EPCG - DGFT equally bad - CAG
THE CAG also conducted a performance audit on the ‘Export Promotion Capital Goods Scheme' (EPCG) to evaluate the adequacy of the provisions of Foreign Trade Policy, Customs Act and related instructions and to assess their proper implementation in issue of authorisation under the scheme.
CAG found:
++ Under EPCG Scheme, the licences issued have to be monitored over an eight year period through many prescribed checks. We observed that authorisations were issued without complete set of documents prescribed and post verification of declarations was usually not done by Regional Licencing Authorities (RLAs) in violation of DGFT's instructions.
++ Post Issue Audit Wings (PIAW) were not operational in most places except Mumbai.
++ Many cases of incorrect fixation of specific export obligation due to calculation mistakes.
++ Authorisations were issued against refusal orders by granting abeyance orders by RLAs without authority.
++ Neither the RLAs had instituted any system to monitor the receipt of installation certificates of the imported capital goods nor the Customs department initiated any address verification in most of the locations.
++ There was lack of monitoring at the redemption stage. The RLAs were not tracking the receipt of redemption applications on the due dates i.e. on completion of eight years from date of issue of licence.