Chennai Excise Intelligence Claims Recovers Rs. 76.88 crs, Detects Another Rs. 362 crs

[Ref: DGCEI, Chennai Press Note dated 9^th January 2013]

During the current Financial Year 2012-13 (upto December 2012),The Directorate General Of Central Excise Intelligence, Chennai Zonal Unit has detected Central Excise duty & Service Tax evasion to the tune of Rs.362.45 Crores and has recovered an amount of Rs. 76.88 Crores on the spot voluntarily from various evaders of Central Excise duty as well as Service Tax. The on-the-spot recovery during the corresponding period in the last Financial Year was about Rs.65.49 Crores and thus the performance during the current Financial Year is up by 17%. During the first three quarters of this Financial Year, the Directorate has come across various types of modus operandi which were adopted by the evaders of central excise duty and service tax.

2. In the Central Excise side, cases were booked against the manufacturers of Iron & Steel products who were suppressing the production and clandestinely removing their dutiable finished goods without payment of duty. Cases where CENVAT credit was taken on the basis of bogus invoices which have been obtained from various firms /registered dealers without actually receiving the corresponding goods /raw materials were also detected. Clearing & Forwarding agents of a reputed watch manufacturer were found to be altering the Maximum Retail Price on watches, subsequent to their clearance from factory, resulting in evasion of central excise duty. Evasion of duty on corrugated boxes made from paper/paperboard by setting up of various dummy units to irregularly avail SSI exemption was also detected.

3. In the Service Tax side,cases were booked against the assesses who are providing Airport Services,Works Contract Services, Banking and Financial Services, Intellectual Property services, Scientific and Technical Consultancy services, Commercial Construction services, Outdoor Catering services, Commercial Coaching services, Business Support / Auxiliary Services,Erection,Installtaion & Commissioning services, Mining Services, Manpower Supply Services, Renting of Immovable Property Services. There have also been cases against public sector undertakings booked by this Directorate. It was noticed in a lot of cases where significant amount of Service Tax have been charged and collected by the assesses but same has not been deposited with the government exchequer.

4. Emphasis was given to finalizing investigations to bring certainty to the issue involved which resulted in the issuance of 128 show cause notices involving demand of Rs.428 Crores in this year so far.