The Joint Action Committee of Export Fabric Manufacturers Association (EFMA) from Coimbatore, Salem, Karur and Erode have asked the Powerloom Development and Export Promotion Council (PDEXCIL) to consider extending the benefit of procurement of yarn without payment of duty to yarn dyed woven fabric manufacturer/ processed fabric manufacturer.
EFMA has requested that its members be allowed to procure raw material viz., yarn etc without payment of duty from manufacturers of such yarn. They want the benefits under the notification 43/2001 - CE (NT) dated 26.06.2001 under rule 5 of Cenvat credit rules, 2002.
Manufacturers of yarn dyed woven fabrics and processed fabrics procure various types of yarns as raw material.
The yarn is duty paid at the hands of the yarn manufacturer. The manufactured fabric are cleared to various manufacturers of garments/ made-up/ fabric/ exporters who subsequently export the garments/ made-up/ fabrics, as such or after manufacturing.
Exporters execute bonds with required agencies to avail benefits under CE (NT) dated 26.06.2001.
Such exporters issue forms form the basis on which fabric manufacturers clear goods without payment of central excise duty.
But if goods were cleared under 43/2001 - CE (NT) dated 26.06.2001 (Annexure I), which were goods for further manufacture and subsequent exports, businesses faced problems.
The receiver of goods under the notification executed a bond with a notified government agency undertaking further manufacture of goods so received for export.
In other words the clearances effected under the notification related only to exports, EFMA members in Coimbatore, Salem, Karur and Erode pointed out.
