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Circular No. 16/2017-Customs

F. No. 605/85/2016-DBK
Government of India
Ministry of Finance: Department of Revenue
Central Board of Excise & Customs
Drawback Division
*****
New Delhi, the 2
nd
May, 2017
To
Principal Chief Commissioners/ Principal Directors General
Chief Commissioners / Directors General
Principal Commissioners& Commissioners all under CBEC

Madam/Sir,

Subject: Monitoring of export obligation fulfillment under EPCG and Advance Authorization Schemes
reg.

I am directed to invite your attention to para 2(d) of Circular No. 5/2010-Cus dated 16.03.2010
directing initiation of action to safeguard revenue in case of non-submission of Export Obligation Discharge
Certificate within the time period stipulated in the relevant Customs notifications. These directions have been
reiterated in para 7 (iii) of Instruction dated 18
th
January, 2011.

2. Some field formations have expressed difficulty in implementing these instructions stating that when
a notice issued (as per time lines prescribed in Customs notifications) to exporter for enforcement of Bond/BG
is taken up for decision, the exporters plead that they have submitted documents to DGFT for issuance of
EODC and that adjudication process of their SCN may be kept in abeyance till the time EODC is issued to
them by DGFT. However, the proceedings cannot be kept pending in Call Book as they do not fulfill criteria
prescribed in Circular No. 162/73/95-CX dated 14.12.1995. This leads to confirmation of demand and further
litigation. This is avoidable if the time period prescribed in Customs notifications is aligned with time period
for issuance of EODC as per FTP/HBP.

3. The matter has been examined. It is noted that during the Chief Commissioner’s Conference dated
08-09/01/2016, it has been decided that a simple notice will suffice to the licence/authorization holder who
does not submit the EODC/Redemption letter within the period prescribed in the relevant Customs
notifications. In these cases also, the principles of natural justice should be followed. Further, this was
reiterated during the Chief Commissioner’s Conference dated 03.01.2017 wherein it was agreed that in view of
time taken by DGFT in issuance of EODC, the practice of issuance of SCN at the first stage itself may be
replaced by issuance of a simple notice to defaulters.

4. In all Advance Authorization and EPCG notifications, the Deputy/Assistant Commissioners of Customs
have power to extend the period to submit proof of fulfillment of EO without any limit. Thus there is inherent
provision in Revenue notifications to keep action of Customs pending till EODC is issued by DGFT. Moreover,
the process of issuance of EODC by DGFT itself is linked to submission of BRC by the licence holder. The BRC
itself can be submitted as per the period allowed by RBI in terms of the Foreign Exchange Management Act,
1999. The licence/authorization is also subject to extension, if any, by DGFT. Hence, alignment of the time
period given in Customs notifications with that given in FTP/HBP may not be required.

5. In view of the above, the field formations may issue simple notice to the licence/authorization holders
for submission of proof of discharge of export obligation. In case where the licence/authorization holder
submits proof of their application having been submitted to DGFT, the matter may be kept in abeyance till the
same is decided by DGFT. Institutional mechanism set up in terms of Instruction F. No. 609/119/2010-DBK
dated 18.1.2011 for regular interaction with RA’s of DGFT should be used to pursue such cases. However, in
cases where the licence/authorization holder fails to submit proof of their application for EODC/Redemption
Certificate, extension/clubbing etc., action for recovery may be initiated by enforcement of Bond/Bank
Guarantee. In cases of fraud, outright evasion, etc., field formations shall continue to take necessary action in
terms of the relevant provisions.

6. Difficulties in implementation, if any, may be brought to the notice of the Board.




(Dinesh Kumar Gupta)
Director (Drawback)
Tel: 23360581