Directorate General of Foreign Trade (DGFT) on Monday has imposed a Rs 100-crore penalty on four Surat-based textile companies for misusing Export Promotion of Capital Goods (EPCG) schemes to claim duty-free imports without fulfilling the conditions required.
The four companies – Nirmal Polyesters Pvt Ltd, Krishna Trading company, Pradeep Kumar Nirmal Kumar Ltd and Meenu Exim Pvt Ltd – have allegedly defaulted on their export obligations, which were mandatory under the EPGC schemes where imports of raw-materials were exempt from cess.
Additional DGFT of Mumbai and the Appellate Authority upheld the order passed by the joint director general of Surat and also imposed a penalty of Rs 25 crore each on the respective firms, for misuse of the Advance Authorization Schemes. Hence, the violation of foreign trade policy rules, said the DGFT order.
"EPCG authorisation holder has to fulfill export obligations against the scheme specified. The action taken by the authorities was to recover the import customs duty on defaulters through an institutional mechanism," a senior official of DGFT told dna.
In the said order, these four companies had obtained advance licence during 2001-05, from joint DGFT Surat for duty-free imports of polyester filament yarn with condition to supply 100% of the finished goods to export oriented units (EOUs). Fabrics made out of such imported yarn should have been towards discharge of export obligation, but this was not the case here, according to DGFT. Each of the firm had obtained advance license for import worth around Rs 70 crore.
As per the Foreign Trade Policy 2009, Under the zero per cent duty, EPCG Authorization holder is required to undertake export obligation equivalent to six times of the duty saved within a period of six years from the date of issue of authorization.
In 2006, the joint-DGFT, Surat, received a report from Directorate-General of Revenue Intelligence (DRI), Ahmedabad informing that all the above companies had misused the Advance Licensing Scheme by selling the duty free imported raw materials in the local market instead of exporting or supplying to EOUs.
On the basis of the said report, the joint DGFT, Surat conducted an investigation and adjudicated the cases by passing order in August 2013, thereby refusing issuance of further license.
Further, all of the four entities filled appeal before Additional DGFT, Mumbai, the Appellate Authority.
After hearing the companies arguments and analysing the reports received from the Central Excise authorities confirming that the firms had not effected any supply of manufactured goods to EOU units, as claimed. Hence the decision to penalise the firms.
Under advance authorisation scheme, any exporter can import raw-materials and related inputs under 100% duty exemption schemes but only after obtaining the license from DGFT, the licensing authority under this category.
The government fixes value addition as per the standard input-output norms. Once the export obligation will be fulfilled with the licensing authority, importers can sell the manufactured products in domestic market.
Source:dnaindia.com
No comments:
Post a Comment