Misuse of Money Credit Scheme - Procedure to be followed - Regarding - Central Excise - 16/91-CX.8

Misuse of Money Credit Scheme - Procedure to be followed - Regarding Circular No. 16/91-CX.8 Dated 25-3-1991 [From F. No. 267/8/91-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject: Misuse of Money Credit Scheme - Procedure to be followed - Regarding. I am directed to say that it has been brought to the notice of the Department that vanaspati manufacturers were availing of money credit even on those oils which were not covered under the scheme, thereby misusing the money credit scheme. For preventing such misuse it was considered necessary to test the oils to ascertain whether the oils in question actually conformed to the eligible categories or not. It was suggested on behalf of Department of Civil Supplies that in case the department did not have the required testing facilities, the sample could be sent to them for verification as they possessed the requisite facilities. The matter has been examined in consultation with the Directorate General of Inspection. It is felt that the departmental laboratories are well equipped to identify the oils at pre-hydrogenation stage. Samples of vegetable oils should, therefore, be drawn at a stage prior to hydrogenation, since during hydrogenation oils lose their identity and there is no facility either with the CRCL or the laboratories of Civil Supplies to ascertain which oil has been used in the manufacture of vanaspati or vanaspati products. It has therefore, been decided that the samples of vegetable oils should normally be drawn from each lot of oils and at least one out of 5 samples should be tested. In case the test results do not tally with the declaration filed, all the remaining samples should immediately be got tested and remedial measures taken in such cases. A detailed procedure for drawing of samples for testing purposes has already been in prescribed in para 114(II) (d) of Basic Excise Manual and in paras 50 51 of the Supplement to the commodity manual on vegetable products. Board has desired that this procedure be strictly followed by the Central Excise Officers in case of the assessees availing of the money credit scheme. Field formations may be instructed accordingly. Receipt of this letter may please be acknowledged.