Payment of base fabrics duty in respect of cotton fabrics removed under Rule 96DD for embroidery - Point regarding - Central Excise - 74/88-CX.6

Payment of base fabrics duty in respect of cotton fabrics removed under Rule 96DD for embroidery - Point regarding Circular No. 74/88-CX.6 Dated 7-10-1988 [From F. No. 209/34/88-CX.6] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Payment of base fabrics duty in respect of cotton fabrics removed under Rule 96DD for embroidery - Point regarding Attention is invited towards Board's F. No. 223/11/88-CX.6, dated the 18th April, 1988 (Circular No. 32/88-CX.6) under which it has been clarified that base fabrics duty will not be payable at the time of payment of compounded embroidered duty (i.e. before the start of the shift). It has been mentioned in the aforesaid instructions that base fabrics duty in respect of cotton fabrics should be collected only after the embroidery of such fabrics and at the time of clearance of such fabrics for home consumption or for export. Some Collectors have raised doubt that base fabrics duty in respect of cotton fabrics has necessarily to be paid in case of exports and no under bond movement of base fabrics is permissible. The matter has been examined by the Board. The intention behind the aforesaid instruction was to clarify that base fabrics duty should not be payable before the start of the shift when compounded embroidered duty is payable. The liability on base fabrics duty arises only when the embroidered fabrics are cleared either for home consumption or for export. In case of exports under claim for rebate, base fabrics duty would be payable at the time of clearance of the embroidered fabrics. However, in case of export under bond, no base fabrics duty would be payable provided the procedure prescribed for export under bond is complied with. It may also be clarified that rate of rebate fixed under Notification No. 162/69, dated 9-6-1969 as amended does not take into consideration duty paid on the base fabrics. Field formations may be informed suitably.