Government of India
Ministry of Finance, Department of Revenue
Drawback Division
Circular No. 12/2016-Customs
New Delhi, Dated the 28th March, 2016
To
Principal Chief Commissioners/Principal Directors General
Chief Commissioners/Director Generals
Principal Commissioners
Commissioners, all under CBEC
Madam/Sir
Subject: Prevention of use of non-genuine transferable duty credit
scrips or DFIA (duty free import authorizations)
Instances of unscrupulous persons being able to put to use non-genuine
transferable duty credit scrips or duty free import authorizations (purported to
relate to chapters 3/5 or 4, respectively, of the respective Foreign Trade
Policy) have been noticed in the field formations. Accordingly, the Board has
decided to sensitize field formations on the issue. This is based on the extant
instructions contained broadly in Boards Circulars 25/2003-Cus, 5/2010-Cus,
17/2012-Cus and 14/2015-Cus related to duty credit scrips, the
Circulars
16/2006-Cus (read with
33/2000-Cus &
59/2000-Cus) related to DFIA, while taking
into account the status of, and developments in, the mechanism of issuing scrips,
the respective notifications issued governing usage of such scrips and
authorizations, common prudence and balance between trade facilitation and
enforcement.
Pre-registration stage
- The issuing authority specifies a port/Custom House where the freely
transferable varieties of reward duty credit scrips (other than related to SEZ)
or duty remission duty credit scrips under post export EPCG scheme or DFIA (duty
free import authorizations) are to be registered. The presentation of the
scrip/DFIA, along with their annexure/condition sheet, allows registration
which, inter alia, involves ruling out existence of any alerts that could cause
delay in use of such financial/fiscal instruments.
- Field formations are to verify the genuineness, of the duty credit scrips/DFIA,
from the issuing authority, through fast and reliable means. This verification
is not to be done by Custom Houses when scrip/DFIA is simultaneously received
online through electronic transmission from DGFT.
- Where export of goods under specific shipping bills/bills of export (not
filed electronically in Customs EDI) shown in annexure/condition sheet of the
reward duty credit scrip is involved, the backing shipping bills need to be
verified for genuineness. However, if the shipping bills were filed
electronically in Customs EDI but scrip was not received simultaneously online
through electronic transmission from DGFT, such verification of genuineness of
shipping bills shall be restricted to not more than 5% randomly selected scrips
for which EDI shipping bill details (irrespective of port of export) shall be
viewed in-house using the role enq_cntry in ICES v. 1.5, without seeking
documents from exporter. The Custom Houses need not verify genuineness of
shipping bills when the reward scrip has been simultaneously received online
through electronic transmission from DGFT.
4A. It may be seen from the foregoing that in certain situations pertaining to
reward scrips the Custom Houses are not required to verify genuineness of the
scrip and/or its backing shipping bills (if any). Such situations require only
check of absence of alert before registration. Registration, in such cases,
should be ensured within 3 hours of presentation of reward scrip. In other cases
of registration of reward scrips, a norm of registration within one day,
excluding time taken if any at end of the Issuing Authority, should be adopted
by Custom Houses.
- At present certain reward duty scrips are registered at office of Development
Commissioner of an SEZ as that may be the port of export. These offices issue
physical release advices to CBECs field formations for usage of duty credit in
relation to these scrips. To illustrate, such a release advice may be received
in relation to VKGUY/FPS scrip issued in relation to exports to SEZ units under
FTP 2009-14. In the case of FTP 2015-20, an example would be MEIS scrip issued
for direct overseas exports made by SEZ units for which release advice may be
received by the field formation. While the Systems Directorate shall examine the
feasibility of integrating such scrips/release advice in Customs EDI, meanwhile,
prior verification of genuineness (from issuing authority) of such physical
release advice should continue to be done.
- Verifications beyond that prescribed in the above paragraphs in relation to
reward duty credit scrips leading to non-acceptance and/or undertaking of
detailed/complete checks before registration should be conducted by field
formations only when there is alert or intelligence suggesting misuse or
requirement of an investigation. For this, the proper reasons must be recorded
in writing in the specific individual cases by officer not below rank of
Assistant Commissioner.
- In the case of duty remission duty credit scrip under post export EPCG duty
credit scheme, the checks prescribed in Circular No.10/2013-Customs read with
the relevant notification are to be conducted before registration. For
transferable DFIA, prior to registration, it is to be verified that the details
of exports given along with the DFIA matches the record of exports and is
genuine. For both, the discrepancy, if any, found needs to be first referred to
Regional Authority of DGFT.
- In registering duty credit scrip or DFIA which is not simultaneously received
online through electronic transmission from DGFT, care should continue to be
exercised that correct particulars are entered in the Customs EDI system so that
there is no room for mismatch of details.
Clearance stage
- The respective notifications issued under Customs Act 1962, inter alia,
prescribe that the scrip/authorization shall be presented before the proper
officer of customs at the time of clearance for debit. This is, inter alia, for
preventing non-genuine usage, for example, arising from difference between
scrip/DFIA particulars vis a vis particulars shown on bill of entry, or from
scrip of one scheme getting used for clearance under another scheme, etc. The
absence of dematerialized system for recording issuance and transfer of scrips/DFIA
issued by DGFT also necessitates presentation of the scrip for ensuring that use
is by a genuine transferee holder-importer.
- Field formations are directed to align their practices along the above
lines. If there are aspects in these Instructions which require a review, they
may be immediately brought to the notice of the Board.
Yours faithfully,
(Dinesh Kumar Gupta)
Director
Tel: 23360581
F. No. 605/67/2015-DBK
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