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TMI Blog2011 (10) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... Sonal Garments Pvt. Ltd. manufacturer exporters of readymade garments (RMG), exported RMG with hangers. As per the specific requirement of their buyers hangers are either procured locally or imported which are shipped along with the RMG. The party while claiming drawback in terms of Section 75 of the Customs Act, 1962 read with Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, had included the value of locally procured hangers in the FOB value. They had exported garments with hangers vide 24 Shipping Bills during the period from 23-8-2006 to 30-6-2007 and the drawback was availed on full FOB value in respect of these 24 shipping bills. As per Circular No. 5/2001-Cus., dated 19-1-2001, Board has clarified that when readym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Rates applicable to readymade garments. The Circular has been wrongly relied upon by the Commissioner (Appeals) as the same is a general Circular in nature. It may be noted that the drawback was allowed at All Industry Rates. Only the value has been adjusted to exclude the value of hangers from the FOB value, while demanding the excess drawback. 4.2 The Board vide Para 3 of its Circular No. 5/2001-Cus., dated 19-1-2001 has clarified that while formulating the All Industry Rates of Drawback for the RMG, the duty incidence on account of hangers has not been included and decided vide para 4(b) that where the hangers are locally procured, suitable deductions should be made from the total value of the garments, if the value of hangers is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e records and perused the impugned orders-in-original and orders-in-appeal. 7. On perusal of records, Government observes that applicant, a manufacturer exporter has exported Readymade Garments (RMG) along with hanger, under claim of duty drawback in terms of Section 75 of Customs Act, 1962 read with Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. Adjudicating authority held that exporter is not eligible for duty drawback on hangers as Article of Plastic as the hangers are exported along with the garments as per order of the buyer and are normally termed as Hanging Garments and are not exported as articles of Plastic. Cost of hangers was deducted from the value of garments to arrive at correct amount of drawback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpnay v. JS - 2007 (211) E.L.T. 378 (Mad.) has held as under :- Drawback - Hangers - Import of, under DEEC Scheme, quantity based Advance licence, for export garments - Whether embellishment under Note II of sl. No. 2704 of Schedule of Customs and Central Excise Duties Drawback Rules, 1971 - Hanger is only for displaying the garment in the showcase or at business place and not the part of garment, hence, not an embellishment for use in manufacture of knitwear - Hangers not to come within meaning of word other embellishments - Duty drawback on hangers not available - However, Government policy encouraging import of items for export of the products, petitioners case be treated under any other schemes subject to the completion of all con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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