Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject: Reopening of the prevailing assessments – Instructions regarding-
I am directed to draw your attention to Board”s Circular No. 249/83/96-CX dated 11.10.96, regarding introduction of self-assessment system. Under this system, the assessee is himself required to assess the duty liability and prepare a return on a monthly-basis (for SSI on quarterly basis) and submit to scrutinise the returns in the manner prescribed in the aforesaid Circular. The assessees are also required to file declaration under rule 173B for the purpose of classification of the goods and a declaration under rule 173C for the value of goods in certain specified type of cases. They also file declaration in respect of modvat credit. These declarations are subject to scrutiny by the Department. No statutory time limit is prescribed for such scrutinies. However, to safeguard the assessees from indefinite uncertainties, it has been emphasised time and again that the scrutiny of such declarations/ returns must be done at the earliest so as to complete the work within the limitation period of raising ordinary demand. It has been noticed that large number of show cause notices are issued changing the accepted practice of assessment by the officers of the rank of Assistant Commissioners and below. This not only causes uncertainty, in the areas of assessment, but it also leads to avoidable increase in the work of the Department.
2. To overcome this problem, it has been decided that a practice of assessment which remains in existence for period over 1 year should not be changed without the specific and prior approval of the Commissioner. It is further clarified that in the system of self-assessment, where no enquiries were initiated or no action was taken for changing the practice of assessment for a period of 1 year from the date from which such practice was adopted, the permission of the Commissioners will be necessary for making any change in the said practice. The Commissioners will ensure that there are sufficient grounds for changing the practice before giving such permission.