Verification of Reward Scrips

The following Public Notice was issued by the Commissioner of Customs (Export) Air Cargo Complex on 26th April 2010.

[Customs Public Notice No. 14 dated 26th April 2010]

Sub: Procedure for verification and registration of Scrips issued under Chapter 3 of FTP like like Served From India Scheme (SFISC), Vishesh Krishi and Gram Udyog Yojana (VKGUY), Target Plus Scheme (TPS), Focus Market Scheme (FMS) and Focus Product Scheme (FPS).

Attention is invited to this office Public Notice No. 10/2008 dated 1.8.2008 regarding the issue of registration and verification of reward scrips. Under this Public Notice, the Air Cargo Complex, Sahar was seeking copies of bank realization certificates as a relevant document at the time of registration/verification. Subsequently, the FTP 2009-2014 was issued. CBEC also issued Circular No. 5/2010 – Cus dated 16.3.2010 that, inter alia, relates to this matter.

2. Accordingly, the entire Procedure for verification and registration of Scrips issued under Chapter 3 of FTP was evaluated.

3. Specific note was kept of ACC, Sahar’s experience while cross-checking against shipping bills and BRCs which has indicated Revenue involving discrepancies in entitlements allowed by scrips. For example –

a) In case of five VKGUY scrips issued for duty credits of Rs.8.51 lakhs, Rs. 5.25 lakhs, Rs. 4.28 lakhs, Rs. 4.98 lakhs & Rs. 4.95 lakhs, it was found that as per BRCs the duty credits were to be Rs. 6.86 lakhs, Rs. 3.48 lakhs, Rs. 3.04 lakhs, Rs. 4.34 lakhs & Rs. 3.82 lakhs, respectively, only.

b) In one other VKGUY scrip issued for Rs.9.59 lakhs, one of the underlying shipping bill’s foreign exchange amount was USD 8374.16 and duty credit was to be totally Rs.2.91 lakhs, but scrip adopted value of USD403969.67 for that shipping bill.

c) In one FMS scrip issued for duty credit of Rs.34.46 lakhs, the admissible credit was found to be Rs.27.86 lakhs. While as per FTP the FOB value of exports was to be calculated on the basis of monthly customs rate of exchange on date of the LEO, the scrip was granted taking rates of exchange w.r.t. dates of BRCs.

d) In one FPS scrip credit was worked out on the basis of BRC showing receipt of Euro 51,000 whereas, the Shipping Bill and the actual receipt was of Euro 5,100 only.

4. ACC, Sahar has addressed Central Board of Excise & Customs seeking guidance and also written to Jt. DGFT, Mumbai to know exact mechanism and procedure followed by them for issuing the scrips that is leading to such Revenue involving discrepancies, and also to be made aware of steps they shall initiate for their prevention.

5. As this jurisdiction was cross-checking BRCs, and these are also being produced along with scrip, at the time of registration with positive results, ACC, Sahar needs to exercise caution till such time as adequate clarity prevails in the matter, and till online transmission of reward scrips issued under Chapter 3 of FTP is made operational.

6. Keeping relevant aspects in view, the following procedure for verification and registration is prescribed w.r.t. duty credit scrips like Served From India Scheme (SFISC), Vishesh Krishi and Gram Udyog Yojana (VKGUY), Target Plus Scheme (TPS), Focus Market Scheme (FMS) and Focus Product Scheme (FPS) -

a) The original scrip including Annexure, along with their photocopy, and copies of Bank Realization Certificate (BRC) shall be presented with application to the TA (License) in License Section. The TA shall give acknowledgement (time and date of receipt) to scrip holder/CHA and also endorse the time and date of receipt on the application. Then TA shall hand over file with these documents to Appraising Officer (AO)/Supdt in License Section.

b) The AO/Supdt (License) shall check the ‘Alert Register’ and if there is no alert, shall endorse “No Alert” with his/her signature and stamp on the file and on original scrip.

c) The AO/Supdt (License) shall issue letter to RLA to confirm genuineness (in terms of para 3.11.3. of Handbook of Procedures Vol.I) of the scrip. [].

d) Then AO/Supdt (License) shall send file to Supdt (EGM) for crosschecking Annexure details with Customs EDI details of shipping bills/EGM filing status, and where relevant the product exported (relevant for FPS scheme) or destination country (relevant for FMS). [].

e) The TA Licence shall then check the FOB value per shipping bills in scrip’s Annexure with BRCs, and the admissible entitlement. The report of the TA (Licence) shall be noted in the file.

f) As soon as report from RLA on verification of genuineness of scrip is received, the TA (License) shall link it with the file, and bring out the facts of cross check/verification, and send file to AO/Supdt (License) who shall cross verify it.

g) If the genuineness stands verified by RLA, and and there is “No Alert” and both crosschecks indicated hereinabove show no discrepancy, the AO/Supdt (License) shall register the scrip in the EDI system. The AO/Supdt (Licence) shall keep a copy of the Scrip & Annexure in the file. The Job Number and Registration Number generated by EDI system will be endorsed on original scrip and its photocopy by AO/Supdt (License) after which the TA (License) will return original scrip to scrip holder/CHA against written acknowledgment on the photocopy of scrip in the file.

h) It shall be the endeavor that in above cases scrip is registered on the same day, but latest by the next working day, on receipt of verification of genuineness from RLA.

i) However, if any discrepancies are revealed in the process of crosscheck and/or verification, the AO/Supdt (License) shall evaluate the courses of action and elevate the matter to DC/AC (License) who will take the further actions to appropriately handle and redress the discrepancies.

7. This procedure shall be reviewed on receipt of guidance from Board and/or on start of online transmission of reward scrips.

F.No. S/3-Misc-25/2010/Lic