The Government is now looking to plug excise revenue leakages through a more rigorous set of deterrent measures and by obtaining third-party information that could be matched against the information on indirect taxes submitted by assessees.

The third-party information collection system is proposed to be modelled on the annual information return (AIR) system that has become successful on the direct tax side.

Concerned over sluggish growth in excise duty collections, the Finance Minister, Mr P. Chidambaram, on Thursday advised the Central Board of Excise and Customs (CBEC) to revisit the existing deterrent measures, stating that they were not deterrent enough.

As many as 49 cases have been subject to deterrent measures. It appears to me that deterrent measures are not deterrent enough. The idea is if you take action against one person, found guilty of excise evasion, the deterrent action taken against that assessee must have salutary effect on the assesses of the same product group, Mr Chidambaram told reporters after inaugurating the two-day annual All-India Conference of Chief Commissioners of excise and customs.

In 2007, the CBEC came up with certain measures, which were deterrent in nature, leading to swift action in cases of planned and deliberate excise duty evasion. The nature of restrictions that could be imposed included withdrawal of the facility of monthly payment of duties for a specified period and non-utilisation of cenvat credit for a specific period. These measures were put in place in the wake of strong manufacturing sector performance not getting translated into increased excise duty collections.

Meanwhile, the Finance Minister, Mr P. Chidambaram, also said that he has impressed upon the chief commissioners that commissioners holding charge on areas that are evasion-prone must be encouraged to take very stern preventive measures rather than discovery through raid and inspections.

Very strong preventive measures are to be taken so that there is no organised evasion of excise duty, he said.

Stating that there has been both clandestine removal of goods and misuse of cenvat credit, Mr Chidambaram said that the revenue department would redouble efforts to achieve excise collection target of Rs 1,36,610 crore this fiscal. Achieving overall indirect tax collection target for 2008-09 would not be enough. Within the overall targets, I would be happy if we achieve the targets set for each taxes customs, service tax and central excise, he said

Although the revenue department achieved indirect tax collection targets (revised estimates) for 2007-08, there was shortfall on the excise duty front. In April this year, there was a decline in excise duty collection, but the Finance Minister termed it as an aberration.