Measures to provide deterrence for tax evaders in the manufacturing sector

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.... issued, inserting rule 12CC in the Central Excise Rules, 2002 and rule 12 AA in the CENVAT Credit Rules, 2004 and notification No.32/2006 C.E.(NT) has also been issued. The salient features of the provisions are enumerated below: 2.1. The following types of offences committed by a manufacturer or a first stage or second stage dealer or an exporter is considered to be serious to warrant the imposition of restrictions on the facilities detailed in the subsequent para. i) Removal of goods without the cover of an invoice and without payment of duty; ii) 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 ....

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....ods from his factory will 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. For second time or subsequent offence, the restriction specified in clauses (i) and (ii) may also be imposed. 2.3. Where a first stage or second stage dealer is found to be knowingly involved in committing the offence specified at clauses (iv) or (v) of para 2.1, the registration granted under rule 9 of the Central Excise Rules 2002 may be suspended for a specified period. During the period of suspension, the said dealer will not be able to issue any Central Excise Invoice. However, he can continue his business an....

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....es to the Chief Commissioner within 30 days of the detection of the case, as far as possible. The Chief Commissioner should forward the comprehensive proposal to the Member (Central Excise) within 20 days of the receipt of the proposal, alongwith the copy of the record of the personal hearing conducted by the Chief Commissioner. 3. It is emphasized that the new provisions should not be invoked in a routine manner involving all types of cases where duty or CENVAT credit involvement is more than 10 lakhs. Infact the government has made it clear in the notification that only in cases where a person is found to be knowingly involved in committing the specified offences, only in such cases, these provisions should be invoked. Therefore, the re....