Whether the yearly ‘declaration’ filed, by a small scale manufacturer can be treated as a ‘return’ under Sec. 32E(1) of the Central Excise Act.

(a) Whether the yearly ‘declaration’ filed, by a small scale manufacturer can be treated as a ‘return’ under Sec. 32E(1) of the Central Excise Act.

Answer: Yes. As discussed supra. A return of production, clearance and duty paid in the prescribed manner, is a statutory requirement. In the absence of a specific reference in Section 32E to ER1/ER3 i.e. monthly/quarterly returns prescribed under Rule 12 of the Central Excise Rules, since the ‘declaration’ filed by a small scale manufacturer also contains the basic particulars of estimated production and clearances though not the duty paid, as the product is totally exempt, and keeps the Department aware of the bona fide existence of the applicant, the yearly declaration can be deemed to serve the purpose of ‘return’, in so far as Sec. 32E(1) of the Central Excise Act is concerned.

(b) Whether a consolidated return filed just before filing the application or along with the application by a person who is not registered with Central Excise and did not obtain ECC Number can be considered as satisfying the condition in Clause (a) of Sec. 32E(1) of the CEA, 1944.

Answer:  No. Though Section 32E(1) does not refer to Rule 12 of the C.E. Rules under which ER1/ER3 returns are prescribed, since the said returns contain details of excisable goods manufactured, cleared and duty paid in the prescribed manner, the said return can be deemed to be the ‘return’ referred to in Section 32E(1). Therefore, even if the views of the counsels that clause (a) of the first proviso to Section 32E(1) lays down for filing of returns in the prescribed manner are to be accepted, then too as per Rule 12 of the Central Excise Rules, 2002, ‘returns’ are to be filed by an assessee on a monthly/quarterly basis. There is no provision for filing of these ‘returns’ in a consolidated manner covering more than one month. Though there is no specific bar against filing of belated returns relating to a particular month, there is no provision for consolidating the returns for any number of months. But going by the earlier stated view that the said Section 32E(1) only refers to mention of the duty paid in the prescribed manner in the return, the Bench observes that if the applicant is to file a consolidated return belatedly without ECC Number, and covering more than one month, such return cannot, naturally, contain the details of any duty paid in the prescribed manner, as no duty would have been paid at nil till then. Further, if the assessee is to file a consolidated return before filing an application or along with the application, there would be questions even on the details of production and clearances shown therein. If the applicant is to furnish the quantum, which is to be reflected in the application for settlement, there will be no additional duty liability disclosure in the said settlement application over and above that in the consolidated return. He cannot also show at the belated stage any ad hoc quantum of production and clearances merely to be able to show extra disclosure in the application form, as the said ad hoc disclosure would not be truthful at that stage. As a result, a consolidated return filed just before filing the application or along with the application by a person, not registered with Central Excise and not having ECC Code Number, cannot be considered as satisfying the requirement of having filed returns as laid down in Clause (a) of the first proviso to Section 32E(1) of the Central Excise Act, 1944.

(c) Can returns filed after obtaining ECC Code, but for the period prior to obtaining such Code Number, be treated as valid returns as per Sec. 32E(1) of the Central Excise Act, 1944.

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