F. No.296/07/2015-CX.9

Govt. of India

Ministry of Finance

Department of Revenue

(Central Board of Excise and Customs)

New Delhi, the 23rd October, 2015

OFFICE MEMORANDUM

Please find enclosed a press release issued by Central Board of Excise and Customs [CBEC] w.r.t. the – “Revised Limit above which arrest and prosecution can now be considered”. The Press Release is enclosed for taking necessary action at your end.

Encls: As above

(Manish Mohan Govil)

Official Spokesperson

[CBEC]

Phone No. 011- 2309 3667

Sh. D.S. Malik,

ADG (M&C)

Ministry of Finance.

North Block, New Delhi.

PRESS NOTE

Persons involved in serious offences of tax evasion are liable for arrest and prosecution under the Central Excise Act, 1994,Finance Act, 1994 dealing with Service Tax and Customs Act, 1962. Central Board of Excise and Customs (CBEC) has issued instructions from time to time prescribing the procedures, safeguards and threshold limits above which these powers are to be exercised with discretion and responsibility. CBEC has now issued fresh instructions on 23-10-15 rescinding the past circulars and consolidating them at one place with following objectives.

2. The monetary limits for arrest and prosecution have been revised substantially upwards to ensure that these powers are not used against small and medium businesses.

3. Thus the limits in case of offence of evasion of tax or wrongful utilization of input tax credit in case of Central Excise and Service tax have been revised to 1 Crore from ₹ 25 lakh and ₹ 10 lakh respectively.

4. In case of evasion of tax under the Customs Act, the limits have been revised to ₹ 1 Crore from ₹ 10 lakh in case of evasion of tax by wrongful avialment of exemption or duty drawback. Similar, revisions regarding value of goods have been carried out regarding appraisement of tax during import or export.

5. In cases of outright smuggling cases or mis-declaration of baggage, the limits regarding value of offending goods have been revised from ₹ 5 Lakh to ₹ 20 Lakh.

As in the past, there shall be no lower limit for arrest and prosecution in the cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species.

6. The procedure to be followed for arrest and sanction of prosecution has been revised and specified with adequate safeguards in these instructions to ensure that only in cases of serious nature above the revised thresholds, where there is strong prima-facie evidence, these powers are exercised.

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Revised monetary thresholds for arrest and prosecution narrow enforcement against small and medium businesses, with specified procedural safeguards and exceptions. CBEC has consolidated and rescinded prior circulars to raise monetary thresholds for considering arrest and prosecution in tax and customs offences-covering central excise, service tax, wrongful input tax credit use, customs evasion by wrongful exemptions or drawback and valuation issues-and increased value limits for smuggling and baggage mis-declaration. The instructions impose procedural requirements and safeguards, directing that arrests and prosecutions be undertaken only for serious cases above the revised thresholds with strong prima facie evidence, while retaining no lower limit for specified grave offences such as counterfeit currency, arms, explosives and endangered species smuggling.