Duty drawback fraud exposes multiple fictitious exporters; investigations prompt warning to field officers to prevent recurrence.
Attempt to obtain duty drawback through fictitious/non-existent companies was detected by Delhi Preventive Customs; preliminary investigation found 27 of 38 examined entities to be fictitious, implicating Rs. 12.52 crores in drawback on Rs. 104 crores of exports. A list of the 27 companies was enclosed, further investigations are ongoing, and customs field officers are directed to circulate the modus operandi and strengthen verification and scrutiny of drawback claims.

Settlement Commission jurisdiction limited; interest under foreign trade bond remains enforceable despite customs waivers.
Settlement Commission waivers under the Customs Act do not extinguish interest liabilities created by the Indemnity cum Guarantee Bond and licence conditions under the Foreign Trade (Development and Regulation) Act for EPCG/Advance Licences issued up to 31 3 1995. DGFT treats interest on duty saved for unfulfilled export obligation as independently recoverable, issues demand notices and BG forfeiture orders, and views non compliance as actionable under FT(D&R) Act; customs formations should notify the Settlement Commission of these facts to protect revenue.

Removal of Budget Day trade restrictions permits normal import-export on Budget Day, subject to customs vigilance against misuse.
Removal of Budget Day restrictions allows importers and exporters to carry out import/export activities on the Budget Day as per law with immediate effect; the decision notes that upward duty revisions are exceptional and that previous restrictions imposed economic costs. Field formations are required to remain vigilant against misuse and notify trade and acknowledge receipt of the instruction.

All Industry Rate drawback permitted pending brand rate fixation to ease exporters' cashflow; differential to be sanctioned later.
Exporters who apply under Rule 7 for fixation of a brand rate may be permitted immediate duty drawback at the All Industry Rate from the Duty Drawback Table pending brand-rate determination, with the differential between the All Industry Rate and the later fixed brand rate to be sanctioned subsequently. Implementation requires public notices and standing orders, and exporter declarations confirming manufacturer/merchant status, non-registration with Central Excise, no Central Excise duty paid on the goods, and no availing of Cenvat.

Duty drawback on composite items: accept exporters' declared constituent weights unless verification is justified by doubt or intelligence.
Where no specific drawback rate exists for a composite article, drawback may be apportioned by net content of constituent materials; as a general policy the Board will accept exporters' declared weights of constituents, and will verify composition only in cases of doubt or adverse intelligence. Exporters claiming All Industry Rates must submit a signed declaration that goods have not borne Central Excise duty, supporting manufacturers (if any) are not excise-registered and have not paid excise, and that Cenvat has not been availed.

Self-declaration of non availment of Cenvat permits certain exporters to secure duty drawback without Central Excise certification.
Manufacturer exporters not registered with Central Excise and merchant exporters whose supporting manufacturers are not registered may furnish a prescribed self declaration that they are not registered and have not availed Cenvat; registered exporters and supporting manufacturers will continue to establish non availment of Cenvat through ARE I and the existing acceptance of ARE I remains unchanged.

Present market value declaration: market verification may adjust FOB valuation for drawback where overvaluation is suspected, with senior approval.
Admissibility of duty drawback rests on declared FOB value; where intelligence or prima facie evidence indicates inflated invoicing or sub-standard goods, field formations must obtain senior approval and undertake market verification to determine present market value. Verifications that establish artificial inflation should be investigated and decided under the legal framework for export valuation and drawback; verifications must not be routine, must be expeditiously concluded to avoid trade harassment, and administrative guidance and public notices should be issued.

Customs classification update: adoption of HSN-based 8-digit tariff codes requires Bills of Entry and EDI updates for compliance.
Promulgation of the Customs Tariff Amendment implements adoption of an 8-digit Customs classification code based on HSN effective 1 February 2003, replacing the 6-digit code; all Bills of Entry must include the new 8-digit Custom Tariff Head or they will not be accepted. EDI systems must be updated to accommodate eight-character CTH fields, RITC will align with CTH, existing exemption notifications remain valid but must be explicitly claimed in EDI, and Central Excise Tariff headings remain unchanged.

Conversion of shipping bills into eligible export promotion schemes permitted when documentary proof satisfies scheme eligibility requirements.
Conversion of shipping bills into Advance License, DEPB, DFRC or Drawback shipping bills may be allowed by the Commissioner on a case to case basis where exporters were compelled to file free shipping bills or were denied scheme benefits, provided the exporter proves use of inputs in the exported product, examination reports and endorsements establish export and coverage under the relevant SION/DEPB schedule, and all conditions of the target scheme are satisfied.

Export controls on dual-use SCOMET items require DGFT export licences; suspected breaches must be referred for enforcement scrutiny.
Exports of items on the SCOMET list are controlled as dual use goods and require a valid export licence from DGFT; manufacture is generally unrestricted but exports need prior authorisation under the ITC (HS) Classification and DGFT notifications. Field formations must remain vigilant, incorporate alerts into the Indian Customs EDI system, and refer suspected contraventions to the Export Commissioner, DGFT, and the DGRI for scrutiny.

Adoption of expanded customs classification code unifies commodity classification across trade agencies to streamline trade procedures.
An 8 digit customs classification code, based on the six digit Harmonised System and subdividing certain entries to eight digits, will replace the current six digit code from 1 February 2003 for commodity classification only; headings, sub headings and notes remain unchanged, the change does not affect duty rates or importability, and the code will be adopted uniformly by Customs, DGFT and DGCIS to harmonize classifications and enable computerized data sharing.

Duty drawback rate update must be reflected in EDI systems to prevent incorrect claim settlements and supplementary filings.
Revision of the duty drawback rates and certain Drawback Schedule entries requires immediate incorporation into the EDI System directories; some field units are still clearing claims at old rates, causing exporters to file supplementary claims. Field formations are instructed to update EDI immediately and to maintain timely updates for any future Drawback Table changes to prevent incorrect settlements and delays.

Misuse of Duty Drawback Scheme: customs alerted to prevent misdeclaration of exports as eligible leather harness goods.
Misuse of the Duty Drawback Scheme was detected where exporters misdeclared consignments as leather harness but examinations found rags of leather hunters/whips ineligible for drawback; a Preventive Commissionerate made the case and a related container was detained, and customs field officers are instructed to be alert to this modus operandi and acknowledge the circular.

Duty drawback: Cenvat allowed for non steel inputs in forgings without denying drawback where claimed.
Drawback rates for non alloy and alloy steel forgings under SS Nos. 73.29 and 73.30 were based only on duty incidence on steel; therefore exporters may avail Cenvat for inputs other than steel without causing double benefit, and drawback should not be denied where such Cenvat has been claimed. Pending cases should be decided accordingly and public notices and standing orders issued.

Extension of warehousing period allows re-export despite expiry, subject to prior warehouse period extension by authorities.
Where an importer requests re-export of goods despite expiry of the permitted bonding period and issuance of demand notices, re-export may be permitted provided the period of warehousing is first extended under the relevant provision to allow export within the newly permitted period.

Customs component allowance of duty drawback permitted where exporters have availed Cenvat, subject to preventing excise duplication.
Clarification authorises allowance of the Customs component of composite duty drawback rates for SS No.73.29 and 73.30 where exporters have availed Cenvat, noting the non-availment condition was intended only to prevent duplication of the Central Excise component; pending cases should be decided accordingly and public notices and standing orders issued for guidance.

Permission to take out plain semi-finished jewellery to DTA for job-work allowed with return within thirty days and stone restrictions.
Gem and jewellery units in SEZs may take out plain semi-finished jewellery into the DTA for job-work provided the returned goods-finished or semi-finished, including studded jewellery-contain quantity and purity equal to the goods taken out and are brought back within thirty days; diamonds, precious and semiprecious stones and studded jewellery are not permitted out for sub-contracting. The prescribed Board procedure for such removals must be followed, publicity given by public notice, and implementation difficulties reported to the Board.