Govt eases penal provisions for customs, excise offences

New Delhi: In a bid to reduce harassment of overseas travellers, the government today eased the penal provisions by raising fourfold to Rs 20 lakh the limit of undeclared or mis-declared baggage that will attract arrest or prosecution.

Presently, overseas travellers can pay a fine for any undeclared or misdeclared baggage of a value up to Rs 5 lakh. Any such baggage beyond this limit attracts prosecution or arrest. The government has now raised this limit to Rs 20 lakh.

"In cases of outright smuggling or mis-declaration of baggage, the limits regarding value of offending goods have been revised from Rs 5 lakh to Rs 20 lakh," a Finance Ministry statement said.

Similarly, the monetary limits for arrests and prosecution have been raised for offenders under other acts including Central Excise, Customs and Service Tax.

However, there will be no limit for arrest and prosecution in the cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species.

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.

"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," the statement added.

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.

"As in the past, there shall be no lower limit for arrest and prosecution in the cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species," it said.

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.

The Finance Ministry said: "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."