Government of India
Ministry of Finance
Department of Revenue
Notification No. 5/2012 - Central Excise (N.T.)
New Delhi, dated, 12th March, 2012
G.S.R. (E).- In pursuance of rule 12CCC of the Central Excise Rules, 2002,
and rule 12AAA of the CENVAT Credit Rules, 2004 and in supersession of the
notification of the Government of India in the Ministry of Finance, Department
of Revenue,
No. 32/2006-Central Excise (N.T), dated the 30th December, 2006,
published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-Section (i), vide G.S.R number 782 (E) dated the 30th December, 2006, the
Central Government, hereby declares that where a manufacturer, first stage or
second stage dealer, or an exporter including a merchant exporter is prima facie
found to be knowingly involved in any of the following,-
- removal of goods without the cover of an invoice and without payment of
duty;
- 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;
- taking of CENVAT Credit without the receipt of goods specified in the
document based on which the said credit has been taken;
- taking of CENVAT Credit on invoices or other documents which a person has
reasons to believe as not genuine;
- issuing duty of excise invoice without delivery of goods specified in the
said invoice;
- claiming of refund or rebate based on the duty of excise paid invoice or
other documents which a person has reason to believe as not genuine;
- removal of inputs as such on which Cenvat credit has been taken, without
paying an amount equal to credit availed on such inputs in terms of sub-rule (5)
of rule 3 of the Cenvat Credit Rules, 2004,
an officer authorized by the Central Board of Excise and Customs may order for
withdrawal of facilities or impose the restrictions as specified in para 2 of
this notification.
2. Facilities to be withdrawn and imposition of restrictions.-
(1) Where a
manufacturer is prima facie found to be knowingly involved in committing the
offences specified in para 1, the officer authorized by the Central Board of
Excise and Customs may impose following restrictions on the facilities, namely:-
- the monthly payment of duty of excise may be withdrawn and the assessee
shall be required to pay duty of excise for each consignment at the time of
removal of goods;
- payment of duty of excise by utilisation of CENVAT credit may be restricted
and the assessee shall be required to pay duty of excise without utilising the
CENVAT credit;
- the assessee may be required to maintain records of receipt, disposal,
consumption and inventory of the principal inputs on which Cenvat credit has not
been taken;
- the assessee may be required to intimate the Superintendent of Central
Excise regarding receipt of principal inputs in the factory on which Cenvat
credit has or has not been taken, within a period specified in the order and the
said inputs shall be made available for verification upto the period specified
in the order:
Provided that where a person is found to be knowingly involved in committing any
one or more type of offences as specified in para 1 for the second time or
subsequently, every removal of goods from his factory may 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.
Explanation.- For the purposes of this paragraph, it is clarified that-
- a person against whom the order under sub-para (3) of para 4 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 assessee commits any offence specified in para 1 for the second time
or subsequently, the officer authorized by the Central Board of Excise and
Customs may impose the restriction specified in clauses (i) and (ii).
- “principal inputs”, means any input which is used in the manufacture of
final products where the cost of such input constitutes not less that 10% of the
total cost of raw materials for the manufacture of unit quantity of a given
final products.
(2) Where a first stage or second stage dealer is found to be knowingly involved
in committing the type of offence specified at clauses (d) or (e) of para 1, the
officer authorized by the Central Board of Excise and Customs may order
suspension for a specified period, the registration granted under rule 9 of the
Central Excise Rules 2002.
(3) During the period of suspension, the said dealer shall not issue any Central
Excise Invoice:
Provided that he may continue his business and issue sales invoices without
showing duty of excise in the invoice and no CENVAT credit shall be admissible
to the recipient of goods under such invoice.
(4) Where a merchant exporter is found to be knowingly involved in committing
the type of offence specified in clause (f) of para 1, the officer authorized by
the Central Board of Excise and Customs may order withdrawal of the self sealing
facility for export consignment and each export consignment shall be examined
and sealed by the jurisdictional Central Excise Officer:
(5) If a manufacturer, first stage dealer or second stage dealer or an exporter
does anything specified in clause (f) of para 1, the officer authorized by the
Central Board of Excise and Customs may order withdrawal of the other facility
available to them.
3. Monetary limit.- The provisions of this notification shall be applicable only
in a case where the duty of excise or CENVAT Credit alleged to be involved in
anything specified in para 1 exceeds rupees ten lakhs.
4. Procedure.- (1) The Commissioner of Central Excise or Additional Director
General of Central Excise Intelligence, as the case may be, after examination of
records and other evidence, and after satisfying himself that the person has
knowingly committed the offence as specified in para 1, may forward a proposal
to the Chief Commissioner or Director General of Central Excise Intelligence, as
the case may be, to withdraw the facilities and impose restriction during or for
such period, within 30 days of the detection of the case, as far as possible.
(2) The Chief Commissioner of Central Excise or Director General of Central
Excise Intelligence, as the case may be, shall examine the said proposal and
after satisfying himself that the records and evidence relied upon in the said
proposal are sufficient to form a reasonable belief that a person has knowingly
done or contravened anything specified in para 1, may forward the proposal along
with his recommendations to the Central Board of Excise and Customs:
provided that the Chief Commissioner of Central Excise or Director General of
Central Excise Intelligence, before forwarding his recommendations, shall give
an opportunity of being heard to the person against whom the proceedings have
been initiated and shall take into account any representation made by such
person before he forwards his recommendations to the Central Board of Excise and
Customs.
(3) An officer authorized by the Central Board of Excise and Customs shall
examine the recommendations received from the Chief Commissioner of Central
Excise or Director General of Central Excise Intelligence and issue an order
specifying the type of facilities to be withdrawn or type of restrictions
imposed, along with the period for which said facilities will not be available
or the period for which the restrictions shall be operative.
(V P Singh)
Under Secretary to the Government of India
F.No.267/77/2011-CX.8