Modvat Credit Scheme - Special measures to prevent and detect the misuses -instructions

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....practices and their efficiency in properly administering the Modvat Scheme. It is noticed, inter alia, that the payment of duty from the Modvat Credit account as a percentage of total revenue has increased substantially and consistently during the last decade or so. Consequently, the marginal rate of increase in revenue is not high as it should be. It is felt that some of the manufacturers have ta....

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.... (vi) Excess credit available with the manufacturer is passed on to other parties without goods, (vii) The goods have been diverted while credit has been taken. (viii) Credit has been taken on capital goods meant for establishing new units in the existing duty paying unit and utilised. 4. The prevalence of such malpractices indicate that there is a need for conducting Modvat checks effec....

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....cy in the revenue collection in the current year. 6.For checking of correctness of Modvat at credit availed and utilised in the last five years, the Commissioners should select the units who have availed more than one crore credit in a year and these should be checked by Special Modvat Verification Teams constituted especially for this purpose with clear in instruction however that no harassmen....