Classification of artware / handicraft items and composite goods in Drawback Schedule - CBEC Clarifies
IT has been brought to notice of the Board that difficulties are being faced by exporters in classification of articles declared as handicraft/artware items. It has also been brought to notice that divergent practices are being followed in classifying the goods made of different constituent materials in the Drawback Schedule.
Board clarifies that the assessing authorities should normally accept the certificates issued by the Development Commissioner (Handicrafts)/EPCH. A decision to reject the certificate issued by the Development Commissioner (Handicrafts)/EPCH certifying the goods as artware/handicraft should be taken only with the approval of the Commissioner of Customs / Central Excise and after discussions with the certificate issuing authority. The exports should not, in the mean time, be held up.
It is further clarified that the relevant headings/sub-headings in the Drawback Schedule for handicraft/artware items include handicraft/artware items with coating/ plating unless specifically provided otherwise.
Further, whenever a composite article is exported for which any specific rate has not been provided in the said Schedule, the rates of drawback applicable to various constituent materials can be extended to the composite article according to net content of such materials. It may be noted that this Note is applicable only to composite articles for which no specific rate has been provided in the Drawback Schedule and not to articles which fall in one or the other headings/sub-headings of the Drawback Schedule (which could be a residuary heading 'others') and have a drawback rate. Therefore, it is clarified that articles made of more than one constituent material should be classified under a heading/sub-heading of the Drawback Schedule in accordance with conditions (1) and (2) of the Drawback Schedule or if the goods are artware or handicraft items in accordance with condition (3) of the Drawback Schedule as discussed in para 5 above. Once, classification of an article (whether artware/handicraft or other) in a heading/sub-heading of the drawback schedule has been determined, then the drawback rate and cap prescribed against that heading/sub-heading should be applied to the whole article irrespective of the value or weight of different constituents.
CBEC Circular No. 3 /2010-Cus., Dated: February 12 2010