Circular No.296/12/97-CX Dated l7/2/97
Subject: Central Excise-Rules 173(2), 223B-and224 of the Central Excise Rules, 1944
Precautions at Budget,1997-98 1nstructions
I am directed to say that the Annual Budget of the Central Government for the
Financial Year 1997-98 is likely to be presented to Parliament on the 28th February,
1997.
2. The procedural restriction envisaged in sub-rule (2) and 2(A) of rule 224, read
with sub-rule (2) of rule 173G of the Central Excise Rules, 1944, regarding removal of
excisable goods after 6 P.M. on the day preceding the Budget Day, should be strictly
enforced on all assessees, including those working under Self Removal Procedure. It is
once again reiterated that the schemes of Record Based Control and Production Based
Control are comprised in Self Removal Procedure. Therefore, instructions contained in
Chapter 7 of the Self Removal Procedure Handbook (Corrected) should be scrupulously
followed. These instructions should be impressed upon the field staff so that they are
thoroughly familiar with them for their implementation. Assessees should be made aware
of the fact that after 6 P.M. on the day preceding the Budget Day and also on the
Budget Day, the Self Removal Procedure remains suspended and that they are required to
discharge certain obligations and observe some of the formalities.
3. You should make arrangements well in time to designate an officer as "proper
officer" in respect of a factory or a group of factories so that he is in a position
to receive
i) advance applications for clearance on Budget Day which are required to be
filled before 5 P.M. on the working day immediately preceding the Budget Day i.e.,
27.2.1997.
ii) intimations regarding particulars of last AR I / Invoice in the prescribed form on
the day preceding the Budget Day i.e., 27.2.1997 and to send these to the Assessment
Range /Divisional Office that very day along with ARI applications, received in
advance, for clearances on Budget Day.
iii) to supervise removals, countersign the invoice and make entries in PLA on the
Budget Day itself.
4. As an Anti-Evasion measure, you may select about 10% of the units depending
upon the commodity manufactured and reputation of the asscssee and depute suitable
"proper officers" for causing verification of stocks of such factories at 5.00 P.M. on
the Budget Day. The officers may be advised to send the results of such verification
immediately by name to the Range and the Divisional Officers.
5. In addition to the above restrictions, attention is also invited to the provisions
contained in sub-rule (1) of rule 224 and in rule 173G (2) of the Central Excise
Rules, 1944. Provisions of sub-rule (1) of rule 224 should he-enforced in respect of
removal of any goods after 6.00 P.M. on the day preceding the Budget Day i.e.,
27.2.1997. After 6.00 P.M. on 27.2.1997 no goods can be delivered from a factory or a
warehouse except with the permission of the Commissioner and under such conditions and
on payment of such overtime fees/supervision charges as may be required. All
clearances after 6.00 P.M. on the day preceding the Budget Day, i.e. 27.2.1997 should
be supervised by the proper officer deputed to a factory or a group of factories as
indicated in para 3 above.
6. (i) As required under rule 223B, all the assessees should intimate to the
Superintendent in charge of their Range, with a copy to the proper officer (a) the
number of last invoice issued by them upto 6.00 P.M. on the day preceding the Budget
Day and (b) the closing balance of stock held by them at 6.00 P.M. on that day. The
declaration form for furnishing the above particulars is enclosed. Penal action under
sub rule (2) of rule223B should be taken against those assessees who fail to give such
declaration or furnish wrong information therein.
(ii) The information regarding the last invoice issued and he closing balance of the
stocks held by the assessees at 6.00 P.M. on the day preceding the Budget Day, should
be furnished by hand by the asses-sees in the Range Office in cases where their
factories arc located at the Range Headquarters. Other assessees whose factories or
warehouses are situated away from the Range Headquarters may be given an option to
send the declaration either by hand on 27.2.1997 or through telegram which should be
despatched by them on 27.2.1997. Arrangements should also be made in the Range Office
to issue acknowledgements for all such receipts in case of hand deliveries. In cases
where the information is send through telegrams, the assessee should be advised to
keep with them the receipts of the telegram sent by them so that these are available
for inspection, wherever felt necessary by the proper officer.
(iii) Provisions of rule 223 B may not be invoked in respect of the manufacturers
working under compounded levy scheme. They are already exempt from the provisions of
rule 224.
7. (i) Your attention is invited to the Explanation and the first proviso to sub-
rule (2) of rule 224. A person can file an application even with regard to those goods
which may come into existence at any time after the filling of the application.
However, for acknowledgement (acceptance of the said application for purpose of sub-
rule (2), power have been given to the Commissioner to prescribe the terms,
conditions and limitations, the fulfilment of which will be necessary for the said
acknowledgement/acceptance.
(ii) Application in relation to goods which are not yet in existence may bi." accepted
(acknowledged) in the following situations, namely :-
a) for removal of goods which are utilised within the same factory for further
manufacture, or which are cleared to an adjacent factory, as an act of
continuous process;
b) in respect of factories having round-the clock despatches, for example,
cement factories and major steel plants; their despatches being .dependent
on allotment of railway wagons, carrying capacity of the wagons and the
movement of the loaded wagons by the railways;
c) for petroleum products cleared through pipelines and petroleum products
required for refueling coastal and foreign going vessels and air crafts;
d) in cases where excisable goods cannot be stored for long or are not capable
of being stored;
e) in cases of clearances necessary -to maintain essential services; and
f) in respect of removal for exports.
ii) in the above situations, with regard to goods which are yet to come into
existence as well as goods which are already in existence, it may be difficult for an
assesses to accurately foresee the quantity of goods likely to be removed by him on the
Budget Day for purposes of submitting advance applications of removal on the working
day preceding the Budget Day. In such cases, the Commissioner may permit the assessee
to furnish in advance, a provisional application for removal for the approximate
quantity of goods likely to be removed on the Budget Day. However, such assessee
should furnish on the day following the Budget. Day the final application for removal
of the exact quantity of goods removed.
8. In respect of relaxations granted in terms of para 7 above, a report should be
sent to the Ministry for information indicating the names of the assessees, the names
and quantities of commodities involved and the reasons for granting the relaxations.
9. Rule 224(2A) governs removal after 5.00 P.M. on the Budget Day. Such removals can
take place only with the permission of the Central .Government and after the assessees
have furnished the necessary undertaking etc., as required under this rule, to pay
duty at the enhanced rate if any, that may be applicable to such goods. In the
interest of expeditious grant of such permission in deserving cases, it has been
decided that the Commissioner may grant such permission in the situations referred to
in para 7 above and even in the case of goods that will come into existence after
presentation of the application.
10. Before granting the relaxation as under para 7 and 9 above. Commissioner should
satisfy himself not only as to the bona fides of the case but also see to it whether
it is a deserving case. The power to grant such relaxation should be exercised by the
Commissioner himself. In. the Commissionerates where no regular Commissioner has been
posted and which are under the charge of a Commissioner holding additional charge, the
Additional Commissioner/Deputy Commissioner may grant relaxations in such bona fide
and deserving cases. But relaxations thus granted should be brought to the notice of
the Commissioner concerned and his approval should be immediately taken.
11. In respect of relaxations /permissions granted in terms of para 9 above,
Commissioner should send a report to the Ministry within a week of the presentation of
Budget regarding the relaxation granted by him and obtain the Central Government"s ex-
post-facto approval. The report should, inter-alia, state names of the assessees,
description and quantity of commodities involved, reasons for granting the
relaxations, whether there was any enhancement of the rate of duty and if so, the
details of recovery of the differential duty, and reasons for non-recovery of
differential duty, if any.
12. Please acknowledge the receipt of this letter immediately by return fax/telex.
Sd/-
(P.K. Sinha)
Under Secretary to the Govt. of India
F. No. 216/1/97-CX.6
Enclosure
Declaration of Stock etc. on Pre-Budget Day by manufacturer
working under self removal
procedure
1. Name of the assessee
2. Registration No.
3. Commodity
I/We hereby declare that the serial number of last invoice/invoices issued by me/us
and the balance in hand of the excisable goods manufactured by me/us on the date
*_____________ at 6.00 P.M. was/were as under :-
Name of goods Serial No. of last invoice Closing balance of
with sub-heading excisable goods in
Number stock as per R.G.1
Certified that the particulars given above are correct.
Place ________________ Signature of the assessee
Date ________________ or his authorised agent.
*0ne day prior to the presentation of annual/supplementary budget of the Union
Government
Handed over to Superintendent/Assistant Commissioner of Central Excise on ______________at___________
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