Systems Alert for monitoring realization of export proceeds in EDI under the BRC module for ICES (introduced in year 2009) and the new RBI BRC Module introduced under DG (Systems) letter dated 28.08.2014, reg. - Customs - 06/2016

OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS CUSTOMS HOUSE, NAVARANGPURA, AHMEDABAD F. No. VIII/48-15/Cus/Systems/2014 Date : 22.03.2016 PUBLIC NOTICE NO. 06/2016 Sub: Systems Alert for monitoring realization of export proceeds in EDI under the BRC module for ICES (introduced in year 2009) and the new RBI BRC Module introduced under DG (Systems) letter dated 28.08.2014, reg. Attention of the Exporters, Custom House Agents and Trade is invited to Board's Circular No.5/2009-Cus, Instruction No.609/119/2010-DBK dated 18.01.2011, Instruction No.609/35/2013-DBK dated 4.4.2013 and para 3 of Instruction No.603/01/2011-DBK dated 11.10.2013 which, amongst other aspects, direct the methodical, time bound and monitored feeding of details of realization/non-realisation received from exporters/their statutory auditors/banks/RBI in the BRC Module of ICES implemented in the year 2009 for achieving complete and effective implementation of the statutory requirement of recovery of drawback with interest with respect to all drawback EDI shipping bills wherein the export proceeds are not realized within statutory time limit. 2. In terms of the second proviso to Section 75 (1) of the Customs Act, 1962 read with sub-rule 16A(1) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, where an amount of drawback has been paid to an exporter but the sale proceeds in respect of such exported goods have not been realized within the time allowed under the Foreign Exchange Management Act (FEMA), 1999, such drawback amount is to be recovered. Sub-rule 16A (2) stipulates that if the exporter fails to produce evidence in respect of realization of export proceeds within the period allowed under the FEMA, 1999 or as extended by the Reserve Bank of India (RBI), the Assistant/Deputy Commissioner of Customs shall issue a notice to the exporter for production of evidence of realization of export proceeds, failing which an order shall be passed to recover the amount of drawback paid to the claimant. 3. Hitherto, the action to recover drawback was being taken on the basis of Export Outstanding Statement (XOS) received from RBI. The XOS is a consolidated half-yearly Statement giving details of all Export Bills outstanding beyond the period prescribed for realization within 15 days from the close of the half year i.e. June/December. However, following the issuance of RBI Circular No. 61 dated 31.1.2004 dispensing with submission of declarations for export goods of value not exceeding US $ 25,000, it is observed that a large number of the export consignments fall outside the purview of monitoring mechanism through XOS inasmuch as the shipment details of goods valued upto $ 25,000 are no longer reported through this statement. 4. In view of this change, particularly considering that under the statute, the drawback payment is ultimately linked to the realization of export proceeds, it has become necessary for the Department to put in place an in-house monitoring mechanism to ensure the realization of such proceeds for exports made under the Drawback Scheme. Extensive consultations were held with field formations and trade industry in this regard, and subsequently, the matter was examined by the Board. For monitoring the realization of export proceeds for drawback purposes, the Board has decided that the exporters will submit a certificate from the authorized dealer(s) or chartered accountant providing details of shipment which remain outstanding beyond the prescribed time limit including the extended time, if any, allowed by the authorized dealer/RBI on a 6 monthly basis. Such certificate shall be furnished by the exporter, authorized dealer wise for each port/ICD. In order to put the exporters on notice at the time of export itself, an endorsement on the exporter's copy of shipping bill would be made specifying the due date for realization of export proceeds. 5. In the light of decisions taken by the Board, the Directorate General of Systems has developed a BRC (Bank Realization Certificate) Software for ICES, the salient features of which are the following:- (a) The exporters filing Shipping Bills (S/Bs) under drawback shall furnish a declaration to the Assistant Commissioner/Deputy Commissioner (Drawback) providing the details of all Authorised Dealers (AD), their codes and addresses through whom they intend to realize the export proceeds. Such a declaration shall be filed at each port of export through which the exporters export their goods. In case, there is a new addition of AD, the same is to be intimated to the concerned Custom House at the port of export. (b) The system would generate on all Drawback Shipping Bills, the due date for submission of BRCs. (c) The exporter shall submit a certificate from the Authorised Dealer(s) in respect of whom declaration has been filed containing details of the shipments which remain outstanding beyond the prescribed time limit, including the extended time, if any, allowed by AD/RBI. Such a certificate can also be provided by a Chartered Accountant in his capacity as a statutory auditor of the exporter's account. Further, the exporters also have the option of giving a BRC from the concerned authorized dealer(s). (d) Such certificates shall be furnished by the exporters on a 6 monthly basis before the 7th day of January and July in respect of exports which have become due for realization in the previous 6 months. (e) Such certificates shall be filed by the exporter AD wise at each port/lCD. The relevant date for filing certificates shall be the date of Let Export Order (LEO) which is the date when the export goods are permitted to be exported. (f) The software shall indicate list of the shipping bills under drawback where the BRC/negative statement has not been furnished by the exporter within the prescribed date. The Assistant Commissioner/Deputy Commissioner (Export) may peruse such lists either for the entire Customs port or for an individual exporter by entering the IE Code of the exporter and accordingly initiate action to recover drawback. (g) The BRC entry module gives three options for entering the details of Foreign Exchange Realisation. (i) If the exporter furnishes the BRCs as a proof of foreign exchange realization, the officer will choose option (1) and enter the specific Shipping Bill numbers and dates. Such Shipping Bills will be deleted by the system from the list of shipping bills pending for realization of export proceeds. (ii) If the exporter produces a negative statement for a specified six monthly period from the AD/chartered accountant that no foreign exchange is pending realization for the exporter in the given period, the officer will choose option (2). The system will automatically display the S/Bs pertaining to the given period on screen and once the officer approves, all such shipping bills shall be deleted from the pendency list. (iii) If the negative statement furnished by the exporter gives the list of S/Bs for a particular six month period, for which foreign exchange has not been realized (and by implication foreign exchange has been realized for all other SIBS) then, the officer will choose option (3). This will allow the officer to enter the SIBS for which the BRCs are pending. Thereafter, all S/Bs except such pending S/Bs will be deleted from the list. (iv) The BRC entry module also enables the Department to remove the list of S/Bs from the pendency list if drawback is recovered subsequently. In such cases, the officer may choose option (1) and enter the order No./challan no. and date and also the no. and date of all shipping bills for which the drawback has been recovered. Thereafter, all such S/Bs will be deleted from the Pendency list. 6. The system will indicate to the Assistant Commissioner/Deputy Commissioner (Drawback) all cases of Drawback Shipping bills with LEO date falling on or after 01.01.2008 if the BRC/negative statement is not submitted by the exporter within the prescribed period. Further, the exporters are required to furnish the BRCs/negative statement in the prescribed Annexure in respect of all the Drawback Shipping Bills having LEO dates from 01.04.2013 to 31.03.2014 (separately for each six month period) by 22.03.2016. 7. For the new BRC module, Exporters are, requested to check BRC integration Status with Customs, using the ICEGATE enquiry module or else follow up with the AD Banks to get the information transmitted to Export Data Processing Monitoring System (EDPMS). It is also informed that in both the modules, an option is available in the DBK AC role to enter drawback recovery particulars, which would remove the said SBS from BRC pendency queue, if required so. 8. For the above purpose, Shri Johny Fernandis, Superintendent, Room No. 304, Custom House, Navrangpura, AHmedabad is hereby designated as Nodal Officer. 9. In case any difficulty is faced while implementing the above instruction, the same should be brought to the notice of the Deputy/Assistant Commissioner, Drawback/Technical Section, Room No. 308, Custom House, Navrangpura, Ahmedabad. Tel No. 079-27540671. Ajay Jain Principal Commissioner Customs, Ahmedabad.