The Government has notified mandatory scheme of payment of excise duty based on capacity of production for pan masala, whether or not containing tobacco, manufactured with the aid of packing machine and put up in pouches, effective from 1st July 2008.
- For a Pan Masala Pouch of up to Rs 1 RSP; excise duty of Rs 9.25 Lakh per packing machine per month has been notified. For a Pan Masala containing Tobacco Pouch of up to Rs 1 RSP; excise duty of Rs 12.50 Lakh per packing machine per month has been notified vide Central Excise Tariff Notification No.42.
- For pouches of above Rs 1 RSP; higher rate of excise duty ranging from Rs 14 Lakh per packing machine per month to Rs 70 Lakh per packing machine has been prescribed.
- Pan Masala & Gutkha have been notified under Section 3A of Central Excise Act vide Central Excise Non-Tariff Notification No.29
- Hitherto, an optional scheme existed for payment of excise duty on the basis of compounded levy for Pan Masala and Gutkha was in force.
- However, mandatory compounded levy scheme is not applicable to pan masala, not containing tobacco, with betel nut content not exceeding 15% and pan masala containing tobacco or gutkha, packed manually or put up in a form of packing other than pouches e.g. tin packs.
- Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules have also been notified vide Central Excise Non-Tariff Notification No. 30
- Pan Masala and Gutkha are considered to be most evasion prone commodity and ,therefore, the Government has tried to plug the evasion. Several Excise Officers have been found to be having nexus with pan Masala lobby. Chief Commissioner of Delhi Central Excise was arrested by CBI while accepting bribe of Rs 10 lakh in his office which was allegedly being paid on behalf of Pan Masala Lobby. An Inspector of Central Excise who remained posted in Anti-Evasion Branch of Delhi Central Excise Commissionerate for a decade thanks to his connection with Pan Masala lobby; resigned from Excise Department and floated his own Pan Masala Units and is now said to be worth Rs 100 Crore. Another Excise Officer who came into contact with Pan Masala Lobby during his long stint in Delhi Anti-Evasion; also resigned and has become Consultant of Pan Masala Units in Delhi. Even an Ex-Chairman of CBEC is now a Consultant for several Pan Masala Units.
- Several Central Excise Preventive Officers including an Additional Commissioner were recently transferred on allegations of having nexus with Pan Masala Units located in Kundli falling under Rohtak Central Excise Commissionerate. Even Ranges having jurisdiction over Pan Masala Units are considered lucrative in excise department.
(Source:Allindiantaxes)
