Subject:    Recommendations of the P.A.C. contained in the 91st Report on paragraph 1.22(i) regarding fraudulent drawback on Zinc Oxide - Reporting of similar cases to the Board for corrective action.

        The Public Accounts Committee in their 91st Report on paragraph 1.22(i) relating to fraudulent drawback on Zinc Oxide have expressed unhappiness over delay in issuance of instruction for taking remedial/ corrective action. In that case two consignments declared to be Zinc Oxide were exported under claim for Drawback through Customs House, Delhi in 1989. No sample was drawn for test and the description of goods was admitted on the basis of visual examination. Subsequently the goods were found to be free of Zinc Oxide. Before the misdeclaration could be detected, one Consignment had already reached Hongkong. Subsequently this case was converted into a Draft Audit Para in 1993. It was at that stage that instructions were issued by the Board in July, 1993 directing that samples should be drawn in each and every case of export of Zinc Oxide for the purpose of Chemical Test.

2.    The P.A.C has therefore desired that the Board should look into the matter and ensure that necessary remedial/ corrective action in such cases is initiated in time.

3.    You are therefore requested to ensure that drawal of samples in all cases of doubtful nature of goods or exporter is ensured so as such irregularity are avoided. Such cases should also be brought to the notice of the Board immediately on detection as well as major Customs Houses alerted immediately. The Board could also examine the matter further and issue necessary instructions for remedial action to be taken in all Customs formation.