In a bid to reduce harassment of overseas travellers, the government today eased the penal provisions by raising the monetary limits for arrests and prosecution of offenders under acts including Central Excise, Customs and Service Tax.
Also, the procedure for arrest and sanction of prosecution has been revised and specified with adequate safeguards to ensure that these powers are exercised only in serious cases above the revised thresholds, and not used against small and medium businesses.
The Finance Ministry said limits in case of offence of evasion of tax or wrongful utilisation of input tax credit in case of Central Excise and Service tax have been revised to Rs 1 crore from Rs 25 lakh and Rs 10 lakh, respectively.
In case of an evasion of tax under the Customs Act, the limits have been revised to Rs 1 crore from Rs 10 lakh in case of evasion of tax by wrongful availment of exemption or duty drawback.
Similar, revisions regarding value of goods have been carried out with regard to taxes concerning import or export.
In a notification, the Central Board of Excise and Customs (CBEC) said in case of “habitual evaders”, notwithstanding the Rs 1 crore limit, prosecution can be launched in the case of a company/ assessee habitually evading tax/duty or misusing CENVAT credit facility.
A company/assessee would be treated as habitually evading tax/duty, if it has has been involved in three or more cases of confirmed demand of excise duty or service tax or misuse of CENVAT credit involving fraud, suppression of facts etc in past five years such that the total duty or tax evaded or total credit misused is equal to or more than Rs 1 crore, the notification said.