3 Commissioners To Clear Backlog Of Excise Evasion Cases

As part of a revenue collection drive, the government has appointed three new commissioners under the directorate general (anti-evasion) to dispose of pending cases involving excise duty evasion of Rs 700 crore in the next three months.

According to revenue officials, the aim of the Central Board for Excise & Customs (CBEC) is to get the backlog of cases adjudicated as soon so possible so that duty recovery can be started by the end of the current financial year.

Several high-profile companies, which have been escaping the excise duty net following inordinate delays in adjudication, are expected to bear the brunt of the governments new drive to expedite matters.

A notification was issued on August 26 announcing the appointment of the new commissioners in Mumbai, Delhi and Chennai who will adjudicate exclusive cases with the DGAE, baring those pertaining to cigarettes.

The cases to be adjudicated over the next three months involve most companies in the tyre industry whose accumulated duty evasion has been about Rs 100 crore. The cases involve most of the big companies like Apollo, Ceat, MRF, Goodyear and Modi Tyre. Most of these tyrefirms had been issued showcause notices last year but their cases had been pending with the DGAE following the directorates decision to appoint a common adjudicator for all the cases since theywere booked under the same offence: passing off passenger car and commercial vehicle tyres as tractor tyres to reduce duty liability.

Other companies include Maruti Udyog, which had been issue a showcause notice in 1990 on charges of excise duty evasion to the tune of Rs 10.60 crore, Shehnaz Hussains company, which had been issued a showcause notice for Rs 14 crore, Liberty Shoes, which had been issued a showcause notice last year for Rs 5.3 crore of alleged duty evasion,

New Tobacco Company, issued showcause notice for Rs 36.52 crore, and J K Industries, served showcause for Rs 15.88 crore.

CBEC has set a target of three months that is up to November this year within which the newly appointed commissioners are expected to complete adjudication of the 500-odd cases involving duty evasion amounting to Rs 700 crore. Besides appointing new commissioners, the powers of additional and deputy commissioners have been enhanced under a new notification issued earlier this month.

Under the new rules, the deputy commissioners can adjudicate cases up to Rs 10 lakh and additional commissioners up to Rs 20 lakh. Besides, deputy commissioners can also adjudicate cases involving suppression of duty and fraud.

Apart from these, CBEC had recently announced an expansion of the central excise network by extending the commissionerates to 59 from the existing 31 in order to expedite the hearing of cases. DGAEs performance with regard to adjudication has been below average, with 51 cases adjudicated last year and 33 cases the previous year. At present, the directorate has 510 cases pending with it.

Major cases pending with DGAE

(Figures in Rs crore)

Company Amount of duty involved

Maruti Udyog 10.60

Carrier Aircon 14.00

Shehnaz Hussain 14.00

LML (Kanpur) 8.45

Modi Tyre 8.69

Apollo Tyre 19.00

MRF Ltd 16.50

J K Industries 15.88

Ceat Ltd 17.83