Trying to project a taxpayer-friendly image, the Central Board of Excise and Customs has significantly scaled up the monetary limits for arrest and prosecution in crimes relating to smuggling and mis-declaration. It has also introduced strict safeguards to ensure that arrests and prosecution are initiated only in serious cases.

“The monetary limits for arrest and prosecution have been revised substantially upwards to ensure that these powers are not used against small and medium businesses,” said a Finance Ministry statement.

For instance, in cases of smuggling and mis-declaration of baggage, the limit for the offending goods has been raised to ₹20 lakh from the current ₹5 lakh, said a Finance Ministry release on Friday.

The riders The CBEC has, however, warned that there is no such limit for prosecution or arrest for smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species.

Penal action such as arrest and prosecution in cases of customs duty evasion through wrongful availment of exemption or duty drawback will only be taken in amounts involving ₹1 crore from the current limit of ₹10 lakh.

The threshold for mis-declaration in the value of imported or exported goods has also been revised upwards.

Similarly, the limits in case of offence of evasion of tax or wrongful utilisation of input tax credit in case of central excise duty and service tax too has been hiked to ₹1 crore from the current limit of ₹25 lakh and ₹10 lakh respectively.

“The procedure to be followed for arrest and sanction of prosecution has been revised and specified with adequate safeguards in these instructions to ensure that only in cases of serious nature above the revised thresholds, where there is strong prima-facie evidence, these powers are exercised,” said the release.

Under the Central Excise Act, 1994, Finance Act, 1994 dealing with Service Tax and Customs Act, 1962, serious offences of tax evasion can lead to arrest and prosecution of the tax payer.

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