Indirect Tax Dispute Resolution Scheme 2016

No. CLE-HO/POL/CIRCULAR/15-16
June 29, 2016
Members of the Council

Sub : Indirect Tax Dispute Resolution Scheme 2016

Dear Member
The Finance Bill 2016 (copy enclosed) introduced the Indirect Tax Dispute Resolution Scheme 2016 which has come into force w.e.f.1.6.16. The highlights of the Scheme are as follows.

This Scheme will cover a dispute in respect of any of the provisions of Customs Act, 1962 ; Central Excise Act, 1944 or Chapter V of Finance Act 1994 (Service Tax Act), which is pending before the Commissioner (Appeals) as an appeal against the impunged order (i.e. any order which is under challenge before Commissioner (Appeals) as on 1st day of March 2016.

Subject to the provisions of this Scheme, a person may make a declaration to the designated authority (an officer not below the rank of Assistant Commissioner who is authorized to act as Assistant Commissioner by the Commissioner for the purpose of Indirect Tax Dispute Resolution Scheme 2016) on or before the 31st day of December, 2016 in the prescribed form and manner, as notified by Central Excise Notification No. 29/2016 –CE(NT) dated 31st May 2016 (copy enclosed).

The designated authority shall acknowledge the declaration in the prescribed form and manner as notified by Central Excise Notification No. 29/2016 –CE(NT) dated 31st May 2016 (copy enclosed).

The declarant shall pay tax due along with the interest thereon at the rate as provided in the Act and penalty equivalent to twenty-five per cent. of the penalty imposed in the impugned order, within fifteen days of the receipt of acknowledgement and intimate the designated authority within seven days of making such payment giving the details of payment made along with the proof thereof.

On receipt of the proof of payment of tax, interest and penalty, the designated authority shall, within fifteen days of the receipt of such proof, pass an order of discharge of dues in the form as notified by Central Excise Notification No. 29/2016 –CE(NT) dated 31st May 2016 (copy enclosed).

The provisions of this Scheme shall not apply, if— (a) the impugned order is in respect of search and seizure proceeding; or (b) prosecution for any offence punishable under the Act has been instituted before the 1st day of June, 2016; or (c) the impugned order is in respect of narcotic drugs or other prohibited goods; or (d) impugned order is in respect of any offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985 or the Prevention of Corruption Act, 1988; or (e) any detention order has been passed under the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974.

Members may please note the above. The Officer of Principal Commissioner of Customs, Air Cargo Commissionerate VII has issued a Public Notice No. 17/2016 dated 21/6/2016 on the scheme, which is also enclosed herewith. Similar Public Notices may be issued by other Customs also, which members may refer.

Thanks and regards
R. Ramesh Kumar
Executive Director