A Central Board of Excise and Customs (CBEC) official said that the proposal has been sent to the law ministry for consideration. "The extent of waiver, whether full or partial, will be decided after we get a reply from the law ministry," he added.

The official said the provision is being relaxed to encourage more litigants to avail of the scheme. It was being seen that many companies in which show cause notices had been issued against their directors were not showing keen interest in the scheme, he added.

The plan, which came into effect from September 1 and ends on December 31, has evoked a poor response so far. From the over 1,300 assesses who have availed of the scheme, only Rs 100-odd crore has flowed into government coffers so far.

The revenue department had estimated indirect-tax arrears of over Rs 12,000 crore as eligible under the scheme, with a maximum potential of generating Rs 6,000 crore.

Under the present provision, in cases where penalty has not been adjudicated, even though the company can avail of the scheme by paying 50 per cent of the tax arrears of duty, the directors have also to file for amnesty under the plan as they are considered different persons than the company.

However, it will be applicable to cases where showcause notices have been issued to the company as well as its directors, but adjudication is pending, clarified the official.

CBEC is understood to have stepped up advertising for the scheme, including direct marketing. "Since the department knows which are the companies eligible for this scheme, it is sending letters directly to the companies to encourage them to avail of the scheme", he added.

CBEC is also learnt to have roped in its advertising agencies to prepare the format for letters and has directed commissioners to interact directly with companies.

"Though the scheme was not supposed to contribute to the current fiscal's indirect-tax collection, owing to poor performance in collection so far, whatever the government collects from the scheme will help in bridging the gap between actual tax realisation and budgeted figures", the official added.

Under the scheme, in cases where the company as well as its directors are involved and there is some duty liability on the company as well as penalty on the company and the directors, then the company has to pay 50 per cent of arrears and 100 per cent penalty will be waived against it.

However, as far as directors are concerned, since there is only a penalty imposed on them and have a different identity, they will have to pay 50 per cent of the penalty imposed on them.