs & Central Excise Duties Drawback Rules, 1995 Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 Appendix 2.I : The Customs and Central Excise Duties Drawback Rules, 1995 Appendix 2.II : Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 Export is Essential Condition Items for which Drawback Admissible Inadmissibility of Drawback No Drawback where Value Addition is Negative No Drawback if Sale Proceeds not Realised within Time Limit Procedure for Recovery of Drawback where Sale Proceeds of exports have not been Realised by exporters Drawback not Mandatory Drawback on Ship Stores Drawback Available on the Date of Import of Material Drawback Claim when to be kept pending till Fixation of Rates Drawback not Admissible if Cenvat Availed of Date of Publication of Notification in the GazetteJudgement of Honble Supreme Court of India Criteria for Determination of Drawback Rates Revision of Drawback Rates/Amount No Notice for Downward Revision of Drawback Rate Required Determination of the Date of Enforcement of Drawback Rate Latest Drawback Rates Categories of Drawback Rates All Industry Rates Brand Rates Provisional Drawback Special Brand Rates Sanction of All Industry Rate of Duty Drawback Pending Fixation of Brand Rate of Drawback Minimum Rate of Drawback Monetary limits for determination/payment of drawback under Rule 7A of the Customs and Central Excise Duties Drawback Rules, 1971 or Rule 8 of Customs and Central Excise Duties Drawback Rules, 1995 Drawback where ad valorem rate subject to a maximum limit in quantity terms have been prescribed Application for Review of All Industry Rates of Drawback Specimen Application for Review of All Industry Rates of Drawback in respect of Food Products100% Natural Indian Honey Another Specimen Proforma for All Industry Rates

Contents
17 17 18 19 19 19 21-43 21 22 22 25 27 39 44-47 44 44 45 45 46 46 47 47 47 47 47 47 48-62 48 48 48 48 49 49 49 50 50 50 51 51 52 52 53 53 60

2. DRAWBACK RULES

3. CONDITIONS FOR DUTY DRAWBACK

4. DRAWBACK RATES (ALL INDUSTRY AND BRAND RATES)

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5. FIXATION OF BRAND RATES (Decentralisation of Work w.e.f. 1.4.2003)

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63-99

Decentralisation of the work relating to fixation of Brand Rate of Drawback under Rule 6 and Rule 7 of the Customs & Central Excise Duties Drawback Rules, 1995 63 Organisational Set up 63 Acknowledgement of Receipt 63 Verification of data given in the application 64 Fixation and approval of Brand Rate 64 : Validity of Brand letters 65 : Port of Registration 65 : Value Addition 65 : Exports which do not Quality Brand Rate 65 : Brand Rate for exports made under DEPB-cum-Drawback Shipping Bills 65 : Enhancement of Quantity Restriction 65 : Time-limit for filling Brand Rate application 66 : Internal Audit 66 : Maintenance of records 66 : Maintenance of the record (portwise) of the Brand Rate of letters 66 Transitional Arrangement 67 Check List 67 Fixation of Brand Rate of Duty Drawback by the Central Excise field formations under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 1995 67 Applicability of All Industry Rates of duty drawback in brand rates of duty drawback 68 Calculation of brand rate of duty drawback for complete buses by the field formations 69 Fixation and approval of brand rate of duty drawback as laid down in para 3(d)(i) of Circular No. 14/2003 vis-a-vis the provision of post-audit prescribed in para 3(d)(ix) 69 Scope of rules 6(3) and 7(4) of the Customs and Central Excise Duties Drawback Rules, 1995 70 Fixation of Brand Rate of Duty Drawback by the Central Excise field formations under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 1995 70 Fixation of Brand Rate of Duty Drawback by the Central Excise field formations under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 1995 71 Fixation of Brand Rate of Duty Drawback by the Central Excise field formations under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 1995 72 Post Audit Fixation of Brand Rates 73 Condonation of Delay in Filing Application for Fixation of Brand Rate under Customs and Central Excise Duties Drawback Rules, 1971/1995 73 Guidelines for Filing of Brand Rate Applications 75 Declaration of Current Market Price in Drawback Applications 77 Declaration of Present Market Value of Export Goods in the Shipping Bill filed under Claim for Duty Drawback 78 DrawbackPresent Market Value (PMV) 78 Incorrect Fixation of Brand Rates of Drawback 78 Check List for Filing Brand Rate Application 79 Dos and Donts for Exporters for Brand Rates 81 Furnishing Correct Information in DBK-I & II Statements 83 Determination of FOB Value for Drawback Purposes Payment Allowed on Gross FOB Value Inclusive of Commission 83 Drawback Representation regarding Exclusion of Landing Charges from CIF Value 83 Procedure for Verification of Brand Rate Applications against Export of Processed Fabrics & Garments 84 Appendix 5.I : Application for Fixation of Drawback Rates under Rule 6(1)(a) (Brand Rates)/Rule 7(1) (Special Brand Rate) of Customs and Central Excise Duties Drawback Rules, 1995 85 Appendix 5.II : Statement DBK I 87 Appendix 5.III : Statement DBK II 89 Appendix 5.IV : Statement DBK IIA 91 Appendix 5.V : Statement DBK III 92 Appendix 5.VI : Statement DBK IIIA 93 Appendix 5.VII : Acknowledgement of Receipt of Application 94 Appendix 5.VIII : Brand Rate Sanction Letter under Rule 7 95

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Appendix 5.IX Appendix 5.X Appendix 5.XI Appendix 5.XII : : : :

Contents
Brand Rate Sanction Letter under Rule 6 Duty Drawback Worksheet Value Addition Working Sheet Declaration Required to be furnished by a Supporting Manufacturer and Vendors alongwith Brand Rate Application 96 97 98 99 100-104 100 100 101 101 102 105-121

6. FIXATION OF PROVISIONAL DRAWBACK RATES Situations under which Provisional Drawback Rate is allowed Application for Provisional Amount of Drawback under Rule 6(2)(3) Application for Provisional Amount of Drawback under Rule 7(3) of Customs and Central Excise Duties Drawback Rules, 1995 Prescribed Application Forms Appendix 6.I : Application for Fixation of Provisional Drawback Rates

7. DRAWBACK FOR DEEMED EXPORTS

Meaning of Deemed Exports 105 Categories of Supply 105 Sale of goods by 100% EOU/EPZ units in the DTA 105 Benefits for Deemed Exports 106 Benefits for DTA Suppliers to SEZ Units 106 Benefits can also be availed by EOU/EHTP/STP/BTP/SEZ Units 106 Procedure for Claiming Benefit of Deemed Exports Drawback Scheme 106 Grant of Deemed Export Benefits 107 Decentralisation of the work relating to fixation of Brand Rate of Drawback for supplies categorised as Deemed Exports 108 Deemed Export BenefitsClarification regarding 109 DTA units eligible for grant of drawback against duties suffered on their inputs which are processed by EOU/EPZ Units 110 DTA Clearance of Goods Procured by EOUs/EPZ/SEZ/EHTP/STP units from Indigenous sources charging of Duty 110 Appendix 7.I : Aayaat Niryaat Form for Claiming Duty Drawback on All Industry Rates/ Fixation of Drawback Rates/Refund of Terminal Excise Duty 111 122-137 122 122 123 123 123 123 124 124 124 125 125 126 126 126 127 Duty Exemption/Remission Scheme Advance Licence Duty Free Replenishment Certificate (DFRC) Drawback and Exim Policy Changes Advance Licence, Admissibility of Drawback Duty Entitlement Pass Book Scheme (DEPB) DEPB, Applicability of Drawback Drawback applications for Value Based Advance Licences applied before 1.4.97 Payment of Drawback under Duty Exemption Scheme on exports made in discharge of obligation against Value Based Advance Licence and Quantity Based Advance Licence issued on or after 1st April, 1995 Difficulties in availing All Industry Rate of Drawback for exports made before 2.5.1995 in terms of Advance Licence issued on or after 1.4.1995 under Customs Notification No. 79/95-Cus. and 80/95-Cus. both dated 31.3.1995 Brand Rate for Export under Duty Exemption Scheme Extension of Brand Rate of Drawback Scheme to exports under DEPB Scheme Reimbursement of Additional Customs Duty (CVD) paid in cash on imported inputs and Excise duty paid on indigenous inputs used for exports of non-excisable products Simultaneous availment of Drawback with DEPB Scheme Extension of Brand Rate of Drawback to exports under DEPB SchemeRelaxation of timelimit prescribed under Duties Drawback Rules, 1995 for filing Brand Rate application under Rule 6/7 of Drawback Rules, 1995 Extension of Brand Rate of Drawback Scheme to exports under DEPB Schemereimbursement of Additional Customs Duty (CVD) paid in cash on imported inputs and exicse duty paid on indigenous inputs in export goods

8. DRAWBACK FOR EXPORTS UNDER DUTY EXEMPTION/REMISSION SCHEME

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Extension of Brand Rate of Drawback Scheme to exports under DEPB Scheme reimbursement of Additional Customs Duty (CVD) paid in cash on imported inputs and Excise Duty paid on indigenous inputs used for exports of non-excisable products. DEPB-cum-Drawback Schemeacceptance of attested copy of Shipping Bill in lieu of Triplicate Copy Extension of Brand Rate of Drawback to exports under DEPB Scheme Relaxation of time-limit for filing Brand Rate Applications under Rule 6/7 and requirement of Declaration of Availment of drawback under Rule 12 of the Customs & Central Excise Duty Drawback Rules, 1995 Extension of All Industry Rate of Drawback to Exports under DEPB Scheme Duty Exemption Scheme : Grant of Drawback on Packing Materials Revised Procedure for Auditing of DEEC Book Conversion of Drawback Shipping Bills into DEEC Shipping Bills Verification, Power to Call for Information etc. Procedure for Advance Licence Holders under the Value Based Licence Scheme Procedure for Advance Licence Holders under the Quantity Based Advance Licence Scheme Instructions regarding Duty free Import of Replenishment Components Admissibility of Drawback at All Industry Rate Grant of All Industry Rate (AIR) of Drawback Equivalent to Central Excise Duty Portion on Indigenous Inputs used in the Manufacture of Resultant Product Exported under DFRC Scheme Eligibility of All Industry Rate (AIR) of Drawback to Goods Exported under DFRC Scheme during 1.4.2000 to 31.5.2000 Eligibility of Drawback for Exports made under DFRC Scheme Exports of Synthetic Textiles under DEEC-cum-Drawback Scheme All Industry Rates of Drawback in Respect of Man-Made Fabrics falling under Chapter 54, 55 and 58 of the Drawback Table

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127 127 128 128 129 129 129 129 129 132 135 135 135 135 136 136 136

9. FILING OF CLAIMS UNDER CUSTOMS & CENTRAL EXCISE DUTIES DRAWBACK RULES, 1995

138-147 138 138 139 139 139 140 140 140 141 141 142 142 143 143 144 144 145 145 145 146 147

Filing of Claim for Drawback on Export by Post Filing of Claim for Drawback on Goods Exported other than by Post Exclusion of Time Taken for Testing of Sample Extension of Time Limit for Filing of Claim Date of Payment for the Purpose of Section 75A Procedure for Claiming Drawback on Goods Exported by Post Statement/Declaration to be made on Exports other than by Post Manner and Time for Claiming Drawback on Goods Exported other than by Post Declaration under Rule 12(1)(a)(ii) of Drawback Rules for availing AIR of Drawback Admissibility of All Industry rates of Duty Drawback on Export Goods Manufactured from out of Inputs, some of which are Non-Duty Paid Review of System for Issuing of Deficiency Memo Mumbai Customs House Revised Procedure Exporters Cautioned against Appointing Liaison Agents Drawback-Fraudulent Drawback Claims Fraudulent Drawback Claims : CBEC Instructions Drawback Frauds : Alert in regard to Detection of Frauds Export of Sub-Standard drugs by Various Companies and Claiming DEPB/Drawback benefits thereon Market Verification for Duty Drawback Disbursement/DEPB verification Admissibility of Drawback and Market Verification for ascertaining the Present Market Value under Drawback Scheme Deduction of Air Freight Element from f.o.b. value Appendix 9.I : Form D : Form for Claim of Drawback under Rule 11

10. FILING OF CLAIMS UNDER RE-EXPORT OF IMPORTED GOODS (DRAWBACK OF CUSTOMS DUTIES) RULES, 1995 Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 Drawback on Goods Exported by Post

148-152 148 148

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Drawback on Goods Exported other than by Post Extension of Time Limit by Assistant Commissioner Orders Passed in Appeal/Revision etc. Date of Payment of Drawback Procedure for Claiming Drawback on Goods Exported by Post Statements/Declarations to be made on Exports other than by Post Manner and Time of Claiming Drawback on Goods Exported other than by Post Appendix 10.I : Form for Claim of Drawback under Section 74 of Customs Act, 1962 on Goods Exported by Post Appendix 10.II : Proforma for Claiming Drawback on Re-export of Duty Paid Goods Under Section 74 of Customs Act, 1962 Supplementary Claim Changes made by Customs and Central Excise Duties Drawback Rules, 1995 Appendix 11.I : Application for Supplementary Claim for Drawback under Rule 15 of Customs and Central Excise Duties Drawback Rules, 1995

Contents
148 148 149 149 149 149 150 151 152 153-154 153 153 154 155-166 155 155 156 156 156 157 157 157 157 158 158 159 159 160 162 163 163 164 164 164 164 164 165 166 167 167

11. SUPPLEMENTARY DRAWBACK CLAIM

12. DRAWBACK SHIPPING BILLS

Filing of Drawback Shipping Bill/Bill of Export in New Standardised Form Drawback Declaration Wrong Availment of DEPB/Drawback Benefit in respect of Exports where Imports were made without Payment of Customs Duty under Notification No. 32/97-Cus. dt. 1.4.1997 Drawback Shipping Bills Declaration of correct Sub-Serial No. Shipping Bills to be Filled Completely and Correctly to Expedite Clearance and Claim of Drawback Drawback not Deniable for Procedural Breaches or Omission to make Declaration in Time or Properly Endorsement of All Industry Rate on Shipping Bills where Parties seek Fixation of Brand Rates Drawback Claims Processing Delayed where Particulars wrongly given or not given at all Drawback Shipping Bills : Irregularities in Entries Conversion of Drawback Shipping Bills into DEEC Shipping Bills Conversion of Free Shipping Bills to DEEC Shipping Bills Conversion of Duty Free or DEEC Shipping Bill to Drawback Shipping Bills Conversion of Free Shipping Bills into Advance Licence/DEPB/DFRC/Drawback Shipping Bills and Conversion of Shipping Bills from one Export Promotion Scheme to Another Conversion of Free Shipping Bills into Advance License/DEPB/DFRC/Drawback Shipping Bills and conversion of Shipping Bills from one Export Promotion scheme to Another Conversion of Old Passbook Shipping Bills into Drawback Shipping Bills Guidelines regarding Grant of Drawback on the Export where Drawback Procedure has not been followed by the Exporters Grant of Drawback on the Export where Drawback Procedure has not been followed by the Exporters : Relaxation of the conditions of Rule 11/12 of the Customs and Central Excise Duties Drawback Rules, 1971/1995 Conversion of Drawback Shipping Bills into DEEC-cum-Drawback Shipping Bills Grant of Drawback on the export where Drawback Procedure has not been followed by the Exporters : Relaxation of the conditions of Rule 11/12 of the Customs and Central Excise Duties Drawback Rules, 1971/1995 Conversion of Drawback Shipping Bills to DEPB Shipping Bills Triplicate copy of Shipping Bills to be filed with Drawback Section Disposal of Central Excise Drawback Application Forms by Customs Authorities Procedure regarding Examination and Sealing of Export Consignments Containing (i) excisable, and (ii) non-excisable goods at Source or at the ICD/CFS Settlement of Drawback Claims in ICD/CFS/ACC Drawback Payment Weekly Issue of Cheques Payment of Drawback under EDI System when the Price is declared as CIF/C&F Basis

13. SIMPLIFIED PROCEDURE FOR PAYMENT OF DRAWBACK AND NEW EDI SYSTEM 167-245

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Time period within which Drawback claims must be Processed-Recommendations of the Transactions Cost Committee Computerised Processing of Export Documents at New Delhi Customs EDI System for Faster Disbursal of Drawback Claims at New Delhi Customs Computerised Processing of Shipping Bills under the Indian Customs EDI System Extension to Drawback and DEEC Shipping Bills Edited Text of New Delhi Customs Public Notice No. 56/96 Dt. 26.10.1996 Edited and updated Text of New Delhi Customs Public Notice No. 42/98 dt. 3.9.1998 regarding Filing of Drawback Declarations Declarations for Availing All Industry Rates of Duty Drawback Computerised Processing of Shipping Bills under the Indian Customs EDI System (Export) at ICD Patparganj Procedure No Stuffing of Containers after Sunset at Patparganj Export Procedure Toughened, Stencil Marking of Exporter Name and Invoice on Each Package a Must Export Marking of Packages Procedure for Calculation of Export Cess Indian Customs EDI System (Exports) Filing of GR1 Form Processing of Shipping Bills under EDI System in ICD Tughlakabad Computerised Processing of Shipping Bills in Mumbai Under EDI Procedure for Computerised Processing of Shipping Bills under Indian Customs EDI (ICES) Exports under Custom House, Calcutta Processing of All Categories of Bills under EDI System in Chennai Refunds and Drawback due to the Importers/Exporters at Chennai Custom House Co-operation of Importers/Exporters sought for speeding up the process of sanctioning Computerised Processing of Shipping Bills under the Indian Customs EDI System (ICES) at Air Cargo Complex, Begumpet, Hyderabad Procedure of Disbursement of Drawback at Indore Drawback Simplified Procedure of Disbursement at Nagpur Drawback Procedure regarding Filing/Processing of Drawback Claims at Jamshedpur Exporters can open Bank Account in any Private Sector Bank or Foreign Bank Irregular Payment of Drawback Payment Under Customs & Central Excise Duties Drawback Rules, 1995 (Rule 14) Payment Under Re-export of Imported (Drawback of Customs Duties) Rules, 1995 (Rule 6) Payment of Interest on Drawback Recovery under the new Drawback Rules, 1995 Interest on Delayed Payment of Duty Date of Payment to be included in Period for Calculating Interest Repayment of Erroneous or Excess Payment of Drawback and Interest Recovery of amount of Drawback where export proceeds not realised Detailed Procedure for Recovery of Drawback where sale proceeds of the exports have not been realised by exporter Time Limit for Recovery of Drawback Text of Section 142 of Customs Act, 1961 Recovery of Sums Due to Government DrawbackRecovery under Rule 16A

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168 168 169 173 176 177 186 190 208 208 209 209 210 210 217 228 228 235 237 240 241 243 244 244 246 246 246

14. PAYMENT OF DRAWBACK & INTEREST

246-247

15. RECOVERY OF EXCESS OR ERRONEOUS DRAWBACK & INTEREST

248-251 248 248 249 249 249 250 251 251

16. DRAWAL OF SAMPLES FOR DRAWBACK PURPOSES/EXAMINATION NORMS FOR EXPORTS

252-262 252 252 253 253 254

255

Instructions regarding Drawal of Samples for Drawback Purpose Further Instructions regarding Drawal of Samples Modification in Procedure for Drawing Samples Samples of Zinc Oxide to be Drawn from Each Consignment Man-Made Fabrics and Made-ups Manufactured Therefrom
Changes in the Rates of Drawback of Man-made Fabrics/Made-ups/Lungies-Registration with Customs House and execution of Bond for Availing of the New Rates

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Drawal of Samples of Silk Goods for Purposes of All Industry Rate Examination of Handicrafts/Brass Artware and requirement of Modvat declaration/ certification for grant of Drawback Testing of Samples for Payment of Drawback Laboratories Tests Procedure Settlement of Drawback Claims before Submission of Test Report Permission for Factory Stuffing of Export Containers Availment of Drawback facility without the test report Examination Norms for Export Goods at Port of Export

Contents
256 256 256 257 257 257 259 260 263-264

17. DRAWBACK ON GOODS EXPORTED TO BURMA, BHUTAN & NEPAL 18. DRAWBACK ON SPARE PARTS, ACCESSORIES, PACKING MATERIALS, GOODS TEMPORARILY IMPORTED AND RE-IMPORT OF GOODS EXPORTED UNDER DRAWBACK REBATE 19. DRAWBACK ON GARMENTS USING TAGS, LABELS, PRINTED TAGS AND STICKERS IMPORTED DUTY FREE 20. BRAND RATE OF DRAWBACK FOR PASSENGER BUSES BUILT THROUGH BODY BUILDERS ON CHASSIS MADE OUT OF IMPORTED KITS 21. DRAWBACK ON EXPORT OF TVs AND OTHER ITEMS EXPORTED IN CKD/SKD CONDITIONS 22. DRAWBACK ON EXPORT OF BAGGAGE 23. DIGEST OF IMPORTANT CASES ON DUTY DRAWBACK 24. CLARIFICATIONS ON ALL INDUSTRY RATES

265-267 268-269 270 271-272 273 274-289 290-314 290 301 304 304 306 307 307 308 309 309 310 310 311 311 311 312 312 313 313

Item Wise Clarifications General Note No. 11 of Notification No. 22/97-Cus. (NT) dated 30th May, 1997requirement of Certificates regarding the non-availment of Modvat facility Requirement/acceptance of Certificate of non-availment of Modvat credit facility for the purpose of processing of Drawback claims as per General Note No. 11 of Notfn. No. 22/97-Cus.(NT) dt. 30.5.1997 Acceptance of self-declaration as to the non-availment of Cenvat facility for extending the duty drawback Rebate of Central Excise duty under Rule 12(1)(b) of the Central Excise Rules, 1944 on processing of fabrics used in manufacture of made-up articles of cotton and man-made textile exported out of India Cash rebate of duty paid from Deemed credit register on processed fabrics Duty Drawback on Ready made Garments in the wake of Levy of Terminal Excise Duty Problems faced by Merchant Exporters regarding availment of Drawback on Garments Exporters Declaration required for Exports of Woven Garments for Availing Higher All Industry Rate of Drawback Supporting Manufacturers/Job Workers Declaration required for Exports of Woven Garments for Availing Higher All Industry Rate of Drawback Problems faced by Merchant Exportes regarding Availment of Drawback on Garments Supporting Manufacturers/Job Workers Declaration required for Exports of Woven Garments for Availing Higher All Industry Rate of Drawback Problems faced by Merchant Exporters regarding Availment of Drawback on Garments Admissibility of All Industry Rates of Drawback to Embroidered Ready-made Garments and Quilted Made-ups Market Verification of Ready-made Garments for Duty Drawback Disbursement All Industry Rate of Drawback in respect of Ready-made Garments Grant of All Industry Rate of Drawback on export of Bicycles under Advance Licence Scheme Drawback Payments of Customs allocation portion in absence of Modvat Certificate References received from the Field Formations without the Approval of Commissioner of Customs concerned

25. RELEVANT EXTRACTS FROM KELKAR COMMITTES FINAL REPORT ON DRAWBACK & DEPB SCHEME 26. GENERAL NOTES TO DRAWBACK RATES FOR 2005-2006 Notification No. 36/2005-Cus. (N.T), dated 2.5.2005

315-322 323-326 323

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TABLE OF DRAWBACK RATES 2005-06

Chapter - 1 : Chapter - 2 : Chapter - 3 : Chapter - 4 : Chapter - 5 : Chapter - 6 : Chapter - 7 : Chapter - 8 : Chapter - 9 : Chapter - 10 : Chapter - 11 : Chapter - 12 : Chapter - 13 : Chapter - 14 : Chapter - 15 : Chapter - 16 : Chapter - 17 : Chapter - 18 : Chapter - 19 : Chapter - 20 : Chapter - 21 : Chapter - 22 : Chapter - 23 : Chapter - 24 : Chapter - 25 : Chapter - 26 : Chapter - 27 : Chapter - 28 : Chapter - 29 : Chapter - 30 : Chapter - 31 : Chapter - 32 : Chapter - 33 : Chapter - 34 : Chapter - 35 : Chapter - 36 : Chapter - 37 : Chapter - 38 : Chapter - 39 : Chapter - 40 : Chapter - 41 : Chapter - 42 : Chapter - 43 : Chapter - 44 : Chapter - 45 : Chapter - 46 : Chapter - 47 : Chapter - 48 : Chapter - 49 : Chapter - 50 : Chapter - 51 : Chapter - 52 : Live Animals Meat and Edible Meat Offal Fish and Crustaceans, Molluscs and other Aquatic Invertebrates Dairy Produce; Birds Eggs; Natural Honey; Edible Products of Animal Origin, not elsewhere specified or included Products of Animal Origin, Not Elsewhere Specified or Included Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage Edible Vegetables Roots and Tubes Edible Fruit and Nuts, Peel of Citrus Fruit or Melons Coffee, Tea, Mate and Spices Cereals Products of Milling Industry; salt; starches; inulin; wheat; gluten Oil seeds and oleginous fruits, miscellaneous grains, seeds and fruit; industrial and medicinal plants; straw and fodder Lac, gums, resins and other vegetable saps and extracts Vegetable plaiting materials, vegetable products, not elsewhere specified or included Animal or Vegetable fats and oils and their Cleavage products, prepared edible fats; Animal or Vegetable Waxes Preparations of Meat, of Fish or of Crustaceans, Molluscs or other Aquatic Invertebrates Sugar and Sugar Confectionery Cocoa and Cocoa preparations Preparations of cereals, flour, starch or milk; Pastry cookis products Preparation of Vegetables, Fruit, nuts or other parts of plants Miscellaneous Edible Preparations Beverages, Spirits and Vinegar Residues and wastages from the Food Industries; prepared animal fodder Tobacco and manufactured tobacco substitutes Salt; sulphur; earths and stone; plastering materials, lime and cement Ores, slag and ash Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes Inorganic chemicals; organic or inorganic compounds of precious metals, or rare-earth metals, of radioactive elements or of isotopes Organic Chemicals Pharmaceutical Products Fertilizers Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks Essential Oils and Resinoids : Perfumery Cosmetic or Toilet Preparations Soaps, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring, preparations, candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis of plaster Albuminoidial substances, modified starches, Glues, Enzymes Explosives, Pyrotechnic Products; Matches; Pyrophoric Alloys; certain Combustible Preparations Photographic or Cinematographic Goods Miscellaneous Chemical Products Plastics & Articles thereof Rubber and Articles thereof Raw Hides and Skins (other than Furskins) and Leather Articles of Leather, Saddlery and harness, Travel Goods, Handbags and similar containers, articles of animal gut (other than skin-worn gut) Furskins and artificial fur; manufactures thereof Wood and articles of Wood; Wood Charcoal Cork and articles of Cork Manufactures of Straw, or esparto or of other plaiting materials; basketware and wicker work Pulp of wood or of other fibrous cellulosic material; recovered (Waste and scrap) paper or paperboard Paper & Paper Board; articles of paper pulp of Paper or of Paper Board Printed books, newspapers, pictures and other products of the Printing Industry, Manuscripts, typescripts and plans Silk, Yarn & Fabric thereof Wool, fine or coarse animal hair; horse hair yarn and woven fabric Cotton 327 327 327 327 327 327 327 327 328 328 328 328 328 328 328 329 329 329 329 329 329 330 330 330 330 331 331 331 342 365 374 374 397 400 402 404 405 407 415 427 432 434 438 438 441 441 442 442 451 454 455 459

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Chapter - 53: Chapter - 54 : Chapter - 55: Chapter - 56: Chapter - 57: Chapter - 58: Chapter - 59: Chapter - 60: Chapter - 61: Chapter - 62: Chapter - 63: Chapter - 64: Chapter - 65: Chapter - 66: Chapter - 67: Chapter - 68: Chapter - 69: Chapter - 70: Chapter - 71: Chapter - 72: Chapter - 73: Chapter - 74: Chapter - 75: Chapter - 76: Chapter - 77: Chapter - 78: Chapter - 79: Chapter - 80: Chapter - 81: Chapter - 82: Chapter - 83: Chapter - 84: Chapter - 85: Chapter - 86: Other vegetable textile fibres; Paper Yarn and Woven Fabrics of Paper Yarn Manmade Filaments Manmade Staple Fibres Wadding, felt and non-wovens; special yarns, twine, cordage, ropes and cables and articles thereof Carpets and Other Textile Floor Coverings Special Woven Fabrics, Tufted textile fabrics, Lace; Tapestries; Trimmings; Embroidery Impregnated, Coated, Covered or Laminated Textile Fabrics; Textile Articles of a kind suitable for industrial use Knitted or Crocheted Fabrics Articles of Apparel and Clothing Accessories, Knitted or Crocheted Articles of Apparel and Clothing Accessories, not Knitted or Crocheted Other Made up Textile Articles, Sets; Worn clothing and worn textile articles; rags Footwear, gaiters and the like; parts of such articles Headgear and Parts Thereof Umbrellas, Sun Umbrellas, Walking sticks, Whips, Riding crops and parts thereof Prepared feathers and down and articles made of feathers or of down; artifical flowers; Articles of Human Hair Articles of Stone, Plaster, Cement, Asbestos, Mica or similar materials Ceramic Products Glass and Glassware Natural or Cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coins Iron & Steel Articles of Iron or Steel Copper and Articles Thereof Nickel and Articles Thereof Aluminium and Articles Thereof Omitted Lead and Articles Thereof Zinc & Articles Thereof Tin & Articles Thereof Other Base Metals; Cermets; Articles thereof Tools, Implements, Cutlery, Spoons and Forks of Base Metal; Parts thereof of Base Metal Miscellaneous Articles of Base Metal Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts Thereof Electrical Machinery and Equipment and Parts thereof; Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers and Parts and Accessories of such Articles Railway or Tramway Locomotives, Rolling Stock and Parts Thereof; Railway or Tramway Track Fixtures and Fittings and Parts thereof, Mechanical (including Electro-mechanical) Traffic Signalling Equipment of all kinds. Vehicles other than Railway or Tramway Rolling Stock and Parts and Accessories Thereof Aircraft, Spacecraft, and Parts Thereof Ships, Boats and Floating Structures Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or Surgical Instruments and Apparatus; Parts and Accessories Thereof Clocks and Watches and Parts Thereof Musical Instruments; Parts and Accessories of such articles Arms and Ammunition; Parts and Accessories Thereof Furniture, Bedding, Mattresses, Mattress Supports, Cushions and Similar Stuffed Furnishings ; Lamps and Lighting Fittings; not elsewhere specified or included; Illuminated Signs, Illuminated Name-plates and the Like; Prefabricated buildings Toys, Games and Sports Requisites; Parts and Accessories Thereof Miscellaneous Manufactured Articles Works of Art, Collectors Pieces and Antiques

Contents
462 464 467 472 475 477 479 482 483 496 510 515 520 520 520 520 524 526 530 533 539 546 548 549 551 551 551 552 552 554 557 560 577

Chapter - 87: Chapter - 88: Chapter - 89: Chapter - 90: Chapter - 91: Chapter - 92: Chapter - 93: Chapter - 94:

586 587 597 597 598 605 607 608

Chapter - 95: Chapter - 96: Chapter - 97:

609 611 613 618