Thursday, April 28, 2016


Recently, the emotional outbreak of the CJI T S Thakur at the Joint Conference of Chief Ministers and Chief Justices of High Courts in Delhi, shocked not only the members on the dais but also the dignitaries attending the function. Even the viewers who saw the same on television were also dumbstruck. Many Chief Justices of India may come and go but this visual will always be imprinted on our minds, not only for the emotions displayed but also for the reason that he was the person who raised his voice and expressed his concern about the inaction by the Govt., thereby showing his commitment as assigned by the Govt. and as expected by the citizens of this country.
In our own Board, the situation is more or less comparable, if not worse, to the Judicial system in the country. We also expect that our Chairman should raise his voice about the dismal situation, especially in human resource management, shortage/lack of proper infrastructure and lack of career progression of officers, which are adversely affecting the morale of the officers and thereby affecting the organization as a whole. Being a revenue generating organization, everybody is happy with the year-on-year increase in the monies collected, but nobody seems to be bothered or concerned about the revenue leakage, that is taking place primarily due to short staffing and secondly either through non-compliance or through compromise and sometimes both.
Cadre restructuring has taken place, but till to date, the benefits for the staff has not been implemented – vacancies are pending at all levels, officers are retiring with only one promotion in their 35 or more years of service in the Department, which demoralize the staff from top to bottom and the sense of alienation is increasing day by day.
In the zone there is no Chief Commissioner and all Principal Commissioners, who are holding the additional charge of Chief Commissioners of their zones, are powerless to act / take action against Commissioners in their zones, as many a times, they happen to be his/her own batch-mates !! Similar is the situation of the officers from ADC to AC holding several additional charges and are somehow managing the show in a ritualistic manner. As compared to the CBDT, and other boards in other ministries, we appear to be lagging far behind in all respects.  
Being a revenue generating Board, all eyes are trained on us, gauging our performance, exhorting us to improve the collections, but seem to be least concerned about the ground realities and functional difficulties/deficiencies faced by the officers at all levels.

Infrastructure-wise, Mumbai, which tops the revenue collections charts, still has many Service Tax Commissionerates which do not have their own premises and are functioning from as & where basis. There is serious shortage of residential accommodations for staff at all levels. There is a severe shortage of funds under all heads, especially under OE, because of which the phones, internet and electricity bills remain unpaid from Nov-Dec of a financial year and get carried forward for the next financial year, which has now become a vicious circle, every year.  Medical claims are pending since 2013-14 and officers are taking loans from financial institutes to meet their medical expenditures.

ACES in Service Tax and Central Excise is operational but not functional, therefore the least said is better. Board is unable to get funds for upgrading the ACES infrastructure especially its connectivity in the new premises, acquired after cadre restructuring.
Corruptions at lower level – actions are visible whereas corruption at high places goes on unchecked and unabated. Those who are not towing to their line, are victimized or sidelined.

Hon’ble judiciary has the authourity to take action on those who do not obey their orders, but in our place, rules & methods are decided depending on the person's position & rank and their interests, rather than in the interest of the organization.

Will the esteemed Chairman of the CBEC, who is known for his honesty and dynamism, dare, like the Hon’ble CJI, to raise the issues facing the Department, before the FM / PM whenever any opportunity arises like above ?

CESA Mumbai humbly submits the following points to be raised on an urgent basis :-

a) Several DPCs are to be held, decisions are to be taken and all the vacant posts required to be filled up so that the stagnating employees will be motivated.

b) Several infrastructure related projects, like renting/constructing of new office premises needs time-bound decisions and to make the necessary funds available for the completion of the project to avoid cost escalations and requirements.

c) Sufficient funds for medical claims should be made available at the zonal level to meet the medical exigencies of the staff.

d) Funds for OE so that the organization should not become a defaulter and have to beg before another Department, like MTNL/Electricity Board to continue their services without interruption even though the bill is pending for payment.

e) Last but not the least, Justice Goda Raghuram, retired as the President of CESTAT on 14-Mar-2016. The roster for allocation of work among the members is made upto the 29-Apr-2016. In the absence of a President, all the six newly joined Members(T) are sitting without work and this non-allocation of work is increasing the pendency in CESTAT, which is currently having 9 to 10 years of backlog in cases.

There are many officers in the Department who are shedding tears for the way the Department is being run, the lack of fair promotion avenues, the lack of will in the Administration in conducting DPCs even when vacancies are existing, etc. Unfortunately, there is nobody to see these tears being shed and no one who raises their fingers to wipe away these tears...What a tragedy...



Monday, April 25, 2016


Shri Gautam Bhattacharya is still in the ICU at Ruby Hall Hospital in Pune. His condition is not stable enough for a surgical intervention. CESA, Mumbai continues to uphold him in prayers for his early recovery…


The Recruitment Rules (RRs) for the Grp-A has been published on 22-Apr-2016, in the government gazette, again without any mention of the 2118 temporary posts of Asstt. Commissioners, created during the cadre restructuring in Oct-2014.

If the RRs were already planned, cleared and ready for publishing in the gazette, what was the need for having a meeting with the IRS Promottee Officers Association on 21-Apr-2016 on the same issue ?

A telling comment in the Taxindiaonline web portal (DDT) on 25-Apr-2016 :-

 “The 2118 posts of Assistant Commissioners created as a part of cadre review do not figure in the new Rules. Are those not IRS officers ?


The physical possession of the premises at Satra Plaza, on Palm Beach Road, Vashi, has been obtained. Orders issued for shifting the offices of the Service Tax-VII Commissionerate and its Divisions from various places to Satra Plaza.


In writ petition filed by S P Sangwan vs Union of India, in the High Court of Delhi, the petitioner prayed that he is retiring in April 2016 and CAT is delaying the matter and thousand of persons have retired without being promoted.

Today, the court was pleased to dispose of the matter giving directions to the Hon'ble CAT and Union that no adjournment will be given and the matter will be heard on 26.4.2016.

And the modification application seeking blanket stay on promotion to the post of assistant commissioner will be decided.



Recently the Board has regularized many adhoc senior officers in the grade of AC/DC/JC/ADC.  It is learnt that several officers whose ACR gradings are below the required benchmark, are likely to be demoted...



Saturday, April 23, 2016


Shri Gautam Bhattacharya, Commissioner, Service Tax, Pune, collapsed in his office cabin today during morning hours. As some officers were present in his cabin, they admitted him to the ICU of Ruby Hall Hospital.

He is considered to be in a critical condition and has been advised bypass surgery. He was staying alone in Pune while his family was in Delhi.

CESA, Mumbai prays for his early recovery. 


As per the Chennai-CAT, the petitioners & the office bearers of the Promotee IRS Officers Assocn. were called for a meeting with the Chairman, CBEC, on the 21-Apr-2016 regarding the amendments of Grp-A RRs.

It is learnt that the Association has submitted a Memorandum to the Chairman. Details follow...

It is learnt that the meeting was fruitful and ended on a cordial & positive note.


Friday, April 22, 2016


CBEC, after the FY 2015-16 ended, sincerely conveyed a big “THANK YOU” to all the tax payers.
24th April is the deadline to serve Show Cause Notices to whoever has been found to be in default  or have evaded Service Tax. The officers of the entire Service Tax Zone are busy with finalizing the SCNs so that the revenue is protected and not time barred.
The essence of the Gita can be summed up as “Do your duty and do not expect for fruits.”  It is the system who makes the officers indispensable and thereafter a nexus gets developed between individuals, for mutual self enrichment, but at the cost of compromising revenue.
In our previous column, CESA Mumbai mentioned about the loss of revenue amounting to Rs. 460 Crores of  Kingfisher Airlines. And now, we are going to unmask another case, which is equally shocking...
Nowadays, even a child is not safe in his own home… a horse is not safe in its own stable… and revenue is not safe in the hands of a few officers in the Department, who are at the fag end of their career...
In Mumbai, when there were two Commissionerates of Service Tax, one Commissioner was very receptive while the other was very vindictive. He was very autocratic, arbitrary and not open to any sensible suggestions.
Mr R Sekar joined in Service Tax-II Commissionerate in June, 2012 and continued to be in charge till September, 2015. During his tenure in Service Tax, Mumbai, he chaired several MCMs and each such MCM, he used to keep the subordinate officers attending the MCM under tremendous mental pressure due to his habit of humiliating them. Several officers were victimized due to such pressure tactics, resulting in them suffering Heart attacks, increase in BP, Diabetes and other health issues.
The special audit group conducted an audit of M/s. Reliance Communications Infrastructure Limited (RCIL) for the period 2009-10 to 2013-14 and the same was placed before MCM for discussion and finalization.  Reliance Big TV provides Broadcasting Services in India. RCIL does the installation and commissioning of DTH equipment at the premises of subscribers of Reliance Big TV. RCIL availed Cenvat credit on Capital Goods viz. equipment (STB, LNB, Dish, etc.) required  for providing such services by Reliance Big TV. As per the Special Audit group, the Cenvat credit of Rs. 107 Crores availed by RCIL on such “Capital Goods” was inadmissible. In the MCM dated 18.10.2013, the learned Commissioner observed that:

“Regarding availment of CENVAT credit on Set Top Boxes under the category of Capital Goods”, the goods are classifiable under CH. 85 and falls within the scope of Capital Goods. Since the goods are used for providing taxable service to M/s. Reliance Big TV (RBTV) and the goods are classifiable under capital goods, there is no bar to avail cenvat credit on Set Top Boxes under the category of capital goods. In view of these facts it was decided that the objection raised is not sustainable and the para is dropped”.  

Subsequently, Audit Party did not proceed further in the matter and the Final Audit Report (FAR) 40/2013 was issued to RCIL.
A  whistle blower approached the DGCEI, Mumbai on the same issue and they carried out their own investigation for the same period and issued SCN bearing F. No. DGCEI/MZU/I & IS ‘C’/12(4)/151/2013 in October, 2014, amounting to approximately Rs. 107 Crores, effectively reversing the MCM findings. The said SCN was made answerable to the Commissioner, Service Tax-VII, Mumbai.  The same was taken up for adjudication and was decided vide Order-in-Original No. 23/ST-VII/RK/2015-16 dated 22-Feb-2016.
During the Personal Hearing RCIL gave reference of the MCM minutes and produced a copy of the FAR 40/2013 and the decisions of the MCM chaired by the then Commissioner Mr R Sekar. On the basis of the said report the adjudicating authority was constrained to drop the demand of Rs 100,05,10,375/- relating to the extended period from 2009-10 to 2012-13 (upto Sept-2013) and confirmed only Rs. 7,20,67,400/- for the normal period.  In a nutshell, due to the decisions of the MCM chaired by Mr R Sekar, there is a revenue loss of Rs. 100 Crores. Had Mr R Sekar let the Audit group to proceed and/or referred the matter to the Anti Evasion, the Department would have not lost Rs. 100 Crores.
Now, as regards to the issue of wrong availment of CENVAT credit on Capital goods, the stand taken by Mr R Sekar was motivated with malafide interest as the DGCEI, Mumbai has rightly reversed the stand of the MCM and issued the SCN and subsequently the adjudicating authority upheld the merit of the same.
Who will be held accountable for the loss of Rs.100 Crores of revenue ???????
Presently major parts of our country are facing the worst draught situation over the years. Had the Rs.100 Crores of revenue been protected, at least 20,000 bore wells could have been dug or any other project for the welfare of the people of India…………
This is only a tip of the iceberg, many more skeletons are in there in his cupboard...
Is it possible that this was a "THANK YOU" extended by Mr Sekar towards the company which provided him with their guesthouse during his initial stay in Mumbai from June to …... ? You be the judge…

Had there been any small lapse on the part of a junior officer, the administration under Mr R Sekar would have pounced on the officer without even giving him an opportunity of natural justice.
CESA Mumbai demands the most stringent & exemplary action to be taken against Mr Sekar, as well as to unearth the nexus between the corporate giants and the corrupt officials.

Saturday, April 16, 2016


For thousands of years, fishermen in China & Japan have been using the amazing fishing ability of the bird called the cormorant. Cormorants are long-necked diving birds with long, hooked bills. After catching the fish, they come up to the surface to eat it. Cormorants have been trained to catch fish from a boat and return to it. They are often tethered with a long cord and a leather collar around the throat prevents the bird from swallowing the catch. The fisherman gently squeezes the bird's neck so that it disgorges the fish...


Common Cormorants are among the world’s greediest birds. They swallow fishes of great size including  a 2.5 meter long eel, though they may die of exhaustion in doing so. Fishermen train these birds to catch fishes for their livelihood. In Sunderbans too, a few tribes do fishing with Cormorants...(

There are so many big fishes (defaulters), which the Anti-Evasion and Audit Officers of our Department, by putting in their best efforts, in adverse working conditions, detect and issue SCNs. But the authorities, instead of garnering and safeguarding the revenue, play a negative role, which are coming to surface as each day passes. There is no check and balance at higher levels and complaints galore everywhere. The concern shown for revenue by the junior officers is too dedicated, while the same zeal is lacking at senior levels, barring a few.

Can the Administration adopt the method used in the case of Cormorants by the above said fishermen, to safeguard the revenue at higher levels. Trust, honesty, integrity, sincerity, reasonable belief etc. should not remain mere dictionary words, but the conduct and action of senior officers should speak for itself and reflect these qualities in the work they do, so that respect is automatically commanded and not demanded.

"Flowers blossom even in forests,

where there is nobody to admire their beauty"


Let us continue our good work honestly, even when nobody appreciates us.



Tuesday, April 12, 2016


In our previous blog, we have mentioned about the red-carpet treatment given to the owner of Kingfisher Airlines. The matter does not end there. There are several other officers who have played a “crucial role” and paved the way for the ‘King of Loot’ to reduce the amounts shown as “Outstanding Liabilities” from their Balance Sheets. The incident narrated below is a shocking one which bleeds the exchequer to the tune of Rs. 460 Crores... 
When the premiere anti-evasion agency, DGCEI, Mumbai, detected the evasion by Kingfisher Airlines from 2005 to 2012, three Show Cause Notices were issued as follows:
1.    01.10.2005 to 31.03.2006 – issued by DGCEI
2.    01.04.2006 to 31.03.2008 – issued by DGCEI
3.    01.04.2008 to 31.03.2012 – issued by Mumbai ST-I Commissionerate.
All the three SCNs were issued for the services viz. Business Auxiliary Services, Commercial Training or Coaching Services, Business Exhibition Services, Event Management Services, Business Support Services, Online Information and Database access and retrieval services, Management or Business Consultant’s Services, Management, Maintenance or Repair Services.
The first two SCNs demanding Rs.103,22,96,421/- and Rs.60,77,90,283/- were adjudicated and dropped by the Commissioner(Adjudication) vide O-i-O Nos. 03/ST/HB/12-13 dated 21.05.2013 and 04/ST/HB/12-13 dated 31.05.2013 respectively. Both the O-i-Os were erroneous and reviewed by the Committee of Chief Commissioners and thereafter Departmental appeals were filed before the Hon’ble CESTAT vide Order No 30/Review/CCO-I/MCX/2013 and 31/Review/CCO-I/MCX/2013.
The third SCN demanding Rs. 309,96,58,076/- was adjudicated by Shri R Sekar, the then Commissioner, Service Tax-V, Mumbai, vide O-i-O No. 02/ST-V/RS/2015 dtd. 24.04.2015. The learned Commissioner has mentioned in Para 8.1 that the earlier two SCNs were decided on the basis of the SC order in the case of Association of Leasing and Financial Services Company, wherein it was held that ‘Operating Lease’ (unlike Financial lease) is neither classifiable as Business Support Service nor any other service, being liable to Sales Tax and as such outside the purview of the Finance Act, 1994.
In Para 8.2, the learned Commissioner has also mentioned that the Committee of Chief Commissioners vide their order No. 31/Review/CCO-I/MCX/2013 dated 19-09-2013 has reviewed the earlier dropped order and an appeal has been filed before CESTAT.

Thereafter, after recording his findings, he dropped the SCN vide his order dated 24.04.2015.
Now the questions that come to mind are :-
a)    if the previous period SCNs which were dropped by a Commissioner and thereafter reviewed by the Committee of Chief Commissioners to be appealed against in CESTAT, why did Shri Sekar take up this SCN, when the issue is pending before CESTAT ?

b)    Why was the said case not transferred to the Call Book register as per the norms prescribed by the Board ?

c)    Was there any pressure on Shri Sekar not to transfer this case to Call Book and to adjudicate the same ?

d)    What was the reason for the haste shown by Shri Sekar in adjudicating the case when the assessee has submitted in writing that they did not desire a personal hearing in the matter and that the matter should be decided on the basis of their written submissions ?  

e)    How come it appears that Kingfisher Airlines were so confident that they did not hire even a small time consultant / laywer for presenting / defending their case, which is involving more than Rs. 309 Crores ?

f)     Being a senior officer, what stopped the Commissioner from cross-examining the investigating officers who had booked the case or calling for their comments in the matter ? 

g)    Is this not a sheer waste of govt. resources, in terms of time & energy of officers and money of the investigating Department to prepare such a voluminous demand notice, where the end result is zero and then filing an appeal in CESTAT, where the pendency is now stretching to 10 years ?

h)   Also, the most important question is that when Shri Sekar has dropped so many cases and when some of these cases have been reviewed by the Committee of Chief Commissioners and appeals filed in Mumbai CESTAT, and now that Shri Sekar has been posted to Mumbai CESTAT, on what grounds will he defend these cases ?... and is the Revenue in safe hands ?
As a matter of probity, Shri Sekar should not have been posted to CESTAT, Mumbai, which covers the same jurisdiction where he has worked as an executive commissioner and will be handling the very same cases which he has disposed off.

As a Commissioner, Service Tax, Shri Sekar always used to ask his subordinate officers offending & demeaning questions like :- are you hand in glove with the trade ? who pays your salary ? are you on the payroll of the assessees ? why are you arguing on behalf of the client ? are you a mouthpiece of the assessee ?

Now it is the time to ask the same questions to Shri Sekar...

Will the Administration take any cognizance of the revenue loss caused by Shri Sekar ? When you are due for rotation, apparently stakes may be very high, thus he dared to break judiciary discipline, causing perpetual revenue loss...

If this type of activity was done by any of the lower officers, what would have been their fate ? Would the Administration remain silent and would no action be taken  against them ? The same punishment should be meted out to Shri Sekar which he apparently deserves... 
This is the time for submitting APAR – every senior officer submits a detailed resume of the work done by them during the previous FY, which includes a list the number of cases adjudicated by them. However, no one bothers to check how many of these adjudication orders are reviewed by their senior officers / Committee of Chief Commissioners and whether they are major contributors to the litigation that are clogging the judicial system and blocking the revenue.
CESA, Mumbai feels that those who have paved the way and helped the ‘King of the Loot’ should be brought to justice and they should be held accountable, whether they are in service or otherwise.
Kingfisher cases are only the tip of the iceberg…more to follow…

Monday, April 11, 2016


A panic situation has been created by constant messaging of abolition of 58 posts from Central Excise quota. When more than 1500 posts are lying vacant since long, the Board, on one or the other pretext, is not able to hold the DPC and filling the posts. Frustration is already at its peak and this message of siphoning of 58 posts have aggravated the feelings even more.
The judgement of the Allahabad CAT – 93/2015 dated 04-Mar-2016 is as under :-
A direct appraiser Shri S J Singh of 1982 batch who subsequently was promoted as Asstt. Commissioner in 1994, in 1998 as DC, in 2005 as JC and since 2007 is serving as ADC, on being aggrieved by the publication of revised select list dated 04-Feb-2013 which has been published for regular promotions to Grade VI of Indian Customs and Central Excise Service Group ‘A’ for the period 1980 to 1996-97 (at page 60 of OA) based on the said revised select list dated 04-Feb-2013 on various grounds.
Subsequently, a Misc. Application was filed by the Direct Recruit Appraisers’ Association for impleadment / intervention in the Original Application, which was allowed.
Their prayer was 'Appraiser-specific'. They asked corrections in the regularisations of promotions (of Appraiser stream) made to JTS during period 1979 to 1996-97 (which was originally done in Nov-2000 in 6:1:2 ratio as per SC order of Nov-1996 in WP No.306/88). They also sought changes in select list (which was revised in Feb-2013, for period 1979 to 1996-97; only i.r.o. Appraiser turned Grp-A).
They prayed for [1] treating the direct recruit JTS posts (which were restricted to 25 nos. by a decision taken in 1995 by CBEC under Secretary(Rev) instructions) in excess of 25 diverted for recruitment by Promotion, to be treated as regular instead of treating as 'adhoc'. [2] deleting names of retired Appraising officers retired/VRS from the select list of respective years. They got the order accordingly.
In the judgement, Paras 20, 24 & 29 are the crucial paras. Para 20 & 24 deal with the dispute among the promotee and the direct recruit appraisers in their slots, in their placements in their final seniority list, in the respective panel years. Para 29 deals with the distribution of promotee vacancies and Direct recruit vacancies diverted for appointment of promotes amongst three streams as per SC judgement dated 21-Nov-1996. There they have calculated that there is a loss of AC’s vacancy to appraisers equal to 550 less 492 = 58 posts. Loss of AC’s vacancy to Supdt. of Customs (Prev) equal to 275 less 150 = 125 posts. Total = 183 posts.
The calculations carried out or presented to CAT appears to be incorrect and partisan in nature. As on date, it can be seen from the Civil List of Jan-2015, that the working strength of Appraisers (both Direct & Promotee) are 3%, share in promotion as per 13:2:1 is 6%. Their share in Promotee Grp-A (JC & ADC) is 148 out of 160, in DC, it is 158 out of 200. In AC/DC (excluding Temporary posts) the appraisers are 195 out of total 341.
Now the time has come to point out that though the present ratio is grossly inadequate to the Central Excise cadre, the Board should not only negate the Allahabad CAT judgement but also devise a mechanism so that all the stakeholders get adequate representations at each level in Grp-A posts.
     However, the Direct IRS Association filed an Appeal(Writ) in the Allahabad High Court against the said order and obtained an interim order, wherein the process (as directed by CAT) has been allowed but restraining its actual implementation. Impleading petition in the said writ petition has also been filed by Shri Ashish Bajpeyi, Jt. Secretary, AIACEGEO.
Matter is now posted to next month for admission and final hearing. CESA, Mumbai appeal to one and all not to panic. In all the jugglery that is taking place, it appears that the ultimate beneficiaries will be the Examiners & Appraisers, although their numbers are small, but their jumps are too high in the matter of career progression and the Board is always favourable to them and unkind to the other stakeholders.