DRI summons for no clear reason

In an unusual move, the Directorate of Revenue Intelligence (DRI) has issued a standard letter to many exporters, to return incentives availed of for shipments during 2014-15 for which the proceeds hadn't been realised within the prescribed time limit. Proof is to be given within 14 days in this regard.

The letter says it is a notice under Section 108 of the Customs Act. And, that the documents and evidence on settlement of irregular export incentive claims can be given in person or by an authorised agent.

Normally, it is the authorities granting export incentives which follow up with the exporters on realisation of proceeds. For instance, Jawaharlal Nehru Customs House at Nhava Sheva (Navi Mumbai) recently issued a public notice, 136/2016 dated October 7, regarding monitoring of such realisations for (duty) drawback shipping bills.

Also, exporters are required to present bank realisation certificates or negative statements issued by banks or chartered accountants to the customs house that released the drawback. Offices of the Directorate General of Foreign Trade monitor cases where incentives were released by them before realisation of the proceeds. Besides, banks monitor cases where export proceeds are not realised and grant write-offs only against an undertaking to surrender the proportionate amount. So, why is another agency chasing the exporters?

According to its charter, put up on its website, the focus of DRI is mainly on collation, analysis and dissemination of intelligence related to smuggling, commercial fraud such as trade-based money laundering, mis-declaration, under invoicing, misuse of end-use and other notifications, free/preferential trade agreements, importer-exporter code, etc. And, non-fiscal enforcement such as crime against environment. So, why has it got into a routine matter of compliance that is already monitored by several other agencies?

The Central Board of Excise and Customs has instructed that when calling for information or documents, the normal mode of communication should be via a telephone call or by sending a simple letter. And, a summons be resorted to only when these two modes of communications are found ineffective or likely to jeopardise the revenue interest. Or when it is essential to ensure the personal presence of the person concerned, to get evidence or record a statement in connection with a tax evasion case.

However, in its letter, the DRI has invoked Section 108 of a 1962 Act that empowers any gazetted officer of the Customs to summon a person whose attendance he considers necessary, either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Act. Now, the DRI letter does not convey any impression of any investigation but only of a fishing expedition. Second, why should DRI insist on presentation of proof regarding realisation of export proceeds in person or through authorised representatives? Why not accept the replies from exporters through e-mail or post/courier, when it is not at all essential to ensure presence of the person concerned or his authorised representative to deliver the necessary documents?

Email: tncrajagopalan@gmail.com