EOU scrap disposal limits: excess waste beyond prescribed percentage attracts duty equal to that on the mother material.
Permissible disposal of waste/scrap by 100% EOUs follows Annexure V norms of Appendix 19 of the Import Export Policy, subject to a maximum of 25%. If waste/scrap exceeds 25%, the excess quantity is charged an amount equal to the duty leviable on the mother material from which the scrap arose under the proviso to Section 3 of the Central Excises & Salt Act, 1944.

Modvat credit: incomplete gate passes may be cured by verification; receipts before required declaration are ineligible.
Availability of Modvat credit is governed by two operative rules: omission of chapter/heading/sub heading numbers on a gate pass alone is not a ground for denial if other duty payment particulars and goods description appear, subject to verification by the jurisdictional Superintendent of Central Excise; receipts of inputs prior to the mandatory declaration under the applicable declaration rule are not eligible for Modvat credit, consistent with earlier departmental instructions.

Search disclosures: declaring and paying tax on unaccounted assets during search prevents concealment penalty under rules.
If unaccounted assets are found in the course of a search, no concealment penalty applies provided the person searched makes a search-statement that the assets were acquired out of income of the year for which return was not yet filed, specifies how the income was derived, pays the tax and interest due, and the period "in the course of the search" includes times when lockers or godowns are under a restraint order; authorised officers must notify searched persons and correctly record such statements.

Write-off of irrecoverable income-tax arrears: delegated approvals require zonal committee recommendations and prior board consent for higher amounts.
Administrative approval for write-off of irrecoverable income-tax arrears is allocated by monetary bands to specified authorities; Commissioners may write off amounts below a mid threshold with zonal committee recommendation, while write-off at or above the mid threshold requires prior central approval based on a proposal recommended by a three-member zonal committee. Interest charged under tax recovery provisions must be calculated and included in the arrears total when considering write-off. In charges with a Chief Commissioner, the Chief Commissioner may write off arrears within an enhanced mid-range band subject to zonal committee recommendation; otherwise existing Board instructions and procedures govern the process.

Automatic transfer of income tax files allowed for assessees with salary, property, securities and other income without officer consent.
Previously, transfers of income tax files required identification and consent via specified intra and inter CIT routing, with CIT I bearing responsibility for obtaining transferee consent. The Board concluded that where an assessee's income is from salaries, property, interest on securities and other similar sources, file transfers occasioned by change of residence or business should proceed automatically without prior consent of the transferee Income tax Officer.

Import permission for EOU rejects into domestic tariff area allowed subject to unit certification and customs verification procedures.
General permission is granted to import rejects from 100% Export Oriented Units into the Domestic Tariff Area, subject to conditions: the unit must certify that defects were unavoidable due to technology, techniques or materials; goods must be invoiced and stamped as 'REJECTS' at clearance; and the Assistant Collector of Customs and Central Excise must be satisfied of their reject status using buyer quality standards, the manufacturer's internal quality report and any further technical opinion.

Modvat credit for countervailing duty: importers can secure credit despite missing Bill of Entry declaration with officer verification.
Importers may obtain Modvat credit of countervailing duty paid on imported goods despite absence of a Bill of Entry declaration if the importer submits a declaration to the Jurisdictional Central Excise Officer that no refund was claimed or obtained; Central Excise may grant credit and refer Customs to verify that no refund was sanctioned, with Customs annotating the Bill of Entry and withholding refunds unless Central Excise confirms adjustment, and any prior refund will be deducted from the credit allowed.

Subsidiary gate pass issuance on endorsed gate passes permitted when entire consignment remains in original packing.
The Board instructs that a subsidiary gate pass may be issued on an endorsed gate pass only where the first consignee has purchased the entire consignment in original packing, so that the endorsed gate pass and the goods remain in original packing; the proper officer is authorised to issue a subsidiary gate pass on that basis.

Voluntary tax compliance encourages liberal treatment of repentant taxpayers while preserving penalties for continued evasion.
Where a taxpayer's high Advance Tax estimate reflects accumulated untaxed income of prior years, officers should treat voluntary declarations sympathetically and avoid reopening earlier assessments unless material in their possession affirmatively shows past evasion that cannot be accounted for by the taxpayer's current-year estimates; this liberal approach is principally applicable where concealment in earlier years is not evidenced by tangible assets.

Non-retroactivity of deemed credit amendment affirmed; prior credits governed by earlier order, recoverable only on case facts.
The amendment removing deemed credit for wastes and scraps of certain metals is not retrospective and applies only from its effective date; credits allowed before that amendment remain governed by the earlier order. Collectors may recover only those credits that, on the facts of a particular case, are found recoverable under the earlier order, and must not demand blanket recovery of all previously availed credits based solely on the later amendment.

Separate MODVAT credit reporting required monthly to segregate credits arising from countervailing duty on imports and gate passes.
The Board directs preparation of a month-end abstract on RG-23A Part II that separately records MODVAT credits taken as countervailing duty (based on Bills of Entry) and as Central Excise duty (based on gate passes); officers must be notified and compliance ensured from the effective date, with acknowledgement of receipt.

Conveyance allowance exemption permitted when employer certifies allowance was incurred wholly and exclusively for official duties.
Exemption under 10(14) for additional conveyance allowance is permitted where the employer appends a salary-certificate certifying that the allowance was granted specifically for expenditure wholly, necessarily and exclusively for performance of duties and was actually incurred, supported by an internal verification system recording individual expenditure, vehicle type, area of operation and performance details.

Secondary packing exclusion: limited to packing necessary for sale; each case must be examined on its merits.
The Ministry accepts the Supreme Court judgment in Godfrey Phillips but limits its scope: only secondary packing necessary to put the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate may be included in value; corrugated fibreboard containers for cigarette transit damage were treated as not necessary and the ruling is confined to that packing type. Each claimed secondary packing must be examined on merits considering commodity nature and marketing practice.

Exemption for spare parts of deep sea fishing trawlers affirmed; provisional imports to be regularised under EOU import duty rules.
Spare parts of deep sea fishing trawlers qualify for exemption from import duty where the trawler itself is the production machinery of an Export Oriented Unit; provisional clearances effected after the notification's effective date should be regularised and those assessments finalised accordingly.

Rule nisi: petition granted unless respondent shows cause on return date; clarifies common court technical terms.
The instruction defines key court procedural expressions: Rule nisi-petition granted unless respondent shows cause on the fixed date; Rule made absolute-petition granted; Rule discharged-show-cause rule revoked and petition not granted; Rule issued-petition granted. These definitions are provided for uniform usage by departmental officers in admitting and disposing of petitions.

Assessable value inclusion of packing costs questioned, authorities seek collectorate reports on practice and disputed cases.
The Ministry requests Collectorates to report the practice on including cost of jute (gunny) bags in the assessable value of cement and to furnish details of all disputed cases-writs, appeals, SLPs, party names and interim orders-with the information to be submitted within seven days.

Modvat credit availability limited to declared inputs; prospective amendment permits credit only for inputs received after acknowledgement.
Modvat credit is available only for inputs specified in the Rule 57G declaration; omitted inputs cannot be covered retrospectively. A declaration may be amended prospectively, and only inputs received after the revised, acknowledged declaration will be eligible for Modvat credit.

Constitution of Tax Bench on continuous basis urged; request establishment of dedicated judicial benches and reporting of outcomes.
Constitution of a Tax Bench on continuous basis is requested to address heavy case pendency; officers are directed to approach the judicial head to seek continuous or dedicated tax bench sittings and to inform the Board of the results of those meetings.

Stay of recovery disfavoured in tax matters; authorities instructed to seek vacation of stays and list stayed cases.
High Courts and the Supreme Court lack authority to grant stay of recovery in income-tax matters; interim orders should not be routinely granted on a prima facie showing. The Board directs immediate action to seek vacation of such stay orders to protect revenue, requiring officers to list cases where recovery of outstanding demand exceeds the specified threshold and to report the action taken by the stated deadline.

Agreement on Merchant Shipping: termination notice withdrawn, agreement remains operative and prior instruction rescinded.
The notice of termination of the Agreement on Merchant Shipping between India and Bulgaria has been withdrawn, the Gazette notification relating to the Agreement remains operative, and Instruction No. 1721 dated 1 August 1986 is rescinded; officers are to be informed.