EA 2000 Audit - Clarification

This query is : Resolved

Ganesh (Querist)
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21 July 2008 Hello! Everybody

We're dealers of exciseable goods, & we're transferring modvat to our customers. And every year we're transferring less what we're getting. And also that we're receiving the material & supplying the same to F.O.R. basis to our customers in our own vehicles as per customer purchase order. Simply, trading activity.

Last year we're facing EA2000 audit from Excise Commissioner Office. In that, they can audit last 5 years, where Excise part was clear. And telling that this EA 2000 was applicable to dealers also from this year, where turnover is morethan 5 crores.
Here we didn't observe that our sale turnover or purchase turnover or excise turnover. Actually, our purchase & sale is morethan 5 crore.

Again this year one notice was came from same excise commissioner office audit wing.
For how many years they can audit? this EA2000. If once Audited, & clear earlier years, is it required again to show the same records. What is actual procedure of this audit. How can we face the same?
In the notice they are asking all documents
relating to banks, financial institutions,
costing, inward & outward registers, sale & purchase registers, returns of all govt. departments & etc.

Please help in this regard.

Thanks.

CA. Harinder Kumar

CA. Harinder Kumar (Expert)
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21 July 2008 1.EA 2000 Audit is done by excise department every year. this is done for unit who is paying duty of Rs.1.00 to 5.00 crores and above from the personal ledger account(PLA) in the preceding financial year(except the units covered by provisions of section 3A of the centeral excise act,1944.
2.if unit is already audited under earlier system then he can not audited again for same year under EA Audit-2000.
3. Uder EA audit 2000 excise dept. audit team can chek all financial records.
4. if they have evidance of any duty eviasion they can go back upto 10 years.

Ganesh

Ganesh (Querist)
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22 July 2008 Hello! CA Harinder Kumar,

What are the exceptions for the units covered by provisions of section 3A of the centeral excise act,1944? And what are these provisions? & What it was saying?

And we're doing trading? By paying Excise only we're getting the material. If we're purchasing the same on credit also we're getting excise paid bill. There is no other point in it? We're paying Excise.

So, they can audit from the next month/year for the earlier audit by showing earlier audit report.

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