The officials of the Directorate of Revenue Intelligence (DRI) have started investigation into the alleged misuse of duty benefits that were offered under the export performance certificate (EPC) scheme of the Union Government, in Tirupur knitwear cluster.

Industry sources confirmed to The Hindu that the DRI officials had conducted inquiries with a few companies in the cluster here and were now in the process of seeking clarifications about the irregularities noticed in the utilisation of the benefits offered under the scheme because of the resale of the accessories and embellishments imported with the certificate.

Duty-free import

The said certificates were issued to exporters by Apparel Export Promotion Council (AEPC) with an objective of helping them get duty-free imports of accessories and embellishments to the tune of 3 per cent of the annual export turnover of the respective companies, the sources said. Without the scheme, exporters would have to pay almost 28.5 per cent duty on the accessories and embellishments that were imported to give value-addition to the apparels.

But, the scheme stipulates that the accessories thus imported should be used only for the internal consumption of the respective companies.

Violation of norms

However, it came to the fore that some executives of a few companies had allegedly sold the accessories to other companies in violation of the scheme’s norms and hence the inquiries were made, industry sources said.