OFFICE OF THE COMISSIONER OF CUSTOMS AND CENTRAL EXCISE
PLOT NO.6, EDC COMPLEX, PATTO, PANAJI-GOA.
TRADE NOTICE NO.2/2007
CENTRAL EXCISE
F.No. :- V/30/63(C )/06-CX.I
Dated: January 2007
Sub: Measures to provide deterrence for tax evaders in the Manufacturing Sector – reg
Attention is invited to the Notification Nos.30/2006-CE(NT) and 31/2006-CE (NT) both dated 30.12.2006 inserting Rule 12CC in the Central Excise Rules, 2002 and Rule 12 AA in the CENVAT Credit Rules, 2004. Attention is also invited to the Notification No.32/2006-CE(NT) dated 30.12.2006. The salient features of the provisions are enumerated below:
2.1 The following types of offences committed by a Manufacturer or a First stage or Second stage Dealer or an Exporter is considered to be serious to warrant the imposition of restrictions on the facilities detailed in the subsequent para.
i. Removal of goods without the cover of an Invoice and without payment of duty;
ii. Removal of goods without declaring- the correct value for payment of duty, where a portion of sale price, in excess of Invoice price, is received by him or on his behalf but not accounted for in the books of account;
iii. Taking of CENVAT Credit without the receipt of goods specified in the document based on which the said credit has been taken;
iv. Taking of CENVAT Credit on Invoices or other documents which a person has reasons to believe as not genuine;
v. Issue of Excise duty Invoice without delivery of goods specified in the said Invoice;
vi. Claiming of refund or rebate based on the Excise duty paid Invoice or other documents which a person has reason to believe as not genuine.
2.2 Where a manufacturer is prima facie found to be knowingly involved in committing the offences as specified in Para 2.1, the following restrictions may be imposed on the facilities:
i. The facility of monthly payment of duties may be withdrawn and the assessees shall be required to pay Excise duty for each consignment at the time of removal of goods;
ii. The payment of duty by utilization of CENVAT credit may be restricted and the assessee shall be required to pay Excise duty without utilization of CENVAT credit;
However, it is clarified that a person against whom the order under sub-para (3) of para 4 of the Notification has been passed may continue to take CENVAT credit. However, he would not be able to utilize the credit for payment of duty during the period specified in the said order. If the person is found to be knowingly involved in committing anyone or more type of offences as specified in Para 2.1 for the second time or subsequently, every removal of goods from his factory will be ordered to be under an Invoice which shall be countersigned by the Inspector ‘of Central Excise or the Superintendent of Central Excise before the said goods are removed from the factory or warehouse. For the second time or subsequent offence, the restriction specified in clauses (i) and (ii) may also be imposed.
2.3 Where a First stage or Second stage Dealer is found to be knowingly involved in committing the offence specified at clauses (iv) or (v) of para 2.1, the registration granted under Rule 9 of the Central Excise Rules, 2002 may be suspended for a specified period. During the period of suspension, the said Dealer will not be able to issue any Central Excise Invoice. However, he can continue his business and issue sales Invoices without indicating the Excise duty component in the Invoice, and no CENVAT credit shall be admissible to the recipient of such goods.
2.4 Where a Merchant Exporter is found to be knowingly involved in committing the offence specified at clause (vi) of para 2.1, the Self Sealing facility for export consignment will be withdrawn whereby each export consignment shall be examined and sealed by the jurisdictional Central Excise Officer.
2.5 The provisions of this Notification shall be applicable only in a case where the duty or CENVAT Credit alleged to be involved in the specified offences is more than Rs.10 lakhs.
2.6 Attention is invited to second proviso in para 2 of the Notification, which provides that any other facility available to a Manufacturer or a Dealer or an Exporter, which has been provided by way of a Circular, or an Order may also be withdrawn. In this connection, the facility of payment of 80% refund / rebate on provisional basis within 15 days of filing of refund claim (Refer to Circular No. 825/5/2006-CX dated 20/04/2006 may also be considered.
3. All Trade Associations and Chambers of Commerce and Industries are requested to bring the contents of this Trade Notice to the notice of their member constituents.
Sd/- 01.02.2007 ( SHEO NARAYAN SINGH) COMMISSIONER
(Authority :- Board’s Instructions issued from
F.No. 224/40/2006-CX.6
dated 30.12.2006)