Introduction Central Board of Excise and Customs is the apex body constituted under law to administer and formulate

policy regarding collection of indirect taxes in India. The present structure of Board is the outcome of incremental changes made from time to time from the legacy of a control economy. The structure of the Board, its Sections and procedures are in need of a relook as fundamental changes in economy and methods of tax collection ha e taken place. Ser ice tax is the fastest growing indirect tax with least resources at its command! Customs is losing its rele ance as a paramount source of re enue and being increasingly recogni"ed for its functions in border control, free trade agreements, trade facilitation etc, and Central Excise has, by now, become a settled law. It is in this background, that a need is felt to relook at the structure of the Board and its Sections to suggest means to impro e the utility and efficiency of the policy wings. #. $resently, arious Sections%&ings of the Board are organi"ed mainly along the three main streams of re enue collection i.e. Central Excise, Customs and Ser ice Tax. Such independent handling sometimes leads to inconsistencies and complications. Thus there is a re'uirement for an institutionali"ed mechanism to ensure better coordination among the three policy wings. (n the other hand, there are certain Sections%&ings in the Board which deal with functional matters common to all the three re enue streams, namely ) T*+, ,egal, and *e iew. -. (n the one hand there are .irectorates ) such as ./ICCE, ./ 01udit2, and CC 0T1*2 ) all under the administrati e control of 3ember 0C42 5 which deal with matters common to all the three re enue streams and, on the other hand, there are .irectorates namely ./ 0Systems and .ata 3anagement2 and ./ Export $romotion for which there is no Section in the 3inistry to interface. 6. Mandate - In the abo e background, the Board constituted a Committee to suggest restructuring of arious sections of the Board with the following mandate ) 0a2 7ecessary measures for effecti e coordination to ensure harmony of policies and procedures and consistency in implementation of law relating to Central Excise, Customs and Ser ice Tax! 0b2 .esirability or otherwise of creation of any new Sections%&ings!

0c2

*eallocation of work distribution, if any, re'uired among Sections%&ings! 0d2 *oles and responsibilities of arious Sections%&ings is5s5 is .irectorates. 0e2 3anpower re'uirements in the light of such reorgani"ation and%or redistribution! 0f2 (ther infrastructural re'uirements in the light of such reorgani"ation and%or redistribution! 0g2 1ny other issue which may arise ha ing any bearing on the abo e. 8. The Committee was constituted by an (.3 dt 659959- issued ide :.7o #;<%9=>%#=9-5C45; with the following members 5 Sl i. ii. iii. i . . 6. Name (S/Shri) $. S. $ruthi Sandeep ?umar 3anish Sinha S. ?. Sinha *. $. Singh Methodology Designation and place of posting Chief Commissioner of Customs and Central Excise, Chandigarh. 0Chairman2 Commissioner 0Customs2, CBEC .irector 0C4.9 @ <2, CBEC .irector 0Audicial2, CBEC .irector 0Customs2, CBEC

<.9 The Committee considered the present organi"ation of the work in the Board and in the .irectorates that function as adBuncts to the Board and also render acti e support to its functioning. The Committee con ened a meeting of the .irector le el officers in the Board and in ited their suggestions on impro ing the efficiency of functioning of Board. The Chairman of the Committee also addressed each of the Aoint Secretaries % Commissioners in the Board office for pro iding suggestions for functional impro ements. The Chairman of the Committee also held a session with a few retired officers @ :ICCI seeking suggestions for functional impro ement and incorporating tradeCs expectations from the Board office. <.# The shortage of manpower and re'uired skill set in the sections of the Board was a common refrain. &hile the need for additional manpower is acknowledged, it was noted that creation of regular sanctioned posts in the Board is difficult and in ol es an extensi e appro al process. The Committee

carefully considered arious suggestions and decided to focus on making such recommendations which can be implemented by the Board without the need for seeking appro als of other 3inistries % departments etc. Therefore, the Committee has suggested inno ati e solutions that can be implemented in the short term and changes that can be made with the a ailable resources. The recommendations of the Committee are gi en in Chapters II to ID below.

Chapter I Rules for transaction of business by the oard E

9 1s per Section 6 092 of the Central Boards of *e enue 1ct, 9;<-, the Central Government may make rules for the purpose of regulating the transaction of business by each Board and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board. 9.9 The Committee could not find any rules made as en isaged by the abo e pro ision to regulate and lay down the transaction of business by the Board. The Committee felt the need for making such rules to pro ide clarity and legal basis for discharge of functions by the Board, particularly those relating to subordinate legislation. 9.# There are powers ested in the Board in se eral Sections of the Customs 1ct, 9;<#, Central Excise 1ct, 9;66 and the :inance 1ct, 9;;6. These powers include power to make regulations and issue non5tariff notifications and instructions of aried nature. Fowe er, there is no definition to state when the power ested in the Board may be exercised by a 3ember alone, or Chairperson or by a full Board meeting. 9.Such a definition will not only pro ide clarity in delegation of powers, but more importantly, pro ide legal backing. This ac'uires added significance in the context of the Budgment of FonCble Supreme Court dated 9>.=#.#=99, in the Sayed 1li case, conse'uent to which the Gproper officerC, was defined in terms of Section #0-62 of the Customs 1ct, 9;<#. Fowe er, what constitutes the power of the Board has not been defined. 9.6 Recommendation! It is therefore recommended that Board set up a Committee that should draft rules under Section 6 092 of the Central Boards of *e enue 1ct, 9;<-.

Chapter II "rgani#ation of charges under Members of the oard

9. 1t present, the Sections%&ings of the Board are organi"ed along three main streams of re enue collection i.e. Central Excise, Customs and Ser ice Tax, with separate di isions for $ersonnel @ Digilance, Budget, ,egal and Audicial. Considering the specific mandate to the Committee to examine whether a re5organi"ation on functional basis could impro e deli ery, the issue was deliberated at length. The present di ision of work based on re enue streams was found to ha e merits. The Committee is of the iew that the extent of commonality of pro isions and functions among Customs, Central Excise and Ser ice Tax does not necessitate a broad based re5organi"ation of work on a functional basis. Fowe er, it was felt that some re5organisation, on functional basis, is desirable, where the synergies of work are already inseparable or where introducing such harmony would significantly impro e functioning. In case of other areas of work, a strong coordination mechanism 0through the coordination section, and through referring of files between the concerned wings of the Board2 would meet the organi"ational needs. 9.9 &hile re iewing di ision of responsibilities, the Committee noted that IT, which has come to be the backbone of tax operations, has always been an additional charge, and that too, without support of a Section in the Board to the 3ember. 9.# The Committee noted the importance of the functioning of the .irectorates as adBuncts to the Board and that there was considerable room for impro ement in the support functions by both ./ICCE and ./E$. 9..uring the course of deliberations and consultations it also emerged that central excise @ ser ice tax di isions needed to work ery closely due to common rules and returns. 9.6 The Committee also felt that fixing of re enue targets and re enue analysis @ monitoring was a core expectation of the FonCble :inance 3inister from CBEC and the manner of handling this function was dis5aggregated among four members. 9.8 In iew of the abo e and other issues, which are discussed in succeeding paras, it was felt that in order to impro e the functioning of the Board (ffice, there was a need to re5organise work in some di isions%sections on functional

basis. In order to extract maximum benefits of such re5organisation, it is critical that consistency in reporting be maintained, ertically. Therefore, in order to ha e a harmonised work distribution and map the arious wings of the Board%.irectorates to the 3embers for better coordination @ super ision, corresponding changes are suggested at le el of 3ember. #. The Committee recommends the following respecti e 3ember of the BoardE 3ember 0Central Excise @ Ser ice Tax2 3ember 0Budget @ *e enue2 3ember 0IT @ /ST72 3ember 0Compliance @ Coordination2 3ember 0Customs2 3ember 0$ @ 12 -. Member (Central $%cise and Ser&ice 'a%)! The Committee finds merit in grouping the non5tariff work and businesses processes of Central Excise and Ser ice Tax under a single 3ember, as the work is increasingly con erging in most areas including Cen at credit pro isions and issues relating thereto, offence pro isions, audit, reports and returns etc. The two streams will con erge e en further in times to come, in iew of the impending introduction of /ST. It is widely acknowledged that the Ser ice Tax wing of the Board needs to be strengthened. The rationalisation of the manpower and sections in the Board looking after Central Excise and Ser ice Tax will therefore lead to impro ed a ailability of resources to Ser ice Tax, and enable a holistic perspecti e on common policy issues in both tax streams. The con ergence of the decision making pyramid at the le el of 3ember is expected to pro ide efficacious and early resolution to long standing issues like common rules, reports and returns. It will facilitate better understanding of common issues, pa ing the way for implementation of /ST. -.9 The recommendations relating to organi"ation of work under the proposed 3ember 0Central Excise @ Ser ice Tax2 are stated in Chapter III of the report. 6. Member ( udget ( Re&enue)E *e enue monitoring and forecasting are core functions of CBEC. The Board briefs FonCble :.3 and other senior erticals headed by

functionaries on re enue position regularly. The present arrangement in the Board, where arious 3embers seek reports from field formations, while $rincipal CC1 pro ides information to T*+, leads to contradictions in re enue figures. The Committee feels that there is considerable scope for impro ement in this work area. It is recommended that this responsibility be centralised with one 3ember. Since 3ember 0Budget2 deals with the fixation of re enue targets for the arious Hones, and knows the basis for assigning the targets and is familiar with macro5economic trends while interacting with chambers of industry and other 3inistries, the Committee recommends that the re enue analysis function should be carried out by 3ember 0Budget2. It has also been kept in mind that the Statistical +nit in the Board functions under 3ember 0Budget2. &hile, 3ember 0Budget2 may be entrusted with the responsibility of *e enue monitoring, including trend analysis, the Burisdictional 3embers would continue the task of initiating steps to augment re enue. 6.9 The recommendations relating to organi"ation of work under the proposed 3ember 0Budget @ *e enue2 are stated in Chapter III of the report. 8. Member (I)' and *S'N)E The I.T initiati es of the .epartment are spread across Customs, Central Excise and Ser ice Tax. The start made by CBEC on automation needs to be built upon and taken to the next le el. The data pertaining to these tax streams needs to be used for impro ed re enue mining and policy making. /i en the need to manage the huge network and disparate applications running across the country and across tax streams and most importantly addressing trade grie ances related to functioning of the IT System, the Committee strongly recommends the need for IT to be an independent charge at the le el of 3ember, with ade'uate secretarial support from within the 3inistry. :urther, the automation work relating to /ST7 is expected to be enormous and critical to the successful implementation of /ST and CBEC would benefit from the super ision of this area by an exclusi e 3ember in charge of I.T. 8.9 The Committee acknowledges that the 3ember 0IT2 would re'uire support of a .i ision under a AS % Commissioner le el officer. Contours of an IT di ision, under a Commissioner assisted by a .irector @ two under secretaries, are suggested in Chapter III. <. Member (Compliance ( Coordination)E :unctionally, the legal and Budicial work, and that emanating from C@1/ 1udits cuts across the multiple steams of taxation and re'uires taking stand on arious issues as well as complying with the outcomes. The Committee felt that the important work

of coordination in the Board should also be placed under a 3ember, to ensure close coordination on cross5cutting issues. :urthermore, .irectorate of 1udit has responsibilities cutting across di isions. 1ll such common functions need to be placed under a single 3ember. The Committee recommends enhancing responsibilities of the 3ember 0,@A2 and re5designating the position as 3ember 0Compliance @ Coordination2. I. Member (Customs)E There is no change proposed in the work under 3ember 0Customs2, except for an intra5di isional re5organisation of work. The recommendations relating to organi"ation of work under 3ember 0Customs2 are stated in Chapter III of the report. >. Member (+ersonnel ( ,dministration)E 3ember 0+(-2 deals with the efficient management of the resources of the department ) manpower and infrastructure. The Digilance function is integral to personnel management there is no reason why it should be mentioned separately in the designation of 3ember 0$ersonnel2. The Committee recommends that the 3ember be re5designated as 3ember 0$ersonnel @ 1dministration2. This designation already appears in the induction material of the .ept. of *e enue 0#==;2 ;. Based upon the reasoning gi en abo e, a detailed organisational chart is annexed 01nnex 12 along with the mapping of arious A.S%Commissioner le el officers and .irectorates to the 3embers.

Chapter III 9. The recommendations relating to organi"ation of work under each 3ember is gi en belowE # Member (Central $%cise ( Ser&ice 'a%)E

#.9 The work performed by the Central Excise and Ser ice Tax wings of the Board should be rationalised so as to de ote e'ual amount of manpower resources to both tax streams. #.# It is noted that a .irectorate /eneral of Ser ice Tax is in 3umbai. The .irectorate is staffed with #8 /roup B officers, 6 .Cs, # 1.Cs and an 1./ @ ./. 1necdotal e idence does not indicate any large 'uantum of work being handled in the .irectorate. It was also gathered that a proposal was made to con ert ./, Ser ice Tax into a ./CEI type of organisation for anti5e asion work, which would then re'uire "onal and regional units to be set up. In iew of the organi"ational theme adopted by this Committee of integration of ser ice tax and central excise, as a precursor to /ST, it is recommended that another organisation for anti5e asion work of ser ice tax is not desirable. Strengthening ./CEI suitably would be a better recourse. ./, Ser ice Tax needs to be re5oriented to ensure impro ed deli ery of policy obBecti es. Single office .irectorates, like ./E$ or ./oD, typically work as adBuncts to the Board, which ob iates the need to expand posts in the 3inistry, which is a cumbersome and uncertain process. In order to achie e its obBecti e, such a .irectorate needs to be head'uartered in .elhi so that fre'uent and close liaison between Board and the .irectorate is possible and files can mo e back @ forth. The Committee finds no good and Bustifiable reasons for ./ Ser ice Tax to be located in 3umbai and recommends that it should be re5located to .elhi. Its resources should be a ailable to 3ember for policy related work. If the abo e proposal is not found acceptable, an alternati e proposal put forth for consideration is to re5orient ./ST as a .irectorate of Daluation for Central Excise @ Ser ice Tax on the lines of ./oD 0Customs2. It is felt that there is considerable scope for monitoring aluation in central excise side with attendant benefits for re enue mining, e en if the aluation law in the three streams of taxation is different. #.- 7otwithstanding the abo e, a re5organisation of Central Excise @ Ser ice Tax Section%.i isions, based on the assumption of a single 3ember heading these Section%.i isions in the 3inistry, has been attempted. 1 draft work distribution order is annexed to this report.

-.

Member ( udget ( Re&enue)E

-.9 1t present, while T*+ issues tariff notifications, the interpretation of such notifications is entrusted to different sections 5 Tariff +nit 0T+2 for Customs notifications and different sections of Central Excise 0based on the FS chapters2. 1s T*+ issues the notifications, the Committee feels that T*+ is best placed to interpret and clarify their policy intent and co erage as well redress policy le el grie ances. Tasking other sections to offer or coordinate clarifications on the scope and co erage of notifications has led to a oidable delays. Therefore, the Committee recommends mandating T*+ to take ownership of all representations relating to classification for the purposes of rate of duty and eligibility to concessional notifications! duty structure! and interpretation of notifications. Fowe er, FS7 @ Tariff 1ct related work would continue with the respecti e sections. -.# 1dhoc exemptions are dealt with in the Customs wing. This work closely relates to Tariff exemptions and should ideally be dealt with in T*+. -.- It is widely held that that the .irectorate /eneral of Inspection Customs and Central Excise 0./ICCE2 is under5utili"ed. The Committee was of the iew that with the expansion of positions at Chief Commissioner le el, the utility of the function of inspection at such a centralised le el has outli ed its utility. Should ./ICCE be re5oriented and its mandate changed, the department will be able to harness the resources to efficient use. The inspection function itself needs to be thought of in terms of Chief Commissioners themsel es constituting teams and conducting inspections, or better still instituting a peer re iew program for cross commissionerate inspections. Therefore, it is recommended that the function of JinspectionK be decentralised and ./ICCE with its regional units be utilised for conducting industry consultations and specialised industry%re enue growth studies by taking up Industry representations recei ed in the Board and handling specific assignments issued by 3ember 0Budget2. -.6 If ./ICCE were to be used to conduct such studies 3ember 0Budget @ *e enue2, will ha e ade'uate assistance in conducting re enue trend analysis, and following up on issues emerging from interaction with different sectors of the industry. 3ember 0Budget2 could also entrust ./ICCE with industry consultations and examining clarificatory representations.

-.8 In order to further strengthen budget making, policy making and re enue forecasting functions, the E.& wing presently under ./ Systems should function under 3ember 0Budget @ *e enue2, as a source of data and analytics. -.< T1*, whose mandate is intrinsically connected to re enue generation, should also report to 3ember 0Budget @ *e enue2. 6. Member (Customs)E

6.9 The Committee suggests that the sections of the Board should focus more on policy making, reforms, pro iding clarity on existing laws and procedures and grie ance redressal. 6.# 1s per BoardCs Circular 9%#==> Customs dated =;.=9.#==>, ./E$ has the important mandate of coordinating the trade facilitation initiati es at the policy le el and functioning as the central consultati e body with trade and other stakeholders, which is an area of work not recei ing any attention. The export promotion 0E$2 schemes handled by ./E$ except SEH scheme 0i.e. E(+, EFT$%ST$I and /ems @ Aewellery2 may be transferred to A.S 0.rawback2, who already handles E$ schemes, such as E$C/, .EEC, .:I1, S:IS etc. The .rawback di ision can be strengthened at the .C%1C le el by re5 positioning some staff of ./E$ with A.S 0.rawback2. ./E$, apart from discharging its mandate on facilitation, should also be utili"ed to conduct stakeholder and trade consultations on :T1s, which ha e been maBorly impacting the re enue as well as domestic industry and farm sectors. 6.- 1t present, the international work relating to Customs is di ided between A.S 0Customs2 who handles work relating to &C(, &T(, 1SE3 @ (CE. and Commissioner 0Customs2, who handles all bi5lateral international work @ :T1s. Commissioner 0Customs2 also super ises work relating to Customs D section, which handles Customs Daluation, adhoc exemptions, exchange rate notifications and tariff alue. The ,and Customs Station, which works ery closely with 3E1 and .ept. of Commerce on issues relating to o erland trade in South 1sia, is also with IC. di ision. 6.6 It is recommended that the international work be consolidated under one of the officers alongside that of ,and Customs section, which is ery similar in nature. The Customs D section, which deals with Customs Daluation, adhoc exemptions, exchange rate notifications and tariff alue be mo ed to the $olicy di ision so that work dealt in Customs III, ID, D and DI

sections be placed under the other officer. This would lead to a better consistency of the stand to be taken on issues in bilateral and multilateral fora in relation IndiaCs obligations to &C( and &T(. 6.8 The work relating to ./ Safeguards is intertwined with work relating to :ree Trade 1greements which is a part of IC.. E ery :T1 has inbuilt pro isions for Safeguards and re'uires legislati e enactment under Customs 1ct, which has been seriously neglected. The work of this .irectorate has huge potential. It is an effecti e alternate mechanism to the anti5dumping .irectorate under the 3inistry of Commerce @ Industry for domestic industry. Therefore, the Safeguard .irectorate should be placed with the officer in Board looking after the international work, i"., Commissioner 0Customs2 as the work relating to in estigating the imposition of safeguard duties has a close bearing with imports under :T1s. 6.< $orts%1irports%IC.s ha e emerged as a domain area under the pri ate sector. ,ogistics, which in ol e Customs brokers, shipping agents, warehouse operators, custodians etc. is becoming increasingly important areas of work. 1 single window for these stakeholders needs to be created under Customs wing. $resently the work is disaggregated between AS Customs @ Commissioner Customs as well as within sections. This should be consolidated under one wing 0AS Customs2 and with one +nder Secretary as a Customs Infrastructure section for dealing with all custodians, agents, customs brokers etc. 8. Member (Compliance ( Coordination)E

8.9 Commissioner 0Coordination2 would function under 3ember 0Compliance @ Coordination2 and perform the highly important role of compliance to the G*ules for transaction of businessC by the Board, organi"ing Board meetings and issuing the decisions, coordinating all issues that ha e ramifications across more than one 3ember etc. Fence, coordination section will be most appropriately placed under this 3ember. 8.# 1t present, $1C section of the Board deals with only the Central Excise and Ser ice Tax audit work whereas the Customs audit work is dealt by indi idual customs sections in the Board. 1ll the work relating to C@1/ audit should be consolidated under Commissioner 0$1C2 to ensure consistency and better coordination with field formations, C@1/ @ ,ok Sabha Sectt. Some staff could be di erted from Customs Sections for this purpose.

8.- ,egal @ Audicial wings would continue to function under this 3ember. The Committee recommends that at the A.S le el, the ,egal @ Audicial wings be placed under a single officer of A.S le el with two .irectors and respecti e sections to pro ide assistance. LThe other officer of A.S rank is being suggested to head the I.T di ision under 3ember 0I.T2 in the para belowM. 8.6 .irectorate /eneral of 1udit also deals with the three steams of indirect taxation and may be placed under this 3ember. The functioning of .. / 01udit2 may be made more rele ant by in ol ing them in conduct of actual audits, particularly of multi5location units as well as large tax payers. This need has been felt in iew of the C@1/ changing their policy of 1udit by shifting from a direct assesse based audit to audit of Commissionerates. 8.8 .$$*, which manages publicity and public relations for the entire CBEC may also be placed under 3ember 0Compliance @ Coordination2. <. Member (I)' ( *S'N)E

<.9 The 3ember of the Board in charge of I.T does not ha e the benefit of assistance of a section of the Board to discharge the work, which is a huge deficiency that needs urgent rectification. Darious wings of the Board place their needs for introducing%amending the software applications for impro ing the business processes. Darious 3inistries like Commerce or 1griculture are also independently liasoning with ./ Systems for their re'uirements of data and putting in place Systems for implementing their policies. :urther, Trade bodies, indi idual corporates, customs brokers are constantly making references regarding I.T related issues 0both hardware and software2 that are hindering trade. 3oreo er, there are financial proposals relating to IT in the 3inistry to be followed up with I:+, .ept. of Expenditure etc. Constituting an I.T wing in the Board would enable effecti e coordination at the 3inistry le el of these issues including user re'uirements. Trade facilitation has come to ac'uire an IT related dimension, which re'uires field Commissioners and 3inistry to be far more Ghands onC on IT related issues. The I.T wing also has to play a proacti e role in guiding @ ser ing as the interface of 3inistry % CBEC while preparing the department for the future implementation of /ST7. <.# The committee therefore recommends that a section headed by a Commissioner le el officer should be set up to assist 3ember 0I.T @ /ST72. 1s stated, one of the two officers, whether A.S 0*e iew2 or Commissioner 0,egal2, will ha e to be freed along with two +nder Secretaries be hi ed into a new di ision for this purpose. The work of Commissioner 0,egal2 should be hi ed

to AS 0*e iew2 and .irector, .irectorate of ,egal 1ffairs. The details of the precise re5allocation of work can be worked out by AS 0*e iew2 and Commissioner 0,egal2. I. Member (+ersonnel ( ,dministration)!

7o maBor changes are being suggested in the organi"ational structure under this 3ember. 71CE7 should continue to function as an adBunct to the Board with regard to policy issues pertaining to them and submit files directly to 3ember 0$ersonnel2. >. &here er re'uired, the details of the precise re5allocation of work can be worked out by the A.S le el officers whose sections are being restructured.

Chapter IStaffing the sections of the oard! The nature of work in the Board places a greater responsibility on the officers at the le el of +nder Secretary and abo e. Net, it is seen that the acant posts at this le el are not filled in time. /i en the lack of support for dealing with policy issues in the Board, the Committee feels it imperati e that steps be taken to fill the posts in Board well before acancies arise. #. There is a dearth of /roup G1C officers willing to work at the le el of +nder Secretary in the Board. The selection process is compounded by the fact that only officers who ha e completed fi e years of working at /roup G1C le el are eligible to be considered as +nder Secretaries in the Board. &hile prior work experience is necessary to work in the Board, it may be noted that there are officers promoted from /roup GBC le el, who already ha e a wide work experience. It is, therefore, recommended that officers promoted from /roup GBC to /roup 1 should be made eligible to Boin the Board, if they ha e a minimum experience of two years at /roup G1C le el. -. It is understood that as on date some #I posts of +nder Secretary, T.(%ST( are lying acant in the Board. If willingness is considered to be an essential ingredient for posting, it is unlikely that we will be able to fill these acancies. Therefore, the Committee feels that the concept of seeking willingness is itself anti'uated. (fficers must necessarily ser e in the Board, if re'uired. Therefore, steps ha e to be taken for posting group 1 officers without obtaining willingness.

Chapter Suggestions to impro&e efficiency of .or/ing and in trade grie&ance redressal Short term 0i2 1n important facet of the functioning of the Board is the receipt of representations from trade and other stakeholders seeking clarifications, information, representing their problems and grie ances. Such communications are often addressed to the *e enue Secretary, Chairperson or the concerned 3ember. Fowe er, when the person%firm%association that has sent the reference desires to follow up the matter, they are not in a position to know which section of the Board is dealing with the reference. It is not possible for them to ascertain this information from the Secretary% Chairperson%3ember. It is therefore recommended that information of the .irector le el officer, who is dealing with the reference be made a ailable to such persons. The working of the Board office should be automated such that any reference recei ed from public%association%corporate is sent to Commissioner 0Coordination2 and is tracked till a final response is gi en. The existing :ile Tracking System 0:TS2 in the 3inistry may be adopted for this purpose. This will also help in keeping a data bank of the arious issues dealt within the Board for the sake of institutional memory. 0ii2 To impro e accountability and response time, 3ember concerned should re iew the pending references recei ed from the trade on a monthly basis. 0iii2 The arious .irectorates under CBEC are mandated to play a ital role in the areas of their speciality by e ol ing tools and guidelines to aid the field formations in discharging their functions efficiently. 1t present, there is no mechanism to monitor the functioning of all the .irectorates. It is therefore recommended that the functioning of each of the .irectorates should be re iewed once in a 'uarter by the Board. 1 template may be got prepared for performance reporting by each .irectorate in order to aid in the re iew. 3edium term 0i 2 It is also recommended that a secure and seamless intra5net be set up for communication within the department between different offices. 1 time5 bound plan should be drawn up for sending communications within the department only by electronic means. (nly external communication i.e. with

trade and other departments could be through letters, if no email address has been pro ided. Each office at field le el 0i.e. a Hone, Commissionerate%Customs Fouse, .i ision, *ange, each .irectorate unit2 should ha e an official e5mail I.. :or trade, a single mail address of the Board may be pro ided to which all their communications could be addressed and due acknowledgement will be pro ided. 1ll communication should be stored in the system ensuring easy retrie ability with access control. 0 2 In iew of the increasing need for cross functional expertise to find solutions to complex technical problems, the Board may constitute Consultati e Committees comprising officials from the Board, rele ant .irectorates, ?ey field formations and representati e from rele ant sections of the trade and industries. The Consultati e Committees may meet at reasonable inter als under the Chairmanship of respecti e Commissioner or A.S and pro ide their inputs on issues ranging from reforms, systemic shortcomings in procedure, to e olution of new systems for impro ing re enue administrations. This mechanism will help to shorten the process of stakeholder consultation. ,ong term 0 i2 There should be a greater le el of automation in the functioning of the Board. The present system of file mo ement is cumbersome and a lot of time is spent in preser ing and tracing past files, which is unproducti e. To ensure better record keeping and retrie ability, and to le erage the efficiency imparted by automation, an e5office system should be introduced in the Board. 0Steps are being taken to introduce such system in .o* 5 FO2.

Chapter -I #I. Suggestions relating to indi&idual Sections

The Committee was unable to examine for purposes of re5allocation and harmoni"ation of each item of work allocated at the +nder Secretary le el, except for Central Excise and Ser ice tax di isions. .epending upon the outcome of the suggestions gi en hereinabo e, the Committee proposes to undertake @ suggest re5allocation of work w.r.t each +nder SecretaryCs section.
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1nnexure II Central $%cise and Ser&ice 'a%! The present distribution of work in the Central Excise and Ser ice tax wing is prescribed by Circular 7o. 98-%6%#=9#5 S.T., dated <5-5#=9# and Circular 7o. <<9%8#%#==#5C4, dated 995;5#==#. &hile Central Excise wing has four sections C459, -, < and > respecti ely, Ser ice tax wing has one section. It is proposed that the work undertaken by these sections be reorgani"ed such that the number of sections shall continue to remain the same i.e fi e with their complement of staff as before. These sections may be called Central Excise and Ser ice Tax sections 0C.4 @ S.T in brief2 and numbered I to 8. Three sections may report to one Commissioner while two sections could report to second Commissioner. The work distribution amongst these sections is suggested as below to cater to the goals of efficiency and harmoni"ation of Central Excise and Ser ice tax law and procedures. 92 i. ii. iii. i . . C)0) ( S)'- I Central Excise 1ct, 9;66 and amendments thereof except on issues relating to Daluation, Classification and Cen at credit, ,egislati e work relating to Central Excise 1ct except budgetary changes and those dealt by Commissioner 0,@A2, $rocedure relating to collection of Cesses except handloom cess, &ork relating to 3edicinal and Toilet $reparation 0Excise .uties2 1ct, 9;88, ,egal issues and instructions relating to 1nti5e asion pro isions in Central Excise and Ser ice tax such as procedure to file 1E59, summoning, search, sei"ure, arrest, prosecution, reco ery of sums due to the go ernment and reward to the officers and informer. i. #2 i. 3isc work relating to Central Excise not specified elsewhere. C)0 ( S)' 1 II Classification of manufactured goods under Central Excise tariff! Classification of ser ices 0if applicable2.

ii. iii.

Daluation of goods under Central Excise 1ct, 9;66 and Ser ices under :inance 1ct, 9;;6 and respecti e rele ant rules. Cen at Credit *ules, #==6 as applicable to both Central Excise and Ser ice tax.

-2 i. ii. iii. i . . i. ii. 62 i.

C)0 ( S)' 1 III Export procedures for both goods and ser ices, Export benefits such as refund and rebate for both goods and ser ices, *efund of taxes to diplomats, ,egal pro isions and procedure for refund in general , $rocessing and issue of 99C notifications and other adhoc exemptions in Central Excise and Ser ice tax, $arliament Ouestions on Central Excise and Ser ice tax, *eply to $1C section on audit obBections. C)0 and S)' 1 I1ll common procedures relating to assessment cycle in Central Excise and Ser ice tax such as registration, self assessment, payment of duty % tax, accounting procedure, returns and their scrutiny, and audit! *ules relating to these pro isions.

ii.

1ll other procedures such as warehousing, licencing, delegation of powers, adBudication limits, o ertime fees etc. relating to Central Excise and Ser ice tax not specified elsewhere! *ules relating to these pro isions.

iii. 82 i. ii. iii.

CBECs 3anual for Supplementary Instructions. C)0 and S)' 1 :inance 1ct, 9;66 and amendments thereof except on issues relating to Daluation, Classification and Cen at credit, ,egislati e work relating to :inance 1ct except budgetary changes and those dealt by Commissioner 0,@A2, 1ll rules relating Ser ice tax such as rules on export and import of ser ices, $lace of pro ision of ser ices, point of pro ision of ser ices or any other subBect not dealt by other wings,

i . . i.

3onitoring of work by filed formation relating to Central Excise and Ser ice tax, 3onitoring of ?*1 relating to Central Excise and Ser ice tax, 3isc work relating to Ser ice tax not specified elsewhere.