Exporters need to tread with caution

The Central Board of Excise and Customs (CBEC) has issued a circular (no. 26/2011-Cus dated 1st July 2011)  asking the field officers to take due care and ensure that all consignments that have been examined/found fit for export on 30th September 2011 are given ‘Let Export' order promptly on the EDI system and that in case of any systems related problem, ‘Let Export Order' should be endorsed manually on such shipping bills on 30th September 2011 so that the interests of the exporters are not adversely affected.

These instructions follow the decision to extend the popular and widely used Duty Entitlement Passbook (DEPB) scheme till 30th September 2011. The CBEC expects that there may be a rush of export consignments before the said date under the DEPB scheme causing extra load on the EDI system, since export consignments with ‘Let Export Order' after 30th September 2011 would not be eligible for benefits of the DEPB scheme.

Quite obviously, the CBEC wants to be helpful but exporters need to carefully note a subtle but important point that can impact their DEPB entitlement.  

Para 9.12 of the Handbook of Procedures, Vol.1 clearly says that wherever, Procedural/Policy provisions are modified to the disadvantage of exporters, same shall not be applicable to consignments already handed over to the Customs for examination and subsequent exports up to Public Notice/Notification date. The intention of this provision is to make sure that the exporters do not suffer if the Customs delay examination or grant of ‘Let Export Order’ for any export consignment for whatever reason, so long as the export goods have been delivered to the Customs in time . Applying the beneficial provision of the said Para 9.12, an exporter may infer that he should not lose his DEPB benefit once he hands over the export consignment to the Customs by 30th September 2011, even if the Customs take their own time to examine the goods or grant ‘Let Export Order’.  If he does so, he will be in for a surprise.

Exporters should note that the beneficial provision of the said Para 9.12 will not be available for DEPB shipments made on 30th September 2011. Now, even if the export goods are handed over to the Customs by 30th September 2011 or earlier, DEPB will not be available against the shipment unless ‘Let Export Order’ is given by the Customs on or before the 30th September 2011.

Another point to note is that Para 2 of the basic notification no. 97/2009-Cus dated 11th September 2009 that grants exemption for imported goods cleared against debit to DEPB scrips, stated that the notification shall have effect up to and inclusive of the 30th day of June 2011. This meant that no more imports will be allowed under the DEPB scheme after 30th June 2011. Now, that Para has been substituted with meaningful wordings that “this notification shall be valid in respect of the Duty Entitlement Pass Book Scrips issued by the Licensing Authority against exports having ‘Let Export Order’ up to and inclusive of the 30th day of September, 2011." This means that the exemption against debit to DEPB scrips will continue to be available until further notice but will be restricted to DEPB issued against shipping bills having ‘Let Export Order’ up to 30th September 2011

tncr@sify.com