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Ci rcular NO. 1 081 /0 212022-CX
F. No.296/63/2020-CXg
Government of lndia
Ministry of Finance
Department of revenue
Central Board of lndirect Taxes and Customs
Dated: 19.01 .2022
All Principal Chief Gommissioners/Chief Gommissioners of ST & CX,
All Principal Chief Gommissioners/Ghief Commissioners of Gustoms
All Principal Director Generals/Director Generals, CBIC
SUBJECT: Master Gircular on Recovery and Write-Off of Arrears of Revenue
1. Board has issued lnstructions/Circulars relating to recovery of alrears under
Centrat Excise, Service Tax and Customs from time to time. Considering the
changes that have taken place, especially after the introduction of GST in July, 2017,
it hai become imperative to update and revamp the procedure for recovery of
arrears of lndirect taxes and Customs. Accordingly, in supersession of instructions
issued earlier on the subjects which are annexed herewith as Annexure - A, this
consolidated Circular is being issued providing guidelines for recovery and write-off
of arrears of lndirect taxes and Customs.
2. THE GONCEPT OF ARREAR:
(i) Anears are the overdue payment of the amount of tax, interest, fine or penalty
iliat is confirmed against a person who is liable to pay the same to the exchequer. lt
arises as a result of Order-in-Original, Order of Appellate forum, like the
Commissioner Appeals / ADC/JC Appeals or the CESTAT and the Courts of law.
(ii) The amount in the case under investigation, unconfirmed demands (i.e. Show
Cause Notice, including those in Call Book), the Order-in-Original that has been set
aside or remanded for de-novo adjudication by Appellate authority do not fall under
the category of 'grrears'.
3. THE STATUTORY PROVISIONS FOR RECOVERY:
Recovery of Arrears is the positive act of getting the money that is legally
overdue from a person/entity. The act of recovery of anears has to be persuasive
and legal. The taxing statutes incorporate the legal provisions for such recovery.
Various statutory provisions for recovery of anears are indicated as below:-
(a) Customs Act, 1962: Section 28 BA, Section 142 read with Section 142 A
(b) Customs (Attachment of Property of Defaulters for recovery of Govemment
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Dues) Rules, 1995;
(c) Central Excise Act, 1944: Section 11 , 11 E, 11 DDA, 12 and Sec 142(1 Xb) and
142(1Xc)(ii) of Customs Act, 1962 as made applicable to Centra! Excise.
(d) Service Tax (Finance Act, 1994): Section 87, 88 and 73 C.
(e) CGST Act, 2017: Chapter XV (Section 73 to 84), Chapter XV! (Section 85 to
94), section 142 (Transitional provisions), Section 174 (saving clauses).
4. CATEGORIESOF ARREARS:
The Monthly TAR Report classifies the anears under following categories:
(i) Anear in Litigation/Appeal: SC/HC/CESTAT/Commissioner (Appeal)/ Additionat
Se cretary ( Revi sion Application).
(ii) Restrained Arrear: OL/DRT/BIFR/NCLT-Units taken
lnstitutions.
over by Financial
(iii) Anear where appeal period is not over
(iv) Recoverable arrear under:
a. Appeal period over but no appealfiled.
b. settlement commission cases (decided after expiry of 30 days).
c. Units closed/defaulters not traceable.
d. Anear under Section -11 of Centrat Excise Act 19Ml 87 of Finance Act
19941142 of Customs Act.
e. Anear under section 142 (1)c (i) & (ii) of customs Act, 1962 i.e.
Certificate Action, and
(v) Anears fit for Write- off
5. PROCEDURE FOR RECOVERY OF ARREARS
The Circulars issued vide F. No. 296134t2004-CX. (pt.) dated 12.09.2004 and
instructions issued vide C. No. CCffARllOt2OO7 dated 23.04.2008 are superseded
and following instructions are issued for necessary action by the field formations.
(i) There should be a dedicated 'Tax Recovery Cetl" headed by a JoinVAdditionat
Commissioner level officer in each Commissionerate. The monitoring of anear
recovery shall be done by the Jurisdictional Pr. Commissioners/Commlbsioners
on monthly basis and the progress shall be monitored by the Zonal Principal Chief
Commissio ner/Chief Commissioner.
(ii) Parallel set of files relating to arears shall be maintained in the TRC.
(aii) The TRC shall review the position of anearc of revenue of indirect taxes, devise
and implement the strategy for realization of anears not only with the objective of
achieving the target but also to liquidate atl the cases of arears, particularly old
cases, either by recovery or by write- off in fit cases. The category-wise guidelines
for recovery are given in the following paragraphs.
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(iv) W.r.t. recovery of anears arising out of common adjudication orders, it is
directed that copy of SCN and Adjudication Order should be endorsed to the
concemed Jurisdictional Pr. Commissioners/Commissioners for recovery of
arears. Such anears should be reported by the said Jurisdictional
Gommissionels / Commissioners and action of recovery of anear should be taken
by him.
5.1 CASESUNDERLITIGATION'APPEAL.
Though, arrears pending before the appellate fora may not be recoverable
immediately yet the status of these cases need to be clarified and monitored
regularly. For this category the following guidelines should be followed for effective
monitoring:
(a) pending before SG / HC, CESTAT-
(i) The Jurisdictional Pr. Commisslonerc lCommissronels will identiff all cases
of appeal where the department has a strong case or a reasonable chance of
success and the amount involved in the anears is more than Rs. 't Crore.
(ii) The particulars of all such cases will be kept with the Review CelULegal Cell
and the TRC of the Commissionerate for regular monitoring.
(iii) Miscellaneous Application for early hearing, out-of-tum hearing, early decision,
stay vacation, bunching of cases as per merits/ requirement should be requested.
For this purpose, the Review Gell/Legal Cell will co-odinate with the offce of
the Chief Commissioner (Authorized Representative/ Depaftmental Counsels. The
implementation of this action for each case will be reviewed every month by the
Jurisdiciional Pn Commissioners / Commissioners so that any deficiencies or
delay is remedied prcmptly.
(iv) The 'Early Hearing' applications shall be sent by the Jurisdic'tional
Commissionerate to the Registrar of the relevant court. Copies of such application
made to CESTAT should also be sent through a DO lefter to the CC(AR) so as to
enable him to get such applications listed and also arange for effective presentation
of the department's case. ln case the AR/Department Counsel needs any briefing by
the conversant officer of the field, the Jurisdidional
CommissionerclCommissioners would make the same available well in time.
(v)
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Decision of CESTAT / Courts on all such applications shall be conveyed by the
Counsels to the Juridic:tional
Commissionerc/Commlssloners for further action.
(b) Gases before Commlssloner (Appeals)
(i) Commissioners (Appeals) will take up cases where the revenue implication is
Rs. 10 Lakhs or more/recuning nature for immediate disposal.
(ii) Commissioners(Appeals) ll ensure immediate communication of his orders
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to the assessee as well the
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(c) The appeals pending with Additional / Joint Commissioner should be reviewed
and cases of high revenue or of recurring nature should be taken upon priority.
(d) Cases before Additional Secretary (Revision Application)-All cases pending
before Additional Secretary (Revision Application) should be scrutinized by the
Jurisdictional Pr. Commissioners / Commissioners and it should be ensured that
comments/reports thereon are sent promptly. Amounts payable to the Government in
accordance with the Admission Orders (interim orders) and the Final Orders of the
Authority should be recovered immediately.
5.2 CASES OF RESTRAINED ARREAR.
Recovery in many cases is restrained due to pendency of the cases relating to
the financial viability of the defaulter before the BIFR IOL INCLT/ DRT.
Though the Customs, Central Excise, Service tax and GST enactments have
provisions for the liability to be the first charge on property but this charge is subject
to the provisions of Section 529 A of the Companies Act, 1956 (Section 326 of
Companies Act, 2013), the Recovery of Debts due to Banks and the Financial
lnstitutions Act, 1993 (RDB Act), the Securitisation and Reconstruction of Financial
Assets and the Enforcement of Security lnterest Act, 2002 (SARFAESI AcQ and the
lnsolvency and Bankruptcy Code, 2016.
ln cases pending with BIFR /OUDRT/Units taken over by Banks, the
department should file affidavits for first charge under Section 11 E of the Central
Excise AcUSection 142 A of the Customs AcUsection 88 of the Finance Act, 1994
and Section 82 of the CGST Act, 2017. Besides taking aforesaid action, the cases
pending in such authorities should be monitored and approached constantly for their
early disposal.
(a) Cases with Board for lndustrial and Financial Reconstruction (BIFR)
/National Company Law Tribunat (NCLT)-
BIFR was set up in January 1987 under The Sick lndustrial Companies
(Special Provisions) Act, 1985 (SICA) to determine the sickness of industrial
companies and to assist in reviving those that may be viable and shutting down
others. lt was dissolved on 30.11.2016 and its proceedings were refened to the
NCLT and NCLAT as per the provisions of the lnsolvency and Bankruptcy Code
2016. The cases which were in advance stages of hearing/ decisions, however, were
decided to remain with BIFR. Therefore, the cases under this category should be
reviewed to find out as to how many cases have migrated to NCLT and how many
are still pending with BIFR. For the cases pending with BIFR, the department should
raise its concem during the proceeding of granting schemes to the company by
BIFR.
(b) The NCLT was formed under section 408 of the Companies Act, 2013 (18 of
2013) w.e.f. 01st June 2016 and the cases pending with the BIFR /DRT got
transfened to NCLT under Section 434 of the Companies Act, 2013.
(c) Necessary action in cases earlier pending with BIFR / DRT, which have now
gone to NCLT / NCLAT as per Section 434 of Companies Act, 2013 should be taken
up promptly by keeping track of hearing dates etc. Well conversant Group 'A' officers
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should properly present the cases before NCLT / NCLAT. Following instructions may
be refered for timely necessary action:
1. F. No. DGPM (TAR/1034/Tech/14llBBl/lnstruction/20'18/4538 to 4574, dated
19.03.18, Sub: Uryent need for alignment of recovery proceedings under Customs,
Central Excise, Service Tax and GST with the lnsolvency and Bankruptcy Code,
2016. These instructions illustrate the life cycle of the case undergoing insolvency
Resolution process.
2. F.No.5611121120191220-272dated12.10.2020, Sub: Restrained arrearblocked
under National Company Law Tribunal (NCLT).
As no separate notice/alerts are teceived by the department for cases before
NCLT / NCAT the website www.abbi.gov.in of NCLT should be visited regularly
to check if any case comes under the proceedings wherc department has to
file a claim. During the Corporate lnsolvency Resolution Process (CIRP), before the
NCLT, the department has two opportunities to raise its concems and file claim:
(D Upon admission of an application, NCLT makes a public announcement and
calls for the submission of claim by all crcditorc within a period of 14 days to lnterim
Resolution Profiessionals. The list of such cases and public announcements is
available on the website of insolvency board www.ibbi.oov.in. lf any of such a case is
listed on the website then it is imperative for the Jurisdictional Commissionerate to
file its claim (if any) with lnterim Resolution Professionals (lRPs) in prescribed format
accompanied with all requisite documents.
The IRP forms the 'Committee of creditors' and calls its meeting to decide
whether the business of corporate defaulter can be revived. Since taxes have been
declared as 'Operation debts' under lBC, the jurisdictional Central Tax or Customs
officer should attend the meeting of committee of creditors although they do not
possess the voting rights. By attending the meetings called by lnterim Resolution
ProfessionalslResolution Professrbna/s, jurisdictional ofiicer may naise their points
regarding protection of Govemment revenue.
(ii) When the insolvency professional acts as the liquidator, he collects the claims
of the creditors within a period of 30 days from the date of @mmencement of the
liquidation proceedings and creates a liquidation estate comprising of all the assets
of the corporate debtor and holds these assets in a fiduciary capacity for the benefit
of all the crcditors. The jurisdictional Gentral Tax/ Customs officers shall have to
submit a claim to the liquidator, within the time period (30 days) along with all such
suppofting documents required to prove the claim as may be specified.
(d) Gases with Debt Recoverv Tribunal (DRT)
(D The RDB Act, 1993 provided for establishment of DRTs with originaljurisdiction
and Debts Recovery Appellate Tribunals (DRATS) with appellate jurisdic'tion, for
expeditious adjudication and of debts due to banks and financial
institutions, insolvency
and connected matters
bankruptcy of individuals and partnership firms
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Banks approach the Debts Recovery Tribunal (DRT) whereas, under Securitization
and Reconstruction of Financial Assets and Enforcement of Security lnterests
(SARFAESI) Act, 2002 borrowers, guarantors, and any other person aggrieved by
any action of the bank can approach the DRT.
After the introduction of the Insolvency and Bankruptcy Code 2016, the
disputed matters relating to individuals will be dealt by the DRT and those for the
companies shall be dealt by the NCLT.
For recovery of departmental anears, a claim can be filed with DRT either
through direct application or through SARFAESI route. A proforma regarding the
application (which may be in the form of affidavit if required) is annexed as annexure
B.
Application Route: An application needs to be filed to a specific DRT if the cause of
action completely or in part emerges within the limits of its jurisdiction along with
paying the required fee.
SARFAESI Route: An application can likewise be made to the DRT under the
Securitization and Remaking for Enforcement of Security lnterest Act (SARFAESI),
2002. SARFAESI perceives the need to strengthen the rights of secured creditors to
help them in recouping their dues. lt sets out the procedure for doing as such without
the intercession of courts or councils.
(e) Cases with Official Liquidator(OL)
(i) The office of the Official Liquidator, is attached to and works under the close
supervision and control of the Company Court, High Court, and is also an integral
part of the Ministry of Corporate Affairs and handles the winding up process of
companies registered in a particular area as mandated by the Companies Act.
(ii) The winding up process includes taking possession of the assets of a company
ordered to be wound up, bringing the assets of the company to sale via public
auction, recovery of debts due to the company, invitation of claims against the
company, settlement of claims so received, distribution of funds to the creditors and
contributories, prosecution of directors of the company in the event of misfeasan@
and eventual dissolution of the company.
(iii) A company is ordered to be compulsorily wound up by the High Court in
response to a petition filed by one or more creditors seeking such relief when the
company is unable to pay off its debts to its creditors. !n the same order the Official
Liquidator is appointed with a direction to take charge of the assets and affairs of
the company.
(iv) During such processes, a claim can be filed by the defaulter as per proforma
annexed herewith as annexure B. The claimant (department) is required to submit all
documents necessary to prove the claim. The said proforma is an Affidavit swom by
the claimant and is to be filed through the departmental counsel.
(v) The Official Liquidator invites claims from the creditors of the company through
an advertisement in leading dailies giving at least 14 days'time (normally 30 days)
for the claimants to file their claims before him. Further, as part of e{ovemance
initiative the advertisement is also displayed.in the court's website covering the entire
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period of 30 days. The claimant is required to file his claim during the notification
period, though it can also be filed later subject to the approval of the High Court
condoning the delay.
(vi) A!! claims crystallize on the date of winding up order/appointment of provisional
liquidator as the case may be. No fresh debt can be created against a company after
the date of winding up order.
(vii) Upon receipt of the claim, Official Liquidator, after calling upon the claimant to
produce additional information or proof, if necessary, will adjudicate upon the same.
Once the claim is adjudicated, the same shall be intimated to claimant by an order
known as adjudication order as per Form 69/Form 70 of Company (Court) Rules,
1959.
5.3 CASES WHERE APPEAL PERIOD IS NOT OVER
The cases under this category should be monitored closely as these are the
new/fresh cases of anears where there is a big possibility that defaulters are
available. Where the period to file an appeal is over and no appeal is filed the case
will switch over to category of 'recoverable aneat' and accordingly action as per para
5.4 should be taken.
5.4 RECOVERY OF UN.DISPUTED/RECOVERABLE ARREARS -
For the cases where demands have been confirmed and the party has not
prefened an appeal or where the appeal period is already over or the anears arise
out of orders of Settlement Commission, the recoveries should be initiated
immediately as such cases are free from any restrain/litigation. The Jurisdictional Pr.
Commissioners/Commissioners should regularly review and monitor such arear
besides identifying the fresh cases arising under this category.
lmmediate action in these cases should be taken and recovery effected under
Section-11 of the Centra! Excise Act, Section 142 of the Customs Act, 1962 or
Section 87 of Finance Act, 1994 as the case may be.
(i) Broad stages for recovery of anear under this category are as under:-
(a) Deducting such amounts from any money owing to the defaulter.
(b) Attachment and sale of excisable goods belonging to the defaulter.
(c) lf the goods belonging to a defaulter are under the control of Customs Officers
anywhere in the country (including Ports, lCDs, CFSs, Bonded Warehouses), such
Officers would be required to recover the said amount by detaining and selling such
goods belonging to the defaulter.
lf the amount cannot be recovered from such person in the manner provided in
aforesaid clauses -
(d) Send a certificate specifying the amount collector of District for recovery
of the amount where the defaulter owns or records or business and the
said Gollector shal! proceed to recover the
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arrear as land revenue.
(e) Detention/attachment and sale of property of defaulter by the department as
per provisions of Section 1421(cXii) of Customs Act, 1962.
(f) Recovery by way of attachment and sale of goods/ material etc. from the
successor of the defaulter (i.e. transferee, purchaser etc.) in business or trade in
whole or part thereof.
(g) lnvoking the Gamishee Provisions i.e. recovery from any other person from
whom money is due to such defaulter or may become due to such defaulter or who
holds or may subsequently hold money for on account of defaulter.
l!. Apart from aforesaid legal provisions there may be occasions where there is a
possibility to recover the anears, few such aspects are illustrated below-
(a) On the Customs side, a lot of facilities, including facility of duty-free imports of
goods, are permitted on submission/fumishing of bank guarantee. The authorities
may review such cases and the bank guarantees been cashed wherever arrears
become due on account of failure of the person concemed to comply with the
condition of the bank guarantee.
(b) Attachment of Bank acepunts of the defaulters may be done as per prescribed
procedure for speedy recovery of anears.
!t is also to state that this is the most important category of anears which requires
personal attention and thorough monitoring. The responsibility for any default in the
action for recovery at any stage under this category will be with the jurisdictional
Assistant Commissioner. The Jurisdictional Pr. Commissioners / Commissioners
should regularly review and monitor these arrears.
6. IDENTIFICATION OF PROPERW OF DEFAULTERS
(i) Many cases under'recoverable area/ category are such where business is
closed and the defaulter is not traceable. ln some cases, even though the defaulters
are traceable yet their properties are not known. ln both categories properties are to
be identified for recovery of anears through attachment and sale.
(ii) The Pr. Commissioner/ Commissioner, to whose jurisdiction the arears
pertained/arisen shall identify the property belonging to the defaulter.
(iii) For tracing the defaulters and identification of their property and its location, the
sources of information will include the official record/documents supplemented with
human intelligence. Efforts should also be made to find out if other place of business
of the defaulter exists anyrhere in lndia.The Jurisdictional Pr. Commissioners /
Commissioners will get the enquiries completed at all known addresses of the
defaulters to ascertain whether he has any moveable or immovable assets that can
be identified for recovery.
(iv) The following sources of information should be accessed. Simultaneous
enquiries w.r.t. all sources should be made for faster and conclusive results.
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(a) lnformation, available with the department, that is contained in various
documents submitted by the defaulter like those relating to registration, retums,
replies to SCN, statements, RUDs etc should be culled out for the PAN, Mobile, e-
mai!, office address and Aadhar No. of the defaulter.
(b) Comprehensive enquiries should be conducted with banks and the known
premises
I residence, warehouse, depots etc.] of the defaulter.
(c) Discrete enquiries/investigation should be made with neighbors, trade rivals,
local market and other departments where there is possibility of registration of
defaulter viz. electricity, SGST, pollution control department, stamp authorities etc.
(d) On the basis of PAN Number, the lncome Tax Department's data base should
be accessed to ascertain the Aadhaar No., Mobile No., phone no., e-mail address,
location address, any house property, life/ medica!/ general insurance, Bank details,
movable & immovable property etc. of the defaulters.
(e) DGFT website can provide the registered residentia!, business address/details
of the defaulters on the basis of IEC and further access to MCA Company data to
verify Directo/s details [DlN] and other companies where the person is a director, its
address etc.
(0 Details of shares in capital market held by defaulters should be found out
through the two depositaries viz. National Securities Depository Limited (NSDL) and
Central Depository Services (!ndia) Limited (CSDL) by searching with PAN of the
defaulters.
(g) Department should access the digita! format of land/assets details
maintained/held by District Authorities so that recovery proceedings can be initiated
early.
(h) CBIC modules (viz. GST backend (Saksham) & ICES) should be used for
Alerts on recoverable dues u/Sec. 142 (1XcXi) or Notice against any GST assessee
or lEC holder.
(i) !n cases of fraud, suppression, smuggling etc. during the investigation itself the
officers should collect the details of bank accounts, property details of the Company/
Directors/ lndividuals and their/ dependents either under bond or while recording
Statement under Sec 108 of Customs Act 1962.
0) Financial lntelligence Unit -lND- FIU-IND is an organisation, working on pan
lndia basis to share the information related to financial frauds with govemment
designated authorities. Commissioner (TAR) is designated as nodal officer on behalf
of CBIC to handle all references frcm field formations seeking information from FIU-
IND in connection with recovery of pending dr6ars. lnformation of defaulters is
provided to FIU which are received from Nodal officers of the Zones and then FIU-
iltD provides relevant information to the Zofes. The following references w.r.t. FIU-
IND should be refened for necessary action:\
(i) lnstructions issued vide F. No. CC(TAByOB12O13 dated 28.01.2014 Sub:
intimation of Nodal fficer for exchange of inftrmation with Financial lntelligence
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Unit (FlU-lND)
(ii) lnstructions issued vide F. No. CC(TAR/OB|2013/F!U 9976-6007 dated
05.04.2018 dated 12.02.2018 Sub: lntimation of Nodal Officer for exchange of
information with Financial lntelligence Unit (FlU IND) and information about filing
information on defaulters in finexe module -
Reg.
(iii) lnstructions issued vide F.No. DGPM/TARy1037/FlUlMiscl2l2018 dated
13.06.2018 Sub: Exchange of information with FIU where defaulters are traceable -
!nformation about filing information on defaulters in finex module.
(k) DGARM being entrusted with responsibility of data analytics using various tools
available with it shall be the Nodal agency for recovery references made to it by the
field formations, as being done w.r.t. the lFU.
7. RECOVERY THROUGH ATTACHMENT AND SALE OF PROPERW
Upon identification of the location of the property of the defaulter by the
jurisdiction Pr. Commissioner/Commissioner (where the anear pertained/arisen), the
certificate under Section 142 (1) (c) of the Customs Act, 1962 should be sent only to
those Jurisdictional Pr. Commissioners/Commissioners under whose jurisdiction the
identified property of the defaulters is located for the following action.
(a) Any moveable or immovable property belonging to or under the control of the
defaulter will be detained under Section 142(1)(c) read with Customs (Attachment of
Property of Defaulters for Recovery of Govemment Dues) Rules, 1ggs.
(P) For recovery of the dues under these provisions, simuttaneous action through
district authorities and through Jurisdictional Pr. Commissioners zCommissioners
should be taken. Accordingly, the Circular No. 54/95-Cus. Dt. 30.05.95 stands
superseded.
(c) lf any dues are not paid within 30 days of the detention as above, the said
propefi would be sold in the prescribed manner.
(d) For recovery through attachment and sale, the procedure prescribed vide
following Circulars may be followed:
(i) circular No. 56/96-cus., Dated 14111196 F. No. 4son296-Cus-vt sub:
Recovery of anears of Revenue under amended Section 142(1) of the Customs Act
1962 read with Customs (Attachment of Property of Defaulters for Recovery of
Govemment of Dues) Rules, 1gg5.
(ii) Circular No. 365/81/97-CX Dated 1511211997 F. No. 296t1tgl-Cx.9 Sub: Sate of
movable/immovable properties by Central Excise fficers for recovery of Central
Excise dues.
(iii) F. No. 22413812004-CX-6 Dated August 2004. Sub: Sale of movable/immovable
properties by Central Excise officers for recovery of Central Excise Dues.
(iv) Circular No.
201t51t2004-CX-6,
4ct,1944.
87411212008-CX Dated 30/06/2008, issued vide F. No.
sub: lnstructions regarding section 11 DDA of the central Excise
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(v) Circular No. 10310612008-5T Dated 0'110712008 Sub: lnstructions regarding
provisional attachment of property under section 73 C of the Finance Act, 1994.
8. RECOVERY OF ARREARS UNDER GGST ACT, 2017:
For recovery, the comprehensive provisions as provided in Chapter XV and XVI
under CGST Act read with Chapter 18 of the CGST Rules, 2017 along with relevant
circulars shall be referred to and followed.
9. WRITE 4FF PROVTSIONS FOR CUSTOMS. GENTRAL EXCISE & SERVICE
TAX ARREARS.
ln cases where recovery is not possible due to non-availability of any propefi
relatable to the defaulter, the action for write-off of such inecoverable anears should
be taken. lt is noticed that many cases of anears are already identified/consistently
reported by the Pr. Commissioners / Commissioners for writing-off yet no action is
taken. tt is hereby directed to dispose of these cases as per following guidelines.
Further, it is also directed that for recoverable anears the procedure of
recovery/identification/attachmenUsale of property etc should be completed within six
months since the anears is considered as undisputed and categorized under
,recoverable
arrears category'. Thereafter the process to write off the same should
be commenced and the process of write off should be completed within 15 days by
the Committee/ Competent Authority.
(a) A proposal for write-off of inecoverable arrears shall be submitted by the
Deputy/ Assistant Commissioner in the prescribed format (attached asAnnexure C),
to the Pr. Commissioner/Commissioner, Zonal Pr. Chief /Chief Commissioner
depending on the amount of duty/tax proposed to be written off. These authorities
shall examine the proposal and if prima-facie satisfied, shall put up the case before
appropriate Committee for decision.
(b) Circular No. 1O8O1O112022-CX dated 19.01 .2022 is issued providing
constitution of two-member Committees to examine the proposals for write-off of
inecoverable anears of duty/taxes and fine & penalties.
(c) The Committee so constituted shall examine the proposals and on the basis of
the recommendation/decision of the Committee, the competent authority shall write-
off anears in deserving cases in accordance with the powers delegated for the
purpose.
(d) The Committee of Jurisdictional Pr. Commissioners/Commissioners so
constituted shal! also examine the proposals/cases to write-off the arrears where
onty penalty ls tevieO on the defaulters (viz. penalty imposed in cases of non-filing of
returns, penalty on crew in smuggling cases/penalty on transporters etc.). On the
basis of iecommendations of the Committee the Competent Authority shal! write-off
arrears in deserving cases.
once duty/tax
written-off.
(e) As regards write-off of interest amount, it is clqrified..that
involved is written off, the interest due thereon would autoy'tatically get
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(0 lt is also directed that the act of writing off of arrear does not absolve
the defaulter from the liability to pay for any new facts coming to notice in
future. Therefore, consequent action if any, should be ensured by the
jurisdictional Pr. Commissioners / Commissioners and the Pr. Chief /Chief
Commissioner as the case may be.
10. The following instructions regarding publication of names of defaulters and
grant of reward to the informers and government servants are in place, which should
be followed wherever required.
(i) Gircular No. 84910712007-CX Dated 1910412007, issued vide F. No.
20115112004-CX-6 about the guidelines in respect of publication of names under
section 37 E of the Central Excise Act, 1944.
(ii) F. No. 130111312004-CUS(AS) Dated 3lstJuly 2015 about the revised
guidelines for grant of reward to informers and Govt. Servants.
11. The responsibility to affect actual recovery will continue to vest with
Jurisdictional Pr. Commissioners/Commissioners where the cause of anears took
place.
12. lnstructions contained in CBEC (CBIC) Hand-Book issued in year 2012 on
recovery of anears or any other circular/ instruction/letter contrary to this circular
stand amended accordingly.
$
Under Secretary to the Govt. of India
Y
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L2
!
i
ANNEXURE - A
The following circulars regarding recovery/writing off of anears are superseded-
(i) F. No. 29014185-CX 9 dated 22.03.85 Sub: Write of Arrears.
(ii) F. No.290/20/90/-CX 9 dated 21.09.1990 Sub: Write off of inecoverable
amounts of Customs/ Central Excise duties and abandonment of irrecoverable
amounts of fines and penalties imposed under Customs Act, 1962, Central Excise
and Salt Act, 1944 and Gold Control Act, 1968- delegation of enhanced powers.
(iii) Circular No 54/95-Customs. Dated 30.05.1995 issued from F. No. 495/15194-
CUS Vl. Sub: Delegation of powers to customs officers under Section 142 of the
Customs Act, 1962.
(iv) Circular issued vide F. No. 29613412004-CX(PI) dated 12.08.2004. Sub:
Outstanding Anears of Centra! Excise and Customs Duties- Constitution of a Task
Force for Recovery.
(v) tnstructions issued vide F. No. CCffANilOIIOO7 dated 23.04.2008 Sub: Write-
off/ abandonment of inecoverable amount of arrears of revenue.
(va) Circular No. 946/0712011, dated 01.06.2011 Sub: Writing off of anears of
Central Excise, Service Tax and Customs Duty- Constitution of Committees to
advise the authority for writing off of arrears.
(vii) lnstruction issued vide F. No. 296/10/2009-CS-9(PI.) dated 29.05.2013. Sub:
Writing off of arrears of Central Excise, Service Tax and Customs duty- Constitution
of Gommittees to advise the authority for writing off of arears.
(vaii) F. No. 2961202t2017-CX-9 dated Sep 2017 Sub: Writing off of anears of
Central Excise, Service Tax and Customs duty- Gonstitution of Committees to advise
the authority for writing off of arrears read with corrigendum w.r.t 2011012017.
13
N
FORM FOR FILING CL"AIM WTH OUDRT
Affidavit of proof of arrear (may be filed in the form of application as the case
may be)
(PETITION No............
r)
l, .............................. of (full name, address and occupation of deponent to
be given) do solemnly affirm and state as follows:-
1. The Company/firm...........................(full name, address etc. of the
company/firm/entity to be given) was, at the date of the order of winding-up the
same* viz., the ............... day of ............. .. 2O...... and still is, justly and truly indebted
to the Department of indirect Taxes & Customs as anears mentioned as follows are
pending for recovery by the office of Jurisdictional
Commissloners/Gommissionerc of (full address)
Arrearc of- Duty/Penalty/Fine/other dues arising out
lt (Rs)
Deponent's signature.
Final orders of confirmation of anears and other related documents must be
attached with the claim and produced before the Authority as and when required.
2. ln respect of the said sum or any part thereof, I say I have not, nor to my/our
knowledge or belief, had or have received any anear or dues except the followingi
[Here state the pafticulars of recoveries made (if any) on the defautter from the date
of arising the anear to date of filing this Affidavit.
flf the claim is made as a preferential claim, say so and set out the grounds on which
the preference is claimed.l
Solemnly, affinned at .................. ..on ...........................( day), the
..........dayof.... .20.......
Before me.
\
o
q.
74
,.
IRRECOVERABLE ARREARS OF REVENUE
RANGE/GROUP/ETC.
DIVISION/BRANCH
COMMISSIONERATE
1 Name of the Defaulter
2.Address
3.Resistration No.
4.Name of the commodity and TH/Service- Description in
brief
5.Brief facts of the case (if necessary, separate sheet may
be attached)
6.Date of issue of Show Cause Notice and of OIO /OlA
/Final Order etc.
7Details of efforts made and result (outcome) thereof -
(a) for realizing amounts from any money owed to the
defaulter
(b) for attachment and sale of goods belonging to the
defaulter
(c) for attachment and sale of goods belonging to the
defaulter. under the control of Customs
(d) w.r.t. certificate for recovery sent to the Distt. Collector
of the district where the defaulter owns any property.
(e) to detain/attach and sellthe goods as per provisions of
Section 142$l C(ii) of Customs Act. 1962.
(0 to attach/and sell the goods in the possession/custody
of the transferee/successor in business under Section 11
of Central Excise Ae/., 19441 Sec. 142 of Gustoms Act,
1962. Section 87 of Finance Act, 1994.
(o) invokinq the oamishee provisions
(h) attachment of Bank account appropriation of Bank
Guarantee/enforcement of bail- bond etc.
(i) to ascertain the location of any moveable/ immoveable
assets belonging to the defaulter through sources
mentioned at para 6 (iv) (a) to (j) of the circular and result
thereof.
(i) others. if anv
8.Amount to be written off:
Rs.Total Amount due
Rs.Duty
Penaltv Rs.
Fine Rs.
Less:
Rs.Amount realized from the defaulter
Rs.Amount recovered out of sale of goods
15
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.:.
rSale of excisable ooods Rs.
Sale of moveable orooertv Rs.
Sale of immoveable prooertv Rs.
Appropriation of Bank Guarantee/recovery from of Bank
Account etc
Rs.
Adiustment of refunds Rs
Other (specifu) Rs
Net amount to be written off Rs
9.Details of financial position of the defaulter
10.Any other relevant facts/remarks
Asst./Deputy Gommissioner ln-charge
(Name and Signature with Date)
15
