concessional rate of duty on DTA sale

[RAJKUMAR JAISANSARIA]

ours is a 100 percent EOU ENGANGED IN MANUFACTURING OF HDPE / PP BAGS FALLING UNDER TARRIFF ITEN NO. 3923 . WE ALSO MANUFACTURE TWISTED YARN FALLING UNDER TARRIFF ITEN NO. 5607 WHICH IS USED FOR STITCHING OF BAGS. WE HAVE EXPORTED BAGS STITCHED WITH YARN. DEPT.HAS DEMANDED FULL RATE OF DUTY ON DTA SALE OF YARN AS WE HAVE NO DIRECT EXPORT OF YARN (THOUGH WE HAVE EXPORTED YARN INDIRECTLY AS USING IT AS STITCHING MATERIAL). FOR DTA SALE ALL OTHER CONDITIONS ARE FULFILLED. WHETHER DEPT'S VIEW IS VALID ?

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

[RAJKUMAR JAISANSARIA]

no,we have not received any reply.

[DR.MARIAPPAN GOVINDARAJAN]

I will analyze your case and revert.

AI Summary

Indirect export qualification: Whether yarn used as input in exported goods permits concessional duty on domestic sale. A 100% EOU manufactured bags exported after being stitched with in house twisted yarn; yarn was also sold in the DTA. The department demanded full customs duty on DTA sale of yarn, asserting absence of direct export of yarn, while the EOU maintains all other conditions for concessional treatment are met and that use of yarn as input in exported goods bears on duty eligibility.