Customs sets threshold for prosecution in baggage mis-declaration at Rs20 lakh
23 Oct 2015
The Central Board of Excise and Customs (CBEC) has revised the limits for arrest and prosecution in cases involving outright smuggling or mis-declaration of baggage substantially upward from Rs5 lakh to Rs20 lakh.
Persons involved in serious offences of tax evasion are liable for arrest and prosecution under the Central Excise Act, 1994, Finance Act, 1994 dealing with Service Tax and Customs Act, 1962.
CBEC issues instructions from time to time prescribing the procedures, safeguards and threshold limits above which these powers are to be exercised with discretion and responsibility.
CBEC today issued fresh instructions rescinding the past circulars and consolidating them at one place with following objectives.
The monetary limits for arrest and prosecution have been revised substantially upwards to ensure that these powers are not used against small and medium businesses.
Thus the 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 Rs1 crore from Rs25 lakh and Rs10 lakh, respectively.
In case of evasion of tax under the Customs Act, the limits have been revised to Rs1 crore from Rs10 lakh in case of evasion of tax by wrongful availment of exemption or duty drawback. Similar revisions regarding value of goods have been made regarding appraisement of tax during import or export.
In cases of outright smuggling or mis-declaration of baggage, the limits regarding value of offending goods have been revised from Rs5 lakh to Rs20 lakh.
However, there will be no lower limit for arrest and prosecution in cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species.
The procedure to be followed for arrest and sanction of prosecution has been revised and specified with adequate safeguards in these instructions to ensure that only in cases of serious nature above the revised thresholds, where there is strong prima-facie evidence, these powers are exercised.