Central Excise Instruction-Authorities to Order Clubbing up of Artificially Split Rebate Claims of Rs. Five Lakhs or more to avoid pre-audit
Excel for
Chartered Accountants
As per CBEC Circular No. 869/07/2008-CX dated 16-05-2008 related to Procedure relating to sanction and post-audit of refund/rebate claims, classify such claims into three categories as under:
|
Rs. 5 lakh or above |
All refund/rebate claims involving an amount of Rs. 5 lakh or above should be subjected to pre-audit at the level of Deputy/Assistant Commissioner (Audit) in the Commissionerate Headquarter Office. In such cases, a suitable Order-in-Original shall be passed by Deputy/Assistant Commissioner of Central Excise. The Orders-in Original passed in this regard shall be subjected to review proceedings by Commissioner as per the provisions of section 35E of the Central Excise Act, 1944 |
|
Above Rs. 50,000/- but less than Rs. 5 lakh |
For refund/rebate claims above Rs. 50,000/- but less than Rs. 5 lakh, Orders-in-Original should be issued by Deputy/Assistant Commissioner. These O-I-Os should be subjected to compulsory post-audit at the level of Deputy/AssistantCommissioner (Audit). The Orders-in-Original shall also be subjected to review as per the provisions of section 35E of the Act. |
|
Upto Rs. 50,000/- |
In cases of refund/rebate claims involving an amount upto Rs. 50,000/-, no Order-in-Original need be passed, if the claim is sanctioned in full. However, in case the sanctioned amount is less than the claimed amount, O-in-O should invariably be issued. These sanction orders may be post-audited on the basis of the random selection by Deputy/Assistant Commissioner (Audit) in such a way that at least 25 percent of the claims are post-audited. As Orders-in-Originals are not being passed in such smaller cases (except when not sanctioned in full), it may not be necessary to subject these sanction orders to review under section 35E |
However, in order to check the practice of spitting up of such refund claims of Rs. five lakhs or more to avoid pre-audit, the following new instructions have been issued.
F.
No.
206/05/2014-CX.B
Government
of
India
Ministry
of
Finance Department
of
Revenue
Central
Board
of
Excise
&
Customs
Dt: 03.11.2014
To
The
Chief
Commissioners
of
Central
Excise
(All)
Sub: Splitting up of rebate claims to avoid pre-audit-reg.
Instances have been brought to the notice of the Board where the assesses have submitted rebate claims by splitting up the amounts of rebate claims so as to keep each individual claim below Rs. 5 lakhs to avoid pre audit.
2. Rebate sanctioning authorities may note that they may order pre audit by clubbing such claims where such claims are artificially split and there is need for pre-audit. Such exercise of powers shall be discretionary and used more as an exception than rule.
3. Above directions may be brought to the notice of the officers competent to sanction rebate claims in the field. Hindi version will follow. Difficulty, if any, in the implementation of the instruction may be brought to the notice of the Board
Yours faithfully,
(Rohan)
OSD
(CX.6)
Copy to: Members of the Board