Circular No. 382/15/98-CX dated 19/3/98 Subject: Time-limit for finalising provisional assessments

I am directed to say that the Public Accounts Committee of the 11th Lok Sabha in 14th Report (1996-97) have gone through the problem of pendency of provisional assessment cases in Central Excise and have made recommendations, inter-alia, making specific provisions prescribing time- limit for finalisation of provisional assessment cases. They have also expressed concern that in many cases in the past, the provisional assessments were made without taking requisite bonds with securities or in many cases the bonds were not. enforced or in yet other cases, the bank guarantees were not renewed. In this regard, they have recommended for strict monitoring, ensuring adherence to instructions and in case of failures on the part of the field officers, to fix responsibilities. These recommendations have been considered by the Government. The legislative changes may require detailed examination. In the meanwhile, the following instructions should be followed scrupulously:

(1) Ail cases of provisional assessment must be finalised within a period of 6 months from the date of issue of the order of provisional assessment.

(2) In case provisional assessment cannot be finalised within a period of 6 months, an extension of another 6 months can be granted by the Commissioner.

(3) Where assessment cannot be finalised within a period of aforesaid one year, a further extension can be granted by the Chief Commissioner for a period as he may find reasonable.

(4) The Chief Commissioner can grant subsequent extensions depending on the merit of the case.

(5) At the time of granting extensions, the Commissioner or the Chief Commissioner, as the case may be, will satisfy himself that there are sufficient reasons for granting extensions and will also monitor such cases.

(6) The Officers issuing orders for provisional assessments or granting extensions/ must ensure that sufficient efforts were made to make available/obtain information for want of which the assessments were made provisional. The officers will also ensure that all the clearances under provisional assessments are covered by sufficient bond backed by proper security. The validity of securities must be examined at the time of granting extensions and should be ensured that such securities are valid for the entire period for which extension is granted.

(7) The concerned Range Officers as well as Assistant Commissioners will ensure renewal of bank guarantees and in case the assessee fails to comply with the directions for renewal, strict action may be taken against them in consultation with the Senior Officers, including refusal of clearances under provisional assessments.

(8) As soon as the assessments are finalised, necessary adjustments should be made within a period of 15 days and in case of any delay on the part of the assessees, the bond/securities must be enforced/encashed to safeguard the revenue.

2. Circular No. 288/4/97-CX dated 14.1.97, which contains the detailed procedure on provisional assessments, stands modified to the above extent.

Sd/
(P.K. Sinha)
Under Secretary (CX.6)

F.No. 224/4/96-CX.6(Pt.)

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