Pan masala and gutkha industries should remain prepared for continued surveillance by the revenue department for incidences of excise evasion by them.
Sources close to the development told FE that the department would continue its crackdown on the industry, which began earlier during the week, for at least another two months. ?We will continue to focus on these industries atleast till December, after which we will review the situation,? an official source said.
It is being monitored by the chairman, Central Board of Excise and Customs (CBEC) on a daily basis and the department has asked its field formation to continue focusing on the sector to prevent further evasion.
Following this decision, the department has already carriedout a search and seizure operations on a number of pan masala andgutkha manufacturing units.
And what is more, the CBEC is confident that it will see a significant rise in central excise collections from next month, all thanks to the increased surveillance on these industries, whicha re among the top excise duty evaders. The sector provides only about Rs 600 crore in central excise duty annually as against a potential of Rs 2,400 crore.
Excise collections have remained very low so far this fiscal. Excise duty collections in the fiscal have risen at a steady albeit low rate of about 6% to 7% in the first six months of the fiscal. In September 2007, the government collected Rs 10,186 as excise duty, an increase of 7.2%.
The department had taken similar action against the units earlier during the year as well when it had made it mandatory for all pan masala and gutkha manufacturers to submit a monthly report on the supply of raw materials and their sales in the market.