Consignment wise payment of duty and scrutiny of returns – back
Why excise laws are subject to frequent tinkering?
The Central Excise Rules, 1944 were in action for over half a century and were more or less settled, when somebody in the Board had a bright idea that these rules had to be broken up into several pieces and confusion increased so that the assessees and the officers will not have peace of mind. So by Notification No. 9/2001-C.E. (N.T.), dated 1-3-2001, the Central Excise Rules, 2001 were notified to be effective from 1.7.2001. But these rules had a premature death, one day before birth on 30.6.2001, when the Central Excise (No. 2) Rules, 2001 were brought into force. These rules lasted less than a year when the Central Excise Rules, 2002 were brought in with effect from 1.3.2002. And these rules have undergone over a dozen amendments in the last three years, mostly to bring back the provisions the law makers forgot to include.
Somewhere down the line, the Government brought in a fortnightly and later a monthly payment of duty destroying the discipline in the industry of paying the duty before clearance. An assessee would never clear goods if he did not have enough money to pay the duty. Once he was allowed to pay duty on a monthly basis, problems started creeping in. Liquidity problems would prevent the assessee from being able to pay the whole month’s duty at the end of the month and naturally there were defaults which worried the Government. There was a provision in the 2001 Rules to make defaulters pay on consignment basis and that too from PLA. Now the Government has brought back the same provision.
As per the latest amendment to the Central Excise Rules;
The interest payable for default of monthly payment is reduced from the present 24% or one thousand per day. It will now be the interest as per Section 11AB which is now 13%.
If the assessee does not pay the defaulted amount within thirty days, he will lose the facility of monthly payment for two months or till the dues are paid, during which period he has to pay in PLA consignment wise. For this, the Assistant Commissioner is required to give an order. Assistant Commissioners can now keep themselves busy with adjudication of these cases.
A new rule – 12(3) – has been inserted to provide for scrutiny of the returns by the proper officer in a manner to be prescribed by the Board.
It has been made mandatory for the assessee to make available the records wanted by the Proper Officer. (Was it not required earlier?)
Assessees and dealers are required to produce the authorized officers a list of all their records relating to raw materials, production clearance and financial records including statements of trial balance! This kind of rule was in force for the last fifty years but is totally ignored, for the simple reason that it is not practically feasible. Imagine a major steel plant spread over hundreds of acres. Who will have a list of all the records maintained by this company?
To be fair to the Government the draft rules were published for public scrutiny. The government should seriously think of bringing back the Central Excise Rules, 1944.
Settlement Commission- DGFT v CBEC
Para 2.46 of the Foreign Trade Policy stated that default of Export Obligations under the FTP would be brought under the purview of the Settlement Commission with effect from 1.4.2005.
With a view to providing assistance to firms who have defaulted under the Foreign Trade Policy for reasons beyond their control as also facilitating the merger, acquisition and rehabilitation of sick units, it has been decided to empower the Settlement Commission in the Central Board of Excise and Customs to decide such cases also with effect from 01.04.2005.
DDT 13, on 20.12.2004 had pointed out that CBEC had in a circular clarified that Settlement Commission had no jurisdiction to settle Export Obligation disputes. But Settlement Commission had been settling such disputes and incidentally the Madras High Court had upheld one such settlement. In DDT 13, we had hoped that the DGFT will in consultation with CBEC clarify this position at least before April 2005.
DGFT has indeed clarified the position one day before the deadline. Now DGFT states that as far as Customs duty and interest are concerned, the Settlement Commission has to be respected, but the Licensing Authority can still proceed against the exporter under the Foreign Trade (Development & Regulation) Act, 1992 for imposition of penalty. This is the kind of confusion that two ministries dealing with the same subject can cause. The Policy is announced by the minister is only for the pink papers to analyse, the policy really is what the Babus later decide. -
Policy Circular No. Dated : March 30, 2005
Adoosa appointed a customs station
Adoosa in Baramulla District is appointed a customs station for import from Pakistan.
NOTIFICATION. No. dated 30.3.2005