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Circular No. 69/95
dated 19/6/95
F.No. 605/111/95-95-DBK
Government of India
Ministry of Finance
Department of Revenue, New Delhi

Subject : Cases of misuse of DEEC Scheme – reg.

Several cases of misuse of DEEC Scheme have been reported to the Board by the Custom Houses/ Collectorates. A gist of the mire important cases of abuse especially where modus operandi adopted could be repeated are indicated below:

(1) Two companies namely, M/s Annapurna Exports and M/s Blumen-feld declared the description of their export consignment as Mulberry Raw Silk Scarves, but the same on examination were found to be laminated jute rolls, raw cotton blanket in rolls, cotton bags and a few scarves made form old silk and synthetic saris. The consignment was valued at Rs. 8 crores FOB.

(2) One M/s Star Auto Aircon, Goa filed a shipping bill for export of Fluid Circulating Control System under DEEC Scheme. On examination of the goods, the same were found to be stones and saw dust. The cartons of the export goods were marked “Caution, To be handled by authorised persons only 250, PSI Pressure”. The exporter on interrogation admitted the fraud. The declared value of the export goods was Rs. 14.65 lakhs as against the value of stones and saw dust for an amount of Rs. 35,000.

(3) One M/s Ratan Exports and Industries Ltd., New Delhi filed Drawback shipping bill for export of 4000 pieces of floppy disc drives valued at Rs. 1.04 crores CIF. The goods were stated to have been manufactured by M/s Sujata Data Products, Medak, Andhara Pradesh. The goods were stuffed into containers under the supervision of Central Excise Officers and were fully sealed with the Central Excise seal. On examination of the container, the goods were found to be floppy disc drive covers as against floppy disc drives declared by the exporter. The market value of the goods is estimated at Rs. 6 lakhs (maximum) as against the declared value of Rs. 1.04 crores.

(4) On the basis of information that M/s Middle East Trading Co., Meerut had misdeclared imported C.R. Sheets as defective/ secondary sheet, an investigation was undertaken. On verification of the goods, the same were found to be of 0.18 M.M. thickness, whereas the import licence permitted importation of CR sheets of 0.50 to 1.6 M.M. thickness. Besides, it was found that 0.18 M.M. thick C.R. sheet did not have any nexus with the resultant product i.e. C.R.G.P. sheet of 0.5 M.M. Thickness. A revenue loss of Rs. 25.26 lakhs is estimated.

The Modus – operandi adopted by the above mentioned parties may be brought to the notice of the field formation so that they are alerted against similar attempts of fraud/ abuse. Anything of interest which comes to notice may be reported to the Ministry and Directorate of Revenue Intelligence.

(Sunil Kumar)
Director (Drawback)

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