Splitting up of rebate claims to avoid pre-audit- CAG wants Rules amended
CBEC Circular dated 16 May 2008 envisages that all refund/rebate claims involving an amount of Rs. 5 lakh or above should be subjected to pre-audit at the level of Jurisdictional Commissioner.
Recently CAG observed that some assessees were filing several claims for the goods exported on the same day under the same shipping bill. These claims were sanctioned by the Division concerned.
Audit observed that the non-consideration of the total amount claimed on one day as a single claim could result in pre-audit not being conducted as per the provisions.The avoidance of pre-audit not only contravenes the instructions of the Board but also increases the probability of excess grant of rebate.
And so the CAG wanted the CE Rules to be amended.
The CBEC bravely replied to the CAG that There is no statutory bar in filing ARE-1 wise rebate claim, irrespective of the fact that that there is only one shipping bill or more. For excise purpose, ARE-1 is the relevant statutory export document.
But Audit persisted and Board Member told the CAG on 21.10.2014 that instructions to field would be reiterated emphasizing the need to undertake pre-audit as per the Circular in all instances where risk involved was high.
And on 03.11.2014, Board issued a letter to the field directing that Rebate sanctioning authorities may note that they may order pre-audit by clubbing such claims where such claims are artificially split and there is need for pre-audit. (Please see )
Source: CAG's Report No.33 of 2014