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Tax man to attach property of tax evaders
July, 01st 2008

Concerned by rising tax evasion especially by exporters and certain big manufacturers, the government today announced that the tax man could provisionally attach the property of evaders to recover dues.

The property of the manufacturers and service providers evading taxes could be attached by the tax man for up to two years to recover the dues, a circular issued by the Central Board of Excise and Customs (CBEC) said today.

The provisional attachment of property will, however, be resorted to only in a case where the service tax or CENVAT credit alleged to be involved is more than Rs 25 lakh.

It said the action would be taken only after issuing show cause notice and would be subject to the approval of the Commissioner of Central Excise.

The decision has been taken following Finance Minister P Chidambaram's recent meeting with Commissioners of Central Excise and Customs, where concern was expressed about fall in excise duty collection especially due to claims of CENVAT credit by issuing fake documents.

Government repays CENVAT credit to exporters to set off paid duties on inputs.

The property could be attached for indulging in sale of taxable services without payment of tax, under-voicing of goods, taking CENVAT credit without receipt of goods or services or through fake invoices in a fraudulent manner.

CBEC also said action could be taken against those officials who decide to attach property on frivolous grounds.

It also said that only immovable property which is used for commercial purpose may be provisionally attached and personal property will be spared.

Movable property could also be attached if the immovable property available for attachment is not sufficient to recover due taxes, it added.

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