PROPOSAL FOR CADRE RESTRUCTURING / REORGANISATION OF FIELD FORMATIONS UNDER CBEC- 2010 Summary of...

PROPOSAL FOR

CADRE RESTRUCTURING / REORGANISATION

OF FIELD FORMATIONS UNDER CBEC-

2010(Updated on 15.04.2013)

15.04.2013

Chapter-1

Proposal for Cadre Restructuring / Reorganization of the Field Formations under CBEC 2010 (Updated as on 15.04.2013) 1

Summary of Reorganization and Cadre Restructuring Proposal

(i) Indian economy has grown at around 6% per annum in the last two decades as against nearly half of that in the previous three decades. Growth since 2004-05 has been even more spectacular with average growth around 9% except during 2008 – 09, due to global meltdown. Even during the slow down, India has produced a performance that is looked at with considerable admiration all over the world. Quick Estimates of Central Statistics Office (CSO) indicate that during the year 2009-10, the Indian Economy grew by 8.0%. Despite global economic recession, the Indian Economy continues to grow, though with a slower, at quite a fair pace.

(ii) The service sector now accounts nearly 57% of India's GDP. The rise in the service sector's share in GDP marks a structural shift in the Indian economy and takes it closer to the fundamentals of a developed economy. After introduction of Negative List of Services in the year 2012, the Service Tax revenue and assessee-basis likely to grow exponentially. At the same time the share of manufacturing sector is also likely to increase, as indicated in the National Manufacturing Policy.

(iii) Over the years, indirect taxes collection has been consistently rising in all the three streams. However, growth in Service Tax collections has been more spectacular. During the year 2012-13, the total revenue from Indirect Taxes has touched all time high to reach 4.74 lakh crore (Customs Rs. 1.66 + Central Excise Rs. 1.76 + 1.32 Service Tax) as per the estimates of Principal Chief Controller of Accounts.

(iv) As per the Government of India Resolution / Notification No. 1/1/2008 I.C. dated 29th August, 2008, issued consequent upon acceptance of the recommendations of 6th Central Pay Commission, cadre restructuring has to be concluded for all the Central Services within a year. Though the direction was to undertake Cadre Restructuring for Group ‘A’ cadre, CBEC decided that due to acute stagnation at lower levels, the morale of the workforce can be raised only by completing a comprehensive cadre restructuring of the entire department comprising all the cadres in the mainstream consisting of 66808 officers.

(v) There is an acute stagnation in Group ‘B’ Gazetted and Non-Gazetted officers of the Department. Majority of the direct recruit Inspectors, especially Inspectors of Central Excise, and Inspectors (Preventive Officers) get only one functional


promotion during approximately 35 years of service. This has resulted in a highly demoralized and demotivated workforce.

(vi) The issue of stagnation is not limited to the Group ‘B’ Gazetted and Non-Gazetted officers of the Department alone. An IRS (C&CE) officer takes more than 21 years of service to reach the Commissioner level post whereas it takes around 17 years in the other services. Similarly, it takes more than 33 years of service to reach the level of Chief Commissioner. The issue of tackling stagnation based on work requirement is a major concern.

(vii) Over the years, the role and responsibilities of the CBEC has increased manifold and become more complex. The increase in workload is manifested in the quantum jump in the Number of Central Excise assessees, Service taxpayers, Customs Bills of Entry and Shipping Bills and International Passenger Traffic.

(viii) Indirect Taxes revenue has consistently increased over the years from Rs.1.38 lakh crore in the year 2002-03 to Rs. 4.74 lakh crore in 2012-13, crossing the revised Budgetary Estimates of Rs. 4.68 lakh crore by Rs. 4.49 lakh crore.

(ix) The CBEC has been attempting to meet the complex and fast evolving challenges, inter alia, by using information technology on the one hand and making requisite legislative and administrative changes on the other. However, in order to adequately respond to the fast changing role and responsibilities and functional complexity of the CBEC, radical changes in the legislative and administrative set up are required.

(x) Cadre restructuring is a periodic opportunity to effect a paradigm shift in the working of the department. It is an opportunity with challenge of securing, at the least economic cost, the best possible organizational configuration, which will last for sufficient length of time and justify itself by increased delivery and raised standards of performance. Meeting legitimate aspirations of the various cadres, improving their skill set, keeping their morale high by ensuring they compete well in terms of promotions and other aspects of job satisfaction, provides an important concern for Cadre Restructuring.

(xi) Current Cadre restructuring and consequent organizational design and structure shall ensure optimization and right sizing of the organization. It also aims at


boosting the morale of various cadres and constituents of the department, thereby raising the efficiency and effectiveness of the department.

(xii) In order to assess the functional requirements of the Department, the CBEC appointed three Study Groups to suggest norms for reorganization and restructuring of staff cadres. The said Study Groups suggested the requisite norms in their respective reports.

(xiii) Norms suggested by the Study Groups were examined and common norms for reorganization & staffing were evolved by DGHRD for formulation of Cadre Restructuring and Reorganization.

(xiv) The norms utilized for proposing reorganization of the Field Formations are as under:

(a) Central Excise Commissionerates: Revenue Norms: Rs. 2100 Crore Central Excise Annual Revenue {(PLA + CENVAT) other than POL Revenue & CENVAT and Service Tax PLA & CENVAT}

Each Commissionerate of Central Excise shall have 5 Divisions and 25 Ranges. The Commissionerates located in an area, which is not covered by an exclusive Service Tax Commissionerate, would be provided with the staff equivalent the staff allocated to one Division exclusively for Service Tax. Commissionerates having Oil Refinery within their jurisdiction would be provided additional staff equivalent to one Range for One Refinery.

(b) Service Tax Commissionerate:Revenue & Assessee-base Norms: Rs. 5400 crore Service Tax Annual Revenue (PLA + CENVAT) and / or more than 17500 assessees.Each Commissionerate of Service Tax shall have 5 Divisions and 25 Ranges.

(c) Customs Commissionerate: Document Based Norms for Revenue Commissionerates: 125000 Bills of Entry for Customs (Imports) Commissionerate and 200000 Shipping Bills for Export Commissionerate. 150000 BEs & SBs for integrated Customs Commissionerate.Customs (P) Commissionerates: To provide Customs Preventive coverage to the entire coastline and International Land Borders of the Country.

(d)Norms for creation of Zones: As far as possible, it is proposed to have one zone for each set of 5-6 executive Commissionerates.


Proposed Audit Commissionerates are proposed to be deployed as indicated below:- For each set of 4 Central Excise Commissionerates- 1 Audit Commissionerate- For each set of 2 Service Tax Commissionerates- 1 Audit Commissionerate- For each LTU- 1 Audit CommissionerIt is also proposed to upgrade the Audit Teams under Commissioner (Audit) for

better compliance verification and detection of violations. An Audit Team is proposed to be headed by an Assistant Commissioner and comprising of four Superintendent and four Inspectors.

60 Posts of Commissioner (Appeals) will be distributed amongst various Zones on the basis of the number of pending Appeal cases.

Major Cadre Controlling Zones would have one Commissioner (Cadre Control) also.

(f) Application of the aforesaid Revenue Norms to the revenue collection and assessee- base would result in reorganization of existing 93 Central Excise Commissionerates and 7 Service Tax Commissionerates into 119 Central Excise Commissionerates and 22 exclusive Service Tax Commissionerates.

(g)Application of these norms would result in reorganization of existing 24 Revenue Customs Commissionerates into 48 Customs Commissionerates.

(h)There are 10 Customs (P) Commissionerates, (viz. Delhi, Amritsar, Jodhpur, Patna, Lucknow, Mumbai, Trichy, West Bengal, , Cochin and Shillong). It is proposed to create two more Customs (P) Commissionerates at Bhubaneshwar and Kakinada so as toprovide preventive cover to the sensitive coastline of the States of Odisha and Andhra Pradesh. Thus, application of the aforesaid norms would result in 12 Customs (P) Commissionerates.

(xv) Reorganization of Directorates: (a)DGRI, DGCEI, DG (Service Tax), DG (Systems & DM), DG(Vigilance) and

DG (National Academy of Customs and Central Excise) are proposed to be upgraded, keeping in view the responsibilities and duties assigned to them and their pan-India jurisdiction.

(b)Directorates General of Safeguards and Export Promotion are proposed to be brought under one Director General to be designated as Director General of Export Promotions & Safeguards.


(c) The Office of the Chief Commissioner of Tax Arrear Recovery is proposed to be converted into full-fledged Directorate General. Directorate of Publicity & Public Relations is proposed to be brought under the administrative control of Director General (TAR).

(d)Directorate General of Service Tax is proposed to be shifted to New Delhi for better coordination with the Board on Service Tax matters.

(e) A new Directorate to be named Directorate General of International Customs is proposed to be created, in view of increasing engagement of the CBEC with international Organizations, such as WCO, WTO, WIPO etc. and the Customs Departments of other countries.

(f) Central Bureau of Narcotics and the Office of the Chief Controller of Government Opium & Alkaloid Factories to be brought under a Chief Commissioner level officer.

(xvi) Following Chart illustrates the existing & proposed organizational structure of the Zones & Commissionerates under CBEC:

(xvii)Restructuring of Cadres: a. IRS (C&CE): Following illustration shows the proposed structure of IRS (C&CE)

(excluding posts sanctioned for SEZs) :


(xviii) Proposal seeks to create new posts in Group ‘A’ STS and JTS grade to address the long pending demand of Stenographers Association and to alleviate acute stagnation being faced by Stenographers.

(xix) Proposal also seeks to reorganize Official Language Grades..

(xx) Proposal seeks to create more posts at level of Group ‘B’ Gazetted and Non-gazetted Executive Officers, viz. Superintendent and Inspector levels.

(xxi) Overall requirement of mainstream manpower is projected to increase from existing 66808 posts in various grades to 87706. Following Diagram illustrates the Proposed Staff Strength with 31.27 % growth over existing staff strength:


Note: Existing Manpower indicated in the diagram does not include SEZ posts. (xxii)The total Cost of the aforesaid proposal works out to only Rs. 787 Crores.

(xxiii) The said proposal is a revenue earning proposition and as per latest estimate seeks to garner additional Rs. 68,000 Crores per annum as against the projected expenditure of Rs. 787 crores per annum.

Chapter – 2Indirect Tax Environment

State of the Indian Economy: The growth of Indian economy has shown a distinctive pattern compared to other rapidly developing economies, such as, China, Brazil etc. This is on account of the fact that from being a pre-dominantly agrarian economy, the Indian economy has leapfrogged into one with the maximum share to GDP being contributed by the services sector etc.

2.0 Indian economy has grown at near 6% per annum in the last two decades as against nearly half of that in the previous three decades. Growth since 2004-05 has


been even more spectacular with average growth around 9% except during 2008 – 09, due to global meltdown. Even during the slow down, India has produced a performance that is looked at with considerable admiration all over the world. The spectacular growth over the past few years will be evident from the following:

3.0 Over the years the share of agriculture in GDP has come down primarily because of lower growth. The service sector is growing at the fastest rate. The annual growth in services during the past four years has been in excess of 10%, a trend unmatched by any other sector of economy. Industry too grew at about 9.5% while agriculture growth was less than 4% during the same period. 4.0 Share of India’s service sector in the total GDP has also been increasing at a brisk pace. The service sector now accounts nearly 57% of India's GDP. The rise in the service sector's share in GDP marks a structural shift in the Indian economy and takes it closer to the fundamentals of a developed economy. At the same time the share of manufacturing sector has more or less been maintained at about 25%.5.0 Macro Tax Scenario: India’s tax to GDP ratio continues to be among the lowest in the

world as can be seen from the following Table:

Sl. No. Country Tax to GDP % Ratio

(2007-08)1 Sweden 522 United Kingdom 373 Australia 314 USA 275 Japan 27


GROWTH IN GDP (Current Market Prices)

32.3937.06

42.8449.48

55.7461.64

010

203040

50

60

70

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Year

Rs. i

n la

kh c

rore

s

6 China 277 Mexico 208 India 17

6.0 After excluding the taxes collected by the States; the ratio of Central Taxes to the GDP is in the vicinity of 10%. Some of the reasons for the low ratio are the large scale exemption in manufacturing and service sectors and suspected non-compliance. The ratio has been improving in recent years as can be seen from the following bar diagram:

7.0 Revenue Profile of Indirect Taxes: A snapshot of revenue contribution over the last 13 years would indicate the significant contribution of the Department in the revenue mobilization efforts of the Government of India:

Table :: 1 (Rs. In Crores)

Tax Revenue 1999-2000

Revenue 2012-13

Percentage Increase

Central Excise 61902 176957 185.05Customs 48420 165952 241.7

Service Tax 2128 131447 6077.02Total Indirect

Taxes 112450 474356 322

In fact, in the year 2012-13, the Indirect Taxes revenue collections have crossed the Budgetary Estimates by 4491 crores (as per the information from Pr. Chief Controller of Accounts, CBEC). This growth in Indirect Taxes has taken place due to the


persistent efforts of the organization to maximize revenue in spite of the progressive reduction in rates of indirect taxes over the years.

8.0 Future Tax CollectionsThe 13th Finance Commission considered various scenarios with respect to

future tax revenue streams. If all taxes grow at the Trend Growth Rate (TGR) for the period 1999-2000 to 2007-08, the implied buoyancy would be 1.43. TGRs for shorter periods yield even higher buoyancies. It was felt that assuming such high buoyancy for the projection period would be unrealistic, given that the 2004-08 period witnessed an unprecedented growth in the direct and service tax base. Thus, it was decided to moderate the buoyancy estimate and the tax revenues for the period 2010-15 have been projected by using an overall buoyancy of 1.33. This is derived by calculating the buoyancy of gross tax revenue, excluding service taxes for the period 1999-2008 (service taxes had a high outlier buoyancy of 4.54 during this period). This has been applied on the base year estimates of individual taxes to arrive at year-wise projections for revenue from each tax item. The resultant tax-GDP ratios are reported in Table below.

Table: Major Taxes of the Centre: Performance since 2003-04Year Total Direct Taxes Total Indirect Taxes

As percent of GDP (Source: INDIAN PUBLIC FINANCE STATISTICS 2009-20102003-04 3.82 5.422004-05 4.08 5.332005-06 4.38 5.502006-07 5.25 5.802007-08 6.31 5.682008-09 6.08 5.192009-10 5.84 4.452010-11 5.71 4.542011-12 5.85 4.53

As percent of Centre’s Gross Tax Revenue2003-04 41.31 58.692004-05 43.53 56.472005-06 45.12 54.882006-07 48.61 51.392007-08 52.63 47.372008-09 55.48 44.522009-10 57.72 42.282010-11 56.82 43.18


2010-11 55.72 44.282011-12 56.32 43.68

Thus, it can be seen that the Central Taxes as % of GDP are expected to show a

marginal growth from 11.75% during 2008-09 to 13.19% in 2014-15. However, the state of Indirect Tax efforts are to be seen in the context of overall duties forgone by the department; tax refunds on export of goods and services to make them internationally competitive and other export incentives. The estimates of Indirect Taxes collection are in fact likely to see higher buoyancy in the context of Negative List of Services & consequent increase in assessee-base of Central Indirect Taxe,

Chapter – 3Role and Functions of Indirect Tax Administration

Historically, the very existence of nation states and civil society is dependent on sovereign sources of revenue in the nature of taxes collected. The bureaucratic as well as security apparatus which sustain a nation are dependent on financial resources available for the same. In modern times; taxes provide for good governance, contribute towards social equity by funding development programmes and contribute towards economic growth. Indirect Taxes in India till the recent past were the dominant contributor to national exchequer.

2.0 Other key features of the Indian Indirect Tax structure under the Central Government has been the key role assigned to it in protecting economic frontiers of the country. With increased focus on globalization and integration of Indian economy


with the world economy, the indirect tax administration has greater focus on playing a facilitative role for the Indian industry and trade in a globalized world. Nevertheless, the regulatory role and guardianship of economic frontiers remain important both for protection of the domestic industry as per internationally accepted safeguard measures and in tackling unscrupulous elements. Another key role is to provide a level playing field to Indian Industry in the course of international trade by non-cumbersome and quick clearance procedures as well as timely and prompt refund of domestic levies.

3.0 Legislative Environment for Indirect Tax AdministrationThere are three distinct streams of taxes/ duties collected by under the Central

Indirect Tax structure:(a) Central Excise Duties;(b) Customs Duties;(c) Service Tax.Central Excise law is administered under the Central Excise Act 1944, Central

Excise Tariff Act 1985 and various Central Excise Rules. On the Customs side Customs Act 1962 and Customs Tariff Act 1975 provide the statutory framework for levy of Customs duties. On the Service Tax side the Finance Act 1994 as amended remains the key legislation.

Legislation including delegated legislation covering the field of Customs, Central Excise and Service Tax presents a complex picture. In fact, in all these three streams of taxation, there is no single comprehensive legislation.

On Central Excise side, the Central Excise Act 1944 comprises of 40 Sections. However, there are 15 sets of Rules comprising over 200 Rules dealing with Valuation, CENVAT Credit procedural and other situations. Further, Central Excise Tariff on the pattern of Customs Tariff is based on HSN and has more than 6000 categories. The actual rate of Central Excise duty is determined by more than 120 Central Excise Notifications in force.

On the Customs side, the Customs Act 1962 provide the legal authority to administer Customs Laws. It comprises 161 Sections and has 76 sets of Rules to deal with various situations in the course of International Trade. Further, there are more than 10 Acts which are also administered by the Customs Authorities at points of entry/exit of internationally traded goods/passengers. Customs Tariff Act 1975


provides internationally accepted classification of goods and currently classifies the goods into more than 6000 categories following the eight digit method. Further, nearly 300 Notifications issued under various Customs provisions govern the procedural/legal aspect whereas Tariff linked notifications exceed 275 in number which govern the actual rate of duties.

On the Service Tax side, the provisions of Finance Act 1994 as amended from time to time provide the legislative framework for levy of Service Tax. However, there is no separate Tariff providing classification of services. The Finance Act 1994 provide the list of services and their scope. Currently 117 services are subject to Service tax. There are further 26 sets of Rules and 128 Notifications which have to be implemented for levy of Service Tax.

Indirect Taxes are administered at the leadership level by IRS (C&CE) officers who are ably assisted by a large number of executives, ministerial and other uniformed officers besides technical grades of Chemical, Marine and Communication officers.

Functions of Indirect Tax Administration The task of Indian Customs & Central Excise officers enforcing Indirect Tax legislation, besides collection of revenue includes implementation of border regulations, prevention and detection of smuggling activities; interdiction of narcotics and clearance of international passengers. Beside it involves implementation of large number of international conventions, bilateral and multilateral trade agreements and enforcing measures to secure international supply chains from terrorists and other unscrupulous elements.

Some of the key functions discharged by them are highlighted below:a. Assessment and collection of Customs duties, Central Excise duties and

Service-tax, respectively under the provisions of Customs Act, 1962, Central Excise Act, 1944 and Finance Act, 1994.

b. Infusion of modern technology in the administrative apparatus under CBEC and providing tax-payer friendly services.

c. Prevention and detection of smuggling and drug trafficking in narcotics d. Prevention of evasion of Customs duties, Central Excise duties and

Service-tax.


e. Implementation of EXIM Policy and Foreign Exchange Management Act and regulations.

f. Supervision of Audit of Central Excise and Service-tax assessees for compliance monitoring and for encouraging voluntary compliance.

g. Enforcing the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).

h. Quasi-judicial functions of Adjudication of tax related disputes.i. Functions related to departmental appellate machinery relating to hearing

and deciding appeals against decisions of quasi-judicial authorities.j. Review functions viz. accepting/challenging adjudication and appellate

orders. k. Defence of cases before the Customs Excise and Service-tax Appellate

Tribunal (CESTAT) and monitoring and pursuing cases pending before Supreme Court, High Court.

l. Functions related to Prosecution and Appeals in the criminal cases filed before the Courts of Law against the offenders under the provisions of various Acts.

m. Facilitation of international passengers and clearance of baggage at the International Airports, Seaports and Land Customs Borders.

n. Enforcement of the provisions of a large number of other enactments like NDPS Act, 1985, Foreign Trade (Development & Regulation) Act, 1992, Wild Life Protection Act, 1972, Antiquities & Art Treasures Act, 1972, Atomic Energy Act, 1962, Arms Act, Environmental Laws etc.

o. Seizure, confiscation, custody of contraband goods, auction and disposal of confiscated goods.

p. Safe guarding of domestic industry from unfair international competition and imposition and administration of Safeguard / anti dumping duties.

q. Implementation of bilateral / multilateral Customs treaties, international commitments in various fora like World Trade Organization, World Customs Organization etc.

r. Recovery of tax arrears.


Chapter - 4Vision, Mission & Strategy

of the Department of Central Excise & CustomsVision of the Department:The Department envisions to provide an efficient and transparent mechanism

for collection of indirect taxes and enforcement of cross border controls with a view to encourage voluntary compliance.

2.0 Mission of the Department:


The Department aims at achieving excellence in the formulation and implementation of Customs, Central Excise and Service Tax laws and procedures aimed at:

realizing the revenues in a fair, equitable, transparent and efficient manner administering the Government’s economic, taxation and trade policies in a

pragmatic manner facilitating trade and industry by streamlining and simplifying Customs, Central

Excise and Service Tax processes and helping Indian business to enhance its competitiveness

ensuring control on cross border movement of goods, services and intellectual property

creating a climate for voluntary compliance by providing information and guidance

combating revenue evasion, commercial frauds and social menace supplementing the efforts to ensure national security.

3. Strategy of the Department:The strategy for achieving the departmental mission comprises of the following: Benchmarking of operations and adopting best practices Enhancing the use of information technology Streamlining Customs, Central Excise and Service Tax procedures by employing

modern techniques like risk management, non-intrusive inspections and accredited clients facilitation

Evolving cooperative initiatives with other government and private agencies and building partnerships with trade, industry and other stakeholders

Measuring conformance to service delivery standards Developing professionalism through capacity building.

Chapter – 5Areas of Key Focus

of the Department of Customs & Central Excise For performing the tasks assigned , the Department of Customs & Central

Excise has following areas of key focus: -(a) Efficient and effective collection of Indirect Taxes comprising of Central Excise

Duties, Customs Duties and Service Tax.


(b) Providing competitive services to the Tax Payers, Exporters, Importers and International Passengers to match international standards.

(c) Assuring level playing field for Domestic industry by way of Additional Customs Duty, Anti Dumping/Safeguard Duty, Countervailing Duty etc.

(d) Assuring India’s Export competitiveness by facilitating exports and timely refund of domestic levies incorporated in Goods and Services exported.

(e) Contributing to eradication of illegal trade in Narcotics and psychotropic substances.

(f) Contribution to Security of India by enforcing Customs border control measures on Land & Marine borders as well as at International Airports.

(g) Prevention and Detection of smuggling activities and combating evasion of Central Indirect Taxes/Duties.

(h) Protecting India’s genetic stock from harmful imports and live stock from Illegal exports.

(i) Protecting the Intellectual Property Rights of the stakeholders(j) Developing an intelligence grid on IT enabled data base to combat tax

evasion, smuggling and other injurious activities

Chapter - 6Background to Cadre Restructuring

The concept of cadre review owes its origin to the recommendations made by the Administrative Reforms Commission in its Report on Personnel Administration released in 1969. Earlier, its Study Team on Personnel Administration. (Personnel Planning etc.) (1967) (1) had pointed out certain deficiencies in the management of cadres under the administrative control of various central Ministries. Administrative Reforms Commission recommended that "for all services advance projections should


be made of the requirements of personnel for 5 years at a time" and that these should be followed by mid-term appraisals where circumstances warrant it with a view to making necessary correctives. (2) The Government of India, while accepting the above recommendations of the ARC, decided that cadre reviews / restructuring in all the departments under the Government of India should be done once in 5 years. Current instructions mandate a cadre review every three years.

2.0 First Cadre restructuring in the Department of Central Excise & Customs took place in the year 1988. The exercise of a comprehensive cadre restructuring / reorganization of the field formations in the Department began after 10 years in the year 1998-99. This exercise, however, fructified only in the year 2001-02. Thus the fresh cadre restructuring became due in the year 2007. Accordingly, the department initiated the process for formulation of the proposal for cadre restructuring reorganization in the year 2007.

3.0 The Sixth Pay Commission was accepted for implementation by the Government in August 2008. Thereafter, DOP&T on 05.09.2008 issued a directive to all the organized Group ‘A’ services to complete Cadre Review exercise within a year. As per the Government of India Resolution / Notification No. 1/1/2008 I.C. dated 29 th August, 2008, issued consequent upon acceptance of the recommendations of 6th Central Pay Commission, cadre restructuring has to be concluded for all the Central Services within a year. Though the direction was to undertake Cadre Restructuring for Group ‘A’ cadre, CBEC decided that due to acute stagnation at lower levels, the morale of the workforce can be raised only by completing a comprehensive cadre restructuring of entire department comprising all the cadres in the mainstream consisting of 66808 officers. These officers and staff are organized into more than 60 different cadres. Efficient cadre management which is one of the major objectives of cadre restructuring cannot be achieved without addressing the major issue of stagnation amongst all the cadres.3.1 There is an acute stagnation in Group ‘B’ Gazetted and Non-Gazetted officers of the Department. Majority of the direct recruit Inspectors, especially Inspectors of Central Excise, and Inspectors (Preventive Officers) get only one functional promotion during approximately 35 years of service. This has resulted in a highly demoralized


and demotivated workforce. Direct recruit Inspectors of Central Excise appointed to the grade in 1976 and Preventive Officers appointed to the grade in 1976 are yet to be promoted to the grade of Assistant Commissioner. This demoralizing effect has been aggravated by the fact that in Income Tax Department, which is also under the Department of Revenue and engaged in similar function of revenue collection. direct recruit Inspector normally reaches up to the level of Additional / Joint Commissioner level and some reach the level of Commissioner. 3.2 The issue of stagnation is not limited to the Group ‘B’ Gazetted and Non-Gazetted officers of the Department alone. An IRS(C&CE) officer takes more than 21 years of service to reach the Commissioner level post whereas it takes around 17 years in the other services. Similarly, it takes more than 33 years of service to reach the level of Chief Commissioner. The issue of tackling stagnation based on work requirement is a major concern.

4.0 Further, the cadres, which are no longer necessary/ relevant to the Department, need to be identified for surrender during cadre restructuring. This surrendering of vacant posts of dying cadres in turn assists in cost neutralization to some extent.

5.0 Cadre Restructuring of non-mainstream cadre consisting of 4976 officers and staff of Marine, Telecommunication, Central Bureau of Narcotics, Chief Controller of Factories etc. are to be taken up after the proposal of cadre restructuring of mainstream cadre is submitted to CBEC. Cadre Restructuring proposal for Central Revenues Control Laboratories officers and staff cadres has already been approved by CBEC and is under examination in the Ministry.

Chapter – 7Cadre Restructuring vis-à-vis Work Load

Over the years, the role and responsibilities of the CBEC have increased manifold and become more complex. The increase in workload is manifested in the quantum jump in the Number of Central Excise assessees, Service taxpayers, Customs


Documents (Bills of Entry and Shipping Bills), which were approximately 80000, 1.5 lakhs and 38 lakhs respectively in 2002-03. The same are estimated to go up to 2.20 lakh, 17 lakhs and 120 lakhs for Central Excise, Service Tax and Customs respectively in 2010-11. Similarly, total Indirect Tax revenue, whixh was Rs. 1.38 lakh crore in 2002-03, has exceeded the Budgetary Estimates of Rs. 3.15 lakh crore to reach Rs. 3.39 lakh crore in the current fiscal (2010-11). Indirect Tax collection is likely to grow further in current financial year to Rs. 3.99 lakh crore (Budgetary Estimate). The numbers of laws and regulations being administered by the CBEC have also increased substantially. Increasing globalization, with ever-increasing international trade and commerce, has thrown up new and complex challenges involving cross-border transactions. Further, security environment and continuous threat from terrorist activities poses new challenge for anti-smuggling operations. The responsibilities of the CBEC now include developing non intrusive assessment / scrutiny procedure, online transaction processing capacities, sophisticated information and intelligence network and databases; improving analytical and preventive capabilities to detect and prevent smuggling including smuggling of items posing hazard to national security, financial frauds and money laundering, both within India and internationally, involving national security.

2.0 The CBEC has been attempting to meet the complex and fast evolving challenges, inter alia, by using information technology on the one hand and making requisite legislative and administrative changes on the other. Reduction in cost of compliance for the Trade and industry, time compression in departmental response and quick feedback for the stakeholders has become a permanent feature of departmental activities. However, in order to adequately respond to the fast changing role and responsibilities and functional complexity of the CBEC, radical changes in the legislative and administrative set up are required. While a major legislative step will be taken through the GST code, the concomitant administrative step of strengthening and streamlining the organizational structure of the tax machinery is urgently required.

3.0 The tables given below represents the increase in revenue and workload during the period 2002-03 to 2010-11: Workload Indicators:


Workload Indicator 2002-03 2010-11 2011-12 % Growth

over 2002-03 in 2011-12

No. of ST Assessees 1,33,531 16,30,317 18,17,415 1261No. of CE Units 79,770 3,60,968 3,96,118 397No. of Shipping Bills

37,40,970 1,25,88,909

1,36,94,901 266

No. of Bills of Entry Factory Stuffing of Containers 1,00,000 10,80,000 12,00,000 1100No. of International Passengers 94 lakh 379 lakh 415 lakh 341

Increase in workload over the years has also resulted in consequent increase in Indirect Tax revenue. From Rs. 1.38 lakh crore in 2002-03, it has exceeded the Budgetary Estimates and reached to Rs. 3.99 lakh crore in 2011-12. This is an increase of 189.13% over 2002-03. This has increased to Rs.4,74,612 Crores in 2012-13 (229.5%). Indirect Tax collection is likely to grow further in 2013-14 to reach Rs.5, 65,003 lakh crore (Budgetary Estimate).Revenue Collection (in crore of Rupees)

Revenue 2002-03 2012-13 2013-14 (BE)

% Growth over 2002-03 in 2011-

12

% Growth over 2002-03 in 2012-13

Central Excise 87383 171996 197554 96.8 122.60

Service Tax 5000 132697 180141 2553 3502Customs 45500 164853 187308 262.31 311.66Total Revenue 137883 469546 565003 240.53 309.76

National Manufacturing Policy, which envisages increase of manufacturing sector in GDP from existing 16% to 25%, is likely to increase the revenue as well as number of Central Excise Assessees significantly in coming years. The estimates of Indirect Taxes collection are likely to be higher with the introduction of Negative List of Services with effect from 1.7.2012 . All services, barring 17, are now liable for the Service Tax. On introduction of GST, an overwhelming increase in the workload is anticipated. The Working Groups have estimated that in the event of the introduction of GST, the assessee-base is likely to grow by 5-6 times. The projected revenue / workload for the year 2015 is as follows:

2002-03

2010-11 % Growth over

2014-15 (projecte

Projected % Growth


2002-03 d) over 2002-03

Revenue 1,37,883 3,34,500 144 6,04,956* 338.75Assessee Base 2,13,301 17,00,000 670 70,00,000+

+ 3181.75No. of

Transactions37,40,97

0120,00,00

0 221 2,94,93,808 688.40

No. of Passengers 94 lakhs 350 lakhs 272.34 462 lakhs 391.48

*As estimated by the Finance Commission ++ Refers to Goods and Service Tax Assessees

Chapter – 8Aims & Objectives of Cadre Restructuring Exercise

Cadre restructuring involves devising a holistic manpower management plan and reorganization of the field formations on a scientific basis to improve the productivity and quality of deliverables. Cadre restructuring is also a means to align human resource architecture with the business process strategies ensuring that there is smooth change management and effective implementation of strategic direction of the department. Thus, Cadre Restructuring needs to be comprehensive, coherent, and cost effective with demonstrable operational linkages to the work processes and pre defined goals of the department. It must also lead to developing core competencies of the department and satisfaction of stake holders, both within Government and outside. Facilitation of honest tax paying entities / persons, strong deterrence against tax evaders, smugglers and drug traffickers shall always be the focus of departmental activities and remain the key focus of current proposals.

2.0 Human Resources of the Department are the main drivers to achieve organizational objectives and are the vital link between articulation of the organizational objectives and their actual achievement. Thus entire spectrum of qualitative and quantitative achievements, enhancement of productivity and satisfaction of stake holders rests on performance levels demonstrated by the Human resources who are also the critical component to secure long term sustained competitive advantage for any organization including CBEC.


3.0 Cadre restructuring is a periodic opportunity to affect a paradigm shift in working of the department. It is an opportunity with challenge of securing at the least economic cost, the best possible organizational configuration, which will last for sufficient length of time and justify itself by increased delivery and raising standards of performance. Human resources in any organization, in particular in a Government organization, are the essential resource, which provides deliverables. Thus, meeting legitimate aspirations of the various cadres, improving their skill set, keeping their morale high by ensuring they compete well in terms of promotions and other aspects of job satisfaction, provides another important concern for Cadre Restructuring. However, betterment of promotion prospects are a result dovetailed to functional justification and not the only aim of a cadre restructuring exercise.

4.0 The key challenges of current Cadre Restructuring has been to re-engineer/strengthen and adopt a departmental structure, which is an effective instrument to realize the vision and objectives of the department and to meet the challenges for an anticipated future scenario. Further the organizational structure has to be so designed that it is effectively prepared to absorb the anticipated growth in workload measured in a scientific and objective manner. The structure is also designed to be suitable to meet a shift in government policies and work processes and to adopt the best global practices.

5.0 Current Cadre restructuring and consequent organizational design and structure shall ensure optimization and right sizing of the organization. It also aims at boosting the morale of various cadres and constituents of the department, thereby raising the efficiency and effectiveness of the department. In this regard, the foremost issue has been to correctly identify the present and future workload, anticipate future business processes and work out the manpower requirements for next five year period. Devising a suitable administrative structure to facilitate honest tax payers and with effective deterrent & punitive capacity to take action against unscrupulous elements has remained a key concern. Need for Meeting aspirations of different cadres has been another objective and taken into account to the extent possible in harmony with the larger objective of meeting organizational goals at the least cost to the government.


6.0 In order to find out ways to address the abovementioned concerns, Customs, Central Excise and Service Tax department is proposed to be reorganized and restructured in a major way with following key parameters:-

(i) Ensuring Revenue Mobilization through availability of optimum manpower.(ii) Increase in number of Customs and Central Excise Zones to cope with

increased workload and meeting prescribed service and delivery standards.(iii) Setting up of Exclusive Service Tax Zones and downward organizational units

to exclusively cater to market segment of ST assessees in geographical areas where they are concentrated.

(iv) Improving compliance standards and strengthening deviance detection by strengthening Investigating Agencies.

(v) Facilitating implementation of Risk Management System by setting up of Exclusive Audit Commissionerates.

(vi) Improving Implementation of Duty relief and exemption regime through lending manpower support for I.T. enabled verification and compliance systems.

(vii) Strengthening Anti-smuggling operations and detection of Commercial frauds.

(viii) Implementation of Information Technology and Communication Technology Projects though increased focus on training competencies and strength.

(ix) Improving facilities for assessee/clients of the department by taking formations close to them, strengthening manpower to enable quick response to their needs.

(x) Improve competence for complying with international obligations for procedural observance as well as securing supply lines for increasing India’s export competitiveness.

(xi) Improved career management by increase in promotional avenues based on quantifiable needs without increase in hierarchical layers of administration.

(xii) Improvement in Administrative Systems and Procedures by creation of exclusive Cadre Control Commissionerates.

(xiii) To ensure broad based better career prospects to meet the legitimate aspirations of all the grades/cadres.


(xiv) To strengthen International relations in Customs related matters and protection of domestic industry from unfair competition.

(xv) Developing core competencies and improving knowledge management function with the department by strengthening of Specialized Directorates.

(xvi) Geographical expansion in unrepresented districts in the country.(xvii) Increased focus on integrity by focusing on aberrant behaviour and remedial

measures through strengthening of vigilance machinery.(xviii) Optimizing manpower taking into account increase in workload since last

cadre restructuring as well as technological infusion, new work processes and legislative as well as administrative accountabilities like RTI, SEVOTTAM etc.

(xix) Increasing departmental resources for Dispute Resolution Forums

Chapter – 9Constitution of the Cadre Restructuring Study Groups

Last Cadre Restructuring / Reorganization of the Department was implemented in the year 2002. Since then, the indirect tax administration has witnessed increase in workload as well as many policy changes. On the revenue side, total indirect tax revenue collection of Rs. 2.79 lakh crores was collected in the year 2007-08. The years 2008-09 and 2009-10 were severely affected by the global economic meltdown and stimulus packages focused mainly on the indirect taxes front.

2.0 Regular Cadre Restructuring / Reorganization of a Department in line with the changing governmental policies is vital for enhancing operational capabilities of the department and betterment of its functioning. Further, DOP&T, vide their OM dated 5.9.2008 issued consequent upon acceptance of the recommendations of 6th CPC, also directed all the Departments to restructure their cadres, particularly Group ‘A’ cadres, within one year.

3.0 Constitution of Cadre Restructuring Study Groups:Cadre Re-structuring of the Department invariably has to justify itself at various

level of administration and in particular IFU, Department of Expenditure and DOPT before it can succeed. While functional justification is always sought for any additional manpower there is also often need to justify re-alignment of cadre structure in various


grades on the basis of norms/parameters which can be quantified in terms of core activities of the department. Further, these parameters also have to be justified on the basis of examination of work load as co-related to core activities of the department.

3.1 During the last Cadre Restructuring the following key norms had been used on creation of Commissionerates:(i) Minimum Central Excise revenue of Rs.500 crore per annum for a

Central Excise Commissionerate having five Central Excise Divisions and twenty five (25) Central Excise Ranges.

(ii) Minimum integrated Central Excise and Service Tax revenue of Rs.500 crore per annum for an integrated Central Excise and Service Tax Commissionerate having five Central Excise and Service Tax Divisions and twenty five (25) Central Excise and Service Tax Ranges.

(iii) Minimum Service Tax revenue of Rs.250 crore per annum for a Service Tax Commissionerate, having five (5) Service Tax Divisions and twenty five (25) Service Tax Ranges. (Norms decided by the Board in the year 2003-04).

(iv) For creation of one Customs Commissionerate, the norm of one (1) lakh (1,00,000) Shipping Bills or fifty thousand (50,000) Bills of Entry and where revenue involved is more than Rs. 1000 crore per annum was basically adopted. Applying these norms, 22 Customs Commissionerates were reorganized during cadre restructuring 2001-02 into 35 Customs Commissionerates for Customs Duty revenue of Rs. 47542 crore in the year 2000-01

3.2 The reasons for constituting the Study Groups in 2008 were as follows:-(a) Considering the revenue target for 2008-09 (Central Excise 1,37,874 Crore

and Service Tax 64,460 Crore) these norms would lead to creation of 276 Central Excise Commissionerates and 250 Service Tax Commissionerates as compared to 93 C. Ex. Commissionerates and Six (6) Service Tax Commissionerates, then in existence. Similarly, on Customs side, considering the Customs Duty collection target of Rs. 1,18,930 crore (BE) for the year 2008-09 and going by the norms discussed in para 3.1 above, 41 more


Customs Commissionerates (over and above existing 35 Commissionerates) may have to be created. It was considered administratively not feasible to create such a large number of Commissionerates, simply on the basis of existing per annum revenue norms, used during last cadre restructuring.

(b) The staffing norms would require to be patterned not only based on discernible parameters like Revenue, number of Assesses etc but also on activities related to Audit, RTI, Receipt and scrutiny of statutory reports, and preparation of Departmental reports etc. undertaken in various administrative components of Commissionerates/Custom Houses etc., after considering the impact of information technology and the projects like Indian Customs EDI System (ICES), Indian Customs & Excise Gateway (ICEGATE), System Excise Revenue & Monitoring System (SERMON), System of Allotment of Central Excise Registration (SACER), System for Allotment of PAN based Service Tax Taxpayer Code (SAPS), Risk Management System (RMS), iCERT CA (Certification Authority for Digital Signatures), Automation in Central Excise & Service Tax (ACES), Computer Aided Audit Protocol (CAAP) etc.

4.0 It was in this context, that three Cadre Restructuring Study Groups were appointed by the Board in November, 2008 in the Department, to evolve new norms.

4.1 The Study Groups were mandated to examine and determine the norms of revenue / assessees with reference to a model sanctioned strength of Commissionerate. Gist of the Terms of Reference of the Study Groups is provided below:(i) To Quantify the workload of field formations, such as Commissionerate, Division and Ranges in terms of number of assessees, number of documents related to various work processes.(ii) Suggest the revenue/units / documents norms for reorganization of existing Zones and Commissionerates and creation of new formations (Zones/Commissionerates/Division/Ranges) in various geographical regions, while keeping in view the legislative changes in various statutes implemented by the Department.(iii) To examine the impact on the functioning of the field formations of information technology and the automation projects implemented by the Department.


(iv) To Interact with recognized Officers / staff Associations and take their concerns/aspirations on board.(v) To take into account the proposed movement towards introduction of Goods and Services Tax and its likely impact in terms of change in roles of officers and their training needs and deployment. (vi) To suggest the staffing norms for various types of field formations, including Large Tax Payers Units.4.2 Composition of the Study Groups was as under:

Study Group-IComposition:(a) Ms. Jasdeep V. Singh, Chief Commissioner of Central Excise & Customs,

Hyderabad(b) Shri V.K. Garg, Commissioner of Service Tax, Delhi(c) Shri Ram Tirath, Commissioner of Central Excise & Customs, Rajkot.Area of Study:(i) Exclusive Central Excise Commissionerates.(ii) Exclusive Service Tax Commissionerates.

Study Group-IIComposition:(a) Shri P.N. Vittal Das, Chief Commissioner of Central Excise & Customs,

Vishakhapatnam(b) Shri D.P. Nagendra Kumar, Commissioner of Central Excise, LTU,

Bangalore(c) Shri C. Rajendran, Commissioner of Central Excise & Customs,

Coimbatore.Area of Study:(i) Combined Central Excise & Service Tax Commissionerates(ii) Large Taxpayers Unit

Study Group-IIIComposition:(a) Shri K.R. Bhargava, Chief Commissioner of Customs, Mumbai-II(b) Shri Sandeep M. Bhatnagar Commissioner of Customs, Chennai(c) Shri R.K. Mahajan, Commissioner of Customs (General), Mumbai


Area of Study:(i) Custom Houses / Exclusive Customs Commissionerates / Customs (P)

Commissionerates(ii) Staffing Norms for Customs Formations in International Airports and Air

Cargo Complexes (with emphasis on key factors of in-bound as well as out-bound Passengers ands Cargo Flights)/ International Container Depots / Container Freight Stations)

Chapter - 10Recommendations of the Cadre Restructuring Study Groups

(Based on the data of 2009-10)

I. Norms Recommended by the Study Group-I: A. Norms for Exclusive Service Tax Commissionerates:(i) A Service Tax Commissionerate for every 17,500 assessees in the cities of Mumbai and Delhi, which are expected to yield average revenue of Rs 3000 cr. each. Each of these Commissionerates to have 5 Divisions with 5 Ranges each and full complement of 422 staff members. (ii) A Commissionerate for every 12000 to 15000 assessees in other major cities with concentrated revenue, i.e., cities of Ahmedabad, Bangalore, Chennai, Kolkata, Pune and Hyderabad. Each of these Commissionerates is expected to have 4 Divisions with 5 Ranges each and a total of 356 staff members. (iii) A new Commissionerate each at NOIDA, Jaipur and Rajkot to cater to 7000 to 10,000 assessees. Each Commissionerate is recommended to have 4 Divisions and 4 Ranges each and total 325 staff members. (iv) One Commissioner (Appeals) for every 2 executive ST Commissioners.


(v) Three Chief Commissioners, together with the necessary complement of staff are required to provide leadership and cohesion and also monitor performance in major tax-paying centers i.e. 2 at Mumbai and 1 at Delhi. For other locations Chief Commissioners may also be considered for the combined jurisdiction of Service Tax and Central Excise.

B. Norms for Exclusive Central Excise Commissionerates (i) New Commissionerates on the twin criteria of revenue collection as well as workload in terms of number of units(ii) Norms for creation of exclusive Central Excise Commissionerates: 1500 assessees and revenue (PLA + CENVAT) in the range of Rs.1500 crore to Rs.2000 crore. (iii) Each Commissionerate to have five Divisions with six Ranges each, having normative staff strength of a Commissionerate is recommended as 428.

Summary of Recommendations of Study Group-I Twin criteria of revenue collection as well as workload in terms of number of

units for creation of Central Excise Commissionerates Creation of 23 exclusive Service Tax Commissionerates, i.e., 17 additional

Commissionerates 14 Commissioner (Appeals) primarily on the basis of 1 Commissioner (Appeals)

for every 2 executive Commissioners, plus at locations with heavy pendency.

II. Norms Recommended by the Study Group-II: (i) Norms for creation of Integrated CE & ST Commissionerates: Total revenue of Rs 2000 Crore (PLA + CENVAT) will be an appropriate norm for a Commissionerate. Revenue of Rs. 400 crore (PLA+CENVAT) for creation of a Division. Revenue of Rs.80 Crores for creation of a Range(ii) Creation of Five Principal Zones-namely North, East, West, South & Central and headed by Principal Chief Commissioner- above the existing Zones.

Summary of Recommendations of Study Group-II


Creation of Principal Zones in the 5 Regions now comprising the Transfer Zones for Group “A” Officers.

Creation of compact Chief Commissionerates with well defined functions.

Creation of 10 more Integrated Commissionerates out of the 65 existing ones.

Reduction in the number of Commissioner (Appeals) to 40.

Introduction of New cadre of Principal Chief Commissioner to man the Principal Zones.

Increase the number of Commissioners by 30

Suggestions for rationalizing the coverage and staffing of LTUs

III. Norms Recommended by the Study Group-III:(i) Norms for exclusive Customs (Import) Commissionerate:

The minimum number of Bills of Entry: 1,25,000 per annum(ii) Norms for exclusive Customs (Export) Commissionerate:

The minimum number of Shipping Bills: 3,00,000 per annum

Summary of Recommendations of Study Group-III

(i) The Group has re-worked out the staff requirement norms for Customs Commissionerate, falling under the categories of Exclusive Import (Sea), Exclusive Export (Sea), Exclusive Import (Air), Exclusive Export (Air), Composite Commissionerate, Airport Commissionerate and Commissionerate (General). As regards Preventive Commissionerates, they vary so much in the geographical dispersion and field units, the Group has largely gone by the recommendations made by the respective Preventive Commissionerates, while making the recommendation for their strengthening

(ii) Group has proposed for creation of 14 new Customs Commissionerates, including two Preventive Commissionerates as per details below:

(iii) Creation of two posts of Commissioner (Adjudication),one at JNCH and another at Chennai

(iv) Creation of four new Customs (Zones) at Hyderabad, Chennai, Bangalore and Ahmedabad


(v) Creation of 23 posts of Principal Chief Commissioner/ Principal Director General for heading important and sensitive Zones / Directorates.

(v) Complete re-organization of Audit set-up in CBEC has been recommended, by shifting from existing transaction based PCA, at Custom Houses to record base audit and Common audit/compliance verification Commissionerates for Customs, Excise and Service Tax. The proposal is to create 10 new Zones and 40 new Commissionerates to carry out Post Clearance Audit.

(vi) Creation of six exclusive Single Window Commissionerates for SEZs/EOUs/STPs (vii) Recommendations for strengthening of (a) Directorate General of Valuation; (b)

Commissioner (Appeal)’s office-and revising the norms for disposal of cases by Commissioner; (c) CDR’s office; (d) Directorate of Legal Affairs.

Chapter – 11Performance & Outcome Analysis

Department of Central Excise, Service Tax & Customs has been doing a yeoman’s service in the area of indirect taxes viz. Central Excise duties, Service Tax and Customs since very inception of the Department. Over the years, there have been some very important and positive developments that have impacted the functioning of the Department positively. Some of these developments are (i) Quantum jump in assessees base, (ii) Process Re-engineering from assessment based administration to audit based tax administration, (iii) Extension of information technology to real-time workflow applications, (iv) Revenue Contribution to commitment under FRBM Act. Following details bears ample testimony to the sterling performance of the Department in the area of revenue generation as well as law enforcement:A. WORK PROFILE:a) Revenue Performance: (in crore of Rupees)

2006-07 2007-08 2008-09 2009-10 2010-11 2012-13


Indirect Taxes

↓

2002

-03

Colle

ctio

n (R

E)

% In

crea

se

over

200

2-03

Colle

ctio

n (B

E)

% In

crea

se

over

200

2-03

Colle

ctio

n

% In

crea

se

over

200

2-03

Colle

ctio

n

% In

crea

se

over

200

2-03

Colle

ctio

n

% In

crea

se

over

200

2-03

Colle

ctio

n

% In

crea

se

over

200

2-03

Service Tax 5000 38169 663.38 50200 904 60716 1114.3 583591067.2 69400 1288 131447 2538.

9Central Excise 84383 117266 34.20 130220 49.02 108100 23.71 10658

4 21.97 133300 52.54 176957 102.5

Customs 45500 81800 79.79 98770 117.08 99817 119.4 84497 85.71 131800 189.7 165 952

263.63

Total 137883 237235 72.06 279190 102.48 268633 94.8 249440 80.91 334500 142.6 4,74,35

6244.0

2

b) Increase in Assessees-base since 2002-03:

Workload Indicator 2002-03 2010-11 % Growth over 2002-03

Average Annual

growth %

No. of CE Units 79,770 2,20,000 175.79 21.97

Total No. of ST Assessees 1,33,531 17,00,000 1173 146.62

No. of Customs Documents (BsE & SBs) 3740970 120 lakh 221 27.62

c) Tax Arrear Recovery:

Head of duty

2006-07 2007-08 2008-09 2009-10Target Realizatio

n Target Realization Target Realizatio

n Target Realization

Central Excise 1300 1379.03 1300 1956.99 1300 1748.37 1500 1360.67

Customs 650 1027.45 900 1380.36 950 1120.92 1200 934.39Service

Tax 500 1060.42 800 1697.7 1000 2062.59 1300 2090.52

TOTAL: 2450 3466.90 3000 5035.05 3250 4931.88 4000 4385.58

d) Decrease in Cost of Collection:There has been a considerable decrease in cost of revenue collection also as

indicated in the table below: (in paisa per Rs. 100/-)

Year Customs Central Excise & Service Tax1997-98 107 951998-99 115 95


1999-2000 99 892000-01 N.A. 902001-02 150 882002-03 90 802003-04 90 802004-05 80 702005-06 70 702006-07 60 602007-08 50 602008-09 70 (Provisional) 90 (Provisional)

Source: C&AG Reports & Performance/ Outcome Budgets of MOFe) Increase in Number of International Passengers:

Sl. No. Year International Passengers1 2002-03 94 lakh2 2003-04 158 lakh3 2004-05 213 lakh4 2005-06 222 lakh5 2006-07 250 lakh6 2007-08 274 lakh7 2008-09 292 lakh 8 2009-10 276 lakh9 2010-11 (Estimated) 350 lakh

B. Enforcement Performance: a) Number of Central Excise & Service Tax Duty Evasion Cases Detected

due to Audit initiative:

S. No Period

No. of audits

conducted

Growth % in

audits conduct

ed

Total detectio

n(Rs. in crores)

Growth % of

detection

Total recover

y(Rs. in crores)

Growth % of

Recovery

(1) (2) (3) (4) (5) (6) (7) (8)1. 2004-05 21313 19% 1661 23% 196 87%

2. 2005-06 25938 22% 2094 26% 280 43%

3. 2006-07 28391 9% 3821 82% 576 106%

4. 2007-08 30883 9% 5101 33% 930 61%

5. 2008-09 35257 14% 7504 47% 1522 64%Source: Annual Report Audit


b) Number of Central Excise and Service Tax Duty Evasion cases in anti- evasion operations:

Year No. of Cases Detected

Duty Evasion (Rs. in crores)

Voluntary Payments made during investigation

(Rs. in crores)2003-04 6085 2860 2422004-05 8070 4335 5602005-06 7683 4847 8612006-07 7523 4887 12392007-08 5907 7353 11742008-09 5370 7736 13682009-10 6709 13247 1408

c) Number of Customs Commercial Frauds Detected: Rs. in Crore

Year >2005-06 2006-07 2007-08 2008-09 2009-10

No. of

Cases

Value/ Duty

No. of Cases

Value/ Duty

No. of Cases

Value/ Duty

No. of

Cases

Value/ Duty

No. of Cases

Value/ Duty

Commercial Frauds

2686 760.3 2643 900 3579 876 330

3 2011.3 3189 838Number of

SCN Issues in CF cases

967 950.5 1176 1991.7 1262 1221.

8157

5 2128 926 1457.7

d) Number of Seizure Cases effected:Item of Seizure 2005-

062006-

072007-

082008-

092009-

10

Contraband Goods(Including Narcotics, Counterfeit Currency, Wild Life etc.)

Number of Cases 43676 46043 42764 43614 37894

Value 675.17 689.16 1021 1731 1583.9

0Number of SCN Issues in Outright Smuggling cases

5719 4776 4885 9054 8978

Duty Involved 152.65 95.72 99.67 147.54 464.41

e) Number of Persons Arrested, Prosecuted and Preventive Detentions:Year Number of Persons Arrested Number of Preventive Detentions

under COFEPOSA / PITNDPS2004-2005 472 103


2005-2006 445 128

2006-2007 390 113

2007-2008 451 102

2008-2009 464 86

2009-2010 493 61

f) Pendency of Adjudication cases:

Head of Duty

As on 31st March, 2008



No. Amount No. Amount No. AmountExcise 11594 8348 14707 13185 15581 15093

Customs 5304 4053 5795 4055 6282 4529Service Tax 96684 18984 79640 28652 29835 11591

TOTAL 113582 31385 100142 45892 51698 31213

Chapter 12Existing Organizational Structure of the Department

Central Board of Excise & Customs is one of the largest Department of Government of India with around 73000 employees spread over 986 locations all over the country. However, the spread is not uniform and departmental presence is at present in 410 Districts out of 631 Districts in the country. This scenario has emerged due to the nature of taxes collected by the department, facilitation of international trade and collection of Customs duties and Border Control functions. Central Excise levy is on manufacture, hence Industrial centres are traditionally the focal points of departmental presence. On Customs side the presence is focused on points of International Trade and where Border management assume major role. Service Tax introduced since 1994 has also seen departmental presence in significant number in major metros.


2.0 At apex level, Central Board of Excise & Customs in the Ministry of Finance is responsible for administration and supervision of the whole Department. CBEC consists of six Members and one Chairman all of whom are Special Secretaries to GOI. CBEC is part of Department of Revenue and its Headquarter is structured on the traditional line of Ministry comprising various levels of decision making at Joint Secretary/ Director/ Under Secretary/ Section Officer etc. Most of the posts in the Secretariat i.e. CBEC are manned by IRS (C&CE) officers as these posts are technical in nature requiring in-depth knowledge of Indirect Tax Law, Laws dealing with Border Control and various prohibitions and restrictions enforced by the department.

3.0 CBEC has attached offices designated as Directorates. These Directorates are repositories of technical knowledge and render specialized advice to the CBEC. Some of these Directorates like DGRI and DGCEI also perform executive function of enforcing Indirect Tax laws and detecting violations. Each of these Directorates perform highly specialized functions like DG (Systems) which is the nodal agency for IT enabled services or DG (Valuation) which provides specialized inputs for correct valuation data in the course of International Trade. NACEN, which is the Training Directorate performs the core functioning of training new entrants of departmental officers and skills up gradation of existing officers. CBEC has 18 such specialized Directorates as its attached offices.

4.0 As regards the field formations under it, CBEC follows a uniform administrative structure called a Zone which controls a specific area termed as jurisdiction for implementing Indirect Tax laws. Each Zone has Commissionerates under it. This organizational structure is followed in all the three streams of Taxes, administered by the Department i.e. Customs, Central Excise & Service Tax.

5.0 On the Customs Preventive front, a Commissionerate is headed by Commissioner and comprise of Divisions and Preventive Formations performing Anti-smuggling role. On the Assessment side a Commissionerate of Customs has Assessment Groups headed by Assistant Commissioners/ Dy. Commissioner reporting to Additional/Joint Commissioner. Each AC/DC further supervises Appraisers,


Superintendent of Customs who in turn are supported by Inspectors/ Preventive Officers.

6.0 On the Central Excise/Service Tax side, the organizational structure comprises of Commissionerate Hqrs. with its own functions defined in terms of Personnel, Audit, Legal and Technical. A Central Excise Commissionerate administers Central Excise Law through various Divisions headed by AC/DC. Each Division has specified number of Ranges headed by Superintendent who are assisted by Inspectors.

7.0 Dispute Resolution mechanism of the Department consists of Commissioner (Appeals) and independent Tribunal (CESTAT) for appeals against the orders of Commissioner (Appeals) and Executive Commissioner.

Chapter 13Proposal for Reorganization of the Field Formations

Reorganization of Central Excise & Service Tax Formations:A. Norms used in Reorganization in the year 2002:1.0 During the last cadre restructuring / reorganization exercise in the year 2002, the Commissionerates were reorganized adopting the following norms:

(a) Central Excise Commissionerate: Rs. 500 crore per annum PLA revenue, CENVAT Revenue was not taken into account for reorganization of the Commissionerates.

(b)Customs Commissionerate: Shipping Bills : 50000 per annum Bills of Entry : 100000 per annum Revenue : Rs. 1000 crore per annum


For Service Tax Commissionerate, no norms were prescribed for creation of exclusive Service Tax Commissionerate. However, in the year 2004, Central Board of Excise & Customs prescribed Rs. 250 crore Service Tax revenue per annum for creation of an exclusive Service Tax Commissionerate.

2.0 Using the aforementioned norms, 94 Central Excise Commissionerates, 34 Customs Commissionerates and 6 Service Tax Commissionerates were created. However, many Commissionerates did not fulfill the norms in as much as many Commissionerates were collecting revenue short of the normative revenue of Rs. 500 crore per annum, while some others were collecting many time more revenue than the normative revenue. These Commissionerates were organized into 23 Central Excise & Service Tax Zones and 11 Customs Zones.

B. Norms suggested by Study Groups: Study Group-I suggested revenue norms of Rs. 1500 to Rs. 2000 crore PLA +

CENVAT Revenue for creation of a Central Excise Commissionerate.Study Group-II suggested revenue norms of Rs. 2000 crore PLA + CENVAT

revenue for creation of a Central Excise Commissionerate.Study Group-I suggested normative Revenue of Rs. 2500-3500 crore and / or

Assessees numbering 17500 for creation of exclusive Service Tax CommissionerateStudy Group –III suggested normative 125000 Bills of Entry for Customs

(Imports) Commissionerate and 300000 Shipping Bills for Export Commissionerate.C. Norms Proposed to be used in current Cadre Restructuring & Reorganization:(a) Central Excise Commissionerates:

Even though during last reorganization of Central Excise Commissionerates, CENVAT revenue was not taken into account, it is felt that for assessment of workload properly, it is necessary to take into account CENVAT revenue also, as CENVAT Credit generates huge amount of workload. Accordingly, following revenue norms are proposed to be adopted for reorganization of Central Excise Commissionerates. While arriving at the normative Central Excise Revenue, POL PLA revenue has been deducted from the total PLA revenue of the existing zones in order to have more realistic revenue and assessee norm for reorganization of Central Excise formations.


Revenue Norms: Rs. 2100 Crore Central Excise Annual Revenue {(PLA + CENVAT) other than POL Revenue & CENVAT and Service Tax PLA & CENVAT}

Each Commissionerate of Central Excise shall have 5 Divisions and 25 Ranges. The Commissionerates located in an area, which is not covered by an exclusive Service Tax Commissionerate, would be provided with the staff equivalent to the staff allocated to one Division exclusively for Service Tax. Additional Staff equivalent to one Range would be provided to the Commissionerates having Oil Refinery under their jurisdiction.

(b) Service Tax Commissionerate:Similarly, PLA revenue and CENVAT credit has been taken into account for

formulating the norms for creation of exclusive Service Tax Commissionerates. Apart from these fundamental basic factors, the other equally important factors like concentration of Service Tax Assessees in particular geographical areas, convenience of the trade, potential of growth etc. have also been accounted for while suggesting creation of exclusive Service Tax Commissionerates. Revenue & Assessee-base Norms: Rs. 5400 crore Service Tax Annual Revenue (PLA + CENVAT) and 17500 assesseesEach Commissionerate of Service Tax shall have 5 Divisions and 25 Ranges.D. Norms for creation of Zones: Number Central Excise Zones is proposed to be kept at existing level of 23. However, 4 new exclusive Service Tax Zones are proposed to be created.

3.0 Application of the aforesaid Revenue Norms to the revenue collection and assessee- base would result in reorganization of existing 93 Central Excise Commissionerates into 119 Central Excise Commissionerates and 22 exclusive Service Tax Commissionerates.

4.0 Proposal for Reorganization of Central Excise Zones :(i) Lucknow & Meerut CE Zones: Presently, there are Seven executive Commissionerates under the two Central Excise Zones., which are proposed to reorganize into ten (10) Central Excise Commissionerates and one (1) Service Tax Commissionerate. The proposed Service Tax Commissionerate may be considered to


be located at NOIDA to cater to the assessees of NOIDA and Ghaziabad area, Remaining Service Tax Assessees can be catered to by the jurisdictional Central Excise Commissionerate.

(ii) Ranchi (Patna) CE Zone: Presently, there are three executive CE Commissionerates under the Zone. As per the proposed norms, the existing 3 Central Excise & Service Tax Commissionerates under Ranchi Zone are proposed to be reorganized into 5 Central Excise Commissionerates. .

(iii) Mumbai-I & Mumbai-II CE Zones: Presently, there are Eight (8) executive CE Commissionerates and Two Service tax Commissionerates under the two Central Excise Zones. These Central Excise Commissionerates are proposed to be reorganized into 8 Commissionerates, while 2 Service Tax Commissionerates into 7 Commissionerates.

(iv) Pune CE Zone: Presently, there are four executive CE Commissionerates and one Customs Commissionerate under the Zone. As per the proposed norms, the existing 4 Central Excise & Service Tax Commissionerates under Pune Zone are proposed to be reorganized into seven (7) Central Excise Commissionerates (including one exclusive CE Commissionerate at Goa), and one (1) exclusive Service Tax Commissionerate. In addition, there would be two exclusive Customs Commissionerates- One in Pune and another at Goa. However, the proposal for reorganization on Customs side is discussed in the Customs proposal later in this report.

(v) Nagpur CE Zone: Nagpur CE Zone is a peculiar Zone in as much as this is the only Zone where the three participating Commissionerates are staffed by two different staff cadres- Bhopal CE cadre provides staff for Nagpur CE Commissionerate and Mumbai/ Pune CE Cadre provides staff for Aurangabad and Nashik Commissionerates.

As per the proposed norms, the existing 3 Central Excise Commissionerates under Nagpur CE Zone are proposed to be reorganized into six (6) Central Excise Commissionerates,

(vi) Bangalore and Mysore CE Zones: Presently, there are six executive CE Commissionerates and one (1) Service tax Commissionerate under the two Central


Excise Zones. After normative analysis of data, the number of existing 6 Central Excise Commissionerates under two Zones are proposed to be retained as such, while one Service Tax Commissionerate is proposed to be reorganized into two (2) ST Commissionerates.

(vii) Cochin Central CE Zone: Presently, there are three executive CE Commissionerates and two Customs Commissionerate under the Zone. As per the proposed norms, the existing 3 Central Excise Commissionerates under Cochin Zone have to be reorganized into one (1) Commissionerate only. However, two of the three Commissionerates, viz. Thiruvanathapuram and Calicut Commissionerates manage two major International Airports and air-cargo complexes attached to them. These airports cleared 2678236 international passengers and 23343 international flights during the year 2009-10. Hence, the existing three Commissionerates have to be necessarily retained. As regards two Customs Commissionerates, two Commissionerates are proposed to be retained as such.

(viii) Delhi Central Excise Zone: Presently, there are six executive CE Commissionerates and one Service Tax Commissionerate under the Zone. As per the proposed norms, the existing 6 Central Excise Commissionerates under Delhi CE Zone may be reorganized into twelve (12) CE Commissionerate and four (4) Service Tax Commissionerates.

(ix) Chandigarh CE Zone: Presently, there are four executive CE Commissionerates, including the Commissionerate of Central Excise & Customs in Jammu & Kashmir, under the Zone. As per the proposed norms, the existing 4 Central Excise & Service Tax Commissionerates under Chandigarh Zone are proposed to reorganized into five (5) Central Excise Commissionerates and one exclusive Service Tax Commissionerate.

(x) Chennai & Coimbatore CE Zones: Presently, there are Ten (10) executive CE Commissionerates and one (1) Service tax Commissionerate under the two Central Excise Zones. After normative analysis of data, the number of existing 10 Central Excise Commissionerates and one Service Tax Commissionerate under two Zones are


proposed to be reorganized into nine (9) CE Commissionerates and two (2) ST Commissionerates.

(xi) Jaipur CE Zone: Presently, there are two executive CE Commissionerates under the Zone. As per the proposed norms, the existing two (2) Central Excise Commissionerates under Jaipur CE Zone may be reorganized into four (4) CE Commissionerate Commissionerates.

(xii) Bhopal CE Zone: Presently, there are three executive CE Commissionerates under the Zone. As per the proposed norms, the existing 3 Central Excise & Service Tax Commissionerates under Bhopal Zone are proposed to be reorganized into 6 Central Excise Commissionerates.

(xiii) Hyderabad & Vishakhapatnam CE Zone: Presently, there are eight executive CE Commissionerates and one Customs Commissionerate (Vishakhapatnam Custom House) under the two Zones. As per the proposed norms, the existing 8 Central Excise Commissionerates under the two Zones are proposed to be reorganized into seven (7) Central Excise Commissionerates and one (1) Service Tax Commissionerate.

As regards reorganization on Customs side, it is proposed to create one exclusive Customs Commissionerate at Hyderabad for Airport and ACC, while one Customs (P) Commissionerate at Kakinada. Vishakhapatnam Custom House is proposed to be retained as such. The proposed

(xiv) Kolkata Central Excise Zone: Kolkata CE Zone is the biggest Central Excise Zone in terms of the number of Commissionerates under its jurisdiction. Presently, there are ten (10) executive CE Commissionerates and one (1) exclusive Service Tax Commissionerate function under its jurisdiction. Normative analysis of the aforesaid revenue and assessee-base suggests that the existing ten (10) Central Excise Commissionerates and one (1) Service Tax Commissionerate under Kolkata CE Zone may be reorganized into six (6) CE Commissionerate Commissionerates and two (2) Service Tax Commissionerates. However, considering that abolition of existing Commissionerates may not be administratively advisable, as it may result in staff


being rendered surplus, it is proposed to reorganize existing Commissionerates into nine (9) Central Excise Commissionerates and two (2) Service Tax Commissionerates. (xv) Shillong CE Zone: Presently, there are three executive CE Commissionerates and one (1) Customs (P) Commissionerate under the Zone. Initially, there were only two CE Commissionerates. Subsequently, one more CE Commissionerate was created at Guwahati in the year 2006. (However, no additional staff strength was provided to the Zone for Guwahati Commissionerate). As per the proposed norms, the existing 3 Central Excise & Service Tax Commissionerates under Shillong CE Zone are proposed to be retained as such.

(xvi) Bhubaneshwar CE Zone: Presently, there are two executive CE Commissionerates under the Zone. As per the proposed norms, the existing 2 Central Excise & Service Tax Commissionerates under Bhubaneshwar Zone are proposed to be reorganized into 3 Central Excise Commissionerates and one Customs (P) Commissionerate.

(xvii) Ahmedabad & Vadodara CE Zones: Presently, there are eleven (11) executive CE Commissionerates and one (1) Service tax Commissionerate under the two Central Excise Zones. After normative analysis of data, the number of existing eleven (11) Central Excise Commissionerates and one (1) Service Tax Commissionerate under two Zones are proposed to be reorganized into Sixteen (16) Central Excise Commissionerates and one Service Tax Commissionerate.

Service Tax Zones: It is proposed to create 4 exclusive Service Tax Zones at Mumbai, Delhi, Kolkata and Chennai to cater to the Service Tax related functions in the four directions of the country, viz. West, North, East and South.

4.2 Following chart shows the reorganized set up, as proposed, of Central Excise & Customs Zones and Service Tax Zones:


Reorganization of Central Excise & Service Tax Commissionerates & Zones (Base Year 2009-10 and Budget Estimate based Projections for 2010-11)

State

EXISTING STRUCTURE OF THE ZONES PROPOSED STRUCTURE OF THE ZONES

Sl. No.

Zones

Total Number of Executive Commissioner

atesProposed Number of Zones

Total Number of Executive Commissionerates

Number

Remarks Number Remarks

U.P. & Uttarancha

l1 Lucknow 3

7 (CE) 2 11 10 (CE) 1 (ST)2 Meerut 4

Bihar & Jharkhand 3 Ranchi

(Patna) 3 3 (CE) 1 5 5 (CE)

Maharashtra

4 Mumbai-I 6 8 (CE) and

2 (ST)2 15 8 (CE)

7 (ST)5 Mumbai-II 4

6 Pune 54 (CE) and 1

(Cus.)1 8

7 (CE), 1 (ST)

2 (Cus.)

7 Nagpur 3 3 (CE) 1 6 6 (CE)

Karnataka8 Bangalore 4

3 (CE) and

1 (ST) 2 8 6 (CE), 2 (ST)

9 Mysore 3 3 (CE)

Kerala 10

Cochin @@ 5

3 (CE) and 2

(Cus.)1 3 3 (CE)

2 (Cus.)

Delhi & Haryana

11 Delhi 7

6 (CE) and

1 (ST) 1 16 12 (CE)

4 (ST)Punjab & H.P., J&K

and Chandigar

h

12 Chandigarh 4 4 (CE) 1 6 5 (CE)

1 (ST)

Tamilnadu13 Chennai 6

5 (CE) and

1 (ST) 2 11 9 (CE) 2 (ST)1

4Coimbato

re 5 5 (CE)

Rajasthan 15 Jaipur 2 2 (CE) 1 4 4 (CE)

M.P. & Chattisgar

h16 Bhopal 3 3 (CE) 1 6 6 (CE)

Andhra 1 Hyderaba 4 4 (CE) 2 8 7 (CE),


Pradesh7 d

1 (ST), 1

8Vishakhap

atnam 54 (CE)

1 (Cus.)

West Bengal

19 Kolkata 11 10 (CE)

1 (ST) 1 11 9 (CE) 2 (ST)

N.E. States 20 Shillong 4

3 (CE) 1

(Cus.)1 3 3 (CE)

Orissa 21

Bhubaneshwar 2 2 (CE) 1 3 3 (CE)

Gujarat22

Ahmedabad 6 5 (CE)

1 (ST) 2 17 16 (CE) 1 (ST)2

3 Vadodara 6 6 (CE)

Total 23 141 119 (CE), 22 (ST)

Proposed 4 exclusive Service Tax Zones at Delhi, Chennai, Kolkata and Mumbai are proposed to have jurisdiction over Service Tax related work Northern, Southern, Eastern and Western Parts of the country respectively.

5.1 Reorganization of Customs Zones:Considering the number of Shipping Bills and Bills of Entry during the year 2009-

10 and the projections for the year 2010-11, following document based norms have been arrived at. In addition, other important factors such as Number of Cases of Factory Stuffing of Containers, Number of International Flights & Passengers, and Number of Seizures, vulnerability of the geographical area to smuggling and anti-national activities etc. during the year 2009-10 have also been taken into account for assessing the Customs workload.

Document Based Norms for Revenue Commissionerates: 125000 Bills of Entry for Customs (Imports) Commissionerate and 200000 Shipping Bills for Export Commissionerate. 150000 BEs & SBs for integrated Customs Commissionerate.(These norms have already been approved by CBEC.)Norms for Customs (P) Commissionerates: To provide Customs Preventive coverage to the entire coastline and International Land Borders of the Country.

(i) Ahmedabad Customs Zone:


There are three Commissionerates of Customs under this Zone. These Commissionerates have jurisdiction over two major international seaports, viz. Kandla and Mundra (a Private Port). Ahmedabad Airport, which receives international flights, is also under the jurisdiction of the Zone. Normative analysis of the workload of the Zone suggests retention of three (3) existing Customs Commissionerates

(ii) Bangalore Customs Zone: Bangalore Customs Zone presently exercises jurisdiction over two Customs Commissionerates, viz. Bangalore and Mangalore Customs Commissionerates, which cater to a major international seaport at Mangalore and a major International Airport at Bangalore. On the basis of normative analysis of the workload of the Zone and increasing number of international passengers, it is proposed to reorganize the zone into three (3) Customs Commissionerates- two (2) Integrated Customs Commissionerates and one (1) Airport Commissionerate at Bangalore.

(iii) Chennai Customs Zone: Presently, there are three City-based Customs Commissionerates under the zone. These Commissionerates have jurisdiction over Chennai Seaport (including recently commissioned Ennore Seaport) and Anna International Airport, Chennai. On the basis of the proposed norms, it is suggested to reorganize the existing three Customs Commissionerates into 3 Export Commissionerates and three Import Commissionerate, and an exclusive Airport / ACC Commissionerates.

(iv) Trichy Customs (P) Zone: Chennai Customs (P) Zone presently has two Customs (P) Commissionerates under its jurisdiction, viz. Tuticorin and Tiruchirapally Commissionerates. These Commissionerates, even though initially created as Customs Preventive Commissionerates, also attend to Customs clearance work also. Being Customs (P) Formations, the existence of the two (2) Commissionerates need not be justified on the basis of quantifiable parameters, such as number of Bills of Entry and Shipping Bills etc. These two Commissionerates cover the entire highly sensitive coastline (except the coastline falling within the jurisdiction of Chennai Customs Zone) of the State of Tamilnadu. Hence, these Commissionerates are proposed to be retained as such..


(v) Delhi Customs Zone: Presently, there are three Commissionerates under Delhi Customs Zone. The Zone exercises jurisdiction over one of the biggest ICDs (ICD, Tughlakabad) and ICD, Patparganj and some smaller ICDs located around Delhi as well as one of the busiest International Airports of the country, viz. Delhi International Airport and ACC. Keeping in view the aforesaid workload, existing three Customs Commissionerates are proposed to be reorganized into three (3) Export Commissionerates, three (3) Import Commissionerates and one (1) Airport & ACC Commissionerate.

(vi) Delhi Customs (P) Zone: There are three (3) Customs (P) Commissionerates under the Zone, two of which Amritsar and Jodhpur Customs (P) Commissionerates have jurisdiction over vast and highly vulnerable Indo- Pak Border, while the third one Delhi Customs (P) Commissionerate exercises jurisdiction over sensitive formations such as ICDs in Delhi and IGI Airport, Delhi. Apart from attending to the Customs Preventive functions, Amritsar and Jodhpur Commissionerates also handle assessment functions as well as clearance of passenger at railheads of Attari and Munnabao. As stated earlier, the reorganization of Customs (P) formations cannot be done on the basis of quantifiable parameters, and the same has to be done keeping in view the vulnerability of geographical regions over which these formations exercise jurisdictions. Customs (P) Commissionerates should be so organized that their main focus remains Customs Preventive work and it does not get diluted by any revenue collection related functions. Accordingly, it is proposed to bifurcate Amritsar Customs (P) Commissionerate to create a Customs Commissionerate at Ludhiana. Commissionerate at Ludhiana may exercise jurisdiction over all revenue generating formation located in the State of Punjab. Creation of Customs Commissionerate at Ludhiana would ensure undivided attention of Amritsar Customs (P) Commissionerate to Customs Preventive functions.

Thus, after reorganization Delhi Customs (P) Commissionerate would have 3 Customs (P) Commissionerates and one (1) integrated Customs Commissionerate under its jurisdiction.

(vii) Kolkata Customs Zone: Presently, there are two Customs Commissionerates and one Customs (P) Commissionerate under its jurisdiction. Two


Customs Commissionerates are manned by Customs Cadres of Kolkata Custom House, while West Bengal Customs (P) Commissionerate, which is vanguard of 960 kms. long coast line, is manned by Central Excise, Kolkata cadres. On the basis of normative analysis of the workload of Kolkata Customs Zone, it is suggested to keep the number of Customs revenue Commissionerates at its present level of two (2). As regards West Bengal Customs (P) Commissionerate, it is observed that the Ministry vide Notification No. 132/2009 dated 9th September, 2009, has restructured the jurisdiction of the Commissionerate and transferred North Bengal Area to Siliguri Central Excise Commissionerate for Customs Preventive function. Hence, there is no need to further restructure the Commissionerate.

(viii) Mumbai-I, Mumbai-II & Mumbai-III Customs Zones: Three Customs Zones in Mumbai exercise jurisdiction over nine (9) Customs Commissionerates, one of which is a Customs (Preventive) Commissionerate. Revenue collection as well as workload-wise, the areas under the jurisdiction of these three Zones are the biggest Customs revenue generator. Normative analysis of the revenue suggests that existing Customs Commissionerates under the three Zones may be reorganized into one (1) Customs Preventive Commissionerate, One (1) Integrated Customs Commissionerate, Eight (8) Customs (Imports) Commissionerates, nine (9) Customs Export Commissionerates and one (1) Airport Commissionerate.

(ix) Patna Customs (P) Zones: There are two (2) Customs Preventive Commissionerates under this Zone presently. These two Commissionerates exercise jurisdiction over vast stretches of sensitive and vulnerable Indo-Nepal Border as well as various other sensitive formations such as Gaya Airport & Patna Airport in Bihar and Lucknow and Varanasi Airports in Uttar Pradesh. Since the Patna Customs Zone is an exclusive Customs Preventive Zone, utility or existence of this zone can not be justified by normative quantifiable parameters. However, sensitivity and vulnerability of the areas under its jurisdiction provide enough reasons for continuation of this Zone with existing two (2) Customs (P) Commissionerates at Patna & Lucknow under its jurisdiction.


5.2 Customs Commissionerates under Central Excise Zones: Following Customs and Customs Commissionerates are proposed to be kept under jurisdiction of local Central Excise Zone:(i) Cochin Central Excise Zone:

- Cochin Custom House- Cochin Customs (P)

(ii) Vishakhapatnam Central Excise Zone: :- Vishakhapatnam Custom House- Proposed Kakinada Customs (P) Commissionerate: The entire 960

Kms. long stretch of the coastline of the State of Andhra Pradesh stretching from Itchapuram (near Orissa Border) in Srikakulam District in the North of Andhra Pradesh to Pulikat Lake in the South (Close to Tamilnadu Border). Is virtually unguarded. There are four Customs (P) Divisions, viz. Kakinada Customs (P) Division, Krishnapatnam Customs Division, Nellore Customs (P) Division and Vishakhapatnam Customs (P) Division. In addition there is one small formation namely Kakinada Custom House, presently under Vishakhapatnam –II CE Commissionerate, which attends to assessment work and consistently generates more than Rs. 500 Crore per annum Customs Revenue, since the year 2005-06. Major commodities imported through Kakinada Sea Port are Chemicals & Fertilizers, Palmoline etc., while export commodities mainly are Iron Ore, Agriculture Produce, Alumina etc. CBEC has already granted its in-principle approval for upgradation of Kakinada Custom House to a full-fledged Customs (P) Commissionerate having jurisdiction over the entire coastline of the State of Andhra Pradesh (except the coastline falling within the jurisdiction of Vishakhapatnam Custom House). Sub-formations under proposed Kakinada Customs (P) Commissionerate are likely to generate Customs revenue of Rs. 690 crore.

(iii) Hyderabad Central Excise Zone:- Proposed Hyderabad Customs Commissionerate: Presently, Customs

work in Hyderabad Central Excise Zone is looked after Hyderabad-II CE Commissionerate. However, after commissioning of Shamshabad International Airport the Customs workload has increased tremendously,


warranting creation of a separate Customs Commissionerate at Hyderabad. During the year 2009-10, total Customs revenue collection in Hyderabad-II Commissionerate was Rs. 956 crore, while 58532 Bills of Entry and 55880 Shipping Bills were handled. During the said period, 13028 international flights and 1560684 international passengers were also cleared. In the year 2010-11, Customs revenue generation is likely to grow to Rs. 1320 crore. Keeping the workload in view, it is proposed to create a separate Customs Commissionerate at Hyderabad under the jurisdiction of one of the two proposed CE Zones in Hyderabad.

(iv) Pune Central Excise Zone: - Pune Customs Commissionerate: - Goa Custom House: Goa Custom House is one of the five Custom Houses

established in pre-independence era. During last cadre restructuring this Custom House lost its original individuality, when it got converted into a Customs & Central Excise Commissionerate, Goa. It is proposed to restore the historic originality of Goa Custom House by bifurcating the existing Goa Customs & Central Excise Commissionerate into Custom House and an exclusive CE Commissionerate. Incidentally, it is pertinent to mention that existing Goa Customs & Central Excise Commissionerate has separate staff cadres for Customs functions and Central Excise functions. Restoration of exclusive Customs Commissionerate at Goa would also lead to greater focus on anti-smuggling and anti-narcotics operations within its jurisdiction, which is highly sensitive area. After restoration of its original status, Goa Custom House may be kept under the jurisdiction of the proposed Customs Zone in Pune.

(v) Shillong Central Excise Zone: - Shillong Customs (P) Commissionerate: Being a Customs (P)

Commissionerate under Shillong CE Zone, which has jurisdiction over the areas located on sensitive Indo-China border and Indo-Myanmar border, its utility and viability can not be assessed on quantifiable parameters. Its usefulness lies in launching Customs Preventive and Anti-smuggling operations in order to check not only the smuggling of consumer goods, but also the smuggling of arms and ammunition etc. It also helps in prevention of


infiltration from across the border. Hence, it is proposed to have this important Commissionerate as such and strengthen it by providing additional manpower and infrastructure.

(vi) Bhubaneshwar Central Excise Zone: - Proposed Bhubaneshwar Customs (P) Commissionerate: Presently,

Customs work in Bhubaneshwar CE Zone is handled by Bhubaneshwar-II CE Commissionerate. However, due to lack of infrastructure and shortage of manpower, 560 Kms. long coastline of the State of Orissa virtually remain unguarded. In order to provide Customs Preventive cover to this sensitive coastline, it is proposed to create a new Customs (P) Commissionerate at Bhubaneshwar. After creation of this Customs (P) Commissionerate, the Department will be in a position to effectively guard the entire coastline of the country. In addition to providing Customs Preventive cover to the Orissa Coastline, the Commissionerate would also attend to assessment work presently attended by Bhubaneshwar-II Commissionerate.

5.2 Thus, application of the aforesaid norms and subjective analysis of the ground realities on Customs side would result in creation of 60 Customs Commissionerates across the country as against existing 34 Customs Commissionerates. Total number of Customs Zones would be 20. Following chart shows the gist of the proposed organization structure of Customs Zones:Reorganization of Customs Zones & Commissionerates (Base Year 2009-10 and Budget Estimate based Projections for 2010-11)

State

Existing Structure Proposed Structure

Sl. No.

Existing Zones

Existing Number of

Commissionerates

Total Number of Proposed

Zones

Number of Proposed Executive Commissionerates

Gujarat 1 Ahmedabad 3 1 3Karnataka 2 Bangalore 2 1 3Tamilnadu 3 Chennai 3 1 7

4 Trichy (P) 2 1 2Delhi 5 Delhi 3 1 7

6 Delhi (P) 3 1 4West Bengal 7 Kolkata 3 1 3 Maharashtra 8 Mumbai-I 3 3 3

9 Mumbai-II 2 9


10 Mumbai-III 4 8U.P, Bihar,

Jharkhand & Uttarakhand

11 Patna (P) 2 1 2

Customs Commissionerates under Central Excise ZonesKerala Cochin 2 2

Andhra Pradesh Vishakhapatnam 1 3

Maharashtra & Goa Pune 1 2

N.E. States Shillong 1 1Orissa Bhubaneswa

r 0 1

Total Number of Customs Commissionerates & Zones Proposed: 60 (58 + 2) and 20 Customs Zones Commissionerates

6.0 Reorganization of Directorates: Presently, there are 18 Directorates under Central Board of Excise & Customs. Each of these Directorates is a specialized unit dealing in assigned technical area of indirect tax administration and is the repository of information on related aspect, besides providing / strengthening institutional memory. Due to the varied nature of the functioning of different Directorates, it is not possible to formulate general norms applicable to all the directorates. Nevertheless, each Directorate has been assessed individually for reorganization based on the recommendations of the individual directorate as well as future role in indirect tax administration envisaged for it. Directorate-wise reorganization proposal is discussed in the following paragraphs:

Directorate of Central Excise Intelligence Directorate General of Revenue Intelligence: Directorate General of Inspection (Customs and Central Excise) Directorate General of Human Resources Development National Academy of Customs, Excise and Narcotics Directorate General of Vigilance: Directorate General of Systems and Data Management: Reorganization of DG (Systems & Data Management Directorate General of Audit: Directorate General of Safeguards: Directorate General of Export Promotion


Directorate General of Valuation: Office of the Chief Departmental Representative, CESTAT: Directorate General of Service Tax: Directorate of Publicity and Public Relations: Directorate of Legal Affairs: Directorate of Logistics Central Bureau of Narcotics Office of Chief Controller of Opium and Alkaloid Factories:

Following new Directorates are proposed to be created: Directorate General of Tax Arrear Recovery Directorate General of International Customs

(iii) Formations other than Directorates: a. Settlement Commission: Presently, four (4) posts each of Commissioner

and Additional Commissioner in Settlement Commission are encadred with IRS (C&CE). It is proposed to continue with this arrangement.

b. Large Tax Payers Units: There are five Large Tax Payer Units (already functional at Delhi, Mumbai, Chennai , Kolkata and Bangalore. Three more LTUs are likely to become opertational. There is no sanctioned strength in any grade, and these LTUs are functioning by diversion of posts. It is proposed to provide separate normative staff strength of 162 posts in all the grades to these LTUs. While the posts from Assistant Commissioner up to Chief Commissioner provided for LTUs are proposed to be encadred with IRS (C&CE), the posts in other grades allocated to LTUs would be filled up by the staff from local Central Excise Zone.

6.15.1 Following table summarizes the proposal for Reorganization of the Field Formations / Attached Offices under CBEC under:

Reorganization Proposal at a GlanceSl. No. Formation Existing

Number Proposed Number

1 Central Excise & Service Tax Zones Zone 23 27

2 Central Excise Commissionerates 93 119


3 Service Tax Commissionerates 7 224 Audit Commissionerates 0 455 Commissioner (Appeals) 67 606 Customs Zones 11 207 Customs Commissionerates 35 60

Number of Sub-formations after proposed reorganization would be as under: Sub-formations Existing & Proposed

1 Divisions 460 7872 Ranges 2614 39653 International Airports 37 374 Major Seaports 12 125 Minor Seaports 81 816 ICDs / CFSs 123 1237 LCS / ICP 125 125

Chpapter-14IT Initiatives and Impact on Manpower Requirement

in the DepartmentDepartment has been progressively using IT enabled work environment for

quicker responses to the needs of stakeholders as well as to reduce human interface with clients of the Department. Such a work environment also leads to standardization of work procedures and introduces well defined responsibility and accountability checks at each stage of delivery of service by keeping electronic trails and preserving records.

In this regard some of the significant IT initiatives are identified below:-ICEGATE and ICENETCBEC Automation ProjectData Warehouse Project.Central Excise ComputerizationInternet Based System of RegistrationE-filing of Returns.Risk Management System (RMS)ACES (Automation of Central Excise & Service Tax)


2.0 The impact of these IT projects on manpower requirement has been the subject of a number of studies, some of which are as follows:-(i) A Survey was conducted with the Chief Commissioners in 2007 and 2008 and it was concluded by the field Chief Commissioners that there is no manpower rendered surplus on account of IT initiatives. It had been felt that IT initiatives improve the quality of output and compress the response time but do not reduce the need for manpower.(ii) A similar exercise was conducted by the Optimization of Staff Committee headed by the then Member (P&V) (2007) and similar observations were made.(iii) The Study Groups who had been given the task of formulating norms for the current Cadre Restructuring exercise had also come to a similar conclusion. In any case norms evolved by them factors in the impact of IT initiatives on manpower norms which are being used in the current manpower planning. (iv) Manpower utilization with respect to ACES has been examined by DG (HRD) set up over different locations. It has been observed that technology interface takes time to settle down. Thus, often there is considerable waiting period before the desired data input is obtained on the computer screen. Similarly, retracing data already worked upon takes time. Overall, it was found that any business process software though enhancing the quality of output and performing automatically arithmetical functions for the officers; does not ipso-facto lead to curtailment of manpower needs.(i) A large quantum of departmental work in particularly on customs related matters require human interface on Anti-smuggling, collection of intelligence and investigations which is self evident. Even in clearance procedures, like checking of container number, Seal No. or physical inspection of cargo continues to engage significant amount of manpower. Similarly, on Central Excise and Service Tax intelligence, investigations and verifications consume significant amount of man-hours. So is the case while dealing with responses requiring non-standardized data, e.g. preparing response to C&AG paras, information sought under the RTI Act and Parliament Questions. Additional manpower is further required to address needs of the projects like SEVOTTAM, CPGRAM etc. which are aimed at improving quality of service to stakeholders. Further, recently introduced Child Care Leave for women employees,


who constitute almost 12% of total workforce under CBEC, also requires additional manpower.

Chapter 15Assessment of the Staffing Requirements

For arriving at the normative requirement of staff of the Department in the reorganized organizational set-up following Staffing Norms are proposed to be used:(A) Staffing Norms Central Excise Commissionerate:

Each Commissionerate would have 5 Divisions and 25 Ranges.

Sl. No. Grade Last CR Norms

(Approved by Union Cabinet) Proposed Revised Norms

1 Commissioner 1 12 Addl./Jt. Commr. 3 23 DC/AC 8 104 Superintendent 91 805 Inspector 136 1206 CAO 1 17 P.S. 1 18 AO 8 109 DOS 39 2010 STA

11 TA 47 24


12 LDC 0 1213 Record Keeper 0 014 Steno. 7 815 Driver 11 516 H. Hav./Hav./Sepoy 95 75

TOTAL 448 369 (B) Staffing Norms for Customs/ Customs (P) Commissionerates:

The following staffing norms are proposed for calculation of staff requirements of all types of Customs Commissionerates, viz. Import & Export Commissionerates, Integrated Commissionerates and Customs (P) Commissionerates:

Sl. No. Grade

Last CR Norms (Approved by Union Cabinet) Proposed Norms

Customs Commrt.

Customs (P) Commrt.

Customs & Customs (P)

Commrt.1 Commissioner 1 1 12 Addl./Jt. Commr. 2 2 33 DC/AC 10 12 144 Superintendent / Appraiser 91 84 805 Inspector 120 155 1206 CAO 1 1 17 P.S. 1 1 18 AO 6 6 59 DOS

34 33 1510 STA11 TA 33 33 2412 LDC 0 0 1213 Record Keeper 0 0 014 Steno. 7 7 1115 Driver 12 26 1416 H. Hav./Hav./Sepoy 130 150 85

TOTAL 448 511 386

(C) Staffing Norms Service Tax Commissionerate:Each Commissionerate would have 5 Divisions and 25 Ranges

Sl. No. Grade Proposed Norms


1 Commissioner 12 Addl./Jt. Commr. 23 DC/AC 104 Superintendent 805 Inspector 1206 CAO 17 P.S. 18 AO 109 DOS 2010 STA

11 TA 2412 LDC 1213 Record Keeper 014 Steno. 815 Driver 516 H. Hav./Hav./Sepoy 50

TOTAL 344 (D) Staffing Norms for Audit Commissionerate:

Each of the proposed Central Excise / Service Tax Zone would have one Commissioner (Audit). The duties of Commissioner (Audit) would include, Central Excise Audit, Service Tax Audit and Post-clearance Customs Audit.

Sl. No. Grade Proposed Norms

1 Commissioner 12 Addl./Jt. Commr. 43 DC/AC 404 Superintendent 805 Inspector 806 CAO 17 A.O. 28 P.S. 19 STA 5

10 TA 1511 Steno. 2512 Driver 4


13 H. Hav./Hav./Sepoy 10TOTAL 268

(E) Staffing Norms for Commissioner (Cadre Control): There are totally 21 Group ‘B’ & ‘C’ officers & Staff cadres in the Department.

Distribution of these cadres is as under:Central Excise : 15Customs : 4Directorate : 2

Sl. No. Grade Proposed Norms1 Commissioner 12 Addl./Jt. Commr. 23 DC/AC 44 CAO 15 Admn. Officer 16 P.S. 17 STA 28 TA 49 LDC 1

10 Steno. 511 Driver 212 H. Hav./Hav./Sepoy 10

TOTAL 34 (F) Staffing Norms for Chief Commissioner Office:

Sl. No. Grade Last CR Staffing Norms Proposed Norms1 Chief Commissioner 1 12 Addl. / Jt. Commr. 2 13 DC/AC 1 24 Superintendent 5 15 Inspector 5 26 CAO 0 17 AO 0 18 P.S. 1 19 DOS 2 110 STA

11 TA 1 212 LDC 1 013 Steno. 1 314 Driver 2 315 H. Hav./Hav./Sepoy 8 1016 DD/ AD (OL) 0 1


17 Sr. Hindi Translator 0 118 Jr. Hindi Translator 0 2

TOTAL 30 33 (G) Staffing Norms for Commissioner (Appeals):

Each of the proposed 65 (45 CE & ST and 20 Customs) Zones would have one Commissioner (Appeals).

Sl. No. Grade Last CR Staffing Norms Proposed Norms1 Commissioner 1 12 DC/AC 0 13 Superintendent 3 14 Inspector 1 25 P.S. 1 16 STA 0 07 TA 2 28 Steno. 0 29 Driver# 1 1

10 H. Hav./Hav./Sepoy 3 2TOTAL 12 13

(F) Staffing of Commissioner (Adjudication): Presently, there are Seven (7) Commissioners (Adjudication). It is proposed to retain

this number. Only Study Group –I recommended staffing norms for Commissionerate (Adjudication).

Sl. No. Grade Last CR Staffing

Norms Proposed Norms1 Commissioner 1 13 DC/AC 1 14 Superintendent 2 15 Inspector 1 27 P.S. 1 1

10 STA 0 011 TA 0 212 LDC 1 014 Steno. 0 215 Driver# 1 116 H. Hav./Hav./Sepoy 3 3

TOTAL 11 14


3.1 By application of the aforementioned Staffing Requirements, following staff strength in various grades has been worked out:

Proposed Grade & Designation

Existing SS

Proposed SS

Additional Posts

Director General 0 16 16Principal Chief Commissioner 0 38 38

Commissioner (HAG) 47 110 63Commissioner (SAG) 295 340 45Addl. Commissioner 593 932 339Joint Commissioner

Dy. / Asst. Commissioner 1550 44182868 (2368-Temporary

posts)Asst. Commissioner (Reserve

Posts) 0 250 250Sr. PS 47 95 48P.S. 295 465 170

Steno Grade-I 735 1715 980Steno Grade-II 550 2269 1719

Superintendent CE / Superintendent Customs (P) /

Appraiser13948 19108 5160

Inspector CE / Preventive Officer / Examiner 20163 25203 5040

CAO 155 349 194A.O. 984 1600 616

Executive Assistant (DOS / STA) 1986 / 3211 4850 -347

TA 5432 6432 1000LDC (including Record Keeper) 908 1917 1009

Driver Spl. Grade 103 86 -17Driver Grade-I 725 392 -333Driver Grade-II 621 427 -194Driver Grade-III 641 480 -161Head Havaldar 2139 6500 4361

Havaldar / Sepoy (Proposed Desig.: Havaldar)

4065 / 6410 8690 -1785

D.D. (O.L.) 6 11 5A.D. (OL) 37 68 31


Senior Hindi Translator 24 79 55Junior Hindi Translator 168 158 -10

Others Group B Gazetted 20 0 -20Others Group B Non-gazetted 60 5 -55

Group 'C' ASI etc. 69 69 0Others Group 'C' 821 634 -187

Grand Total 66808 87706

3.3 Total Staff Strength Staff Strength (including Technical Cadres) after Cadre Restructuring:

Cadres Total Proposed Staff StrengthMainstream cadres 87706Technical cadres 4976

Grand Total 92682

Chapter 16Restructuring of Cadres

Restructuring of the officers and staff that would result because of the aforesaid normative requirement of staff is detailed below:(i) Restructuring of IRS (C&CE):

The proposal seeks to achieve structural parity of Indian Revenue Service (C&CE) with other Organized Group ‘A’ Central Services by creation of 16 posts in Apex Scale, 38 posts in HAG+ grade and 110 posts in HAG grade. Creation of all these posts is proposed on the basis of functional requirements of the Department only.

Deployment of Apex, HAG= and HAG level posts is proposed as indicated below:A. Director General (Apex Level Posts):

Apex level posts are deployed in important zones having large staff cadres / large Revenue collection/ Pan-India jurisdiction:

i. Lucknow Central Excise Zoneii. Mumbai-I Central Excise Zoneiii. Bangalore Central Excise Zoneiv. Delhi Central Excise Zonev. Chennai Central Excise Zonevi. Kolkata Central Excise Zonevii. Vadodara Central Excise Zone


viii. Mumbai-I Customs Zoneix. Hyderabad Central Excise Zonex. Chennai Central Excise Zone

In addition following Directorates General handling important functions and having pan-India jurisdiction are

also proposed to be kept at Apex Level:

1. DG, Revenue Intelligence Anti-smuggling operations, narco-terrorism ,Commercial Fraud, under the Customs Act

2. DG, Central Ex. Intelligence

Checking evasion of Central Excise duty and Service Tax and major tax policy inputs

3. DG, Service Tax Major tax policy inputs and trends in commercial frauds in the area of service tax

4. DG, Systems

Automation projects in the area of indirect taxation ,suitable adaptation of hardware software, training of personnel and monitoring of expenditure budget on computerization at the central and field levels, Anti-tax evasion initiatives ( Business Intelligence ), DW , Smart View

5. DG, Vigilance Anti-corruption supervisory role ,Disciplinary Authority for Gr. B Officers

6. DG, NACEN

Training of probationers at inception, up gradation of human skills and resource and Capacity Building ; interaction with foreign training universities/faculties for mid-career training programmes, charting training programmes for Group B .

B. Principal Chief Commissioner (HAG+ Posts): HAG+ Posts are also proposed to be deployed on the basis of factors like revenue collection/

1 Mumbai-II Customs Zone2 Ahmedabad Customs Zone3 Delhi Customs Zone,4 Lucknow CE Zone5 Mumbai-II CE Zone6 Ranchi (Patna) CE Zone7 Vishakhapatnam CE Zone8 Mumbai-III Customs Zone9 Bhopal CE Zone

10 Kolkata Customs Zone11 Cochin CE & Customs Zone12 Ahmedabad CE Zone13 Mysore CE Zone14 Meerut CE Zone15 Pune CE Zone16 Bangalore Customs Zone


17 Jaipur CE Zone18 Hyderabad CE Zone19 Nagpur CE Zone20 Trichy Customs (P) Zone21 Shillong CE Zone22 Bhubaneshwar CE Zone23 Coimbatore CE Zone24 Chandigarh CE Zone25 Patna Customs (P) Zone26 Delhi Customs (P) Zone27 CDR, CESTAT 28 Chief Commissioner. TAR29 DG, Legal Affairs 30 DG Audit31 DG Valuation32 DG Safeguards 33 DG Export Promotion 34 DG, International Customs 35 Service Tax Zone, Chennai36 Service Tax Zone, Delhi37 Service Tax Zone, Kolkata38 Service Tax Zone, Mumbai

C. HAG Posts: Proposed Deployment of HAG posts is as under:S.No Formations Existin

g Propose

d POSTS IDENTIFIED FOR HAG

GRADE OFFICERS (110 )

1 DGRI 1 (Delhi) 9

Delhi -3, Mumbai- 1, Kolkata- 1 , Chennai-1, Ahemdabad -1, Bangalore-1 , Lucknow- 1

2 DGCEI 1 (Delhi) 9

Delhi -3, Mumbai 1, Kolkata -1 , Chennai-1, Ahemdabad -1, Bangalore- 1 , Hyderabad- 1

3 DG,NACEN 1 (Delhi) 11

Faridabad -2, Delhi -1 , Mumbai-1, Kolkata-1, Chennai-1 , Patna-1, Kanpur -1, Vadodra-1, Hyderabad -1 ,Bangalore -1

4 DG, Vig 1 (Delhi) 5 Delhi -1, Mumbai-1, Kolkata -1 ,

Chennai-1, Bangalore- 1 5 DG ,Syst 1

(Delhi) 9 Delhi -7, Mumbai- 1 , Chennai-1

6 LTU 0 8(i) Delhi (ii) Mumbai , (iii) Kolkata (iv) Chennai (v) Bangalore (vi) Pune (vii) Hyderabad & (viii) Ahemadabad

7 ST 0 22 (i) Noida -1 (ii) Mumbai -7 (iii) Pune-1,


(iv) Bangalore -2 (v) Delhi -4 (vi) Chandigarh-1 (vii) Chennai -2 (ix) Hyderabad -1 (x) Kolkata-2 , Ahmedabad -1

ST Zone 4

8 DG(ST) 0 1 (i) Delhi (ii) Mumbai (iii) Kolkata (iv) Chennai

9 DG, Export Promotion 1 1

10 DG (Audit) 1 3

9 Apex CCA NA 10

(i) Mumbai-I(CE)(ii) Mumbai-I (Cus)(iii) Chennai (CE), (iv)Chennai (Cus)(V) Delhi (CE)(vi) Lucknow (CE), (vii) Hyderabad (CE),(viii) Vadodra , (ix) Bangalore,(x) Kolkata (CE)

10 Comm(Prev) 0 11

(i) Trichy (ii) Delhi (iii) Kolkata (iv) Mumbai (v) Cochin (vi) Patna (vii) Lucknow (viii) Shillong (ix) Bhubaneshwar (x) Jodhpur and (xi) Amristar

11Major Airport Commissionerates & Air Cargo Complex

0 7 Delhi, Mumbai ,Chennai, Bangalore , Cochin , Hyderabad & Kolkata

110

D. SAG Posts: Proposed deployment of SAG Posts is as indicated below:

Details Nos. Remarks Central Excise Commissionerates 119 increased from existing 93 to 119

Service Tax Commsiionerates 22 increased from existing 07 to 22

Customs Commissinerates 60 increased from existing 34 to 60

Audit Commissionerates 45 New Formation -45Large tax payers Unit 8 Sanctioned strength =NIL Commissioners (Appeal) 60 decreased from existing 69 to 60Commissioner (Adjudication) 4 decreased from 7 to 4Commissioner (CBEC) 6 Existing Sanctioned Strength


Settlement Commission 4 Existing Sanctioned StrengthCadre Control ( Mumbai CE , Mumbai Cus., Kolkata CE ,Delhi CE,Vadodra CE,Chennai CE,Lucknow CE, Bangalore CE)

8 NIL

Directorate of Legal Affairs 1 Existing Sanctioned Strength

Central Bureau of Narcotics 1 Existing Sanctioned Strength

Chief Controller of Factories 1 Existing Sanctioned Strength

Directorate of Publicity & Public Relations 1 Existing Sanctioned Strength 340

STS/JTS Level: Existing Sanctioned strength at the cutting edge level of indirect tax administration (the Dy. / Asst. Commissioner level) is proposed to be enhanced from existing 1550 to 4418 , inter alia, to strengthen field formations for trade facilitation, compliance of scrutiny norms and to strengthen audit machinery for better compliance management and detection of duty evasion. Strengthening of audit set up is expected to generate / recover huge amount of revenue. It would also provide much needed relief to the acutely stagnating Group ‘B’ Gazetted Executive officers. Total existing sanctioned strength of IRS (C&CE) is proposed to be enhanced from existing 2485 to 6104 (including 250 reserve posts at JTS level).

ii) Restructuring of other cadres: a. Creation of more posts at Group ‘B’ Executive Gazetted / Non-gazetted levels for trade facilitation, compliance of scrutiny norms and to strengthen audit, anti-evasion and anti-smuggling formations etc. would also improve the promotional avenues for Inspector / ministerial grade officers. Accordingly, 5160 additional posts in the Superintendent grade and 5040 posts in Inspector grade are proposed to be created.

b. The proposal seeks to strengthen Official Language and Stenographer grades, to provide due support to the field formations. Strengthening of official language grades will help the Department in better implementation of official language policy of the Government. As regards Stenographer grade, more posts at the level of Senior Private Secretary and Private Secretary are proposed to be created to meet the requirement of secretarial assistance of the Apex, HAG+, HAG and SAG officers of IRS (C&CE).

c. The proposal also seeks to enhance the sanctioned strength at Chief Accounts Officers (Group ‘A’) and Administrative officer levels as per the need of proposed


organizational structure. The enhanced strength at these levels would benefit the Ministerial grades in general and Deputy Office Superintendents (DOS) grade in particular, as all existing DOS will get promoted to the grade of AO.

Chapter 17Financial Implications of the Proposal

The total Cost of the aforesaid proposal works out to Rs. 937 crore per annum (excluding the cost of 250 Reserve posts at JTS level). However, since 2718 officers at JTS-level posts which are to be filled by promotion are already drawing maximum pay-scale of JTS/STS level, there would be a saving of Rs. 150 crores (approx) from the projected expenditure of Rs. 937 crores. Thus, the actual expenditure incurred per annum would therefore be only Rs. 787 Crores. It is proposed to meet the said additional expenditure by increase in productivity (by improvement in morale of the officers and staff) and consequently enhanced revenue collection by the Department. The said proposal, however, is a revenue earning proposition and as per latest estimate seeks to garner additional Rs. 68,000 Crores per annum as against the projected expenditure of Rs. 787 crores per annum.

Matching Savings / Earnings: It is proposed to meet the cost of Cadre Restructuring by improving revenue collection over the period of next five years. Further, enhanced manpower and improved morale of the officers would result in improved compliance monitoring and verification, which would plug the revenue leakages. Enhanced manpower strength would also improve the border management functions of the department, and enhance the contribution of the Department to national security which would be invaluable. It also aims at generation of additional revenue of Rs. 68000 crore over abd above the Budgetary Estimates for the current fiscal.


Chapter- 18Interaction with Recognized Officers and Staff

Associations While formulating the Cadre Restructuring / Reorganization proposal, the

DGHRD, under the directions of the Central Board of Excise & Customs, interacted on multiple occasions with following officers and staff associations, to ascertain their views:

(i) Indian Revenue Service (C&CE) Association (ii) All India Association of Central Excise Gazetted Executive Officers (iii) All India Customs Preventive Service Federation(iv) All India Association of Superintendent of Customs(v) All India Central Excise Inspectors' Association (vi) All India Association of Customs & Central Excise Stenographers(vii) All India Customs Ministerial Officers' Association(viii) All India Customs Ministerial Employees Federation(ix) All India Central Excise & Service Tax Ministerial Officers' Association(x) All India Customs & Central Excise Group 'D' Officers Federation(xi) All India Customs Group 'D' Officers Federation

During these interaction, the associations / federations submitted their respective representations containing their demands/ suggestions for Cadre Restructuring exercise. These demands were examined by the CBEC. The final Cadre


Restructuring Proposal has been formulated according to the directions of CBEC taking into consideration the demands raised by these associations/ federations and to the extent found in line with present and future needs of the Department.


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