Introduction

Central Board of Excise and Customs is the apex body constituted under law to administer and formulate policy regarding collection of indirect taxes in India. The present structure of Board is the outcome of incremental changes made from time to time from the legacy of a control economy. The structure of the Board, its Sections and procedures are in need of a relook as fundamental changes in economy and methods of tax collection have taken place. Service tax is the fastest growing indirect tax with least resources at its command; Customs is losing its relevance as a paramount source of revenue and being increasingly recognized for its functions in border control, free trade agreements, trade facilitation etc, and Central Excise has, by now, become a settled law. It is in this background, that a need is felt to relook at the structure of the Board and its Sections to suggest means to improve the utility and efficiency of the policy wings.

2. Presently, various Sections/Wings of the Board are organized mainly along the three main streams of revenue collection i.e. Central Excise, Customs and Service Tax. Such independent handling sometimes leads to inconsistencies and complications. Thus there is a requirement for an institutionalized mechanism to ensure better coordination among the three policy wings. On the other hand, there are certain Sections/Wings in the Board which deal with functional matters common to all the three revenue streams, namely – TRU, Legal, and Review.

3. On the one hand there are Directorates – such as DGICCE, DG (Audit), and CC (TAR) – all under the administrative control of Member (CX) - which deal with matters common to all the three revenue streams and, on the other hand, there are Directorates namely DG (Systems and Data Management) and DG Export Promotion for which there is no Section in the Ministry to interface.

4. Mandate - In the above background, the Board constituted a Committee to suggest restructuring of various sections of the Board with the following mandate –

(a) Necessary measures for effective coordination to ensure harmony of policies and procedures and consistency in implementation of law relating to Central Excise, Customs and Service Tax;

(a) Desirability or otherwise of creation of any new Sections/Wings;

(b) Reallocation of work distribution, if any, required among Sections/Wings;

(c) Roles and responsibilities of various Sections/Wings vis-s-vis Directorates.

(d) Manpower requirements in the light of such reorganization and/or redistribution;

(e) Other infrastructural requirements in the light of such reorganization and/or redistribution;

(f) Any other issue which may arise having any bearing on the above.

5. The Committee was constituted by an O.M dt 4-11-13 issued vide F.No 296/108/2013-CX-9 with the following members -

Sl Name (S/Shri)

Designation and place of posting

i. P. S. Pruthi Chief Commissioner of Customs and Central Excise, Chandigarh. (Chairman)

ii. Sandeep Kumar

Commissioner (Customs), CBEC

iii. Manish Sinha

Director (CX.1 & 6), CBEC

iv. S. K. Sinha Director (Judicial), CBECv. R. P. Singh Director (Customs), CBEC

6. Methodology

6.1 The Committee considered the present organization of the work in the Board and in the Directorates that function as adjuncts to the Board and also render active support to its functioning. The

Committee convened a meeting of the Director level officers in the Board and invited their suggestions on improving the efficiency of functioning of Board. The Chairman of the Committee also addressed each of the Joint Secretaries / Commissioners in the Board office for providing suggestions for functional improvements. The Chairman of the Committee also held a session with a few retired officers & FICCI seeking suggestions for functional improvement and incorporating trade’s expectations from the Board office.

6.2 The shortage of manpower and required skill set in the sections of the Board was a common refrain. While the need for additional manpower is acknowledged, it was noted that creation of regular sanctioned posts in the Board is difficult and involves an extensive approval process. The Committee carefully considered various suggestions and decided to focus on making such recommendations which can be implemented by the Board without the need for seeking approvals of other Ministries / departments etc. Therefore, the Committee has suggested innovative solutions that can be implemented in the short term and changes that can be made with the available resources. The recommendations of the Committee are given in Chapters II to IV below.

Chapter I

Rules for transaction of business by the Board:

1 As per Section 4 (1) of the Central Boards of Revenue Act, 1963, the Central Government may make rules for the purpose of regulating the transaction of business by each Board and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board.

1.1 The Committee could not find any rules made as envisaged by the above provision to regulate and lay down the transaction of business by the Board. The Committee felt the need for making such rules to provide clarity and legal basis for discharge of functions by the Board, particularly those relating to subordinate legislation.

1.2 There are powers vested in the Board in several Sections of the Customs Act, 1962, Central Excise Act, 1944 and the Finance Act, 1994. These powers include power to make regulations and issue non-tariff notifications and instructions of varied nature. However, there is no definition to state when the power vested in the Board may be exercised by a Member alone, or Chairperson or by a full Board meeting.

1.3 Such a definition will not only provide clarity in delegation of powers, but more importantly, provide legal backing. This acquires added significance in the context of the judgment of Hon’ble Supreme Court dated 18.02.2011, in the Sayed Ali case, consequent to which the ‘proper officer’, was defined in terms of Section 2(34) of the Customs Act, 1962. However, what constitutes the power of the Board has not been defined. 

1.4 Recommendation: It is therefore recommended that Board set up a Committee that should draft rules under Section 4 (1) of the Central Boards of Revenue Act, 1963.

Chapter II

Organization of charges under Members of the Board

1. At present, the Sections/Wings of the Board are organized along three main streams of revenue collection i.e. Central Excise, Customs and Service Tax, with separate divisions for Personnel & Vigilance, Budget, Legal and Judicial. Considering the specific mandate to the Committee to examine whether a re-organization on functional basis could improve delivery, the issue was deliberated at length. The present division of work based on revenue streams was found to have merits. The Committee is of the view that the extent of commonality of provisions and functions among Customs, Central Excise and Service Tax does not necessitate a broad based re-organization of work on a functional basis. However, it was felt that some re-organisation, on functional basis, is desirable, where the synergies of work are already inseparable or where introducing such harmony would significantly improve functioning. In case of other areas of work, a strong coordination mechanism (through the coordination section, and through referring of files between the concerned wings of the Board) would meet the organizational needs.

1.1 While reviewing division of responsibilities, the Committee noted that IT, which has come to be the backbone of tax operations, has always been an additional charge, and that too, without support of a Section in the Board to the Member.

1.2 The Committee noted the importance of the functioning of the Directorates as adjuncts to the Board and that there was considerable room for improvement in the support functions by both DGICCE and DGEP.

1.3 During the course of deliberations and consultations it also emerged that central excise & service tax divisions needed to work very closely due to common rules and returns.

1.4 The Committee also felt that fixing of revenue targets and revenue analysis & monitoring was a core expectation of the Hon’ble Finance Minister from CBEC and the manner of handling this function was dis-aggregated among four members.

1.5 In view of the above and other issues, which are discussed in succeeding paras, it was felt that in order to improve the functioning of the Board Office, there was a need to re-organise work in some divisions/sections on functional basis. In order to extract maximum benefits of such re-organisation, it is critical that consistency in reporting be maintained, vertically. Therefore, in order to have a harmonised work distribution and map the various wings of the Board/Directorates to the Members for better coordination & supervision, corresponding changes are suggested at level of Member.

2. The Committee recommends the following verticals headed by respective Member of the Board:

Member (Central Excise & Service Tax) Member (Budget & Revenue) Member (IT & GSTN) Member (Compliance & Coordination) Member (Customs) Member (P & A)

3. Member (Central Excise and Service Tax): The Committee finds merit in grouping the non-tariff work and businesses processes of Central Excise and Service Tax under a single Member, as the work is increasingly converging in most areas including Cenvat credit provisions and issues relating thereto, offence provisions, audit, reports and returns etc. The two streams will converge even further in times to come, in view of the impending introduction of GST. It is widely acknowledged that the

Service Tax wing of the Board needs to be strengthened. The rationalisation of the manpower and sections in the Board looking after Central Excise and Service Tax will therefore lead to improved availability of resources to Service Tax, and enable a holistic perspective on common policy issues in both tax streams. The convergence of the decision making pyramid at the level of Member is expected to provide efficacious and early resolution to long standing issues like common rules, reports and returns. It will facilitate better understanding of common issues, paving the way for implementation of GST.

3.1 The recommendations relating to organization of work under the proposed Member (Central Excise & Service Tax) are stated in Chapter III of the report.

4. Member (Budget & Revenue): Revenue monitoring and forecasting are core functions of CBEC. The Board briefs Hon’ble F.M and other senior functionaries on revenue position regularly. The present arrangement in the Board, where various Members seek reports from field formations, while Principal CCA provides information to TRU, leads to contradictions in revenue figures. The Committee feels that there is considerable scope for improvement in this work area. It is recommended that this responsibility be centralised with one Member. Since Member (Budget) deals with the fixation of revenue targets for the various Zones, and knows the basis for assigning the targets and is familiar with macro-economic trends while interacting with chambers of industry and other Ministries, the Committee recommends that the revenue analysis function should be carried out by Member (Budget). It has also been kept in mind that the Statistical Unit in the Board functions under Member (Budget). While, Member (Budget) may be entrusted with the responsibility of Revenue monitoring, including trend analysis, the jurisdictional Members would continue the task of initiating steps to augment revenue.

4.1 The recommendations relating to organization of work under the proposed Member (Budget & Revenue) are stated in Chapter III of the report.

5. Member (I.T and GSTN): The I.T initiatives of the Department are spread across Customs, Central Excise and Service Tax. The start made by CBEC on automation needs to be built upon and taken to the next level. The data pertaining to these tax streams needs to be used for improved revenue mining and policy making. Given the need to manage the huge network and disparate applications running across the country and across tax streams and most importantly addressing trade grievances related to functioning of the IT System, the Committee strongly recommends the need for IT to be an independent charge at the level of Member, with adequate secretarial support from within the Ministry. Further, the automation work relating to GSTN is expected to be enormous and critical to the successful implementation of GST and CBEC would benefit from the supervision of this area by an exclusive Member in charge of I.T.

5.1 The Committee acknowledges that the Member (IT) would require support of a Division under a JS / Commissioner level officer. Contours of an IT division, under a Commissioner assisted by a Director & two under secretaries, are suggested in Chapter III.

6. Member (Compliance & Coordination): Functionally, the legal and judicial work, and that emanating from C&AG Audits cuts across the multiple steams of taxation and requires taking stand on various issues as well as complying with the outcomes. The Committee felt that the important work of coordination in the Board should also be placed under a Member, to ensure close coordination on cross-cutting issues. Furthermore, Directorate of Audit has responsibilities cutting across divisions. All such common functions need to be placed under a single Member. The Committee recommends enhancing responsibilities of the Member (L&J) and re-designating the position as Member (Compliance & Coordination).

7. Member (Customs): There is no change proposed in the work under Member (Customs), except for an intra-divisional re-organisation of work. The recommendations relating to organization of work under Member (Customs) are stated in Chapter III of the report.

8. Member (Personnel & Administration): Member (P&V) deals with the efficient management of the resources of the department – manpower and infrastructure. The Vigilance function is integral to personnel management there is no reason why it should be mentioned separately in the designation of Member (Personnel). The Committee recommends that the Member be re-designated as Member (Personnel & Administration). This designation already appears in the induction material of the Dept. of Revenue (2009)

9. Based upon the reasoning given above, a detailed organisational chart is annexed (Annex A) along with the mapping of various J.S/Commissioner level officers and Directorates to the Members.

Chapter III

1. The recommendations relating to organization of work under each Member is given below:

2 Member (Central Excise & Service Tax):

2.1 The work performed by the Central Excise and Service Tax wings of the Board should be rationalised so as to devote equal amount of manpower resources to both tax streams.

2.2 It is noted that a Directorate General of Service Tax is in Mumbai. The Directorate is staffed with 25 Group B officers, 4 DCs, 2 ADCs and an ADG & DG. Anecdotal evidence does not indicate any large quantum of work being handled in the Directorate. It was also gathered that a proposal was made to convert DG, Service Tax into a DGCEI type of organisation for anti-evasion work, which would then require zonal and regional units to be set up. In view of the organizational theme adopted by this Committee of integration of service tax and central excise, as a precursor to GST, it is recommended that another organisation for anti-evasion work of service tax is not desirable. Strengthening DGCEI suitably would be a better recourse. DG, Service Tax needs to be re-oriented to ensure improved delivery of policy objectives. Single office Directorates, like DGEP or DGoV, typically work as adjuncts to the Board, which obviates the need to expand posts in the Ministry, which is a cumbersome and uncertain process. In order to achieve its objective, such a Directorate needs to be headquartered in Delhi so that frequent and close liaison between Board and the Directorate is possible and files can move back & forth. The Committee finds no good and justifiable reasons for DG Service Tax to be located in Mumbai and recommends that it should be re-located to Delhi. Its resources should be available to Member for policy related work. If the above proposal is not found acceptable, an alternative proposal put forth for consideration is to re-orient DGST as a Directorate of Valuation for Central Excise & Service Tax on the lines of DGoV (Customs). It is felt that there is considerable scope for monitoring valuation in central excise side with attendant benefits for revenue mining, even if the valuation law in the three streams of taxation is different.

2.3 Notwithstanding the above, a re-organisation of Central Excise & Service Tax Section/Divisions, based on the assumption of a single Member heading these Section/Divisions in the Ministry, has been attempted. A draft work distribution order is annexed to this report.

3. Member (Budget & Revenue):

3.1 At present, while TRU issues tariff notifications, the interpretation of such notifications is entrusted to different sections - Tariff Unit (TU) for Customs notifications and different sections of Central Excise (based on the HS chapters). As TRU issues the notifications, the Committee feels that TRU is best placed to interpret and clarify their policy intent and coverage as well redress policy level grievances. Tasking other sections to offer or coordinate clarifications on the scope and coverage of notifications has led to avoidable delays. Therefore, the Committee recommends mandating TRU to take ownership of all representations relating to classification for the purposes of rate of duty and eligibility to concessional notifications; duty structure; and interpretation of notifications. However, HSN & Tariff Act related work would continue with the respective sections.

3.2 Adhoc exemptions are dealt with in the Customs wing. This work closely relates to Tariff exemptions and should ideally be dealt with in TRU.

3.3 It is widely held that that the Directorate General of Inspection Customs and Central Excise (DGICCE) is under-utilized. The Committee was of the view that with the expansion of positions at Chief Commissioner level, the utility of the function of inspection at such a centralised level has outlived its utility. Should DGICCE be re-oriented and its mandate changed, the department will be able to harness the resources to efficient use. The inspection function itself needs to be thought of in terms of Chief Commissioners themselves constituting teams and conducting inspections, or better still instituting a peer review program for cross commissionerate inspections. Therefore, it is recommended that the function of “inspection” be decentralised and DGICCE with

its regional units be utilised for conducting industry consultations and specialised industry/revenue growth studies by taking up Industry representations received in the Board and handling specific assignments issued by Member (Budget).

3.4 If DGICCE were to be used to conduct such studies Member (Budget & Revenue), will have adequate assistance in conducting revenue trend analysis, and following up on issues emerging from interaction with different sectors of the industry. Member (Budget) could also entrust DGICCE with industry consultations and examining clarificatory representations.

3.5 In order to further strengthen budget making, policy making and revenue forecasting functions, the EDW wing presently under DG Systems should function under Member (Budget & Revenue), as a source of data and analytics.

3.6 TAR, whose mandate is intrinsically connected to revenue generation, should also report to Member (Budget & Revenue).

4. Member (Customs):

4.1 The Committee suggests that the sections of the Board should focus more on policy making, reforms, providing clarity on existing laws and procedures and grievance redressal.

4.2 As per Board’s Circular 1/2008 Customs dated 09.01.2008, DGEP has the important mandate of coordinating the trade facilitation initiatives at the policy level and functioning as the central consultative body with trade and other stakeholders, which is an area of work not receiving any attention. The export promotion (EP) schemes handled by DGEP except SEZ scheme (i.e. EOU, EHTP/STPI and Gems & Jewellery) may be transferred to J.S (Drawback), who already handles EP schemes, such as EPCG, DEEC, DFIA, SFIS etc. The Drawback division can be strengthened at the DC/AC level by re-positioning some staff of DGEP with J.S (Drawback). DGEP, apart from discharging its mandate on facilitation, should also be utilized to conduct stakeholder and trade consultations on FTAs, which have been majorly impacting the revenue as well as domestic industry and farm sectors.

4.3 At present, the international work relating to Customs is divided between J.S (Customs) who handles work relating to WCO, WTO, ASEM & OCED and Commissioner (Customs), who handles all bi-lateral international work & FTAs. Commissioner (Customs) also supervises work relating to Customs V section, which handles Customs Valuation, adhoc exemptions, exchange rate notifications and tariff value. The Land Customs Station, which works very closely with MEA and Dept. of Commerce on issues relating to overland trade in South Asia, is also with ICD division.

4.4 It is recommended that the international work be consolidated under one of the officers alongside that of Land Customs section, which is very similar in nature. The Customs V section, which deals with Customs Valuation, adhoc exemptions, exchange rate notifications and tariff value be moved to the Policy division so that work dealt in Customs III, IV, V and VI sections be placed under the other officer. This would lead to a better consistency of the stand to be taken on issues in bilateral and multilateral fora in relation India’s obligations to WCO and WTO.

4.5 The work relating to DG Safeguards is intertwined with work relating to Free Trade Agreements which is a part of ICD. Every FTA has inbuilt provisions for Safeguards and requires legislative enactment under Customs Act, which has been seriously neglected. The work of this Directorate has huge potential. It is an effective alternate mechanism to the anti-dumping Directorate under the Ministry of Commerce & Industry for domestic industry. Therefore, the Safeguard Directorate should be placed with the officer in Board looking after the international work, viz., Commissioner (Customs) as the work relating to investigating the imposition of safeguard duties has a close bearing with imports under FTAs.

4.6 Ports/Airports/ICDs have emerged as a domain area under the private sector. Logistics, which involve Customs brokers, shipping agents, warehouse operators, custodians etc. is becoming increasingly important areas of work. A single window for these stakeholders needs to be created under Customs wing. Presently the work is disaggregated between JS Customs & Commissioner Customs as well as within sections. This should be consolidated

under one wing (JS Customs) and with one Under Secretary as a Customs Infrastructure section for dealing with all custodians, agents, customs brokers etc.

5. Member (Compliance & Coordination):

5.1 Commissioner (Coordination) would function under Member (Compliance & Coordination) and perform the highly important role of compliance to the ‘Rules for transaction of business’ by the Board, organizing Board meetings and issuing the decisions, coordinating all issues that have ramifications across more than one Member etc. Hence, coordination section will be most appropriately placed under this Member.

5.2 At present, PAC section of the Board deals with only the Central Excise and Service Tax audit work whereas the Customs audit work is dealt by individual customs sections in the Board. All the work relating to C&AG audit should be consolidated under Commissioner (PAC) to ensure consistency and better coordination with field formations, C&AG & Lok Sabha Sectt. Some staff could be diverted from Customs Sections for this purpose.

5.3 Legal & Judicial wings would continue to function under this Member. The Committee recommends that at the J.S level, the Legal & Judicial wings be placed under a single officer of J.S level with two Directors and respective sections to provide assistance. [The other officer of J.S rank is being suggested to head the I.T division under Member (I.T) in the para below].

5.4 Directorate General of Audit also deals with the three steams of indirect taxation and may be placed under this Member. The functioning of D. G (Audit) may be made more relevant by involving them in conduct of actual audits, particularly of multi-location units as well as large tax payers. This need has been felt in view of the C&AG changing their policy of Audit by shifting from a direct assesse based audit to audit of Commissionerates.

5.5 DPPR, which manages publicity and public relations for the entire CBEC may also be placed under Member (Compliance & Coordination).

6. Member (I.T & GSTN):

6.1 The Member of the Board in charge of I.T does not have the benefit of assistance of a section of the Board to discharge the work, which is a huge deficiency that needs urgent rectification. Various wings of the Board place their needs for introducing/amending the software applications for improving the business processes. Various Ministries like Commerce or Agriculture are also independently liasoning with DG Systems for their requirements of data and putting in place Systems for implementing their policies. Further, Trade bodies, individual corporates, customs brokers are constantly making references regarding I.T related issues (both hardware and software) that are hindering trade. Moreover, there are financial proposals relating to IT in the Ministry to be followed up with IFU, Dept. of Expenditure etc. Constituting an I.T wing in the Board would enable effective coordination at the Ministry level of these issues including user requirements. Trade facilitation has come to acquire an IT related dimension, which requires field Commissioners and Ministry to be far more ‘hands on’ on IT related issues. The I.T wing also has to play a proactive role in guiding & serving as the interface of Ministry / CBEC while preparing the department for the future implementation of GSTN. 6.2 The committee therefore recommends that a section headed by a Commissioner level officer should be set up to assist Member (I.T & GSTN). As stated, one of the two officers, whether J.S (Review) or Commissioner (Legal), will have to be freed along with two Under Secretaries be hived into a new division for this purpose. The work of Commissioner (Legal) should be hived to JS (Review) and Director, Directorate of Legal Affairs. The details of the precise re-allocation of work can be worked out by JS (Review) and Commissioner (Legal).

7. Member (Personnel & Administration):

No major changes are being suggested in the organizational structure under this Member. NACEN should continue to function

as an adjunct to the Board with regard to policy issues pertaining to them and submit files directly to Member (Personnel).

8. Wherever required, the details of the precise re-allocation of work can be worked out by the J.S level officers whose sections are being restructured.

Chapter IV

Staffing the sections of the Board: The nature of work in the Board places a greater responsibility on the officers at the level of Under Secretary and above. Yet, it is seen that the vacant posts at this level are not filled in time. Given the lack of support for dealing with policy issues in the Board, the Committee feels it imperative that steps be taken to fill the posts in Board well before vacancies arise.

2. There is a dearth of Group ‘A’ officers willing to work at the level of Under Secretary in the Board. The selection process is compounded by the fact that only officers who have completed five years of working at Group ‘A’ level are eligible to be considered as Under Secretaries in the Board. While prior work experience is necessary to work in the Board, it may be noted that there are officers promoted from Group ‘B’ level, who already have a wide work experience. It is, therefore, recommended that officers promoted from Group ‘B’ to Group A should be made eligible to join the Board, if they have a minimum experience of two years at Group ‘A’ level.

3. It is understood that as on date some 27 posts of Under Secretary, T.O/STO are lying vacant in the Board. If willingness is considered to be an essential ingredient for posting, it is unlikely that we will be able to fill these vacancies. Therefore, the Committee feels that the concept of seeking willingness is itself antiquated. Officers must necessarily serve in the Board, if required. Therefore, steps have to be taken for posting group A officers without obtaining willingness.

Chapter V

Suggestions to improve efficiency of working and in trade grievance redressal

Short term

(i) An important facet of the functioning of the Board is the receipt of representations from trade and other stakeholders seeking clarifications, information, representing their problems and grievances. Such communications are often addressed to the Revenue Secretary, Chairperson or the concerned Member. However, when the person/firm/association that has sent the reference desires to follow up the matter, they are not in a position to know which section of the Board is dealing with the reference. It is not possible for them to ascertain this information from the Secretary/ Chairperson/Member. It is therefore recommended that information of the Director level officer, who is dealing with the reference be made available to such persons. The working of the Board office should be automated such that any reference received from public/association/corporate is sent to Commissioner (Coordination) and is tracked till a final response is given. The existing File Tracking System (FTS) in the Ministry may be adopted for this purpose. This will also help in keeping a data bank of the various issues dealt within the Board for the sake of institutional memory.

(ii) To improve accountability and response time, Member concerned should review the pending references received from the trade on a monthly basis.

(iii) The various Directorates under CBEC are mandated to play a vital role in the areas of their speciality by evolving tools and guidelines to aid the field formations in discharging their functions efficiently. At present, there is no mechanism to monitor the functioning of all the Directorates. It is therefore recommended that the functioning of each of the Directorates should be reviewed once in a quarter by the Board. A template may be got prepared for performance reporting by each Directorate in order to aid in the review.

Medium term

(iv) It is also recommended that a secure and seamless intra-net be set up for communication within the department between different offices. A time-bound plan should be drawn up for sending communications within the department only by electronic means. Only external communication i.e. with trade and other departments could be through letters, if no email address has been provided. Each office at field level (i.e. a Zone, Commissionerate/Customs House, Division, Range, each Directorate unit) should have an official e-mail ID. For trade, a single mail address of the Board may be provided to which all their communications could be addressed and due acknowledgement will be provided. All communication should be stored in the system ensuring easy retrievability with access control.

(v) In view of the increasing need for cross functional expertise to find solutions to complex technical problems, the Board may constitute Consultative Committees comprising officials from the Board, relevant Directorates, Key field formations and representative from relevant sections of the trade and industries. The Consultative Committees may meet at reasonable intervals under the Chairmanship of respective Commissioner or J.S and provide their inputs on issues ranging from reforms, systemic shortcomings in procedure, to evolution of new systems for improving revenue administrations. This mechanism will help to shorten the process of stakeholder consultation.

Long term

(vi) There should be a greater level of automation in the functioning of the Board. The present system of file movement is cumbersome and a lot of time is spent in preserving and tracing past files, which is unproductive. To ensure better record keeping and retrievability, and to leverage the efficiency imparted by automation, an e-office system should be introduced in the Board. (Steps are being taken to introduce such system in DoR - HQ).

Chapter VI

27. Suggestions relating to individual Sections

The Committee was unable to examine for purposes of re-allocation and harmonization of each item of work allocated at the Under Secretary level, except for Central Excise and Service tax divisions. Depending upon the outcome of the suggestions given hereinabove, the Committee proposes to undertake & suggest re-allocation of work w.r.t each Under Secretary’s section.

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Annexure II

Central Excise and Service Tax: The present distribution of work in the Central Excise and Service tax wing is prescribed by Circular No. 153/4/2012-S.T., dated 6-3-2012 and Circular No. 661/52/2002-CX, dated 11-9-2002. While Central Excise wing has four sections CX-1, 3, 6 and 8 respectively, Service tax wing has one section. It is proposed that the work undertaken by these sections be reorganized such that the number of sections shall continue to remain the same i.e five with their complement of staff as before. These sections may be called Central Excise and Service Tax sections (C.X & S.T in brief) and numbered I to 5. Three sections may report to one Commissioner while two sections could report to second Commissioner. The work distribution amongst these sections is suggested as below to cater to the goals of efficiency and harmonization of Central Excise and Service tax law and procedures.

1) C.X. & S.T- Ii. Central Excise Act, 1944 and amendments thereof except on

issues relating to Valuation, Classification and Cenvat credit, ii. Legislative work relating to Central Excise Act except budgetary

changes and those dealt by Commissioner (L&J), iii. Procedure relating to collection of Cesses except handloom cess, iv. Work relating to Medicinal and Toilet Preparation (Excise

Duties) Act, 1955, v. Legal issues and instructions relating to Anti-evasion provisions

in Central Excise and Service tax such as procedure to file AE-1, summoning, search, seizure, arrest, prosecution, recovery of sums due to the government and reward to the officers and informer.

vi. Misc work relating to Central Excise not specified elsewhere.

2) C.X & S.T – II i. Classification of manufactured goods under Central Excise tariff;

Classification of services (if applicable). ii. Valuation of goods under Central Excise Act, 1944 and Services

under Finance Act, 1994 and respective relevant rules.iii. Cenvat Credit Rules, 2004 as applicable to both Central Excise

and Service tax.

3) C.X & S.T – III i. Export procedures for both goods and services,

ii. Export benefits such as refund and rebate for both goods and services,

iii. Refund of taxes to diplomats, iv. Legal provisions and procedure for refund in general , v. Processing and issue of 11C notifications and other adhoc

exemptions in Central Excise and Service tax, vi. Parliament Questions on Central Excise and Service tax,

vii. Reply to PAC section on audit objections.

4) C.X and S.T – IV i. All common procedures relating to assessment cycle in Central

Excise and Service tax such as registration, self assessment, payment of duty / tax, accounting procedure, returns and their scrutiny, and audit; Rules relating to these provisions.

ii. All other procedures such as warehousing, licencing, delegation of powers, adjudication limits, overtime fees etc. relating to Central Excise and Service tax not specified elsewhere; Rules relating to these provisions.

iii. CBECs Manual for Supplementary Instructions.

5) C.X and S.T – V

i. Finance Act, 1944 and amendments thereof except on issues relating to Valuation, Classification and Cenvat credit,

ii. Legislative work relating to Finance Act except budgetary changes and those dealt by Commissioner (L&J),

iii. All rules relating Service tax such as rules on export and import of services, Place of provision of services, point of provision of services or any other subject not dealt by other wings,

iv. Monitoring of work by filed formation relating to Central Excise and Service tax,

v. Monitoring of KRA relating to Central Excise and Service tax, vi. Misc work relating to Service tax not specified elsewhere.