The revenue department has recommended a new policy package for ware-houses which aims to simplify and rationalise the existing excise laws governing ware-housing business in the country.
The measures suggested by the department include: conferring power to the central excise department for cancellation of public warehouses, elimination of prior notification before transferring goods from one warehouse to another, reducing the period of warehousing from three years in case of perishable goods and removing the substantive part of warehousing laws from the Central Excise Rules to the Central Excise Act.
These changes have been incorporated in the newly drafted Central Excise Bill which proposes to replace the existing Central Excise Act once the finance ministry and Parliament ratify it.
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The existing Central Excise Act has no provision for cancellation of public warehouses. The public ware houses, run by organisations like the Central Warehousing Corporation, unlike private warehouses cannot be cancelled by the central excise department even in case of gross violation of the rules. The department has suggested that since it has the authority to appoint the public warehouses, it should also be vested with the powers of cancelling it.
The department has suggested that prior notification for transfer of goods from one warehouse to another should be eliminated. Presently, the government notifies certain goods which can be warehoused and in case these goods are transferred from one warehouse to another, a prior notification is required.
It has also proposed rationalisation of the extension of warehousing period which at present is three years. The department said in case of perishable goods, the department should reserve the right to reduce the period of warehousing in order to avoid revenue loss.
Besides, the department has also proposed that the substantive portion of the laws dealing with warehousing should be removed from the Central Excise Rules to the Central Excise Act. Since the Rules follow from the Act itself.
The department has also suggested a series of procedural simplifications relating to export oriented units (EOUs) and exports.
"It is proposed to have a separate chapter in Central Excise Rules detailing the facilities of export. Whereas the enabling power to allow exports without payment of duty or under claim for rebate have been made part of the Act. ...The facility of deferred payment of duty through warehousing has been highlighted," the draft bill states.
Besides, all provisions relating to mandatory penalties and confiscation have been clubbed under two sections in the new draft.
It has also relaxed most of the restrictions on pre-Budget day and Budget day movement of goods.