Why should you do things in a manner
which is not commensurate with the quantum of workload & which is bound to
create room for cheating, leakages etc. The only reason to my mind is that the
vested interests wish to perpetuate rent seeking. Then, is the CBEC blind
enough not to see the things in the right perspective! The duty drawback claims
are settled in less than 15 days as per the claims made by the officials of the
Customs house in the Chief Commissioner’s open House at Mumbai. I believe them
because the computers do not cheat & they leave a foot print of the doings.
As you know this is the story about
the rebate in exports. Here we describe that how leeway is created by the
corrupt policymakers to facilitate & perpetuate corruption.
Please refer to the Notification No. 40/2001-C.E. (N.T.),
dated 26-6-2001. The said notification speaks about electronic declaration being put
into use for the purpose of rebate. Thus more than a decade ago, it was
envisaged that electronic declaration is the way out of the mess. The
computerization started more than a decade ago. However, in terms of
implementation, nothing is done by the CBEC. Is it not because, the refunds are
very good source of rent seeking & the exporter is easy prey. Why in more
than a decade this important area operations could not be computerized. Is the
Chairman, CBEC not accountable to the citizens of this country for such wrongs
in the system! Is the CBEC not accountable to anyone & in any manner for
such blemishes.
The
biggest source of corruption is the fact that the CBEC allows 90 days for
settlement of rebate claims. This in itself tells you that rent seeking can be
the only objective for allowing such a long period for the settlement of
claims. The opportunity cost of money in this country is in excess of 18%. Therefore
normally the exporters are forced to pay upwards of 1% of the rebate claim to
get the payment earlier/in time. It will be illogical that why this rent amount
will not be paid by the exporter if he gets the payment in 30-40 days therefore
there is a genuine case for fuelling corruption through the legislation. I do
not whether this can be termed as legalization of corruption by the policy
makers & the government. What right the government /CBEC has to withhold my
money by just in place a procedure, which curtails efficiency & encourages
rent seeking. In the first place, the exporter is required to file the rebate
claim along with the copy of the export promotion copy of the shipping bll. The
first stumbling block is thus introduced for delay because the EP copies are
not released by the customs field formations normally for more than 30 days.
Not only this, the print of the EP copies is a serious problem i.e. at times
you are not able to take out a photocopy out of the EP copy. Thereafter, you
file the rebate claim. Here again the winding procedures ensure that delay is
bound to take place. The rebate sanctioning authority needs to get confirmation
of exports having taken place from the port authorities. The point here is that
if the exports have not taken place then from where the EP copy of the S/B has
emerged. Therefore, why the second check is deemed necessary? Even if it is
deemed necessary than it should not result in withholding of the rebate because
in any case the department is entitled to recovery of erroneous refund with
interest. Therefore the interest of the department is well protected. The
second point is the check regarding the duty payment. Once again, the game is
that the rebate sanctioning authority will say that Duty verification letter
has been sent whereas the recipient jurisdictional authority will say that the
same is not received. The receipt are only acknowledged & appropriate
action taken if the palms are greased. Thus once again a fertile ground is
created for corruption. Thus the exporters are required to deploy agents for
getting their own money back. In contrast to this please note that in case of
drawback claims, the time period for settlement was reduced to 60 days &
then to 30 days. When in case of Drawback, the CBEC thinks that time limit of
30 days should apply then why there should be 90 days period allowed in the
case of Rebate claims. It tells you only one thing that cheating &
corruption is the order of the day. The rebate still remains a cash cow for the
department & even the CBEC does not let the opportunity slip from the hands
of the department.
The story does not end here. If you just point
out the loopholes, the department has a very easy passage to slip out of the
wrongs taking place therefore informing the solution is a must. The thankless
officials of the department would then utilize the same to their advantage one
day claiming laurels for what is implemented. This writer has made suggestion
several times & nobody ever said that it is not workable or in the best
interest of all concerned but then you require a will to get things done &
none exists in CBEC. The solution is very simple. The ARE-1 details are filled
in the S/B. The rebate amount should also be filled in the S/B. The said amount
should be then credited directly to the account of the exporter through EFT.
The intimation of the rebate should be given to the jurisdictional Excise
office & they should counter check whether the rebate is correctly
sanctioned or not. If the rebate is not correctly sanctioned then the
jurisdictional Excise authority should immediately initiate action for the
recovery of rebate with interest. Anyhow, the law permits full one year to the
department to take action. This will unburden the system & free up the
resources for better use but if that would be the way, this country would move
100 years ahead in no time & beat the best in the world hollow but then is
the CBEC listening & the corrupt Board wake up & do something.
This will
free up officers in the maritime Commissioners office. These officials can then
be utilized for C. Ex. audit 2000. Wherever the rebate claims of the units are
in excess of Rs. 50 Lakhs then those units should be compulsorily audited every
year by the department. This second check will then ensure that there is no
case of leakage or cheating possible until & unless there is collusion to
commit fraud.
Please
note that there have been frauds on regular basis reported in relation to the
rebate claims. If the suggested procedure is adopted then it plugs the
loopholes for the frauds thus this is an added advantage.
This is the Seventh part of the story. However,
the story of the abuse of authority does not end here. Further lampooning of
the system & abuse by the authorities will follow in the next write up.
Till then Good bye.
rajiv.pec@gmail.com
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