CBIC & DGFT: Why does JNCH Customs indulge in manipulative interpretation for ulterior motives—Part 3
There’s an old adage that says you can lead a horse to water, but you can’t make it drink. Similarly, there’s no reasoning with idiocy, especially when it emanates from officials who consider themselves above the law. I am compelled to share my observations, having witnessed both overt and covert forms of corruption within the Customs Department. From the days when drawers stayed open for bribes to be dropped in, to customs officials deploying individuals to “assist” in their duties, power-drunk officers have always existed. These officials believe they are untouchable, rendering the written law meaningless. This perpetuates a poor public perception and undermines digitization efforts meant to combat corruption and reduce costs for exporters.
Let me illustrate how whimsical decisions and illegal pressures contribute to systemic corruption. Entitlements issued by exporters are transmitted electronically to Customs via ICEGATE, an otherwise flawless system. Once the entitlement is issued by the DGFT, it is then transmitted to Customs through ICEGATE, and the same is available with the Customs field formation. The fact of the matter is that not only is the entitlement issued transferred, but even the file number generated initially at the DGFT level is transmitted because filing of the entitlement application permits the exporter to begin exports at his own risk & consequences. Not only this, a report is generated on the DGFT portal giving the details of the Customs file number & acknowledging the status of transmission as successful by sending an acceptance code as 00 indicating that there is no error in transmission of the entitlement to the customs. If there is an error, then the error code tells you what kind of an error has occurred & as a matter of fact it is the responsibility of the authorities to see the diagnostic report & take action but then nobody seems to be bothered in the DGFT. Therefore, the responsibility falls on the shoulders of the exporters to work as unpaid servants & get the error-free transmission completed. Not only this, there is a corresponding entry created in the relevant port of registration containing the details of the file number in the first instance, which can be utilized for the purpose of export & which is subsequently replaced by the authorization number. It should be clear to anyone with common sense that authorizations are now transmitted electronically through a closed system, eliminating the need for a registration process. However, the perpetuation of corruption demands otherwise, requiring exporters to print the authorization and complete the registration process manually. This effectively means taking one step forward and two steps back. The registration process is a farcical exercise, as it involves printing a legally valid electronically transmitted entitlement to perform a redundant task. It’s baffling how the Ministry of Finance tolerates and permits such practices, indicating deeply entrenched corruption with no apparent escape. Despite pointing out these issues to the CCC, Mumbai-II, I was met with indifference rather than the expected urgency. The process of registration was originally established to verify the authenticity of authorizations when they were printed on security paper, involving checks of seals, signatures, alerts, and bulletins. Electronic transmission has rendered this process obsolete, yet corruption persists.
Moreover, there is a separate Bond/BG acceptance process i.e. a Bond/BG, as the case maybe is accepted prior to the authorization can be put to use for imports. Now, once again, everyone with common sense can comprehend that at the time of the completion of this process in any case, the AA is being put to use in the system, which is received from the DGFT electronically, therefore there cannot be any element of doubt about the authorization in itself. Therefore, this in itself raises a serious question that why & how the registration process should continue except for the corruption factor.
Now, let’s talk about another redundant process perpetuating corruption in the customs field formations, particularly at JNCH, Nhava Sheva. This concerns the verification of the Redemption/EODC (Export Obligation Discharge Certificate) cases to the extent of 5%. It is important to note that redemption/EODC is carried out by the DGFT authorities based on data transmitted by the Customs authorities through ICEGATE. Since the data transmission occurs through a closed, secure system, there is minimal scope for errors. However, rare exceptions might occur where data is not transmitted correctly or is mutilated during transmission & therefore cannot be put to use. Under these circumstances rectification through retransmission resolves the issue before the process is completed. When import-export data comes directly from Customs to the DGFT, it should be unquestionable. Once this data is used for redemption/EODC, further verification should be unnecessary because the data has already been validated by the DGFT. Therefore, the verification exercise should end there. Customs authorities, however, often act as perpetual doubters, continuing endless verifications under the guise of preventing errors but, in reality, facilitating corruption. Once again, when the S/Bs & the Bill of Entry was in paper form, the checks & balances were in order but now digitization ensures that none of this can be continued. We set up committees after committees to curb down the costs for exporters but then nobody takes out these redundancies, therefore what are we talking about at the level of the CBIC or these committees. Are we really serious or only interested in cracking poor jokes? I would also like to point out that there is another serious anomaly because the Customs is only allowed to pick up & verify 5% of the cases that means in 95% of the cases, they are obligated to release them automatically but this understanding only remains confined to the Standing order issued by the Commissionerate but not implemented because that will eliminate corruption. However, customs want that exporters undergo a drill through the Customs broker & pay for the release of the Bond/BG cancelation. If this represents the mindset of the officials then you understand why manipulative interpretations remain order of the day & nobody seems to appreciate the sense of justice. Leave aside that, they seem to be least bothered because the layering in bureaucracy has turned them into bigger than the Gods even. This is the basic reason that corruption not only prevails but is rampant & these redundant exercises are proof of that. The poor joke does not end here. Despite the software-driven approach, officials at JNCH Customs remain oblivious to the details and status of authorizations. This ignorance leads them to harass exporters by issuing frivolous notices, even in cases where the bonds have been canceled by JNCH itself. Furthermore, they issue notices regarding post-shipment, post-realization entitlements, where no bond is even executed to submit the redemption documents. Despite these issues being brought to the attention of top officials in the Ministry, they prefer to look the other way and brush the problem under the carpet. This negligence speaks volumes about the competence of the system as a whole and why corruption prevails. Finally, corruption is fundamentally a mindset issue, and it starts from the top. If officials can indulge in manipulative interpretations of clear circulars or ignore judicial pronouncements and discipline, then carrying out a frivolous exercise in the name of registration is a minor task with significant rewards. This redundant process applies to all authorizations, providing ample opportunity for corrupt practices. When the JNCH Commissionerate fails to address blatant corruption under its nose, even when pointed out, it’s clear that justice is unlikely. Corrupt bureaucracy is shameless, ignoring both accountability and reforms. This is just one of many stories of everyday corruption, with more to follow.
The systemic issues within the Customs Department highlight the urgent need for comprehensive reforms to eradicate entrenched corruption and restore public trust in the system. It’s imperative that authorities address these issues head-on, holding accountable those responsible for perpetuating corruption and implementing transparent and efficient processes. Without meaningful reforms and a commitment to integrity at all levels, the Customs Department risks further erosion of public confidence and continued exploitation by those seeking to benefit from corrupt practices. It’s time for decisive action to root out corruption and ensure that the Customs Department operates with the highest standards of professionalism and integrity. Only then can we truly restore faith in the system and ensure fair and lawful trade practices for all stakeholders involved.
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