Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise & Customs
New Delhi, dated the December 2nd 2015
Instruction
To
Principal Chief Commissioners / Chief Commissioners (All)
Principal Directors General / Directors General (All)
Principal Commissioners/Commissioners (All)
Madam/Sir,
Subject: Timely cancellation of bond executed with Customs in advance
authorisation cases - regarding
During discussions in the Ministry, the Export Promotion Councils have
highlighted that field formations take substantial time to cancel the bond
executed by exporters with the Customs in terms of the advance authorisation
notifications. EPCs informed that much of this time is associated with retrieval
of bond file and re-verifying documentation submitted by exporter for obtaining
the export obligation discharge certificate (EODC) from the Regional Authority
of DGFT. The matter was examined by Board.
- In view of the condition in the relevant notifications regarding actual usage
of imported materials, the
Circular No.5/2010-Cus dated 16.3.2010 and
Instruction No.609/119/2010-DBK dated 18.1.2011 had directed confirming,
preferably through Central Excise Divisions, the correctness of address shown on
authorization/availability of inputs imported duty free through random checks in
at least 5% authorizations registered at a port. The check is envisaged during
validity period of the authorization. The Board has decided to restrict the
percentage of these random checks from presently at least 5% cases to 5% cases.
The Commissioners are directed to ensure these checks are initiated periodically
every month based on the imports made. These checks should be completed during
validity of authorisation. The selection should be made at least at
Joint/Additional Commissioner level and record kept. Work should be arranged in
a manner that non-receipt of confirmation from Central Excise is not a cause for
delay in processing a subsequent application for cancellation of bond.
- It has been gathered that the process for retrieval of bond file begins after
the exporter submits EODC and original authorization with condition sheet and
once the Customs link their own copy of the EODC (or take confirmation from RA).
The Board observes that the authorisations where export obligation period is
getting over can be identified in advance with the help of various reports
available in the EDI System.
Therefore, Commissioners are directed to make it a
general practice that the bond file is retrieved from record prior to expiry of
export obligation period and the confirmations referred in para 2 above, if any,
are linked therein in advance. The work should be arranged in a manner that bond
files are readily available for immediate processing. Where request for
cancellation of bond is presented before expiry of the normal EO period, the
bond file should be retrieved and readied for processing within 1 day.
- 4A. In
Circular No.5/2010-Cus,
Instruction No.609/119/2010-DBK dated 18.1.2011
and
Circular No.14/2015-Customs, the guideline provided to field formations is
that EODCs against advance authorisations issued by RAs may normally be
accepted. However, exceptions for checks are – (a) check, in detail, randomly at
least 5% of the EODCs and when there is specific intelligence available
suggesting misuse/need for detailed verification (b) verify shipping bills/other
documents based on RA’s endorsement on EODC or verify the genuineness of non-EDI
shipping bills/bills of export on
which EODC is based. The Board has decided that the percentage of these random
checks be
restricted from present level of at least 5% cases to 5% cases. In arriving at
this conclusion the Board
has, inter alia, kept note that the Handbook of Procedures, for FTP 2004-09, FTP
2009-14 and FTP
2015-20, provides that RA may issue EODC if EO has been fulfilled and it further
specifies that this
does not preclude the Customs from conducting random checks and also from taking
action for any
misrepresentation, mis-declaration and default detected subsequently as per the
Customs Act.
4B. The Commissioners are also directed that the selection parameters should be
meaningful and
practically applicable upfront without recourse to prior enquiry with exporter
or long drawn analysis
after EODC is received. To illustrate, the EDI system can be used to work out,
in advance, a list of authorisations from a risk perspective say by judging, from the linked import
bills of entry and
shipping bills, parameters such as import of materials otherwise attracting high
rates of duties or
combination of specific and ad valorem duty rates or exports to sensitive
destinations or by third
parties or new IECs at the locations etc. Similarly, the accompanying details
with advance
authorisation EODCs can identify authorisations associated with non-EDI
parameters such as deemed
exports or manual ports etc. From amongst EODCs received for such (or otherwise)
identified list of
authorisations, the selection for check should be made at least at
Joint/Additional Commissioner level
and the relevant exporter should, invariably, be informed, on the date of
selection itself, via official
email communication that its case is selected for detailed checks.
- The Board further directs the Commissioners to bring credibility and
transparency into the
bond cancellation process for advance isations. To institutionalise a
service orientation, a
verifiable record must be kept of the date the exporter applied with documents
(like EODC and
original authorisation with condition sheet) for cancellation of bond and, every
3rd day or earlier if
required by quantum of EODC inflow, selection for checks should be made (and
intimated) from
amongst the relevant applications. Exporters should be requested to share their
email addresses on the
application. The work should be arranged in a manner that –
- in respect of cases not so selected (and also not involving verification of
documents endorsed
by RA or of genuineness of non-EDI shipping documents) all processes related to
compliance
of conditions of notification get expeditiously completed and the bond/bank
guarantee gets
returned to exporter normally within 10 days from date of receipt of exporter’s
said application
- In the cases apart from the above, except cases under investigation or where
there is
intelligence of misuse, the norm of within 30 days should be adopted for, inter
alia, completing
the said processes and the return of the bond/bank guarantee
- exporter is not asked to routinely produce information that can be sourced
from the Customs
EDI system
- an initial special drive is launched to dispose previous pending work of
bond cancellation.
- 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 strict
implementation.
(Rajiv Talwar)
Joint Secretary to the Government of India
Tel: 23341079
F. No. 605/71/2015-DBK
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