In a last-ditch attempt to shore up faltering excise duty collection, the Central Bureau of Excise and Customs (CBEC) has empowered chief commissioners to act tough on manufacturers and dealers evading duty payment and abusing duty credit facilities.

The new provisions, notified on March 21, expose producers evading excise payments to the threat of losing Cenvat credit facility and the monthly payment option. They, instead, will be allowed to clear consignments out of factories or warehouses only on production of duty payment receipts countersigned by an inspector or Superintendent. Besides, companies that are found to have evaded duty will have to keep detailed records of inventory on which Cenvat credit has not been taken.

The move comes after the indirect tax administration recently reviewed revenue collection trends. Central Excise collection has contracted by over 4% in the first nine months of the current fiscal, weighing heavily on the overall tax revenue collections.

The proposed restrictions will be imposed on producers for six months for the first offence and for a year on subsequent instances. The Board said that chief commissioners will give a hearing to companies accused of duty evasion before any action is initiated against them.

These actions will be taken in cases of moving goods out of factories without duty payment invoices, under-invoicing, using the Cenvat credit facility without support of receipt of goods based on which credit is taken, issuing excise invoices without delivery of goods and using documents that are not genuine, the Board said in the notification.

The Central Excise Amendment Rules, 2014 also allow chief commissioners to suspend the registration of first- and second-stage dealers for specified violations. (Financial Express)