Circular No.17/17/94-CX.6

dated 6/2/94


 Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs, New Delhi

Subject: Central Excise – Rules 173G(2), 223B and 224 of the Central Excise Rules, 1944 – Precautions at Budget, 1994 – Instructions regarding.

I am directed to say that the Annual Budget of the Central Government for the financial Year 1994-95 is likely to be presented to Parliament on the 28th of February, 1994.

2. The procedural restriction envisaged in sub-rule (2) and (2A) of rule 224, read with sub-rule (2) of rule 173HG of the Central Excise Rule, 1944, regarding removal of excisable goods after 6 P.M. on the day preceding the Budget Day and also on 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 the Budget Day which are required to be filed before 5 P.M. on the working day immediately proceding the Budget Day, i.e. 25.2.1994

(ii) Intimations regarding particulars of last AR 1/GP I/GP 2 in the prescribed form on the day preceding the Budget Day i.e. 27.2.1994 and to send these to the Assessment Range/ Divisional Office that very day alongwith AR.I applications, received in advance, for clearances on Budget Day.

(iii) to supervise removals, countersign gate passes 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 officer” 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 result of such verification immediately by name to the Range and the Divisional Officer.

5. In addition to the above restriction, attention is also invited to the provisions contained in sub-rule (1) 224 and in rule 173G(2) of the Central Excise Rules, 1944.  Provision 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. 27.2.1994.  After 6.00 P.M. on 27.2.1994 no goods can be delivered from a factory or warehouse except with the permission of the Collector 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. 27.2.1994 should be supervised by the proper officer deputed to a factory or a group of factories as indicated in para 3 above.

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

 (ii)  The information regarding last gate pass inside and the 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 27.2.94 or through telegram which should be desatched by them on 27.2.94.  Arrangements 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 sent through telegrams, the assessees should be advised to keep with them the receipt of the telegram sent by them so that these are available for inspection, wherever felt necessary by the proper officer.

(iii)  Provisions of rule 223B may not be invoked in respect of the manufacturers working under compounded levy Schemes.  They are already exempt from the provision of rule 224. 
7. (i)  Your attention is invited to the Explanation and the first proviso to sub-rule (2) of rule 224.  A person can file an application even with regard to those goods which may come in existence at any time after the filing of the application.  However, for acknowledgment (acceptance of the said application for purpose of sub-fule (2)), power have been given to the Collector to prescribe the terms, conditions and limitations, the fulfillment of which will be necessary for the said acknowledgment / acceptance.

(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 art of a continuous process;

b) in respect of factories having round-the-clock despatches, 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 railway,

c) for petroleum products cleared through pipe-lines and petroleum products required for refueling coastal and foreign going vessels and aircraft”s;

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.

(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 of purposes of submitting advance applications of removal on the working day preceding the Budget Day.  In such cases, the Collector may permit the assessee to furnish in advance, a provisional application for removal for the appropriate 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 t he exact quantity of goods removed.

8. In respect of relaxations granted in terms of para 7 above, 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 the expeditious grant of such permission in the situations referred to para 7 above and even in the case of goods that will come into existence after presentation to the application.

10. Before granting the relaxation as under para 7 and 9 above, Collector 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 Collector himself. In the Collectorates where no regular Collector has been posted and which are under the charge of a Collector holding Additional charge, the Additional Collector/Deputy Collector may grant the relaxations in such bonafide and deserving cases. But relaxations thus granted should be brought to the notice of the Collector concerned and his approval should be immediately taken.

11. In respect of relaxations / permissions granted in terms of para 9 above, Collector 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-alia, state names  of 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 different duty, if any.

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

(Himanshu Gupta)

Under Secretary to the Government of India


Declaration of Stock etc. on Pre-Budget Day by

Manufacturer Working under S.R.P.

1. Name of License

2. L.4 Licence No.

3. Commodity

I/We hereby declare that the serial number of last gate (s) in form G.P. 1/G.P.2 issued by me / us and the balance in hand of the excisable goods manufactured by me / us on the date ———– at 6.00 P.M. was / were as under : 

Name of goods with sub-heading No.  Serial No. of last G.P.1/G.P.2   Closing Balance of excisable goods in stock as per R.G.I.

Certified that the particulars given above are correct.

Place : 
Date :

Signature of the assessee or his
authorised agent.

Handed over to Superintendent / Assistant Collector of Central Excise  on ………. at………

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