Raids On Small Units Reveal Massive Duty Evasion
Large-scale evasion of duty by small-scale industries (SSIs) has come to light during raids conducted by the anti-evasion wing of central excise. The units were misusing the facilities provided under the SSI category.
Revenue department sources said the small scale industries were claiming that their annual clearance was below Rs 30 lakh to evade duty. They did not have a central excise registration number, despite selling a branded product.
Besides, they were also indulging in issue of fake bills, and manufacturing and sale of products not mentioned in their account books.
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Raids on over 200 small scale industries in recent months have indicated malpractice and evasion of duty in manufacture of pressure cookers, power transmission cables, paints, refrigerators, chewing tobacco and voltage stabilisers.
The total duty evaded is put at over Rs 60 crore.
If the annual clearance of an SSI is below Rs 30 lakh, it does not have to pay excise duty. A unit with annual clearance above this level has to obtain excise registration and pay excise duty.
Officials say that if an SSI is found to be evading duty, exemptions provided to it under the SSI scheme should be withdrawn.
The enforcing agencies should be given more teeth, as recommended by the Abid Hussain Committee report on SSIs, said a revenue department official.
Excise officials would face an additional burden now that the government has raised the limit on investment in plant and machinery to Rs 3 crore for a unit to qualify for the SSI status, said the official.
In one case, the Delhi excise officials seized documents showing manufacturers using fake sales tax and excise registration numbers, besides fake bills. It was found that the addresses provided were fictitious.
Besides, most of the clearances from the erring units was not being documented.
In the case of clandestine clearance of power transmission cables, it was found that Gautam Cable Industries had suppressed its production and clearances figures by issuing fake invoices. One of the promoters of the firm, Anil Kumar, has been arrested by the excise officials. It was found later that the firm had claimed excise duty from its customers.
In the case of pressure cookers with the brand name