With the number of pending cases on non-payment or short-payment of
excise duty rising in all sectors including the pharmaceuticals, the
Finance Ministry has launched a special drive for adjudication of show
cause notices issued to the manufacturers.
A special cell has
been created in the Directorate of General of Inspections in the Customs
and Excise Department to monitor pending cases in the pharmaceutical
sector and has launched an intensive drive to recover the arrears,
sources said.
As per a preliminary scrutiny, it was found that at
least 220 cases of adjudication of show cause notices issued to
manufacturers of pharmaceutical products by 82 commissionerates are
pending. The cases, pending for over a year, involved a total revenue of
Rs. 26.92 crore.
Thirty per cent
of the cases, constituting 42 per cent of the total revenue involved,
were more than five years old. Further, 16 per cent of the cases,
constituting eight per cent of the total revenue involved, were more
than three years but less than five years old, sources said.
Short
payment/non-payment of duty on any excisable goods is to be recovered
by issuing a Show Cause Notice (SCN) under section 11A of Central Excise
Act, 1944, to be followed up with adjudication and recovery
proceedings. The period of limitation for issue of SCN is one year in
normal cases and five years in cases of non/short levy due to fraud,
collusion, etc. The SCN has to be adjudicated within six months in the
former case and within one year in the latter case, as per the rules.
However,
the cases have been pending for years either due to the laxity on the
part of the authorities or some other reasons. Hence the drive is now
launched to track down the pending cases, especially those more than
five years old. The special cell is learnt to be issuing orders to the
respective commissioners to investigate the reasons of long pendency,
sources said.
Citing a typical case of pendency, sources said
though three show cause notices were sent by Surat II commissionerate to
a leading pharma company under its jurisdiction during 1996 and 1997
demanding duty and penalty of Rs. 19.79 lakh, the cases were still pending. As per the rules, it had to be adjudicated within six months of sending the notice.