Suppression of Production - Detection Techniques Central Excise

TOWARDS PERFECTION IN PERFORMANCE

For Central Excise Anti-evasion Officers:-

To detect under valuation / Suppression of Production:

Preparations before operation:

  • Please gather MO Circulars, if any, and a few Judgements / Decisions decided in favour of the Revenue relevant to the commodity / evasion.
  • Please gather data pertaining to the commodity(ies) where evasion is suspected viz. Identifying the raw material(s) consumption of which could help in ascertaining / arriving at the end product, source from where procured, the normal price range prevailing in the market for the particular specification/variety/grade/brand and how brought to the factory.
  • Please gather the address of Corporate Office etc. where accounts are maintained / kept - if situated outside jurisdiction to enlist assistances therefrom in advance.
  • Please gather the shift timings for workers / office timings of staff including weekly holidays etc.

Start up at site:

  • It would be a better strategy to leave one officer at the Gate Office till the remaining officers take stock of the situation and leader of the party charts the next course of action.
  • As a safety precaution, please obtain the land line and mobile phone No. of the person in charge of the factory/premises as well as the person who deals with taxation matters. This may be sent preferably by FAX or at least by SMS to the next senior officer of the department.
  • Please ask the concerned person whether stock of finished product and raw materials were arrived at and entered in any register at the close of the previous day. At least there should be basic documents based on which the stock could be arrived at.
  • In case these registers / documents are not readily made available for verification, it could be construed that there is possibility of fraud. A brief letter to the effect that these records could not be provided for verification by officers may be obtained from the person handling the subject.

Operation:

  • Action has to be taken to ascertain the available finished products / major raw materials lying in the factory / premises. If large factory, initially test check may be conducted.
  • In / Out passes to be got collected by the officer left at the Gate Office. Correctness of the quantity / description of the last arrived / removed items need to be verified first. If any deficiency noticed, immediate action has to be taken to intercept the concerned vehicle to proceed further.
  • A couple of recent purchase documents of major raw materais consumption of which could be correlated to the finished procuts may be verified telephonically with the supplier.
  • Similarly, a couple of recent clearance documents to be taken up for telephonic verification of their correctness at the receiving end.

When it becomes apparent that any seizure to be made or mahazar to be drawn, it would be a better suggestion to request somebody available in the premises who is not in the rolls of the factory/premises to witness the proceedings. The witness should be briefed of the check already done till that time and the remaining proceedings should be completed in their active presence within the shortest possible time.

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