Proposal for conversion of two Central Excise Commissionerates into Service Tax Commissionerates

Central Excise Superintendents’Association Mumbai Unit of AIACEGEO (Recognized under F. No. B-12017/10/206-Ad-IV A dtd. 21-01-2008).    V.A. Kolhatkar, President                 A.K. Sasmal-General Secretary

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Mumbai I,  II,  III, V,  Thane I, II, Belapur, Raigad, Customs Prev,, Service Tax – I & II Comm’te& L.T.U. Mumbai.

 

Ref : CESA/43/2013

Dtd.: 12.08.2013

Shri Sumit Bose,

Hon’ble Revenue Secretary,

Ministry of Finance,

North Block, New Delhi.

Ms. Praveen Mahajan,

Hon’ble Chairperson,

CBEC, Ministry of Finance,

North Block, New Delhi.

Sub:    Proposal for conversion of two Central Excise Commissionerates into Service Tax Commissionerates – reg

Ref: Letter F. No. 137/38/2006 – Service Tax (Part – I) dated 22.07.2013 of Shri Rajeev Yadav, Director Service Tax.

         Letter F. No. I/12 – 02/Admn.CCO/MCX – I/2013 dated 25.04.2013 of CC Mumbai, Central Excise Zone – I.

Respected Sir/Madam,

CESA Mumbai, vide its various representations apprised you about the working conditions in Service Tax Commissionerates in Mumbai since its inception. It is disheartening to note that the work and Administration of Service Tax is still functioning on adhocism mode despite the fact that now almost every service is covered under Service Tax net resulting in increase of the Assessees manifold. It is a matter of concern that we are still working on the resources made available to Excise formation. Not a single premises is hired or constructed to accommodate the Service Tax Commissionerates. Even the staff strength is not sanctioned appropriately commensurating the work load in Mumbai. The impact of this can be visualized by the Tax evasion cases made by other agencies in Service Tax.

2.       The officers are posted in Service Tax by diverting and disrupting the Central Excise formation’s work in field, including Audit, specially in Zone – I, which has not only created work stress but also strong resentment and frustration, the sign of which can be seen from the untimely deaths and health problems. Besides, due to frustration and lack of future in career progression VRS route is adopted by officers.

3.       It is learnt from the above referred letters, that a proposal for conversion of two Central Excise Commissionerates, viz. Mumbai III & V into Service Tax vide letter F. No. 137/38/2006 – Service Tax (part – I) dated 22.07.2013 Board has 

considered the proposal of conversion of Mumbai – III Commissionerate of

Zone – II into Service Tax- III Commissionerate Mumbai and asked for various details and modalities to re-organize the Service Tax jurisdiction in Mumbai.

4.       In light of above back ground CESA submits the following for your kind consideration while considering the proposal for approval:

A.  This is known fact that restructuring proposal after getting final approval from Finance Minister is already under active consideration and is pending for clearance from cabinet.

B.  In the said proposal, in Mumbai, there is already a proposal for 8 Commissionerates of Central Excise and 7 Service Tax Commissionerates by the Study Group. Though we don’t agree with the same as in Mumbai there is potential for growth in Service Tax as the data for CR proposal was furnished five years back. There is need of more Commissionerates of Central Excise as well as Service Tax than the number of Commissionerates proposed in the earlier CR proposal. Considering the pace of growth in Service Tax sector, there is scope of further increase of the assessee base, thereby necessiting increase in Service tax Commissionerates.

C.  As on date there are 8 Central Excise Commissionerates and 2 Service Tax Commissionerates, which is as per the old Cadre Restructuring proposal itself and there is no scope for the conversion of any Central Excise Commissionerate.

D.  Considering the growth of Service Tax after introduction of negative list concept, we need more Service Tax Commissionerates than the 7 Commissionerates proposed few years back in the Cadre Restructuring proposal.

E.  As pointed above the approach of Department in respect of collection and Administration of Service Tax is totally ad-hoc even after 20 years approx.

F.  In Raigad Commissionerate of Zone-II, a separate section has been created to look after the Service Tax, though the number of assessee is more than 7000 and the Revenue is about 630 Crs in 2012. This section is functioning on ad-hoc basis as there is no sanctioned strength of staff, the existing Assistant Commissioner/Deputy Commissioner are holding additional charge.

G.  Raigad Commissionerate also functions as a Maritime Commissionerate. However, no strength of staff is sanctioned even after a lapse of considerable time. As of now the functioning of Maritime Commissionerate is by squeezing staff from the already short strength of Raigad Commissionerate. Similar is the case with the Maritime Commissionerate of Mumbai-III Commissionerate.

H.  In fact there should have been norms about creation of Groups/Division/ Commissionerate in respect of Service Tax as the Service Tax sector is ever growing in Mumbai. We still remember that earlier such norms did exist in Central Excise and the number of assessee was the basis. Even in Income tax, the other wing of Revenue Department also have similar norms and accordingly ask for infrastructure and staff creation of new wards.

I.     Apart from this frequent dislocation of Central Excise by conversion/ merger etc and again new creation in CADRE RESTRUCTURING will hamper the working and may not be proper to do so as the Central Excise Commissionerates in Zone-I are being crippled with skeleton staff provided as of now and majority staff either on regular or on loan basis engaged in Service Tax only.

J.   Besides, the move to abolish the Commissionerate of Central Excise is anti staff, because the stagnation in all the cadres is alarming.

K.  Further, this will give a wrong signal in the field formation and demoralize the field staff that the Cadre Restructuring is likely to be delayed for which a temporary arrangement is being made, in the name of creation and abolition.

L.  Proposal may be made for recruitment for more staff in all the cadres by ascertaining the present workload as well as expected growth in future.

In view of the above CESA Mumbai Suggest:

a.   All existing 8 Central Excise Commissionerates be retained and status quo be maintained and creation of Commissionerate in piecemeal manner be avoided.

b.   Mumbai – III Commissionerate is also a Maritime Commissionerate hence its conversion into Service tax is also not a viable proposal from the trade point of view.

c.   At least sufficient Service Tax Commissionerates be created with more groups and a cap of number of assessee to be handled by Groups/Divisions/Commissionerate.

d.  Diversion of staff on loan to any formation be done away and for every increase in work load as per norms staff and all infrastructure be provided.

e.   Kindly make proposal with foresight on long term basis for field formations as well as the Trade.

f.    Kindly give up the practice of adhocism as it is not in the interest of either trade or revenue or staff existing in the department.

g.   CC, Zone – I vide his order dated 15.07.2013, to strengthen the Service Tax Administration has reduced 6 Groups each from
Mumbai –I/V/Thane – I/II and diverted 29 Superintendents and 29 Inspectors to Service Tax – I/II. If the Central Excise Audit can be managed as considered by the Head of the Zone I, then,  to maintain the uniformity and to spare staff on loan / temporary basis similar criteria may be adopted in Mumbai  Zone – II.  In Mumbai – II Central Excise, there are 14 Superintendents and 12 Inspectors and in Mumbai – III there are 23 Superintendents and 16 Inspectors, in HQ Audit.  The Audit Groups in Central Excise Zone II be reduced and the staff may be diverted to Service Tax to cater the work. 

h.   In Central Excise Staff is apportioned to M&P from the Commissionerate of both the Zones.  Earlier sanctioned strength of the Superintendents was 90 and Inspectors was 155.  In 2005, when

i.    independent Service Tax – I came into existence 26 Superintendents were withdrawn from M & P and their strength remained 64.  The staff of Excise provided to M & P Wing of Customs Preventive Commissionerate not to R & I Division.  However, the staff of Excise are misutilised and 9 Superintendents and 19 Inspectors are posted to R & I Division as well as in CC Unit.  As Service Tax needs more staff, 9 Superintendents and 19 Inspectors be withdrawn immediately and diverted to Service Tax Commissionerate. CESA has already proposed to reduce the strength of M & P from Central Excise side which may be considered and staff strength so reduced may also be diverted to Service Tax Commissioenrates.

Lastly the said attempt of abolition of Commissionerate has created lot of resentment. CESA welcomes the creation of new formation because it would create avenue for Career Progression of the staff.   The number of Divisions be increased from present 6 to 10 for effective control and monitoring of Service Tax collection.

The Administrative Control of both the Service Tax Commissionerates presently lies with Mumbai Zone – I, who provides staff to various deputations and LTU Mumbai from the Commissionerates under its control, the Zone-I Administration is unable to get staff from Zone – II either for Service Tax or LTU, though the Service Tax and LTU covers part of the Zone-II jurisdiction too.  Hence it is suggested that for the time being, for convenience and without any much disturbance, hindrance to manage the working of Service Tax- II Commissionerate, the Administrative Control be transferred to Mumbai Zone – II, so that as narrated above, sufficient staff can be spared from the strength of Zone – II, till Cadre Restructuring, which all are eagerly awaiting.

Thanking you.

Yours sincerely

A.K. Sasmal

General Secretary

Copy to:   

1.    Ms. Lipika Majumdar, Hon’ble Member (Service Tax), CBEC, North Block, New Delhi. For kind information & necessary action.

2.    Ms. Sheela Sangwan, Hon’ble Member, CBEC (In charge of Mumbai Zone), North Block, New Delhi. For kind information & necessary action.

3.    Ms. Shobha L. Chary, Hon’ble Member (P&V), CBEC, North Block, New Delhi. For kind information & necessary action.

4.    Hon’ble Director General (HRD), CBEC, New Delhi. For kind information & necessary action.

5.    Hon’ble Chief Commissioners, Central Excise Zone I & Zone II, Mumbai – for kind information and necessary action.

6.    Hon’ble Chief Commissioner, Customs Zone-III Mumbai, for kind information and necessary action.

7.    Hon’ble Commissioner, Service Tax – I, II Mumbai and Central Excise, Mumbai – II & Mumbai – III for kind information and necessary action.

8.    Secretary General, AIACEGEO, New Delhi.