DRI notices to 7 exporters selling restricted goods

The Directorate of Revenue Intelligence (DRI) has sent notices to seven exporters who were allegedly exporting restricted products.

The directorate has confiscated some shipments of chemicals, minerals, metal and alloys and some essential commodities, which were under the special chemicals, organisms, materials, equipment and technologies (SCOMET) list, officials said. The shipments were confiscated by the Mumbai, Gujarat and Chennai zones, they said.

These exporters were marginally tweaking the products and exporting them without prior permission, which is mandatory for products under the SCOMET list, said officials.

The SCOMET list includes materials used for nuclear technology, defence production and essential raw materials for the domestic industry. The list is administered by the Directorate General of Foreign Trade (DGFT), which notifies the products added to the list from time to time which are subject to licensing regulation.

"We have detected some instances where prohibited items, including some being used for reactors, were exported without taking prior approval," a senior government official told ET on condition of anonymity.

The official said while the amount involved was not significant, the items that were being exported were sensitive. "This is a serious offence," said the official.

Every SCOMET authorisation holder is required to retain specified records in manual or electronic form for a period of five years from the date of import or export as the case may be. A modified format for end-use cum end-user certificate required for obtaining export licence for SCOMET items has also been specified.

Any violation of these norms may lead to suspension or cancellation of the Importer-Exporter Code and imprisonment of not less than five years. Imprisonment can extend for life along with a fine.

Officials said they were closely tracking export shipments with the help of advanced technology.

Exporters, however, said the DGFT list is very wide and often leads to disputes due to nomenclature issues.

"We will write to the DGFT about it for further guidance and clarification," said a senior executive with an exporting house, who did not wish to be identified.

"Export of SCOMET items, a very carefully drafted list, are regulated in national interest and require an export authorisation. At the same time, undue restriction on wrong items can harm Indian exports," said Abhishek A Rastogi, founder of Rastogi Chambers.

He said the provisions provide that classification of specific description shall be preferred to a more general description and that the end-use of the item should be a relevant criterion in determining the classification.