We are 100% EOU and imported cotton yarn without payment of duty as notfn no. 52/2003 Cus. During the manufacturing process, yarn waste (ch 5202 1000) is generated and we have cleared the same into DTA without payment of duty claiming exemption of notification no.23/2003 CE sr.no.15.
Now my question is..
1. Duty is applicable on this?if yes what the rate?
2. Can department ask for duty on assessable value as per bill of entry of cotton yarn contained in the yarn waste?
Pl advise.
Duty on Yarn Waste: Clarification on Exemption and Rate Under Notification 23/2003 CE for Export Oriented Units A company operating as a 100% Export Oriented Unit (EOU) imported cotton yarn duty-free under notification 52/2003 Cus. During production, yarn waste was generated and cleared into the Domestic Tariff Area (DTA) without duty, claiming exemption under notification 23/2003 CE. The company sought clarification on whether duty is applicable on the yarn waste and at what rate. The response indicated that if the waste is within specified limits, the exemption can be claimed; otherwise, duty must be paid on the assessable value from the Bill of Entry at the prevailing customs rate, with necessary permissions. (AI Summary)
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