Yarn duty exemption confirmed for fabrics exported under bond; duty and interest payable if goods are diverted to home consumption. Yarn used in fabrics exported under bond is treated as raw material for the exported goods so that where fabrics are cleared for export without payment of duty no yarn duty arises and consequently no interest under the manufacturer exemption mechanism is payable; the Ministry has accepted this position and withdrawn its earlier contrary instruction. If goods exported under bond are later diverted to home consumption, duty on fabrics and yarn and the related interest (where the manufacturer exemption mechanism applied) are recoverable.
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Provisions expressly mentioned in the judgment/order text.
Yarn duty exemption confirmed for fabrics exported under bond; duty and interest payable if goods are diverted to home consumption.
Yarn used in fabrics exported under bond is treated as raw material for the exported goods so that where fabrics are cleared for export without payment of duty no yarn duty arises and consequently no interest under the manufacturer exemption mechanism is payable; the Ministry has accepted this position and withdrawn its earlier contrary instruction. If goods exported under bond are later diverted to home consumption, duty on fabrics and yarn and the related interest (where the manufacturer exemption mechanism applied) are recoverable.
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