CBEC-Brand Ambassador of Ad-hocism in Service matters

Exchange Rate for imported goods is Rs 74.03 Per Pound Sterling and Rs 51.22 Per Yen-Exchange Rate for export is Rs 72.45 Per Pound Sterling and Rs 49.94 Per Yen-Customs Non-Tariff Notification No.128 Sensex slips further and closes at 8773 100 per cent EOUs allowed to export non-basmati rice-DGFT Notification No.59 Customs duty of 5 per cent imposed on import of Pig Iron, spiegeleisen, semi-finished products, flat products & long products Import of Crude Soyabean Oil subjected to 20 per cent customs duty- no change in import duty on refined soyabean oil-Customs Tariff Notification No.122 Time-limit for filing refund of service tax extended to 6 months-Service Tax Notification No.32 Rahul Bajaj asks Industry to prepare for the worst Tariff Value for import of Brass Scrap is 3525 and for poppy seeds 5206-Customs Non-Tariff Notification No. 127 CBEC clarifies the entire amount of duty paid by the manufacturer, as shown in the invoice would be available as credit irrespective of the fact that subsequent to clearance of the goods, the price is reduced by way of discount or otherwise-Central Excise Circular No.877 Mandavariya (Kishangarh), District Ajmer notified for Unloading of imported goods and loading of export goods-Customs Non-Tariff Notification No.117 SC Ruling-the entitlement of benefit in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act- conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounted to manufacture/production-AIT-2008-413-SC SC Ruling-Whether any "gift" arose in terms of Section 2(xii) of the Gift-tax Act, 1958 on the allotment of rights issue by the appellant company to its shareholders vide Board's Resolution- Whether there was any element of "gift" as defined under Section 2(xii) in the appellant issuing Bonus shares in the ratio of 1:23-AIT-2008-412-SC DEPB benefit allowed on export of cement and steel-DGFT PN 108 exports of cement in all types and forms and primary steel products eligible for export incentives under Focus Market Scheme-DGFT Notification No.58 Import of Marble Tiles-DGFT Notification No.57 Clarification on setting up Duty Free Shops approved by FIPB-Customs Circular No.19 HC Ruling-Income Tax-"reserves" arising out of the acquisition of the business of Tata Cellular Limited could never have the character of "income" in the hands of the petitioners-pre-requisite condition contained in proviso to section 147 to enable the re-assessment to be opened after period of 4 years have elapsed have not been met-AIT-2008-410-HC HC Ruling-Central Excise- valuation of the goods for the purpose of excise duty and whether excise duty was chargeable under Section 4 or Section 4A of the Central Excise Act 1944-while construing rule 3, who are excluded are only the institutional or industrial consumers as explained in Rule 2A and the industrial or institutional consumers in terms of the proviso to rule 2(p) for the purpose of chapter-II are the same-If the person who purchase the prepacked commodity not directly from the manufacturer or packers, they are consumers and the declaration will be of no effect-AIT-2008-408-HC Government considering imposition of import duty on steel Bad News for Consulting Engineers- whether turnkey contract can be vivisected?- The conclusion in Daelim case on the point, prima facie, being not in accordance with law, matter goes to Larger Bench-AIT-2008-405-CESTAT Larger Bench of CESTAT rules Credit is admissible on an input service relating to the business-AIT-2008-407-CESTAT credit of the service tax paid on the outdoor catering (canteen) service is admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004-AIT-2008-406-CESTAT The payment for use of "services for MTNL/other companies via the interconnect/port/access/toll by the assessee would not fall within the purview of payments as provided for under section 194J of the Act, so as to be eligible for tax deduction at source-The interconnect charges/port access charges cannot be regarded as fees for technical services-AIT-2008-404-HC Computation of Value under Section 14 for Levy of Export Duty - Customs Circular No. 18 Advance Ruling- Whether the service fee paid by the applicant to Intertek Testing Management Limited UK under Global Management Service Agreement is taxable as "Royalties & Fee for Technical Services" as per the provisions of Article 13 of DTAA between India & UK? Whether the applicant is required to deduct tax at source on the service fee paid to Intertek Testing Management Limited, UK, at the rate of 10% plus applicable surcharge and cess as per the provisions of section 115A(1)(b)(BB) of the Income-tax Act-AIT-2008-401-AAR Larger Bench of SC Ruling-whether the revenue can be precluded from filing an appeal even though in respect of some other years involving identical dispute no appeal is filed -AIT-2008-403-SC SC Ruling-whether transfer of Banking Undertaking gave rise to taxable capital gains under Section 45 of the 1961 Act-it was not possible to compute capital gains and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of Income Tax Act-AIT-2008-400-SC Export duty of 8 per cent notified in place of earlier rate of Rs. 200 per tonne on export of iron ore fines-Customs Tariff Notification No.121 Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Second Amendment Rules, 2008-Central Excise Non-Tariff Notification No.45 SC rules Ethylene and propylene manufactured by the assessee and used in its factory in the further manufacture of the same goods would be entitled to the benefit of exemption contained in notification no.217/86-AIT-2008-398-SC New DEPB Rates on export of all products notified–DGFT PN 102 service tax paid under Section 66A is available as 'input credit' under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service-Service Tax Trade Notice No.43/2008 Anti-dumping duty imposed on import of cable ties from China & Taiwan-Customs Tariff Notification No.118 Definitive Anti-dumping duty imposed on import of Phenol from Singapore, South Africa & European Union-Customs Tariff Notification No.114 High-tech products entitled to benefits under High-Tech Products Export Promotion Scheme –DGFT PN 101

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CBEC-Brand Ambassador of Ad-hocism in Service matters

AIT News Network

NEW DELHI. In the era of LPG- (L-Liberalisation; P-Privatisation; G-Globalisation), for anything and every thing, we find identified Brand Ambassadors being notified. However, till date, no Government Department has been notified as Brand Ambassador. In any move to identify brand Ambassador among the various departments for issues in service matters , Ministry of Finance being the Fund generator, regulator and distributor, it should take the lead role. The defiant attitude and approach towards the Taxpayers and Industrialists is well known. The main reason for such indifference by the Department could be the disgruntled work force.

Let us analyse the present set up in the CBEC:

The arrangement at the top is ideal –out of the six members in the CBEC holding the rank of the Addl. Secretary to the Government of India , there is a Member exclusively for P&V matters. Also there is the Directorate of Organisation & Personnel Management (DOPM) headed by an experienced Commissioner of Joint. Secretary level, for the Personnel and career management directly reporting to the Member (P&V) .The entire cadre management on DPCs, seniority, deputations etc. of Group B&A cadres is being handled by the Board and personally monitored by the Member(P&V). Out of the total 65,000 (approx) employees, there is a total sanctioned strength of 12,766 in Group B and around 2304 in the Group A services. In the normal course, everything should have been handled very systematically and efficiently. But strangely, all is not well as could be seen today.After the re-structuring implemented in Nov,2002, there are around 2000 newly created posts never filled up till date!! The creation and distribution of these posts were definitely never need based nor actually required at all. The large number of posts created of Appellate Commissioners and the posts allocated for anti-smuggling work all over the country would stand as testimonials for ever. But the cadres of Group C &B of Central Excise side remain the most disgruntled and stagnating even today. There are 8 to 10 Group B officers working under one AC in almost every Central Excise Division of which on an average 4 or 5 will be those in the same scale of pay of the ACs after getting the second ACP on completion of 24 years service. There are around 4000 in the ACP scale and only 250 divisions in the field set up. There were three Committees created by the CBEC during 2003-2004 viz.(i)-Study committee in Feb,2003 on removal of stagnation headed by Sri.SK Mishra, the then Member P&V.(ii)-Study committee on merger of cadres headed by the Sri.SK.Bharadwaj,Member P&V with CC of Chandigarh as a member in Sept,2003 (iii)-Committee on creation of Service Tax Commissionerates and cadre re-structuring headed by Sri. RK.Tewari, CC ,Pune in Oct,2004 (who was Member P&V for couple of months-before joining Settlement Commission.)All these committees were set up with the noble purposes and based on repeated representations made by the staff associations of Superintendents and Inspectors. The Tewari Committee set up in Oct, 2004 had done a commendable work within a record time-limit of three months and recommended for creation of 266 posts of A Cs as early in Dec,2004 and entrusting the ACP Superintendents with powers of A Cs for Service tax matters in a time-bound manner. Nothing was heard there after in the matter.

The Merger Committee gave the strange recommendation for merger of cadres with a road map to be effective after all the working persons in the Customs Wing as Examiners and Appraisers/Superintendents are either retired or promoted as ACs !!.

This Committee completely ignored the study undertaken as early in March,1992 by Sri.SK Kohli, the then DOMS. and also the Board’s decision taken in the meeting on 16-01-1996 for the merger of the GroupB&C cadres with immediate effect. The very powerful lobby from Customs cadres could see to it that no follow up was ever undertaken by the CBEC on this decision.During th period from 2003 till date there were at least half a dozen Members of CBEC in charge of the P&V-even for short spells like 2-3 months; giving an impression that this is the safest portfolio in CBEC without any professional hazards. There was a committee constituted in Feb,2004 under the Chairmanship of the then M(P&V) to examine the feasibility of introducing All India Seniority among the Group B,C&D cadres notwithstanding the fact that at the Group B level all the cadres were already having the same!! This Committee has un-necessarily linked the all India transfer liability as a pre-condition for adopting All India Seniority for promotions only to create confusion among the cadres and they have easily succeeded in the same. It is well known to all by now that except the huge amount spent for the TA/DA for the All India tour by the few selected, none of these three Committees had brought out any change or solace to all those concerned/aggrieved. Further, to add insult to injury, ever since 1979,all the promotions to the Group A from the Group B cadres are being ordered only on Ad hoc basis.

It will be worth considering the Government of India regulations/conditions for resorting to ad hoc promotions:

“The Ad hoc promotions should not be made for the reasons of –

(i)-Absence of Rectt.Rules, (ii)-Revision of Rectt. Rules, (iii)-Cases are pending in Courts/Tribunals for resolution of disputed seniority list.

Again, it has been stipulated the cases where Ad hoc promotion can be made

(i)-Where there is no candidate in the approved panel.

(ii)-Where there is injunction by Court/Tribunal against filling up the vacancy on regular basis and the post cannot be kept vacant till the final judgment.

(iii)-Filling up short-term vacancies-Approved panel should be prepared taking into account vacancies likely to arise in the year. Senior most in the panel should be appointed against short-term vacancies of more than 45 days on ad hoc basis”.

From the above, it would be clear that the Ad hoc promotion being made to Group A cadre to fill up the retirement vacancies by the CBEC is totally against these guidelines as none of the justifying situations are available.

The Ad hocism followed all these years has now brought in the anomalous situation that after the latest promotion orders issued and there is wide disparity in the promotion among the three feeder cadres. The Superintendent Central Excise of June,1991, Superintendent of Customs of June,1996 and the Custom Appraisers of Mar, 1994 have become Assistant Commissioners even though the promotions are being ordered in the ratio of 6:1:2 among the cadres.

The strange ratio of 6:1:2 fixed in 1989 by the CBEC was in no way proportionate to the cadre strength of 3102:287:581.This ratio is being followed among even after the re-structuring implemented in 2002 with revised cadre strength of 9437:2520:809 respectively. On the pro rata cadre strength the ratio should have been 15:4:1. Even though the review and streamlining of RRs of all cadres was a pre-condition while approving the Cadre Restructuring by DOPT in Nov,2001 , the CBEC has not done anything on these lines on the RRs of the Group A service for best known reasons.

The recent orders, though belatedly issued on 1-9-2006 promoting ten senior officers as Chief Commissioners have taken into account even the retirement vacancies arising on 30-09-2006. It is really a good gesture worth emulating for all the cadres. But the fact remains that though there are several vacancies of ACs arisen due to retirement etc , the adhoc promotions from Group B to Group A are not regularly ordered for long what to talk about regular promotion.

The reasons for the disgruntlement among the Superintendent of Central Excise –the largest among the Group B feeder cadres entrusted with the enforcement of CentralExcise, Service tax and Land Customs work in the field is well established and there is hardly any motivation to perform the job assigned.

The prolonged policy of Ad hocism adopted in the Personnel management has earned the CBEC the reputation as Brand Ambassador of Ad hocism in Service matters among all the Government Departments. Now that yet another Member(P&V) has been posted ; let us hope, wish and pray for a positive approach in staff matters of the type discussed above.

Tailpiece: Recently one DR Appraiser of 1972 working as AC from 1983 onwards (also regularized from 1985 by the review DPC held in Nov, 2000) was mentioning that there is no scope of being considered for promotion (before his retirement in a couple of years) as Commissioner though the 1986 batch DRs of IC&CE have already been promoted. The true Martyr of ADHOCISM by CBEC—as also the victim of the never ending seniority dispute between the DRs and Promotees.It is high time CBEC also appoints HRD Consultant to keep its flock together and expect some motivational performance from its brilliant Officers on the close of the Financial Year for toning up revenue efforts.

( To be continued )