Selective Audit of SSI/Medium Units
Circular No. 395/28/98-CX dated 2/6/1998
Subject: Central Excise - Selective Audit of Small Scale and Medium Scale units
by Internal Audit Department - Instructions
I am directed to draw your attention to Board"s instructions regarding Selective Audit
contained in Circular No. 267/101/96-CX dated 13th November, 1996. Para 2.2 of the
said Circular is reproduced below :-
2.2 SSI units and medium units paying annual revenue of less than Rs. 1 crore need not
be audited in the above manner. Instead there will be a system of Selective Audit
keeping in mind the units which are manufacturing evasion-prone commodities, using
costly raw materials, showing negative growth of revenue etc. SSI units should be
visited only on written permission of an officer not below the rank of Assistant
Commissioner. Chief Commissioner may decide industry-wise/sectoral Audit of such units
on the basis of list of sensitive commodities as may be identified by the Director
General, Anti Evasion.
2. Though above methodology of Selective Audit by Internal Audit Parties may continue,
it is further directed that the small scale and medium scale units will be audited
only once in two years. Large scale units will continue to be audited once in a year.
Any audit shall be done only after giving one week"s prior notice to the assessee.
Sd/-
(P.K. Sinha)
Under Secretary to the Govt. of India
F.No. 201/03/98-CX.6