Excise Bill Moots Assessee-Friendly Rules

The Central Excise Bill, 1998, has proposed sweeping changes in the excise regime, including devolution of more power to the excise officers, creation of a stronger audit department and other procedural simplifications to introduce an assessee-friendly tax regime. The Bill, which is scheduled to be discussed by the Board of Central Excise and Customs tomorrow, will be submitted to the finance ministry thereafter. Consequent on its acceptance by the cabinet and clearance by the House, the proposed law would replace the existing Central Excise Act and Rules, 1944.

The Bill envisages a series of administrative reforms which includes empowerment of the central excise officers of the rank of assistant commissioners to solve disputed Modvat cases relating to procedural irregularities. This is aimed at reducing litigation in Modvat cases.

 

According to revenue department officers, 90 per cent of the existing Modvat cases pertain to procedural irregularities and the existing law requires the officer to raise objections in case the assessee fails to comply with the requirements. The assessee would then have to approach the appellate tribunal for proper redressal. The Bill also envisages strengthening the audit department by creating a separate section for this department. "The idea is to involve a two pronged strategy wherein the audit department would be responsible for detection of irregularities in books of account while the Anti-Evasion Directorate would be vested with the enforcement powers", explained a senior revenue officer. The Bill further reiterates that all costs and expenses involving special audits would be borne by the revenue department. At present, such costs are picked up by the respective companies.

It also recognises computerised records as legal documents and states that all such records would be acceptable by the department for scrutiny.

The Bill also delineates a series of procedural simplifications which include lifting of restriction on movement of goods from one warehouse to another and also extension of warehousing period and procedures relating to export oriented units and exports. All provisions relating to mandatory penalties and confiscation have been clubbed under two sections in the new Bill. It has also relaxed most of the restrictions on pre-Budget day and Budget day movement of goods. The new Bill has incorporated major deletions from the existing Act in order to facilitate the excise payment procedures by existing industries. For instance, Rules 83 to 92 of the central excise rules which deals with special procedures for the sugar industry has been deleted.