Deterrent Action - Board's Powers given to Chief Commissioners
BY virtue of Rule 12CCC of the Central Excise Rules, the Central Government may in order to prevent evasion of, and default in payment of duty of excise, provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter by Notification, specify the nature of restrictions including suspension of registration in case of a dealer, types of facilities to be withdrawn and procedure for issue of such order by an officer authorized by the Board.
And by Rule 12AAA of the CENVAT Credit Rules, the Central Government may in order to prevent the misuse of the provisions of CENVAT credit, provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter by Notification, specify the nature of restrictions including restrictions on utilization of CENVAT credit and suspension of registration in case of a dealer and type of facilities to be withdrawn and procedure for issue of such order by an officer authorized by the Board.
By Notification No. 5/2012-CENT dated 12.3.2012, the Government prescribed the facilities to be withdrawn and detailed guidelines to be followed by the officials while imposing restrictions or withdrawing facilities.
By Notification No. 6/2012-CENT dated 13.3.2012, the CBEC authorised Member (CE) of the Board as the officer authorised to issue orders in terms of Notification No. 5/2012-CENT.
Come March and all the energies of the Board are concentrated on Revenue and more Revenue and searching for more avenues. As per the existing Rules and procedure, the Board Member has to give orders for deterrent action and Delhi is too far. So, they have amended Rule 12CCC of the Central Excise Rules, Rule 12AAA of the CENVAT Credit Rules, superseded Notification No. 5/2012-CENT dated 12.3.2012 by a new Notification and rescinded Notification No. 6/2012-CENT dated 13.3.2012. The words by an officer authorized by the Board are substituted with by the Chief Commissioner of Central Excise in the above two Rules. Since the Rules specify the officer, there is no need for Notification No. 6/2012-CENT dated 13.3.2012 and is so rescinded.
Needless to say, proceedings already initiated continue - with the Chief Commissioner.
Apart from giving the power to the Chief Commissioners, there are some minor changes like: the period of restriction may not be more than 6 months for the first offence and not more than 1 year for the subsequent offence.
Now that the powers are with the field, we can perhaps expect more misuse and abuse.
Is it CENVAT Credit or Cenvat Credit? In the latest Notification, CENVAT Credit is used 10 times and Cenvat Credit twice. By an overwhelming majority, CENVAT Credit is correct.
These provisions, as they say, have a chequered history.
Please see:
- 14.03.2012
- 02.01.2007
Rule 12AAA of CCRs& Rule 12CCC of CX Rules: Constitutional validity of Notfn 5/2012 in Doubt
Notification No., Dated: March 21, 2014
Notification No., Dated: March 21, 2014
Notification No., Dated: March 21, 2014
Notification No., Dated: March 21, 2014