Annexure-i undertaking by the informer



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Annexure-I

UNDERTAKING BY THE INFORMER

I am aware that the extent of reward depends on the precision of the information furnished by me; that the provision of section 82 of the Indian Penal Code have been read by and/or explained to me; that I am aware that if the information furnished by me is found to be false, I would be liable to prosecution; that I accept that the Government is under no obligation to enter into any correspondence regarding details of seizure made etc., if any, and that the payment of reward is ex-gratia in the absolute discretion of the authority competent to grant reward. It is clear to me that the Government is under no obligation to grant/sanction the maximum admissible reward upto 20% of the net sale proceeds of the seized/confiscated goods, (if any) and/or the amount of additional duty/penalty/redemption fine recovered and that the amount of reward to be sanctioned to me will purely depend on the specificity and accuracy of the information and other dependant factors as per the reward instructions dated 20th June, 2001.


Left thumb impression or signature of the informer

Annexure –II
AE-1 INFORMATION REPORT
AE-I Number…… . Date:………………..
1. Source & Date of Information :
2. Subject Report: :



  1. Name of the assessee :




  1. Name of the jurisdictional Division & :

Commissionerate


  1. Modus Operandi :




  1. Estimated amount of duty evasion :




  1. Value of the offending goods :

3. Information


4. Proposed action with details of premises :

to be covered

5. For working out, the information is :

forwarded to

6. Grading (must be completed by reporting :

officer
Source Information Reporting officer


Completely reliable 1. Confirmed

Usually reliable 2. Probably true

Fairly reliable 3. Possibly true

Not usually reliable 4. Doubtfully true

Unreliable 5. Improbable report

Reliably unknown 6. Truth can’t be judged

____________________________________________________________________

Time : Signature of Reporting officer with date


Place :

Annexure –III
WARRANT OF AUTHORISATION FOR SEARCH
To
Shri……………………………..
………………………………
……………………………
Whereas an information has been laid before me which is considered to be reliable and due enquiry having been made thereupon, I have reason to believe that goods liable to confiscation and documents relevant to the proceedings under the Central Excises Act, 1944 are secreted in the business / residential premises of

……………………………………………………………………………………………………………………………………………………………………………………

Now, therefore, in exercise of the powers conferred upon me under Section 105 of the Customs Act, 1962, made applicable to Central Excise vide Government of India (Ministry of Finance) Notification No.68/63-CE dated 4.5.1963 (as amended), issued under section 12 of the Central Excises Act, 1944, I authorize and require you to search the above premises with such assistance as may be necessary for the said goods or documents and/or any other things relevant to the proceedings, under the said Act, and, if found, to seize and produce the same forthwith before me for further disposal under the Central Excises Act, 1944 and rules made thereunder.

Given under my hand & seal this…………………………………………..day of

……………………..month………………………….200…..

Signature, Name and designation of the issuing authority
Seal of issuing Authority

Annexure – IV
FORM OF SUPURDNAMA

To

The President of India


I/We ……………………………………..S/.o……………………………..of M/s…………………………………………………………………………………………..R/o…………………………………………P.O…………………………Distt…………...do hereby state that I/We have on this…………………………day of…………………..200……………………….received from……………………….of Central Excise…………………………………….the following number of packages containing……………………………………………………………………………

(State the description of the goods)

valued at Rs…………………………in consideration of the sum of Rs……………………..paid by the Central Excise Department.
I/We hereby undertake to keep the said packages with me/us for safe custody. I/We further undertake to produce the said packages containing the said goods intact and in the same condition as they are (reasonable wear and tear accepted), whenever called upon to do so by the competent authority of Central Excise Department and not to deliver the same to any person or otherwise dispose of or deal with the same without an order from the proper officer of Central Excise Department. I shall neither claim any ownership of the goods nor charge any rent for keeping the goods in safe custody.

Witnesses Signature of Bailer

1.

2.
PARTICULARS OF THE SEIZED GOODS


1. Name of owner of the seized goods…………………………………….

2. Description & Qty. of goods……………………………………………

3. Value ……………………………………………………………………

4. Amount of duty involved………………………………………………

5. Condition of goods……………………………………………………..

Signature of the bailer


Signature & Designation of the officer before

Whom the goods are given in the custody of

Shri……………………………………….

Annexure-V

GENERAL FORMAT OF PANCHNAMA DRAWN FOR SEARCH

Panch No.1 Complete details viz. Name, age, parentage
Panch No.2 Residential address & occupation
We the above named Panchas having been called upon by Shri ……….. (named & designation of the s/w holder) presented ourselves today……….at ………..at (address of the premises to be searched) to witness the search operation intended to be conducted by a team of officers of Central Excise led by Shri………
On reaching the aforesaid premises, the officers met Shri………… (name of the person incharge of the premises) and introduced themselves as the officers of Central Excise. The officers introduced themselves by showing their identity card and disclosed the purpose of visit by showing the warrant of authorisation for search issued by…………………………. (details of S.W. issuing authority) under section 105 of the Customs Act, 1962 made applicable to Central Excise cases under section 12 of the Central Excise Act, 1944. Shri……………… (person incharge of the premises) and we, the panchas have put out dated signatures on the search warrant in token of having seen the same. The officers of Central Excise offered themselves for personal search which was politely declined by Shri ………….. (person incharge). The team of officers also included Smt. ……………. as a lady officer. The search was, thereafter, commenced.

DETAILS OF SEARCH

……………………………

……………………………

Details of search conducted should include goods and documents recovered and seized enclosed in Annexures. The legal grounds for seizure being liable for confiscation or relevant for proceedings etc. should be recorded. The place from where these recoveries were made should be recorded in the panchnama. Procedure adopted for quantification of goods should also be recorded. Pages should be properly numbered and signed by the person incharge as well as the witnesses. Locker, almirahs etc. if any sealed should be recorded. Cash seized should be recorded. Any other important event also be recorded.

The search operation started at …………… hours and concluded at ……….. hours. The officers after conclusion of search offered themselves for personal search which was declined by the party. The officers have taken into possession nothing except for the goods/records/documents seized as detailed in Annexure to this Panchnama. The proceedings were conducted peacefully and no damage was done either to property or to persons. The aforesaid proceedings were conducted in our presence. The panchnama was read over and explained to us in Vernacular also. We are satisfied with the manner of search and the contents of Panchnama.

Signature of the officer Signature of the party Panch No.1

authorised to search Panch No.2

Annexure-VI
C.No……. Date:
A.E. II (OFFENCE REPORT/SEIZURE REPORT)
1. Name & address of party :
2. Date & time of detection :
3. Commodity & Chapter :
4. Value and the duty :

involved in seized goods


5. Estimated duty involved :

in offending goods – other

than seized goods, if any.
6. Modus operandi :
7. Rules contravened :
8. Name of the officers :

and role played.


9. Brief facts of the case :

Name & Designation
Copy to:
1. The Director General, DGCEI, New Delhi.

2. The Additional Director General, DGCEI,

Jurisdictional Zonal Units.

3. The Commissioner Central Excise


Annexure – VII
SUMMONS
To
……………………………….

……………………………….


Sub:- Case of………………………………………..
Whereas a case against/about…………………………………………………

Under Section(s) ……….of the Central Excise Act, 1944, the Central Excise Rules 2002/the Customs Act, 1962 is being enquired by me/under my orders.

And whereas I have reason to believe that you are in possession of facts or/and documents and records which are material to the above enquiry.

You are hereby summoned under Section 14 of the Central Excise Act, 1944/108 of the Customs Act, 1962 to appear before me in person/by an authorized agent on…………………………..the day of……………………..at……………………hrs. in the office of………………………………………………………to give evidence truthfully on such matters concerning the enquiry as you may be asked and produce the documents and records mentioned in the Schedule for my examination.
If you fail to comply with this summons without lawful excuse, you will be liable to be punished under the law.
-Schedule-

Given under my hand and seal of office to-day the…………………………………


Signature………………………………
Designation……………………………
Seal of Office.
Note- Under sub section 3 of Section 14 of the Central Excise Act, 1944, the above enquiry is deemed to be a judicial proceeding within the meaning of section 193 and 228 of the Indian Penal Code, 1860.

Annexure –VIII
ARREST MEMO

Dated ………………


To

_________________________

__________________________

Consequent upon recovery of incriminating documents and the statements of other witnesses it has emerged that ……………………………..(Name of the person to be arrested and his designation and address) having a factory of…………….(name of the commodity) situated at……………………(name and address of the factory) had actively participated in the………………………..(nature of the offence) in violation of the provisions of Central Excises Act, 1944 and Rule………………..of Central Excise Rules made thereunder.

I, ………………………..Inspector (Preventive), Office of the Commissioner, Central Excise/Additional Director General, DGCEI………………having office at…………………………, therefore, having reason to believe that you are liable to punishment under the provisions of section………………………………………………………….of the Central Excise Act, 1944 and being duly authorized, hereby arrest you today the………………….(date & time) at…………….(Place) under the powers vested in me under Section 13 of the said Act.

Name & designation of the arresting officer

Before arresting, the JAMA TALASHI of Shri……………………….(name of the person arrested) was taken and he is possessing………………..(description of the valuables and cash) which are kept with the arresting officer under sealed envelope with the inventory written over the envelope.


Name & designation of the arresting officer

Witnesses to the arrest:-
1.
2.
(Signature, name & address)


Annexure – IX
CHALLAN FOR HANDING OVER PERSONS ARRESTED

To
The Officer in Charge,

………………………………………….Police Station,

The person(s) mentioned below is/are forwarded to you under Section 19 of the Central Excise Act, 1944 for safe custody. He/they were arrested by me at……………………………………………on……………………………under section…………………………………of the Central Excise Act, 1944, for violation of Section…………………………………of the said Act. He/they should be produced before the Court of……………………………………………at 10AM on the……………… OR the undersigned shall take back the custody of the arrested person on …………. (date & time) for producing him before the court of …………………. .


Particulars of the arrested person(s)

_______________________________________________________________­_



Sl. No. Name Father’s name Full Address Remarks

_________________________________________________________________


Signature, name & designation of the

Central Excise Officer

Date………………………………..


Signature of the Officer-in-Charge to

whom the arrested person(s) is/are

forwarded………………………….
Date ……………………………..


Annexure – X

BAIL BOND AND SECURITY BOND

I………………………………………….Son of…………………………………

of (address)…………………………………………………………………..being charged with the offence of………………………………………………………………………….

do hereby bind myself to appear at…………………………………………………………

in the court of………………………………………………………at…………………….

hours on……………………the day of…………………………….and thereafter from day today until otherwise directed by such Magistrage, to answer further to the said charge, and in the case of my making default therein, I bind myself to forfeit to the President of India the sum of Rs,……………………………………………………..

Dated, the………………………………day of……………………19……….
Signature of the arrested person………..
Surety/Sureties
I/We ……………………………………….Son of…………………………..

Jointly and severally hereby declare myself/ourselves surety/sureties for the aforesaid…………………………………………..son of………………………………….

of……………………………………that he shall appear before………………………….

At……………………..hours on the…………………………day of and thereafter from day to day until otherwise directed to answer to the charge pending against him, and in case of his failure to do so, I/We jointly and severally bind myself/ourselves to forfeit to the President of India the sum of Rupees………………….

Signature…………………………………..

Profession…………………………………

Address……………………………………

Date……………………………………….


Annexure XI
FORMAT FOR APPROVAL OF PROSECUTION
Commissionerate …………… Division…………..
1. Name & address of the company :

2. Nature of offence including commodity :

3. Charges :

4. Period of offence :

5. Amount of evasion involved :

6. Particulars of persons proposed to be prosecuted:



(1)(a)

Name




(b)

Father’s Name




(c)

Age of Sex




(d)

Address




(e)

Occupation


(f)


Position held in the company




(g)

Role played in the offence




(h)

Material evidence available against the accused (Please indicate separately documentary and oral evidence).




(i)

Action ordered against the accused in adjudication.







  1. Brief note why prosecution is recommended:


NOTE:


  1. The proposal should be made in the above form in conformity with the guidelines issued by the Ministry. With regard to column 3 above, all the charging sections in the Central Excise Act and other allied Acts should be mentioned. If the provision for conspiracy as under Section 120B of IPC is sought to be invoked, this fact should be clearly mentioned. With regard to column 6, information should be filed separately for each person sought to be prosecuted.




  1. A copy of the Show Cause Notice as well as the order of adjudication should be enclosed with this Report. If any appeal has been filed, this fact should be specifically stated.



Annexure XII
CERTIFICATE OF DISBURSAL OF REWARD FOR DEPARTMENTAL USE

Certified that a sum of Rs. …………… /- (Rs.. ……………………… only), sanctioned as advance/final reward vide Director General/ Additional Director General of Central Excise Intelligence, New Delhi’s Order No. ………… … dated ………… issued under F. No. …………….. …….. in the case against M/s …………………………………. detected on …………………..and drawn in contingent bill No………………………… dated …………… from State Bank of India, I.P. Estate, New Delhi, was paid in cash to the right informer from whom a receipt has been obtained by me in the presence of two witnesses.

Signature of disbursing authority

With rubber stamp affixed giving

his full name and designation



Note: - Two copies are made. One copy is kept in case file from where reward is

disbursed and another copy sent to cashier.



Annexure -XIII
CERTIFICATE OF DISBURSAL OF REWARD TO THE CORRECT INFORMER
Received a sum of Rs. ………………….. (Rs. …………………. only) in cash as advance/final reward in the case against M/s. detected on from Director General, DGCEI, New Delhi today i.e. .

Thumb Impression/Signature Signature of the identifying officer

of the informer with date of with name and designation

payment and code No.


Certified that the payment has been made to the right informer whose thumb impression/signature appears on the above receipt, this day the , 2003.

Name and designation of the disbursing officer

Signature of witness Officer:

1.

(Name & Designation )



2.

(Name & Designation )

Note:- Only one copy of this Certificate is made and kept in a separate sealed envelope with the sealed envelope containing original information. Both envelops are kept in safe custody.


Annexure XIV
CERTIFICATE OF DISBURSAL OF REWARD FOR INCOME TAX PURPOSES

Certified that a sum of Rs. ……………. /- (Rs. ……………… only) sanctioned as advance/final reward vide Director General/Additional Director General, New Delhi’s order No dated issued under F. No ………………………has been paid to the right person whose thumb impression/signature is given below.


Thumb Impression/Signature of

the informer.

Signature of the Disbursing authority

with rubber stamp affixed giving

his full name and designation.

Note: - Name and address of informer should never be recorded in this Certificate. Two copies of this Certificate are made. The first certificate in which thumb impression of informer is available is given to the informer. The second certificate retained in case file does not have thumb impression of the informer.


Annexure-XV
VOUCHER

I have incurred Rs…………(Rupees………………….only) from Secret Service Fund in connection with collection and development of intelligence and the developing contacts and sources of information relating to (Name of the office)


Name
Designation

F.No.
Month

Annexure-XVI
STATEMENT OF EXPENDITURE OF SSF FOR THE MONTH OF ………………..

(Name of the office)

Opening Balance

Receipt


Expenditure

Closing Balance


(SPENDING OFFICER)

DESIGNATION

Details of expenditure during the month
S/Shri
1.

2.

3.



4.

5.

Total


Certified that an amount of Rs…………(in figures and words) has been spent from the Secret Service Fund during the month of ………………in connection with collection and development of intelligence and for developing contacts and sources of information in the (name of office)
(SPENDING OFFICER)

DESIGNATION
F.No. Dated:
Forwarded to the (Controlling Officer) alongwith vouchers as above.
(SPENDING OFFICER)

DESIGNATION


-I
INTRODUCTORY

1. Preamble: This Manual of Departmental Instructions on Preventive and Investigation Work deals with the collection and co-ordination of intelligence relating to the preventive work and the detection of offences, particularly offences relating to Central Excise impinging on duty collection. The instructions contained in this Manual can also be followed with advantages by the regular executive staff in the detection of offences in the course of their normal office work.

2. Scope of Instructions: These instructions are supplemental to and must be read in conjunction with the Central Excise Act and rules framed thereunder and the instructions issued by the Board from time to time. They are applicable throughout the territory of India and should not be departed from without strong reasons to be recorded in writing by the officers concerned. In case of any deviation, the officers concerned should report the same to his immediate superior at once. The Commissioner may issue written orders providing for any supplemental matters arising out of the Act and the Rules, and such orders may, where the Commissioner considers this absolutely essential, permit temporary deviation from the standing instructions. Such orders should be immediately communicated to the Board, and unless of purely local interest, they will normally be subsequently incorporated in the Manual.

3. Implementation of Instructions: The Assistant Commissioner /Deputy Commissioners and the Range Officers will be responsible within their respective jurisdictions for the proper observance of the provisions of this Manual by their subordinates; breaches of the instructions should be treated as misdemeanors and visited with disciplinary action.
4. Doubtful Points: The officers should refer all points of doubt or difficulty at once to their immediate superiors who will, where necessary obtain the orders of the Commissioner on matters of special importance, and particularly those involving questions of policy or interpretation of the Act or Rules. All such points should be referred to the Board.
5. Amendments: Future amendments and additions to this Volume will be issued on the basis of experience gained. They will usually be sent out in the form of printed amendment slips or replacement sheets which will be numbered serially. All officers must at once amend their copies of the Manual accordingly. The Assistant Commissioner/Deputy Commissioner and Range Officer should review the position at regular intervals and ensure that the Manual is kept up to date at all times.
6. Custody of Manuals: Since the Manual is a compendium of departmental instructions, the officers are expected to ensure its safe custody.

CHAPTER - II


ANTI-EVASION SET-UP



  1. COMMISSIONERATE



(i) Nature of the Preventive Formations and their Distribution and Location

The character of the various preventive-intelligence formations to be established and their number, distribution and location is decided by the Commissioners in consultation with their staff on the basis of very careful and thorough survey of the Commissionerates in the context of the actual preventive need. The intensity, concentration and distribution of warehousing and manufacturing centres, the location of the principal markets, the road and other routes whereby the bulk of any excisable goods is carried, the special propensity or notoriety of the inhabitants of the area for duty evasion and similar such factors should be considered in setting up of the preventive intelligence formations. Since the centre of gravity of evasion keeps shifting from time to time, the position of the postings must be periodically reviewed. The present anti evasion set-up in the Commissionerates is as under:-

Headquarters
2. Preventive and intelligence work in the Commissionerates is entrusted to officers called “Preventive Intelligence Officers”. Generally 3 to 4 Superintendents and 20 to 25 Inspectors are posted under one Assistant/Deputy Commissioner who supervises and monitors the day-to-day work and activities of these officers both for preventive and intelligence duties. The work is categorized as under:-
(a) Collection of Intelligence
3. The Preventive Intelligence Officers are deployed to collect and develop a sound intelligence system which is the very basis of fruitful preventive work. The officers serve as mobile field units for collection of intelligence and for procuring information through reliable informers.

(b) Transit Checks


4. The vehicles carrying excisable goods are also checked in transit at vulnerable points by way of road blocks or fixing check posts. Regular patrolling is also done by the officers to observe the movement of the goods in transit. In Central Excise, such checks are solely intended to see whether the consignments carried in the vehicles are covered by valid transport documents or invoices. The road blocks at fixed points on important highways and at other places are mainly meant for the check and rummaging of vehicular traffic to detect contraband goods.



  1. Organizing Searches in the Factory, Office as well as Residence

5. On the basis of intelligence collected and developed by the Preventive Intelligence Officers or gathered through other sources, search operations are carried out in the factory, office, residence and other allied premises. The documents and records found relevant for further investigation are seized under proper panchnama. The offending goods are either detained or seized depending upon the gravity of the offence and the evidences collected at the time of search.



  1. Investigations

6. The records are scrutinized by the officers and follow up searches, if required, are carried out. The concerned persons are also interrogated and their statements are recorded keeping in view the facts and evidences available on record. On completion of investigation, a Show Cause Notice, if warranted, is issued to the concerned party/parties.




  1. Miscellaneous Work

7. Day-to-day file work along with preparation and compilation of various reports and returns is also attended to by the Preventive Intelligence Officers. Legal matters including proposals for COFEPOSA as well as prosecution are also looked after by the Preventive Intelligence Officers. The cases pending adjudication in the Headquarters or at the appeal stage in the Tribunal or Courts are also attended to by these officers.





  1. Work of Co-ordination

8. An important function of the Preventive Wing of the Headquarters is the work of co-ordination of preventive intelligence activities of the officers throughout the Commissionerate, maintenance of proper liaison with other Commissionerates of Central Excise as well as Customs, the Directorate General of Revenue Intelligence and allied departments of the Government and building up of central records on anti-evasion activities at the Commissionerate Headquarters. The co-ordination work should, inter alia, include the following:-




  1. to classify, catalogue and index the secret information, messages and intelligence reports received from the various sources,




  1. to scrutinize and collate all information and intelligence reports received from the officers,



  1. to supplement the intelligence received from the field units by instituting special enquiries in the directions indicated in the reports,





  1. to co-ordinate the preventive intelligence activities in the Commissionerate as a whole on the basis of the available intelligence,




  1. to undertake critical studies of commercial and statistical intelligence like rise or fall in average yield / production and revenue, rise and fall in price index of commodities, rise and fall in export and import of excisable commodities and rise in the credit availed through Modvat/Cenvat. Such statistics will be mainly based on a proper interpretation of reports, returns and statistics received from the lower formations. The purpose is to find out to what extent the fluctuations are due to natural causes or otherwise,




  1. to prepare and issue, for the guidance of the officers, monthly intelligence bulletin on the trend, volume and values of duty evasion, showing the places and commodities where the centre of gravity of evasion has shifted, the information available on the activities of the different groups of duty evaders, their modus operandi and areas of action and the nature of the problems which are required to be tackled,




  1. to attend the registration and indexing of informers with necessary cross reference to information received from them and the seizure case files,

h) to maintain the history sheets and index cards of offenders from the seizure reports and history sheets submitted by the seizing officers,

9. Having regard to the modus operandi of evasion of Central Excise duty by way of clandestine removal of excisable goods, the checking of the trucks carrying excisable goods at various check posts of Sales Tax / Commercial Tax is unavoidable. For fruitful results, proper liaison with the officers of the Sales Tax / Commercial Tax of the concerned State government is necessary. Through such contacts, copies of Bilty/GR resumed at the Check Posts can be obtained easily.

Divisions
10. As in the case of Headquarters Preventive Unit, preventive and intelligence work in the Division is entrusted to officers styled “Preventive Intelligence Officers”. Generally one Superintendent and 5 to 6 Inspectors are posted under the Divisional Officer who supervises and monitors the day-to-day work and activities of these officers, both for preventive and intelligence duties. The work of the Preventive Unit in the Division is broadly the same as that of the Headquarters Preventive Unit except that the latter has a somewhat larger role in regard to the work of co-ordination.
(ii) Technique of Preventive Work
11. Preventive Intelligence Officers should not be employed solely on routine checks which rightly fall within the domain of the Range staff. The preventive officers must endeavor to develop a sound intelligence system which is the very basis of fruitful preventive work. The officers will serve as mobile field units for collection of intelligence and for procuring information through reliable informers.
(iii) Selection of Preventive-Intelligence Officers

12. The success of preventive and intelligence work largely depends on the selection of the right type of officers as the personal factor invariably plays an important role in this type of work. The natural aptitude for detection, the knack for collecting intelligence, the honesty, integrity, initiative and drive of the officers should be carefully examined in making the selection. An officer who is excellent for routine executive duties may be a misfit for preventive work for no other reason than that he is not suited to it by temperament. In the same manner an officer with fine detective abilities may not be very suitable for regular Range Office or Divisional Office work. Instead of wasting their talents by haphazard postings the aim should be to make the maximum use of their natural abilities. Those officers with a flair for detection and with a high sense of integrity and devotion to duty should be prepared and from out of this list, selection should be made for the posts of preventive intelligence officers.

(iv) Training
13. Every preventive-intelligence officer should be given a proper training after his selection to enable him to have a sound knowledge of his duties. He must be trained in the collection of information, compilation of intelligence reports, conducting investigations, carrying out searches and raids, making seizures and the various other duties concerned with his work. Unless his knowledge of the rules, regulations and procedures is thorough and up to date he will lack in both confidence and the ability to do useful preventive and detection work. He must be made fully aware of his powers and limitations so that he may not be guilty of excesses and indiscretions.
(v) Co-operation between the General Executive and the Preventive-Intelligence Officers

14. Perfect co-operation between the regular executive and the preventive intelligence staff should be developed as their functions are complementary. It is evident that neither one can function satisfactorily without the active and willing co-operation of the other. The executive staff may immediately pass on to the preventive-intelligence staff any important information relating to leakage of revenue which may come to their knowledge and which may not be possible for them to work out satisfactorily. They must similarly communicate to the preventive intelligence officers any reasonable suspicions which they may have about the unlawful activities of any manufacturer in their respective jurisdictions. A case detected or a seizure made in pursuance of such information will be chiefly a matter of credit to the regular staff and they will be entitled to rewards and appreciation. The preventive intelligence staff must remember that the success of their work will depend on, to a great extent, the co-operation and support of their colleagues in the Ranges and Divisions. It will be the special responsibility of the Range and Divisional Officers to ensure that this co-operation between the executive and the preventive staff exists.

B. DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE (DGCEI)


  1. History

15. The Directorate General of Central Excise Intelligence (DGCEI) under the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance is the apex intelligence organisation in the area of detection of duty evasion of central excise.


16. It was in the year 1979 that the Directorate of Anti-Evasion (Central Excise) was set up as a wing of the Directorate of Revenue Intelligence, New Delhi. It was headed by a Commissioner, who was designated as the Joint Director. Initially it had units at Madras, Delhi, Calcutta and Mumbai. Over a period of time the units in metropolis were upgraded to Zonal Units and Regional Units were set up at Bangalore, Cochin, Hyderabad, Indore, Kanpur, Pune, Vadodara, Patna and Ludhiana. On becoming a full-fledged Directorate in 1983, the Joint Director was redesignated as Director. In August, 1988 the Directorate was upgraded to Directorate General under the charge of a Director General posted at its Headquarters at New Delhi and the Zonal Units at Madras, Delhi, Calcutta and Mumbai were headed by Additional Director General.

17. The year 2000 witnessed further expansion of the Directorate General with the setting up of a number of Regional Units under the respective Zonal Units. With a view to focus on the core area of intelligence gathering and dissemination relating to central excise duty evasion, the name of the Directorate General was changed from the Directorate General of Anti-Evasion (Central Excise) to the Directorate General of Central Excise Intelligence. The restructuring of the Customs and Central Excise department in November, 2002 had its impact on the Directorate also. As a result two additional Zones, namely Ahmedabad and Bangalore were added. Presently, DGCEI with its Headquarters at New Delhi has 6 Zonal Units and 18 Regional Units.


(ii) Charter of Functions of DGCEI
18. The role of the Directorate General in tackling the menace of duty evasion is manifold. On the one hand, it develops intelligence specially in the new areas of tax evasion through its intelligence network across the country, while on the other, it undertakes ‘system studies’ of various laws and procedures to identify and plug the loopholes that are likely to be misused by the tax evaders. It receives statistical data as well as details of duty evasion from the field formations across the country and maintains a data bank of the same. Based on the intelligence and information received, it selectively conducts search operations and carries out investigations, and the results thereof are disseminated to the field formations by way of modus operandi circulars. It also assists and advises the Central Excise Commissionerates in the matter of anti-evasion activities, coordinating and supplementing their efforts in the area of detection of duty evasion. The Directorate General also makes recommendations to the Central Board of Excise & Customs for carrying out suitable legislative and procedural changes with a view to combating evasion. The detailed charter of functions of DGCEI is as follows:-
i. Collection, collation and dissemination of intelligence relating to evasion of central excise duties on all India basis.


  1. Studying the modus-operandi of evasion peculiar to excisable commodities and to alert the Commissionerates about it.




  1. Studying the price structure, marketing patterns and classification of commodities in respect of which possibilities of evasion are likely with a view to advising the Commissionerates for plugging loopholes.

iv. Supplementing and coordinating the efforts of the field formations in investigations in cases of evasion wherever necessary.

v. Coordinating action with enforcement agencies like Central Economic Intelligence Bureau (CEIB), Income Tax, Sales Tax, Enforcement Directorate etc., in respect of cases in which central excise evasion has come to notice.

vi. Investigating offences involving evasion of central excise duty having ramifications in more than one Commissionerate including investigation of complicated cases selected by the Directorate or entrusted to it by the Ministry.


  1. Having at all times, a complete detailed & up-to-date study of the Taxation Laws and implementation machinery and to have proper appreciation and assessment of possibilities of evasion.




  1. Assisting in advisory capacity in proper deployment of the Central Excise preventive staff in the Central Excise Commissionerates for effective anti-evasion measures.




  1. Examining and studying the effects and implementation of various tax concessions, exemptions and relaxations in controls and to make recommendations to the government from time to time, to ensure that they do not become a source of evasion.

x. Maintaining liaison with other Central & State agencies in all matters pertaining to tax evasion.


19. The principal resource of the Directorate General is a set of officers carefully selected to meet the high standards of the organisation. The use of modern techniques and technologies, extensive research, and co-ordinated and speedy action contribute in making the Directorate General a highly effective organisation for tackling the tax-evaders.

Organizational Structure




  • ADG: Additional Director General

  • RU : Regional Unit

**********

CHAPTER-III


SEARCH AND SEIZURE – LEGAL BASE

The powers of search and seizure are provided in the Central Excise Act, 1944 and rules made there under read with the relevant provisions of the Customs Act, 1962 as made applicable to the Central Excise Act. The objectives of the provisions of search and seizure are, firstly, to get hold of evidence bearing on the tax liability of a person/firm/company which he is seeking to withhold from the assessing authority. The other objective is to get hold of assets acquired through evasion of duties.

2. The search is a process exceedingly arbitrary in character, therefore stringent statutory conditions are imposed by the legislature on exercise of this power. Section 165 of the Cr.PC lays down various steps to be followed in making a search and any search made in contravention of these provisions is illegal. In this chapter, the basic provisions relating to search, seizure and confiscation are discussed, with particular focus on the procedure for conducting search operations. In the relevant sections of the Customs and Central Excise Acts, certain terms and phrases have been used which, through Court Judgements and Tribunal decisions, have acquired a certain meaning. An attempt has been made to discuss these terms and phrases as well.

(a) Search
3. The provisions relating to search under Section 105 (sub-section 1) of the Customs Act, 1962 have been made applicable to Central Excise by section 12 of the Central Excise Act, 1944 read with notification No. 68/63-CE dated 4.5.63 with certain modification/changes as detailed in the said notification. Section 105 (1) as modified for central excise purposes is as under:-
If the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise (or an officer of Central Excise not inferior in rank to an inspector specially empowered by name in this behalf by the Board), has reason to believe that any good liable to confiscation, or any documents or things which in his opinion will be useful for or relevant to any proceedings under the Central Excise Act and Central Excise Rules, are secreted in any place, he may authorise any officer of Central Excise not inferior in rank to an inspector to search or may himself search for such goods, documents or things.
(i)Conditions

4. The various conditions which need to be met to issue a warrant authorising search are:



  1. there should be reason to believe,

  2. there should be goods liable to confiscation or

  3. documents/things relevant for proceedings under the Central Excise Act.

  4. they should be secreted.


(ii)Meaning of the ExpressionReason to Believe’
5. One of the essential ingredients to be satisfied before authorising the search is that there should be “reason to believe”. It is important to note that the expression believe has been used in this context. This has been interpreted by judiciary in various cases and the expression has come to be understood with a certain meaning. The word ‘believe’ is much stronger than the word ‘suspect’. A belief in the existence of a thing requires a more solid foundation than in the case of a mere suspicion. Belief has to be such as any reasonable man in the circumstances would entertain. A person is said to have reason to believe a thing, if he has sufficient cause to believe that thing but not otherwise. ‘Reason to believe’ contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances. Although the officer is not required to state the reasons for such belief before issuing an authorisation for search, he has to disclose the material on which his belief was formed, should an issue be raised on this score.

6. 'Reason to believe' need not be recorded. In case the authorizing officer’s satisfaction of reasonable belief is questioned in any collateral proceedings, only then he has to produce relevant evidence which formed the basis of his belief. Generally, hon’ble High Courts have not gone into the question of sufficiency of material to form such belief. The existence of such material is considered sufficient. Only in those cases where seizure is unreasonable and perverse and that no reasonable person could have reached that conclusion, procedures become unauthorized.

(iii)Meaning of the Word ‘Document’
7. Generally, the term 'document' shall include any matter written or expressed or described upon any substance. Therefore, it will include accounts books in written, typed or printed or a paper on which markings are made. In the recent times, Courts have recognised computer print-outs and storage devices like floppies as documents which can be relied upon as evidence. Further, section 36B of the Central Excise Act envisages admissibility of micro-films, facsimile copy of document and computer print-outs as documents.
(iv)Meaning of the Word 'Secreted'

8. The word ‘secreted’ means documents which are not kept in the normal or usual space with a view to conceal/hide them and it will even mean documents or things which are likely to be secreted. Thus, what can be called from an assessee in normal course should not be recovered from him under search proceedings.


(v)Meaning of the Expression ‘Liable to Confiscation’
9. The conditions under which goods become liable to confiscation are provided in Rule 25 of the Central Excise Rules, 2002 and Rule 13 of the CENVAT Credit Rules, 2002. Under Rule 25 of Central Excise Rules, 2002, goods become liable to confiscation when any producer, manufacturer, registered person of a warehouse or a registered dealer,-


  1. removes any excisable goods in contravention of any of the

provisions of these rules or the notifications issued under

these rules; or




  1. does not account for any excisable goods produced

or manufactured or stored by him; or


  1. engages in the manufacture, production or storage

of any excisable goods without having applied for the

registration certificate required under section 6 of the Act; or


  1. contravenes any of the provisions of these rules or

the notifications issued under these rules with intent to

evade payment of duty.


10. Under Rule 13 of CENVAT Credit Rules, 2002, if any person, takes CENVAT credit in respect of inputs or capital goods, wrongly or without taking reasonable steps to ensure that appropriate duty on the said inputs or capital goods has been paid as indicated in the document accompanying the inputs or capital goods specified in rule 7, or contravenes any of the provisions of these rules in respect of any inputs or capital goods then, all such goods shall be liable to confiscation.
11. To put it briefly, where the goods are manufactured without taking central excise registration and the manufacturer does not pay appropriate duty on their removal and neither he follows the procedural law relating to manufacture, storage and clearance of goods, the goods become liable to confiscation.
12. Besides the above, the vehicle used for transporting the offending goods, packages in which they are packed, the goods used to conceal offending goods, offending goods in changed form and sale proceeds of offending goods are also liable to confiscation. These are discussed elsewhere in this chapter.




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