Government functions with the help of the taxes collected
from the citizens. The tax levy is a system, which is
generally not to the liking of the public. Hence, the tax
evasion is the major field, were Government revenue is lost.
To enhance the detection of evasion Government has framed the system
of rewards to the people who help in the detection of the tax
evasion. In Central Excise also reward is given to the people
who give concrete information about tax evaders. The following are a
few guidelines for the people who like to help detection of Central
Excise Duty evasion:
1) What is an information?
An information is any useful message received from the public
or any person for that matter revealing fraudulent evasion of duty.
It is the message based on which the department officials conduct
further enquiry and investigation.
2) Who can give information?
Any person who is aware of the illegal activities of
the manufacturing units or any Central Excise assessee can give an
is an informer?
person other than the Officers of the Central Excise who has the
requisite information relating to evasion of duty is an
4) Whom should an informer contact?
informer with an information and can contact Central Excise
department and deliver the information to any Officer of the rank of
Inspector and above.
to give an information?
information has to be given in writing addressed to the Head of the
department, after affixing the signature of the person giving the
information along with the left-hand thumb impression.
6) What should an information contain?
information should contain details of the evasion known, such as
name & address of the unit, method adopted for the evasion, the
persons responsible and all other relevant details connected with
What are the common methods of evasion adopted with regard to
a) Misdeclaration /
under-valuation of the product.
Manufacture of the
products without the informing the Department. Selling the same at
a higher price after showing a lesser value to the department.
Producing the goods
without properly accounting the same in the records.
Removing the goods without accounting the same and with out
payment of duty. Even a transporter who stores such goods is liable
the department receives an information?
department acknowledges the information. The name and address
of the informer is kept confidential.
What benefit does an informer get?
informer is given the reward if the information given is correct and
the duty payable by the assessee is recovered.
What is the eligible reward amount and how it is
reward amount is up to 20% of the duty evasion detected and
realized. The amount is disbursed in the following manner :
- a) Upto 25% of
eligible reward amount after issue of Show Cause Notice.
- b) Balance reward amount after conclusion of the appeal
When are the above rewards sanctioned?
first category of reward is advance reward and is sanctioned after
issue of Show Cause Notice, provided the authority competent to
sanction reward is satisfied that there is reasonable chance of
confiscability/infringement/evasion. The second category is final
reward. it is sanctioned after conclusion of appeal proceedings.
What is the punishment for false information?
false information is given to the department, action can be
initiated against the informer under Section 182 of Indian Penal