The Central Board of Excise and Customs (CBEC) have recently issued a circular regarding Monitoring of export obligation fulfillment under EPCG and Advance Authorization Schemes. The new circular instructs the Officials to issue a simple notice to the licence/authorization holders for submission of proof of discharge of export obligation instead of sending Show Cause Notices. This is with a view to reduce litigations.
As per the circular issued in January, it was advised to send Show Cause Notices to the Exporters for non-submission of Export Obligation Discharge Certificate within the time period stipulated in the relevant Customs notifications. The circular stated that some officials have expressed their difficulty in implementing the instructions contained in the circular. It was stated that on issuing SCN, 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. Since the circular do not authorize to grant further time, they are compelled to confirm the demand which will eventually lead to 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.
The new circular clarifies that “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.”
Read the full text of the Circular below.
