These consignments were detained by the customs department in May last in view of notifications issued by New Delhi towards the end of March and early April, 2000. Also a few persons were arrested in view of these notifications.Surprisingly, however some fresh instructions appear to have been received by the customs department from New Delhi and all these consignments which were detained earlier, have been suddenly freed. No one in the trade is aware of full details of these fresh instructions, or of the basis on which these are released.

Trade sources say, this reversal of the customs stand may mean that various malpractices which were resorted to earlier to effect substantial imports in order to effect large sales in the DTA areas, might revive.

The chance of collecting some revenue from importers who had imported these containers has thus been abandoned or lost. Every one is left wondering what prompted the officials in New Delhi to act this way.

It might be interesting to note that the Central Board of Excise and Customs (CBEC) had issued on March 28, 2000 instructions to various Commissioners of Customs to supply to it details about EOU/EPZ/STP/EHTP units which had failed in achieving their export obligations and value-additions in the prescribed period of five years of commercial production.New Delhi also wanted to know whether demand notices were issued to such defaulting units.

About 10 days later the CBEC issued another notification saying that EOU/EPZ units were earlier allowed to sell in the DTA area "25 per cent of their production in value-terms". This provision was subsequently modified and they were allowed to effect DTA sales" upto 50 per cent of FOB value of exports."

This new provision came into effect from April 1, 1999. DTA sales were thus related to FOB value of physical exports. However in some cases EOU/EPZ units were allowed DTA sales entitlements against "deemed exports". Since clearances for DTA sale were on payment of concessional duties, the CBEC felt that in such entitlements to EOU/EPZ units issued against "deemed exports", might have resulted in loss of revenue.

The CBEC therefore, directed all Customs Commissioners to review all the DTA clearances of EOU/EPZ units under their jurisidctions after April 1, 1999 and initiate recovery proceedings, if there had been any short levy. New Delhi further directed that this exercise should be undertaken on any short levy.

New Delhi further directed that this exercise should be undertaken on a priority basis and its progress should be conveyed to New Delhi positively by April 25, 2000.

In view of this clear directive, the Customs Department swung into action and reportedly detained about 166 consignments suspected of duty evasion amounting to about Rs 600 crore. Some of these containers which were held up were subsequently released while those which were still held up are released now.

It remains a mystery what made the Central Board of Excise and Customs change its course and advise the Customs Department to release all such detained consignments.

According to trade sources some of the units which did not have capacity to consume even 50 tonnes of polyester were reportedly importing the material far in excess of their capacity to get it cleared for DTA sales at concessional rates of duty. When this menace was stopped for a while, prices for POY and bright trilobal yarn had improved. They, however, began subsiding as soon as the release of the detained cargo started.