Textiles exporters bear brunt of rebate scam

Cautious excise dept stops giving duty rebates

The duty rebate scam unearthed a few months back is hurting genuine textile exporters as the excise department has stopped giving them duty rebates.

"There is a panic situation in the excise department on account of the mass suspensions following the expose of the rebate scam. The department is being extra careful and has stopped giving duty rebates to exporters for the last five to six months," South Gujarat Textile Exporters Association executive director Rakesh Chaudhary said.

"The reason being given to us is that there have been several instances of fraudulent exports of late. The department has adopted this policy to ensure that the wrongdoers do not get any benefits," Chaudhary said.

"We can understand the position of the excise officials, but they too must realise that the genuine exporters are facing problems on account of this. We are offering all co-operation and hope things work out well in the coming days," he added.

Sushil Kumar Solanki, central excise commissioner, Surat - I, said: "We are in the process of separating the genuine exporters from those with a shady background. We realise that genuine exporters are facing problems due to non-payment of duty rebate, but we can assure them that things would be back on track in the very near future."

A leading exporter of Surat who did not wish to be named said: "The excise department's policy of stopping duty rebate payments is not right. We have replied to all their queries and produced all export-related documents. Even though there is no provision of conducting physical verification in the law, they have conducted physical verification of goods meant for export. The department has completed all necessary formalities, but we are not being paid the duty rebate since the last five to six months."

"Since no duty rebate is being paid, the circulation of money has come to a halt. On account of the cash crunch, there is no money to purchase goods. Our production costs have gone up in view of the interest accrued. The non-payment of duty rebate has disturbed all our plans, and is adversely affecting our business," he added.

"Around Rs 10 crore worth of duty rebate, which exporters of Surat are liable to get, is stuck in the excise department since past five-six months. As per the provisions in the law, the excise department is liable to pay interest to exporters if it is unable to settle the rebate claim within 90 days. We are not seeking interest or any benefit from the department. All we are asking for is the duty rebate, which we are entitled to get," another exporter said.

Forty two excise officers of superintendent, inspectors and tax assistants grade, were suspended, and four officers of assistant commissioner and deputy commissioner grade were transferred on December 3 following the expose of the duty rebate scam. Bogus export documents and shipping documents were produced by the scamsters to secure duty rebate to the tune of Rs 14.70 crore.

The action against the excise officers was due to their failure and suspected complicity in the scam. Investigations have revealed involvement of over 35 parties in the scam, out of whom 12 have been arrested.