A top revenue official said that this recommendation, which is a part of the Iyer-Mitra committee report on the restructuring of the central excise law and its procedural aspects, is "under active consideration of the Central Board of Excise and Customs (CBEC)".

The Iyer-Mitra committee, which submitted its report to the finance ministry last month, has also suggested that all restrictions in regard to availability of Modvat credit--including its restriction to 95 per cent--should be withdrawn as early as possible.

The report has said that preventive and audit checks should be applied based on the reputation of the unit, nature of the commodity manufactured, the parameters of the units as compared to the parameters of the industry for the whole nation.

Production-based control checks should be undertaken only in cases where accordingto the data maintained by the range office, divisional office or by the central data bank, the unit falls outside the norms observed for the particular industry as not as a matter of course, the report mentions.The government had, in March, constituted the two member committee - fornmer special secretary to government S V Iyear and FICCI secretary general Amit Mitra - to suggest alternatives to decrease the interface between assessees and excise officials.

The study states that if the interface between the assessees and the excise officers is to be reduced, the scheme of collection of excise duties should be one which creates a distance between the assessees and the excise officers, unless it is unaviodable.

The study has also recommended that central excise duty on goods cleared during a month should be paid by the seventh of the following month. However, the assessee should continue to self-assess the duty as at present on each invoice and the daily production and clearance should be entered in theprescribed registers, or in the manufacturers' private records so that the excise authorities are able to cheack the stock in the factory in case of reasonable doubt regarding evasion by any unit.

According to the study, the benefit of Modvat on the basis of the second stage dealer's invoice should be withdrawn. This measure will not cause any serious problems for the users of the inputs, the study adds.

The provisions relating to seizure and confiscation of goods, land and machinery should not apply to cases other than those where the goods are found to have been removed unauthorised or the production suppressed, the study states.