To facilitate the cigarette manufacturers operating under Large Taxpayer Unit (LTU), Karachi, the government has withdrawn the powers of excise officers to supervise the transportation of non-duty paid tobacco from the factory gate to warehouse.
Previously, the excise officers were empowered to monitor consignments to ensure that non-duty paid un-manufactured tobacco was not downloaded by the manufacturer while transporting it from factory gate to warehouse. Now, supervision has been withdrawn due to non-availability of excise staff at LTU.
Central Excise Rules 1944 have been amended in Finance Bill 2004 to implement the decision.
According to details, Rule 42B of the Central Excise Rules 1944 requires that proper officer shall physically supervise transportation of un-manufactured tobacco from the factory gate to the warehouse.
This rule says that the manufacturer will bring the un-manufactured tobacco to his factory without payment of CED after obtaining endorsement by the excise officer.
The CBR opined that the condition of supervision by excise staff has been taken away as there is no supervisory officer available in the LTU, Karachi.
Keeping this in view, the condition for the cigarette manufacturing units falling in the jurisdiction of LTU Collectorate has been relaxed through a provision in rule 42B of the Central Excise Rules 1944.
In another decision, the CBR has permitted all LTU units engaged in the manufacture of excisable commodities, including cement and beverage, to make clearance of goods after 6.00 pm.
Under rule 224 of the Central Excise Rules 1944, goods may not be cleared from a licensed factory after 6.00 pm, nor on Sundays and public holidays, except by permission of the collector. These provisions are not applicable to cement factories and beverage manufacturers located in LTU. Now, the facility of clearance after 6.00 pm has been extended to all the excisable units operating under LTU. Necessary amendment in sub-rule (1-B) of Rule 224 of the Central Excise Rules 1944, has been made.
To check evasion of excise duty by cigarette industry, the CBR has empowered the tax officials to fix minimum price of any goods for charging excise duty. This would check evasion of excise duty by the cigarette manufacturers working in un-organised sector, who usually sell their brands in the market at low price. Through Finance Ordinance 2004, a proviso was added in sub-section 4 of the Central Excise Act, 1944.
For the purpose of fixation of minimum price of goods, the element of sales tax has been included in the said proviso.
Under the amendment, the words ''Sales Tax'' have been deleted from the proviso to bring it in line with the criteria of fixing price (retail price) as laid down in sub-section (2) of section 4 of the Central Excise Rules 1944.