Letter for extension of time for issue of SCN

 Ref. No: CBIC/32/2020                                 Date: 22.09.2020

 

 

To

The Chairman,

CBIC, New Delhi.

 

Sir,

Sub:  Relaxation of Time Limit Under Certain Indirect Tax Laws – requirement of further extension - reg.

 

          Please refer to the Ordinance dated 31/3/2020 on the above subject and subsequent notification dated 27/06/2020 under the same. In terms of the ordinance, time limit for issuing Notices under Central Excise Act, 1944 and Finance Act, 1994, which were due within 31/3/2020, now stands extended to 30/9/2020. We also understand that a bill has already been placed in Parliament to substitute the ordinance with an Act.

 

          Members from all corners of the country are urging upon the Association to request further extension in relaxation of time limit under Central Excise Act, 1944 and Finance Act, 1994 through notification under the ordinance/ Act (as may be applicable) mainly due to the following reasons:

         

1.   The work in the Ranges has been increasing multi-fold in spite of claims of simplification and skewed perception. These can be listed as below:

·         GST filer/non-filer check

·         GSTR 1 vs GSTR 3B mismatch

·         ITC reconciliation

·         Cancellation of Registration

·         Revocation of cancellation verification report including No Due certificate,

·         DGARM reports,

·         Revenue augmentation drive

·         Scrutiny of returns

·         ST3 pending scrutiny

(the above are scheduled Range work)

·         Service Tax verification of Third party information

·         Arrear recovery

·         Audit SCN and para-wise comments

(not Range work per se but loaded)

Recently in many places, even Investigation like - fraud ITC, fraud Registration, Risky exporters verification, etc are also being put on Ranges. Many Ranges are even now issuing a certificate under seal for the assessees who were issued SVLDRS 3 but could not /did not pay the amount under proper link provided but made the payment through general payments (and thus exposing them to remain vulnerable to any future fraud).

 

2.   Due to shortage of staff, in a large number of Ranges, not only the Superintendents, but even Inspectors are holding multiple charges.  Hence the quality of work vastly suffers when the quantity is increased multi-fold.

 

3.   Unlike all other stipulated or non-stipulated work, “verification of third party information”, is fully dependable on quality of data/ information provided by income tax   department and then again on the taxpayers’ cooperation. It would not be wise to issue blind SCNs by relying only on the values from the said data as also already instructed by DG (Systems) vide letter F. No. IV(20)/3/2015- Systems/Pt-I dated 08.07.2019 in r/o ITR-TDS data (registered assessees) wherein it is mentioned “It may be noted that before taking any legal action in this matter, the facts may be properly investigated”. As these assessees are not registered with the Department, in order to obtain their documents/ information (in case not submitted against our communications made) for issuing a justified SCN, search of the assessee’s premises is required under a Search Warrant under Section 67 of the CGST Act, 2017.  In a period of pandemic, the difficulty in indulging in such exercise, in respect of several assesses, with very little manpower at our command, could very well be imagined. 

 

4.   During the ‘lockdown’ and the continuing pandemic period, collecting/ verifying outside data/ information has become very challenging. The acute paucity of manpower and infrastructural support like computers (laptops) and vehicles in ranges only make it more difficult and in any fair assessment, in hundreds of Ranges, either the quality of verification or quantity might be compromised causing loss of potential revenue.

 

5.   Further it is reported that for third party data of 2015-16 (EDW-2), last date is within 01.10.2020 to 24.10.2020 and that the data is not available in many cases due to which a Notice issued for the sake of issuing would become futile and cause unnecessary strain to the Officers and harm to the exchequer.

 

6.   The pandemic has been increasing in spread in various parts of the country.  Our Officers in the field are much exposed to the threats of the virus and assesses also have a reasonable excuse not to respond to our calls, summons etc, during such an unprecedented emergency.  The trade which is also reeling under an economic emergency get irritated when approached for investigations since they feel harassed at such a juncture.  Thus, any   investigation cannot be complete to the satisfaction of the department if hurried for the sake of meeting the deadline for issue of SCNs.

 

Accordingly, we request your good office to initiate and ensure a further extension of the time limit for issuance of notices etc. under Central Excise Act, 1944 and Finance Act, 1994 falling due up to 31/3/2020 (and now extended up to 30/9/2020) and oblige. 

 

On the same lines, extension may kindly be sought in respect of all due dates falling between March 20 to 24th Oct. 20 for all legacy SCNs at least up to March 2021, but for which there will be a heavy pressure on the Officers and the Notices may ultimately fail due to be wanting in details or vital parameters causing the exchequer dear.

 

Thanking You,

Yours truly,

(R. Manimohan)

Secretary General

Copy for kind attention and necessary orders to:

        The Finance Secretary to the GOI, North Block, New Delhi.

 

(R. Manimohan)

Secretary Genera
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