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Circular No. 444/9/99-CX
dated 12/3/1999

F.No. 210/01/99-CX.6

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs, New Delhi

Subject : Central Excise - Modification of Circular No. 5/83-CX.6 dated 10.3.83 regarding issue of demand relating to Audit Objections - Regarding -

    I am directed to draw your attention to Board"s Circular No. 5/83-CX.6 ( F.No. 210/29/81-CX.6) dated 10.3.83, wherein it has been directed, inter alia, that immediately on receipt of objection from the Accountant-General"s Audit Party, demand-cum-show-notice should be issued without any loss of time even if the Central Excise Officers do not agree with the Audit"s point of view and such demand-cum-show-cause-notice may be withdrawn where Department"s stand is ultimately accepted by the Accountant General"s Office and the objective is settled. Since the settlement of Audit Objection takes a long time, the protective demands go on piling up.

2. There may be cases where on the issue relating to a particular Audit Objection, the Board has issued Orders contrary to that objection under Section 37B to bring about uniformity in the classification of excisable goods or with regard to levy of duty by which all Central Excise Officers except Commissioner of Central Excise (Appeals) are bound. Issue of protective demands in contradiction to 37B Order/Circular would upset the basic purpose of bringing uniformity.

3. The matter has been examined by the Board in consultation with the Office of Accountant-General. It has been decided that the Assessing Officer should not raise protective demands pursuant to the Audit Objections country to the Orders issued by the Board under section 37B of the Central Excise Act, 1944. Circular No. 5/83-CX.6 dated 10.3.83 stands modified to the above extent only.

(S. K. Sinha)
Under Secretary (CX.6)