Part- VI-SCRUTINY OF ASSESSMENT
1. Introduction
1.1 In view of the self-assessment procedure wherein the assessee himself assesses the duty liability the responsibility of the departmental officers is to scrutinise the assessment made for verification of its correctness.
2. Scrutiny of Assessment
2.1 The Central Excise Officers having jurisdiction over the factory/premises of the assessee is responsible for the scrutiny of returns. For this purpose, the said officer(s) may require the relevant documents. Though the statutory records have been dispensed with, the assessee is required to maintain private records containing all requisite information as required by different rules and also provide a list of all records maintained by him to the Range Office. The Officer responsible for scrutiny of return may require the invoices issued by the assessee, Daily Stock Account, Cenvat Account, cash ledgers, Ledger of all receipts and payments and the source documents etc. It shall be compulsory for the assessee to provide the necessary records upon receiving the "Requisition Letter’ from the Range Officer or other superior officers. He shall hand over the records under proper acknowledgement and receive them back under proper acknowledgement too. The Officer scrutinizing return may require presence of the assessee or his authorised person at mutually convenient time, for seeking certain information relating to the records.
2.2 The Superintendent of Central Excise in-charge of the Range Office, with assistance of the Inspectors in-charge of the factory of an assessee, will scrutinise all the returns. They shall, in selected cases, call all connecting documents including invoices and the records and scrutinise the correctness of assessment.
2.3 The Deputy/Assistant Commissioner of Central Excise will scrutinise the returns of the units, which pay duty-exceeding rupees one crore but less than Rs.5 crores from PLA per annum every six months. They shall requisition all connecting documents including invoices and the records and scrutinise the correctness of assessment.
| (i) | 2.4 The Additional/Joint Commissioner of Central Excise will scrutinise the returns of the units which pay duty Rs. 5 crores or more from PLA per annum every six months. They shall requisition all connecting documents including invoices and the records and scrutinise the correctness of assessment. Classification and rate of duty: For determining the rate of duty, classification is prerequisite. Classification means the appropriate classification code which is applicable to the excisable goods in question under the First Schedule to Central Excise Tariff Act, 1985 (5 of 1986). There are Section Notes and Chapter Notes, in the Tariff which are helpful in determining the appropriate classification. In case of difficulties, there are "Interpretative Rules" in the said Act. There is large number of judicial pronouncements concerning classification, which have to be applied in relevant case. The said Tariff also prescribes the ‘Tariff Rate of duty’. Some commodities may be subject to ‘special duty of excise’ prescribed under the Second Schedule to Central Excise Tariff Act, 1985. Thus, a reference to the Second Schedule to Central Excise Tariff Act, 1985 should also be made to see if the goods are covered there. However, duty chargeable is the ‘effective rate’. Thus, if any exemption is available to any commodity, the same may be ascertained and the applicable rate of duty should be determined. If such exemption is subject to certain conditions, it shall be necessary to follow those conditions. Certain goods may also be subject to duty under some other Acts such as Additional Duty of Excise (Goods of Special Importance) Act, 1957 or certain Cess. The manufacturer or owner of goods in a warehouse is liable to pay all such applicable duties on removal of excisable goods | |
| (ii) | Valuation: Where rate of duty is dependent on value of the goods (ad valorem duty), value has to be determined in accordance with the provisions of Central Excise Act, 1944, as follows: | |
| Value under section 4 including transaction value under this section | ||
| Value based on retail sale price under section 4A. | ||
| Tariff value fixed under Section 3. | ||
| (iii) | Quantity Removed: Where duty is on value, the total value is determined by multiplying unit value with the total quantity. The unit quantity of goods are also required in cases where duty is charged at specific rate. | |
3. Self Assessment
3.1 As per rule 6 of the said Rules a Central Excise assessee is himself (self-assessment) required to determine duty liability at the time of removal of excisable goods and discharge the same. In other words, the assessee should apply correct classification and value (where duty is ad valorem) on the quantities being removed by him and indicate the same in the invoice (except assessee manufacturing cigarettes, in which case the Superintendent or Inspector of Central Excise has to assess the duty payable before removal by the assessee).
3.2 Assessee is also required to assess his return for a month and submit to the Range Office having jurisdiction over his factory within ten days of the succeeding month. They are also requited to submit ‘CENVAT Return’ for a month within five days of the succeeding month. A manufacturer availing exemption notification for Small Scale Industries is permitted to file his return of quarterly basis. Their returns have to be filed in the following frequency: -
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Return for the quarter (for months) |
By 20th day of the month |
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First quarter – April, May, June |
July |