The tax structure has seen a plethora of changes over the past years including rationalization of tariffs and easing of procedures. Despite reduction in duties over the last decade, evasion of central excise duties is still prevalent. Various Modus Operandi are adopted by manufacturers and service providers to evade central excise duty and service tax. In those cases where CENVAT is not available to end user, clandestine clearance without payment of duty is the preferred mode of evasion. Instances have come to notice where even the reputed manufacturers indulge in under valuation in case of consumer products or goods meant for mass consumption. Tobacco products such as Guthka and Khaini, attracting high duty structure, have traditionally been highly susceptible to evasion. In a growing economy like ours, use of sophisticated tools and techniques by tax evaders has made the task of detection of evasion even more complicated and challenging.
Analysis of the intelligence and performance reports received by the DGCEI from its Zonal and Regional Units as well as the Central Excise Commissionerates, indicate that the major evasion prone commodities are Iron and Steel, Gutkha / Pan Masala, Khaini, Copper and articles thereof, Cement and pharmaceuticals. Further, the manufacturing units availing area based exemption Notifications were also found to be prone to evasion. CENVAT credit related frauds were also observed wherein only duty paying documents changed hands between the parties for availing irregular and undue CENVAT credit without any movement of goods. Based on an analysis of the major cases (cases involving duty of Rs. 10 lakhs and above) the details of the common modus operandi adopted are as below:
ANTI-EVASION PERFORMANCE OF DGCEI |
