Duty - waste yarn price

[RAMESH ANANTHAKRISHNAN]

We are having a 100% EOU where we produce Plastic spools by injection moulding process and rewind of monofilament yarn in various dia meters. We buy monofilament yarn from the local source and also importing from other countries. After completing the winding operation there may be slight quantity of monofilament yarn is left on the parent bobbin which we can't use. Hence we are clearing the yarn waste with proper intimation to the Customs authorties. Duty is being paid on the basis of waste yarn price as per the market condition but Customs authorities are insisting us to make the duty payment as per the imported yarn price. Kindly advise whether customs authorities views are right. If not what we have to do now?

AI Summary

Customs Duty Dispute: Company Challenges Duty on Waste Yarn Based on Imported Price vs. Market Conditions A company operating a 100% Export Oriented Unit (EOU) produces plastic spools and rewinds monofilament yarn. They face an issue with Customs authorities regarding duty payments on waste yarn, which is leftover after winding operations. The authorities insist on duty based on the imported yarn price, while the company pays based on market conditions for waste yarn. Responses suggest that if the waste is within permissible limits according to the Standard Input Output Norms (SION), the company should not pay duty on the imported price. It is advised that waste can be sold or returned to suppliers if it meets scrap definitions.