MANU/EXCR/0005/2016

Ministry : Ministry of Finance

Department/Board : CBEC Excise

Circular No. : 1018/6/2016-CX

Date : 29.02.2016

Notification/ Circulars Referred : Circular No. 1010/17/2015-CX dated 23.10.2015 MANU/EXCR/0017/2015

Citing Reference:
Circular No. 1010/17/2015-CX dated 23.10.2015 MANU/EXCR/0017/2015  Referred

To,

Principal Chief Commissioners/Chief Commissioners of Central Excise (All),
Principal Chief Commissioners/Chief Commissioners of Central Excise & Service Tax (All),
Principal Commissioner of Central Excise, Service Tax (All),
Web-master, CBEC

Sir/Madam,

Withdrawal from prosecution in Central Excise cases older than 15 years involving duty less than rupees five lakhs.- reg.

CAG submitted its report regarding administration of prosecution and penalty in Central Excise and Service Tax wherein regarding withdrawal of old cases of prosecution, it noted that "though the discretion to allow withdrawal of prosecution ultimately rests with the Court, it is the department's responsibility to ensure periodic monitoring of the status of long pending cases as to ensure that cases which in the opinion of the department merit withdrawal are being brought to the notice of the Court alongwith all supporting facts at the proper time in terms of Sections 257 and 321 of CrPC 1973."

2. The issue has been examined. The present limit for arrest and prosecution in Central Excise cases is Rupees one crore which was made effective vide Circular No. 1010/17/2015-CX dated 23.10.2015. Earlier, the limit for launching prosecution was Rs.25 Lakhs, which came into effect vide letter F.No. 208/31/97-CX6 dated 04.04.1994. Taking into consideration this increase in the limit for prosecution over a period of time, expenditure involved in continuing with old prosecution and equivalent value of the present threshold limit of rupees one crore in the past, it was decided to collect information on prosecution pending in courts for more than fifteen years where the duty involved is less than rupees five lakhs. On the basis of the reports received, it was found that there are 288 cases older than fifteen years, involving duty of rupees five lakh or less. In these 288 cases, the total amount of duty evasion involved was found to be Rs.2.31 crore, which comes to an average of Rs. 80,000/- per case.