Circular No. 296/12/97- Central Excise

dated 17/2/97

F.No. 216/1/97-CX.6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs, New Delhi

Subject: Central Excise – Rules 173(2), 223B and 224 of the Central Excise Rules, 1944 Precautions at Budget, 1997-98 Instructions regarding.

I am directed to say that the Annual Budget of the Central Government for the Financial Year 1997-98 is likely to be presented to Parliament on the 28th February, 1997.

2. The procedural restriction envisaged in sub-rule (2) and 2(A) of rule 224, read with sub-rule (2) of rule 173G of the Central Excise Rules, 1944, regarding removal of excisable goods after 6 P.M. on the day preceding the Budget Day, should be strictly enforced on all assessees, including those working under Self Removal Procedure. It is once again reiterated that the schemes of Record Based Control and Production Based Control are comprised in Self Removal Procedure. Therefore, instructions contained in Chapter 7 of the Self Removal Procedure Handbook (Corrected) should be scrupulously followed. These instructions should be impressed upon the field staff so that they are thoroughly familiar with them for their implementation. assessees should be made aware of the fact that after 6 P.M. on the day preceding the Budget Day and also on the Budget Day, the Self Removal Procedure remains suspended and that they are required to discharge certain obligations and observe some of the formalities.

3.  You should make arrangements well in time to designate an officer as “proper officer” in respect of a factory or a group of factories so that he is in a position to receive –

(i) advance applications for clearance on Budget Day which are required to be filled before 5 P.M. on the working day immediately preceding the Budget Day i.e., 27.2.1997.

(ii) intimations regarding particulars of last AR1/ Invoice in the prescribed form on the day preceding the Budget Day i.e., 27.2.1997 and to send these to the Assessment Range/ Divisional Office that very day along with AR1 applications, received in advance, for clearances on Budget Day.

(iii) to supervise removals, countersign the invoice and make entries in PLA on the Budget Day itself.

4. As an anti Evasion measure, you may select about 10% of the units depending upon the commodity manufactured and reputation of the assessee and depute suitable “proper officers” for causing verification of stocks of such factories at 5.00 P.M. on the Budget Day. The officers may be advised to send the results of such verification immediately by name to the Range and the Divisional Officers.

5. In addition to the above restrictions, attention is also invited to the provisions contained in sub-rule (1) of rule 224 and in rule 173G (2) of the Central Excise rules, 1944. Provisions of sub-rule (1) of rule 224 should be enforced in respect of removal of any goods after 6.00 P.M. on the day preceding the Budget Day i.e., 27.2.1997. After 6.00 P.M. on 27.2.1997 on goods can be delivered from a factory or a warehouse except with the permission of the Commissioner and under such conditions and on payment of such overtime fees/ supervision charges as may be required. All clearances after 6.00 P.M. on the day preceding the Budget Day, i.e. 27.2.1997 should be supervised by the proper officer deputed to a factory or a group of factories as indicated im para 3 above.

6.(i) As required under rule 223B, all the assessees should intimate to the Superintendent in charge of their Range, with a copy to the proper officer (a) the number of last invoice issued by  them upto 6.00 P.M. on the day preceding the Budget Day and (b) the closing balance of stock held by the at 6.00 P.M. on the day. The declaration form for furnishing the above particulars in enclosed. Penal action under sub-rule (2) or rule 223 B should be taken against those assessees who fail to give such declaration or furnish wrong information therein.

6.(ii) The information regarding the last invoice and he closing balance of the stocks held by the assessees at 6.00 P.M. on the day preceding the Budget Day, should be furnished by hand by the assessees in the Range Office in cases where their factories are located at the Range Headquarters. Other assessees whose factories or warehouses are situated away from the Range Headquarters may be given an option to send the declaration either by hand on 27.2.1997 or through telegram which should be despatched by them on 27.2.1997. Arrangement should also be made in the Range Office to issue acknowledgments for all such receipt in case of hand deliveries. In cases where the information is send through telegrams, the assessee should be advised to keep with them the receipts of the telegram sent by them so that these available for inspection, wherever felt necessary by the proper officer.

6.(iii) Provisions of rule 223B may not be invoked in respect of the manufacturers working under compounded levy scheme. They are already exempt form the provisions of rule 224.

7. (i) Your attention is invited to the Explanation and the first proviso to sub-rule (2) or rule 224. A person can file an application even with regard to those goods which may come into existence at any time after the filling of the application. However, for acknowledgement (acceptance of the said application for purpose of sub-rule (2)), power have been given to the Commissioner to prescribe the terms, conditions and limitations, the fulfillment of which will be necessary for the said acknowledgement/ acceptance.

7 (ii) Application in relation to goods which are not yet in existence may be accepted (acknowledged) in the following situations, namely:-

a) for removal of goods which are utilised within the same factory for further manufacture, or which are cleared to an adjacent factory as an act of continuous process;

b) in respect of factories having round-the clock despatched, for example, cement factories and major steel plants; their despatches being dependent on allotment of railway wagons, carrying capacity of the wagons and the movement of the loaded wagons by the railways.

c) for petroleum products cleared through pipelines and petroleum products required for refueling coastal and foreign going vessels and air crafts;

d) in cases where excisable goods cannot be stored for long or are not capable of being stored;

e) in cases of clearances necessary to maintain essential services; and

f) in respect of removal for exports.

7. (iii) in the above situations, with regard to goods which are yet to come into existence as well as goods which are already in existence, it may be difficult for an assessee to accurately foresee the quantity of goods likely to be removed by him on the Budget Day for purposes of submitting advance applications of removal on the working day. preceding the Budget Day. In such cases, the Commissioner may permit the assessee to furnish in advance, a provisional application for removal for the approximate quantity of goods likely to be removed on the Budget Day. However, such assessee should furnish on the day following the Budget Day the final application for removal of the exact quantity of goods removed.

8. In respect of relaxations granted in terms of para 7 above, a report should be sent to the Ministry for information indicating the names of the assessees, the names and quantities of commodities involved and the reasons for granting the relaxations.

9. Rule 224(2A) governs removal after 5.00 P.M. on the Budget Day. Such removals can take place only with the permission of the Central Government and after the assessees have furnished the necessary undertaking etc., as required under this rule, to pay duty at the enhanced rate if any, that may be applicable to such goods. In the interest of expeditious grant of such permission in deserving cases, it has been decided that the Commissioner may grant such permission in the situations referred to in para 7 above and even in the case of goods that will come into existence after presentation of the application.

10. Before granting the relaxation as under para 7 and 9 above, Commissioner should satisfy himself not only as to the bona fides of the case but also see to it whether it is a deserving case. The power to grant such relaxation should be exercised by the Commissioner himself. In the Commissionerates where no regular Commissioner has been posted and which are under the charge of a Commissioner holding additional charge, the Additional Commissioner/ Deputy Commissioner may grant relaxations in such bona fide and deserving cases. But relaxations thus granted should be brought to the notice of the Commissioner concerned and his approval should be immediately taken.

11. In respect of relaxations/ permissions granted in terms of para 9 above, Commissioner should send a report to the Ministry within a week of the presentation of Budget regarding the relaxation granted by him and obtain the Central Government”s ex-post-facto approval. The report should, inter-alis, state names of the assessees, description and quantity of commodities involved, reasons for granting the relaxations, whether there was any enhancement of the rate of duty and if so, the details of recovery of the differential duty, and reasons for non-recovery of differential duty, if any.

12. Please acknowledge the receipt of this letter immediately by return fax/ telex.

(P.K. Sinha)
Under Secretary to the Govt. of India

Declaration of Stock etc. on Pre-Budget Day by manufacturer working

under self removal procedure

1.  Name of the assessee

2.  Registration No.

3.  Commodity

I/We hereby declare that the serial number of last invoice / invoices issued by me/us and the balance in hand of the excisable good manufactured by me/ us on the date* _________________ at 6.00 P.M. was/ were as under:-

Name of goods with
sub – heading Number

Serial No. of last invoice

Closing balance of  excisable goods in stock as per R.G. 1

Certified that the particulars given above are correct.

Place _____________
Signature of the assessee
Date _____________
or his authorised agent.

*One day prior to the presentation of annual/ supplementary budget of the Union Government.

Handed over to Superintendent/ Assistant Commissioner of Central Excise on ____________________ at __________________ .

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