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Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Circular No. 996/3/2015-CX
dated the 28th Feb., 2015
To
Principal Chief Commissioners/Chief Commissioners of Central Excise (All),
Principal Chief Commissioners/Chief Commissioners of Service Tax (All),
Principal Chief Commissioners/Chief Commissioners of Customs (All),
Directorate of Revenue Intelligence,
Directorate General of Central Excise Intelligence,
Web-master, CBEC.
Madam/Sir,
Sub: Recovery of arrears in installments and amendment of Garnishee
Notice – reg. Your attention is invited to provisions of sub-section (2) of
section 11 of the Central Excise
Act, 1944. Central Excise Officers are empowered under this provision to
issue an order to any other person from whom money is due to such person from
whom recovery of arrears
is required to be made. Such notice for recovery to the other person is
generally referred as Garnishee Notice. Similar provisions are contained in
section 142(1)(d) of the Customs Act, 1962 and section 87(b) of the Finance Act,
1994 . It has been brought to the notice of the Board that clarification is
required regarding powers of recovery officer to amend or
withdraw the Garnishee Notice.
- The issue has been examined. There are occasions when the assessee
comes forward for
payment of arrears, once Garnishee Notice are issued to the persons from
whom money is
due to the assessee. There would be a practical need to amend or withdraw
the Garnishee
Notice issued in such situations. Further, section 21 of the General Clauses
Act, 1897 clearly
provides that power to issue an order includes power to add, amend, vary or
rescind the
order. Furthermore, an interpretation that Garnishee Notice cannot be
amended or
rescinded would make the provisions unworkable. Such interpretations should
be avoided
in law.
- In view of the above, it is hereby clarified that recovery
officers do have powers to add,
amend, vary or rescind any Garnishee Notice issued. However, the interest of
revenue has
to be suitably safeguarded.
- Attention is also invited to the issue of recovery of arrears in
installments. On Central
Excise side, three circulars/instructionshave been issued in the past viz.
instructions from F. No. 289/10/91-CX.9 dt 18-3-1991, Circular no. 32/32/94/CX dt. 11-4-94 and
Circular no.
208/42/96-CX dt. 2-5-1996. There is a need to provide uniform instructions
regarding
facility to pay arrears in installments in Central Excise, Service Tax and
Customs.It has
therefore been decided that in supersession of all earlier circulars and
instructions,
following instructions shall be followed hereafter to allow payment of
arrears in
installments under the Central Excise Act, 1944, Chapter V of the Finance
Act, 1994 (for
Service tax) and the Customs Act, 1962.
- It has been decided by the Board to allow recovery of arrears of taxes,
interest and
penalty in installments. The power to allow such payment in monthly
installments shall be
discretionary and shall be exercised by the Commissioners for granting
sanction to pay
arrears in installments upto a maximum of 24monthly installments and by the
Chief
Commissioners for granting sanction to pay arrears in monthly installments
greater than 24
and upto a maximum of 36monthly installments.
- The facility to pay arrears in installments shall generally be granted to
companies which
show a reasonable cause for payment of arrears in installments such as the
company being
under temporary financial distress. Approval to pay in installments and the
number of
installments should be fixed such that an appropriate balance between
recovery of arrears
and survival of business is maintained taking into consideration the overall
financial
situation of the company, its assets, liabilities, income and expenses.
Frequent defaulters
may not be allowed payment of arrears in installments. The decision shall be
taken on a
case to case basis taking into consideration the facts of the case, interest
of the revenue,
track record of the company its financial situation.
- The application for
allowing payment of arrears shall be made to the jurisdictional
Commissioner giving full justification for the same. The approval of the
application shouldbe
in writing with due acknowledgment taken on record.The permission should
clearly identify
the number of installment and the month from which the payments of
installments should
begin and should also clearly stipulate that in case of default in payment
of installments, the
permission shall be withdrawn and action shall be taken for recovery of
arrears.
- For this purpose, Commissioner shall also exercise the power to cancel
the permission to
pay arrears in installments. Cancellation should be resorted to in cases of
default in the
payment of installments or when the company is becoming financial unviable
and there is
likelihood of winding up of business. After cancelling the permission to pay
in installments,
action should be taken forthwith for recovery of arrears.
- Any difficulty in implementing the circular may be brought to the notice
of the Board.
Hindi version would follow.
(ROHAN)
Under Secretary to the Government of India
F. No. 207/02/2015-CX.6
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