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Procedures for market verification for duty drawback disbursement/ DEPB
verification
Circular No. 26 dated 24th April 2001
Board is concerned about the exporters resorting to over-invoicing of
export goods, and also possibly exporting sub-standard goods by declaring FOB
values, which are not in consonance with the market value of the commodities
being exported. Many instances of frauds attempted by the exporters to avail
higher benefits through such means, have also been detected by the Directorate
of Revenue Intelligence and even by the Custom Houses.
2. Board desires
that the intelligence system should be beefed up in the Custom Houses in respect
of such exporters who may be over-valuing the goods grossly and may be trying to
export even sub-standard goods procured at very low prices and declaring high
F.O.B/ market prices so as to get away with high export benefits. It is,
therefore, mandatory for the exporters to declare the present market value of
the goods and the veracity of the same should be checked by the field officers.
In case, on examination of the goods, the f.o.b. value as well as the declared
market value of the goods are suspected to be on the higher side or the goods
appear to be sub-standard, then the samples shall be drawn with the approval of
the Assistant Commissioner of Customs and careful market verification carried
out on most speedy basis.
3. The provisions
contained in section 76(I) (c) of the Customs Act, 1962, stipulate that no
drawback shall be allowed in respect of any goods the market price of which is
less than the amount of drawback thereon. Similarly, in the case of DEPB, it has
been provided that wherever the value of the goods appear on the higher side,
the DEPB credit shall be restricted to the extent of 50% of the present market
value (PMV) of the goods.
4. Hence, if on the
basis of market inquiry, it is found that the declared value of the export goods
is more than their present market value then such present market value shall be
the determining value for the purposes of allowing drawback / DEPB credit.
5. This may be
brought to the notice of the staff concerned and the trade through issuance of
suitable standing order and public notice. It should also be ensured that such
verifications are conducted only in suspected cases and not in a routine manner
in case of all exports and no harassment is caused to the genuine exporting
community.
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