The facility of Duty and Tax Remission Rules for Export (DTRE) may be denied to manufacturer-cum-exporter or commercial exporter in case where the question of criminal liability is involved.
This has been clarified by the Central Board of Revenue (CBR) in response to certain DTRE-related issues raised by the Collector of Customs, Multan, after examining these issues in consultation with different Collectors of Customs.
The issue was that the DTRE rule stated that in case of misuse of any facility by any manufacturer-cum exporter or commercial exporter the facility might be denied on the recommendation of the respective association.
The CBR clarified that in cases where the question of "criminal liability" was involved, the DTRE facility might be denied by the Collector by stating reasons with a copy to the concerned association for information.
Regarding the issue that approval under certain rules does not require the presentation of record of export business to the approving authority, the CBR clarified as under:
-- Collectors can call for any additional record/information under Section 26 of the Customs Act, 1969 before granting the DTRE approval. The existing linkage of sales tax refund database with Starr may be utilised to enlist the information about the export performance of the DTRE-applicants as and when needed.
-- Physical verification/inspection can also be carried out in doubtful cases.
On the issue of rules, which require the applicant to submit the complete security, against all the duty and tax remission to be availed of along with the application for the DTRE approval, the CBR clarified that furnishing of security documents in the collectorate other than the collectorate where the DTRE approval had been issued was not allowed.
This was because the discharge of these documents was contingent upon the completion of the DTRE audit and recovery of dues, if any, by the later collectorate, said the CBR.
"Moreover, para 45 of the Customs General Order 12 of 2002 of June 15, 2002 prescribes a procedure for co-ordination/exchange of information between the clearing collectorates and the approving collectorates through the DSAO. Director (DSAO/IOCO) should keep regular watch that no security is discharged until all the DTRE related formalities/obligations have been fulfilled by the DTRE concessionaire.
"The provisions of rules will prevail over those of the general order.
"The issue under the TP rule 340(1) which require all the goods for which transshipment permit has been issued to reach the customs port or station of destination within seven days of the issuance of transshipment permit, there is no specific defined time limit within which the consignment after getting cleared under the DTRE must reach the station of destination, said the CBR.
CBR clarification: Under rule 303, the DTRE approved person is required to maintain detailed books and records relating to purchases, importation, stocks of goods, production, packing, sales, shipping and exportation of all goods for a period of five years after the export of finished goods.
Under the existing DTRE scheme, movements of inputs or outputs, as such, is not physically or otherwise controlled by the department. However, each DTRE approved person is required to maintain records of receipts of goods from any source or dispatch/clearance of goods for any approved/prescribed purposes.
There is already a system in place whereby all data of imports and exports is transmitted by Pral to Starr/Sales Tax, Director (DSAO/IOCO) is also advised to evolve a procedure whereby it is ensured that imports under the DTRE are allowed clearance only up to authorised quantity of the DTRE-approved persons and all the DTRE related data is sent to the relevant collectorate and the CBR on weekly basis. The CBR will regularly watch and monitor the progress of DSAO/IOCO on this account.
It has been specifically pointed out that since several DTRE related issues have been dealt with progressively under different rulings/clarifications issued from time to time, the present clarifications are being issued in view of peculiar problems experienced from the forward looking application of the DTRE scheme.
The CBR, therefore, clarified that all instructions earlier issued on the issues covered in this letter, which might be manifestly or latently contrary to these instructions would be treated as cancelled to the extent of contradiction/inconsistency, if any.
These instructions would thus have an unconditional over-riding effect, but should under no circumstance be construed as a shift in the overall declared CBR's policy of facilitating the genuine DTRE exporters/cases.