Government of India
Ministry of Finance: Department of Revenue
Central Board of Excise and Customs
(Drawback Division)
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Instruction
New Delhi, dated 14th October, 2016
To
Pr. Chief Commissioners/Pr. Directors General (All)
Chief Commissioners/Directors General (All)
Pr. Commissioners/Commissioners (All)
Madam/Sir,
Subject: Rationalization of procedures in handling exporters
obligations under EPCG authorizations -reg.
The undersigned is directed to say that as a part of further rationalizing
procedures and avoiding duplication of work based on feedback on outcomes of
applying extant procedures, taking into account the conditions prescribed in the
Foreign Trade Policy and Customs notifications, the Board reviewed certain
aspects of the directions given to field formations in Circular No. 5/2010-Cus,
Instruction No. 609/119/2010-DBK dated 18.01.2011 and Circular No. 14/2015-Cus
insofar as they relate to EPCG scheme. The details are given in succeeding
paragraphs.
2. At present the correctness of the installation certificates issued by
Chartered Engineers are to be verified on random basis in at least 5% cases
through the Central Excise Division. The Board has decided that this
verification be restricted to 5% cases.
3A. In the Circular of 2010 it was prescribed that first block EO (export
obligation) should be verified in detail and if it has been found satisfactory
then EODC issued at end of second block should be accepted without further
verification. The Instruction of 2011 confirmed that this is to be implemented;
however, for past cases where exporter had not come forward for first block
verification but had submitted the EODC, the EODC may be accepted subject to
random verification of at least 5% of EODCs issued in such past cases. It
further directed that the Customs check, in detail, at least 5% EODCs. In this
connection, it was noted that not meeting the block-wise EO attracts composition
fees or payment of duty with interest and this find mention in HBP and is also
referred in Customs notifications.
3B. On consultation, the DGFT has informed that the provisions of para 5.14 of
HBP 2015-20 that provides “5.14(c)HBP: Where EO of the first block is not
fulfilled in terms of the above proportions, except in cases where the EO
prescribed for first block is extended by the Regional Authority subject to
payment of composition fee of 2% on duty saved amount proportionate to
unfulfilled portion of EO pertaining to the block, the Authorization holder
shall, within 3 months from the expiry of the block, pay duties of customs
(along with applicable interest as notified by DOR) proportionate to duty saved
amount on total unfulfilled EO of the first block”, and the similar provisions
in previous FTP/HBP 2009-14 and 2004-09 are strictly followed by Regional
Authorities before issuing EODC/redemption/closure letters; and also that cases
of condoning / delay in fulfillment of block-wise EO are considered by Regional
Authorities only when exporter has obtained relaxation in terms of DGFT’s powers
under the FTP. The DGFT has also advised its Regional Authorities to ensure that
these provisions are strictly followed in respect of all unredeemed EPCG
authorization issued during the FTP 2004-09, 2009-14 and 2015-20.
3C. In the light of this, Board has decided that Customs authorities need not
replicate the verification of export obligation of the first block that is being
conducted by Regional Authorities and that the EODCs received under EPCG Scheme
in terms of FTP/HBP 2004-09, 2009-14 and 2015-20 be normally accepted without
further verification, except in 5% cases where they be verified in detail before
acceptance.
4. The foregoing aspects remain subject to detailed verification of EODC when
there is such a need suggested by specific intelligence. Further, if Regional
Authorities endorse verification of shipping bills/other documents on an EODC,
such verification shall be carried out. Moreover, it remains mandatory to verify
genuineness of non-EDI shipping bills/bills of export on which an EODC may be
based.
5. The guidelines issued in the past on the subject shall be modified to the
above extent. It should be noted that monitoring of progress of block-wise EO
fulfillment is to continue and as clarified in
Circular No. 14/2015-Cus the
field formations can view the EPCG authorization-wise all India export details
in EDI.
6. The Commissioners are also directed to ensure transparent random selection
criteria and selection for 5% check being made at least at Joint/Additional
Commissioner level and the relevant exporter being invariably informed, on the
date of selection itself, via official email communication that its case is
selected for detailed checks. Credibility and transparency may be brought into
the Bond cancellation process which may be made speedier. The exporter should
not be asked to routinely produce information that can be sourced from the
Customs EDI system.
7. The above aspects should be given publicity through issuing public notice.
Standing order should be issued to suitably arrange the work and guide the
personnel. The Chief Commissioners are requested to monitor the functioning on a
monthly basis and ensure effective implementation.
(Dinesh Kumar Gupta)
Director
Tel. 23360581
F.No.605/71/2015-DBK
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