As per CBEC Circular No. 869/07/2008-CX dated 16-05-2008 related to procedure relating to sanction and post-audit of refund/rebate claims, all refund/rebate claims involving an amount of Rs. 5 lakh or above should be subjected to  pre-audit at the level of Deputy/Assistant Commissioner (Audit) in the Commissionerate Headquarter Office.
CBEC has noticed instances wherein the assesses have submitted rebate claims by splitting up the amounts of rebate claims below Rs. 5 lakhs to avoid pre-audit.
In this regard, CBEC has authorized the rebate sanctioning authority that they may order a pre audit by clubbing such artificially spilt claims. However, it is clarified that such power may be exercised only in exceptional cases.

F. No. 206/05/2014-CX.6

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Dt: 03.11.2014

To

The Chief Commissioners of Central Excise (All)

Sub: Splitting up of rebate claims to avoid pre-audit-reg.

Instances have been brought to the notice of the Board where the assesses have submitted rebate claims by splitting up the amounts of rebate claims so as to keep each individual claim below Rs. 5 lakhs to avoid pre-audit.

 2. Rebate sanctioning authorities may note that they may order pre-audit by clubbing such claims where such claims are artificially split and there is need for pre-audit. Such exercise of powers shall be discretionary and used more as an exception than rule.

3.  Above directions may be brought to the notice of the officers competent to sanction rebate claims in the field. Hindi version will follow. Difficulty, if any, in the implementation of the instruction may be brought to the notice of the Board.

Yours faithfully,

(Rohan)

OSD (CX.6)

Copy to: Members of the Board

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