Of this amount, the department has recovered Rs 25 crore already. Invoices and other records are under verification in all the cases. The total duty evasion is pegged at Rs 267 crore, which includes the Rs 75 crore evaded by wrong MODVAT claims. Nine persons have been arrested for fraud in various cases.

Last year, the figure of MODVAT misuse cases till November-end was 1200, involving Rs 43 cr. The other anti-evasion cases were 531 and involved duty to the tune of Rs 135 cr.

In some cases, officers found that credit had been claimed with bogus documents, not backed up by actual movement of goods, or vice versa. In other cases, overvaluation was detected, all to avail of the credit.

Apartfrom MODVAT misuse the other cases of evasion are by way of misclassification, suppression of production figures, illicit removal and wrong exemptions claims.

Companies involved in the manufacture of processed fabric, iron and steel, steel goods, machine parts, medicines, have been identified in the cases. Several cases involved misrepresentation of the SSI limit (Rs 50 lakh).

Meanwhile, independent processors of fabric, who process fabric with the use of power or have the facility for heat setting of fabrics with the aid of power or steam in the hot air stentor will now pay excise duty on capacity of production, instead of the meterwise duty on ad valorem basis.

The change has been introduced from December 16, 1998. The processor will pay Rs 1.5 lakh per chamber if the value of the processed fabric is less than RS 30 per sq mtr, and RS 2 lakh when the value is over Rs 30 per sq mtr. The length of the chamber is required to be 3.05 mtrs. and if it exceeds the same, the rate would have to be worked outon a pro-rate basis.

The procedure for export of fabrics from independent processors would also be changed to the one applicable to any non-excisable goods that are exported. The notional duty discharged by the independent processor is also reimbursable through the drawback route.