CESA'S PROPOSAL ON RE-ORGANISATION OF COMMISSIONERATE AND JURISDICTION

Ref     : CESA/05/2013.

Date   :  Mumbai 22.01.2014

Ms. Neerja Shah,

Hon’ble DGHRD,

CBEC, New Delhi.

Respected Madam,

Sub : Reorganization of field formation in CBEC consequent to

Cadre Restructuring - Suggestions for reorganization

of Mumbai Zones - Reg. 

          In this regard, your kind attention is invited to F. No: II/39-10/Admn/ CCO/MCX-I/2011/13351 dated the 1^st Nov. 2011, of Chief Commissioner Central Excise Mumbai Zone – I, wherein the then Chief Commissioner submitted the proposal of creation of new Service Tax Commissionerates and realignment of Central Excise Commissionerates to your good office.

          The said proposal was based on the constituted committee report, as assigned by the Cadre Controlling Authority, who had proposed (A) 8 Central Excise Commissionerates and 3 Zones, (B) 7 Service Tax Commissionerates and 2 Zones.

A.       For 8 Central Excise Commissionerates, the revenue was 24847 Crores during the year 2010-11 and the number of assessees is 6383 in Zone I and 3317 in Zone II. 

B.       For 7 Service Tax Commissionerates (proposed), the revenue was 23392 Crores and the number of assessee is 209613, during the year 2010-11.

C.       The Service Tax revenue during the current financial year ( upto to 31.12.2013 ) is Rs. 34538 Crores.  SBE for the year 2013-14 is Rs. 60201 Crores.

The above said proposal was prepared on the basis of the number of assessees of the Central Excise and Service Tax and Revenue as on 2010-11. However, as of now there is considerable change in the scenario, since the Revenue and number of assessees of service tax has increased substantially and is ever growing.

          Madam, the Cadre Restructuring and the Reorganization is not the exercise which is conducted frequently. Even the present exercise is done after a gap of 12 years and with the stipulation in the present CR it appears that in next 5 years also there will be no such exercise. Thus the present exercise is around for 15-20 years in contrast to the norms laid down for the same as 5 years.  In such a situation we have to take into consideration the future growth and the data as available on the date of approval and accordingly we have to organize / re-organize the formation and fix norms so that the data base be ready for the next automatically.  The number of assessee increase/decrease needs proper determination for reorganization of the Commissionerates.  Similarly norms for deployment of staff in LTU on the basis of assessee and the number of Registration and documents like rebate, refunds etc the officers have to deal, so that proper deployment of staff be there to provide best services in LTU to our Large Tax payers, justifying the name of specialized unit.   

        

Keeping this in mind and the basis of the proposal made earlier, the matter is examined by the Association and it is felt that the proposed number of Commissionerates will not satisfy the need of the Mumbai Zone to provide the satisfactory services to the assessee and also to plug the evasion. We all know that after the introduction of Negative list concept in Service tax hardly any activity is left which is out of Service tax net, and the growth and evasion in this sector can be gauged by the VCES declarations received in this zone and revenue paid as well as the estimation of CBEC in this regard for the whole country.

Madam, the growth of the Service tax, assessee-wise as well as revenue-wise has increased in many folds, almost double i.e. Rs. 45000 Crores approximately + 10,000 Crores in CENVAT.  The existing Manpower as well as the organization set up in Commissionerate is totally inadequate to administer the work.  Every month around 3000 new assessee are entering in the tax net of Service Tax. The growth can be compared from the data submitted in November 2011 by the then Chief Commissioner and the present figures as on December 2013 which is as below.

Comparative period	No of assessee		S.B.E.	Revenue Rs. In Crores
	C. Excise	Service Tax
As per letter dtd 01.11.2011	9700	209613	---	24847
As on December 2013	9546	294004	60201	48200

Gross and net revenue realized upto the month of December, 2013 is enclosed.

Details of the No. of assessees of Zone – I & Zone – II, L.T.U. is also enclosed.

From the above data it is suggested to have more number of Service Tax Commissionerates in Mumbai Zone. After careful study of the details and the norms adopted for creation of Commissionerate of Service Tax CESA suggests the following set up for service tax in Mumbai Zone.

-        Abolition of one Commissionerate of Central Excise detailed in Annexure A

-         12 Service Tax Commissionerate Revenue/ Assessees / divide by the norms laid for CR as detailed in Annexure ”B”

Apart from the above formation set up we also request to give directions to the Mumbai Administration to re-examine and work out the required number of Commissionerates as suggested for Service Tax as well as Central Excise, Audit, Anti-evasion etc., It is once again requested to involve all the Staff Associations for finalising the proposals for formation of new Commissionerates/Zones and to form a Committee for infrastructure.  CESA, Mumbai assures its fullest co-operation for the above exercise for effective implementation for Cadre restructuring and re-organisation of the field formation.  For allocation of staff and for improvement of the infrastructure, CESA will make a separate representation.

          Thanking you,

Encl. : as above.                                                      Yours sincerely

  sd./

A.K. Sasmal

General Secretary

Copy to:

1.       Hon’ble Chairman, C.B.E.C., New Delhi for kind information and necessary action.

2.       Hon’ble Member (P & V), C.B.E.C., New Delhi for kind information and necessary action.

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

4.       Secretary General, A.I.A.C.E.G.E.O, New Delhi.

A N N E X U R E – ‘A’

          At present Mumbai Zones are having 8 Central Excise Commissionerates i.e. Mumbai – I, II, III, V, Belapur, Raigad, Thane – I & II.  Considerable number of units have been closed in Mumbai – I, Mumbai – II, Mumbai – III as the asseesee have shifted their business activities to some other location because of the increase in real estate prices. 

Sr. No.	Proposal of Administration for 8 C.Ex. Commissionerates	Suggestion of CESA.
1	2	3
	proposed vide their letter dated 01/11/2011 (in annexure ‘A”(e) i.e. Mumbai (West), Thane – I, Thane – II, Mumbai (East), Belapur, Panvel and Raigad.  In the said proposal in Mumbai (West) they have abolished the erstwhile Mumbai – V and named it Mumbai (West) by including the jurisdiction of Bhyander Division of existing Thane – II Commissionerate. The jurisdiction of Thane – I Commissionerate is without the jurisdiction of Thane City Division.  Thane – I Commissionerate except the jurisdiction of Thane City Division and 3 Ranges i.e. Range – II, Range – III and Range – IV of Kalyan – IV Division.  The jurisdiction of Thane – II except Bhyander Division.  The jurisdiction of newly named Mumbai (East). i.e. the jurisdiction of Mumbai – II and Thane City Division of Thane – I Commissionerate.  Belapur Commissionerate without the jurisdiction of Taloja Division.  Newly proposed Panvel Commissionerate, Panvel Division, Taloja Division and  3 ranges i.e. Range – II, Range – III and Range – IV of Kalyan – IV Division of Thane – I Commissionerate. Raigad Commissionerate without the jurisdiction of Panvel Division.	Mumbai – I : In the last restructuring Mumbai-I was bifurcated and Mumbai – IV was created. Again it was abolished in 2010 and merged with Mumbai – I Commissionerate.  The revenue of the Commissionerate is mainly from Oil Cess and major units are closed.  Hence, it may  remain as it is. Mumbai – II :  The major revenue of the Commissionerate is from the refinery and other units are on the verge of closure.  Similarly, in Mumbai-III Commissionerates many units are closed hence it is suggested that the Mumbai – III Commissionerate be abolished and be merged with Mumbai – II Commissionerate.   Further, the jurisdiction of three ranges i.e. Range – I, Range – III and Range – V of Thane City Division which is in the jurisdiction of Thane Corporation be included.  Other two Ranges of Thane City Division be excluded from the proposal. Wagle – I, Wagle – II, Wagle – III and Thane City Division be realigned and two division may be made.  Similarly, Chembur – I, Chembur – II, Kurla and Vikhroli (of Mumbai – II Commissionerate) be realigned like Chembur – I with Kurla and Chembur – II with Vikhroli.  In Mumbai – III Kanjur, Bhandup and Mulund be realigned and two divisions be formed.  Chembur –I, Chembur- II, Powai  Kanjur / Mulund  Thus, Mumbai – II will have 7 Divisions in the Commissionerate. Mumbai – III : As mentioned above be abolished. Mumbai – V : As proposed by the Administration Bhayander Division of Thane – II Commissionerate be merged with the jurisdiction of Mumbai – V Commissionerate.  The name of the Commissionerate should not be changed to avoid confusion.

1	2	3
		Thane-I :    Range-II & IV of Thane City Division and remaining four divisions i.e., Kalyan-I, Kalyan-II, Kalyan-III & Kalyan-IV inclusive of Ambarnath Taluka i.e.  Range-II, Range-III & Range-IV be created five divisions.  For continuity as it is adjacent to Ulhas Nagar taluka and Badlapur Taluka  the proposal of merging in New Panvel Commissionerate is highly inconvenient and in-appropriate.  Hence it should remain in Thane-I Jurisdiction. Thane-II  :Vasai Division &  Palghar/ Boisar-I / Boisar-II be realigned and Four Divisions be created  out of the existing three divisions. Belapur : The present jurisdiction of Belapur Commissionerate should remained same.  The jurisdiction of Taloja Division be retained intact with the Belapur Commissionerate. Panvel : The Committee which has suggested this proposal, apparently of geographical location and it’s convenience for staff and trade was not considered.  All the three pockets i.e. Panvel, Taloja M.I.D.C. additional Ambernath MIDC are in triangular shape.  There is no mode of public transport from one end to another. The route is in circuits and involves hours of  travelling time to reach the other end.   All staff do not have personal vehicle but have to depend on public transport i.e. local train / S.T. bus.  The units in the jurisdiction do not have easy access and will be highly inconvenient for staff.  Hence, it is earnestly suggested that the proposal for creating of new Panvel Commissionerate be ruled out. Raigad : The present jurisdiction of Raigad Commissionerate should remain same.  The proposal of excluding Panvel Division be ruled out.

  A N N E X U R E – ‘B’

CREATION OF NEW SERVICE TAX COMMISSIONERATES:

The proposal on the basis of revenue and assessee during the year 2010-2011 was considered and proposed to create 7 Commissionerates out of existing 2 Commissionerates (i.e. Service Tax – I & Service Tax – II)

          The revenue during 2012-2013 and 2013-2014 is around Rs.43381 Cr. and Rs. 34096 Cr. till December, 2013, respectively.  The details is enclosed herewith.

          The S.B.E for the year 2013-2014 is Rs.  59360 Cr. and is likely to be exceed.  The CENVAT revenue is around Rs. 10,000 Cr. which has not been taken into account which takes more time and energy of the officer.  Hence, we propose that new 12 Commissionerates be made for Service Tax, Mumbai out of these two Commissionerates. This suggestion is based on the revenue and assessee strength as on date and upto this financial year.  Growth in the service sector in the next few years have not been considered and projected.  Just to cater and manage the current numbers, the expansion as proposed, be considered.     

          While creating groups in the divisions, it is to be ensured that no officer should be given more than 500 tax paying service provider for effective control, if numbers are beyond 500, then it is not humanly possible to control or monitor. 

          Adhocism in the Service Tax should not be allowed to continue.  Similarly, the approach of loan postings and diversion of staff from other formation should not be encouraged, as it is severely effecting the working and cripple the normal working of the Commissionerates from which officers are taken on loan.

  

A N N E X U R E – ‘C’

AUDIT COMMISSIONERATE:

          It is proposed to have 5 Audit Commissionerates in Mumbai on the basis of revenue and assessee for the year 2010-2011. Now the revenue of the Service Tax itself has doubled and with coming time the growth of the Service Tax would be phenomenal.  For another 5 years there is no possibility of any re-organisation.  Presently in the Commissionerate of Central Excise, Zone – I the staff of the Audit has been diverted to Service Tax Commissionerate and the work of the Central Excise Audit is badly hampered and the Department is not able to carry out even mandatory Audit.  The number of assessee in Service Tax is so high and is not within manageable limits with the existing machinery and staff.  

           Audit Commissionerate - On the basis of Audit Norms as there are 2939 Assessee paying more than 1 Crore tax and rest are below.   At present the work is not manageable by taking almost entire audit teams of Excise, and thus the work on both sides are hampered.

           Hence it is suggested that 7 new Audit Commissionerates be formed instead of proposed 5 Commissionerates.

 A N N E X U R E – ‘D’

CREATION OF ANTI-EVASION COMMISSIONERATE:

          The Administration has proposed in Annexure “D” (in letter dated 01/11/2011) one more regional Directorate headed by A.D.G., DGCEI, with the required subordinate staff.  The evasion of Service Tax is rampant and we are lacking adequate mechanism to plug the same.  We welcome this suggestion and another preventive Commissionerate or a Regional Directorate with full fledged staff be created or an exclusive Anti Evasion Commissionerate be created.

 A N N E X U R E – ‘E’

 MARITIME COMMISSIONERATE:

           The jurisdiction of Maritime Commissionerate : Presently, the work of Maritime Commissionerate is handled by Mumbai–I Commissionerate, Mumbai–III Commissionerate and Raigad Commissionerate.  The existing practice may be continued without any changes.  However, as suggested by the Administration the allocations amongst the Commissionerate under the control of Chief Commissioner be given to Raigad and Belapur Commissionerate and sanctioned strength of each one be approved separately on the basis of documents to be managed.

 

A N N E X U R E – ‘F’

          The jurisdiction of Service Tax Commissionerates – Presently, the jurisdiction of Service Tax Commissionerates is divided amongst the jurisdiction of Central Excise Commissionerates.  In the changed scenario the proposal of the Administration to allocate Service wise jurisdiction seems to be out dated as the negative list has brought all the services into the net of Service Tax.  Hence the existing system of jurisdiction be continued with Division wise allocation instead of Commissionerate wise allocation.  This will help the trade immensely as it will remove confusion and they will get services of staff and be properly administered.

 

A N N E X U R E – ‘G’

LTU be made a specialized one in letter and spirit and staffing  norms be laid down and this should be on the basis of all the requirement as LTU needs effective Audit and Anti Evasion Wings and at present both are absent in Mumbai LTU.  Whatever is done is somehow managed with limited staff. Infrastructure should also be taken into consideration for the growing needs of LTU on priority.  As on date 40 units are administered from Mumbai, with inadequate staff.  To manage the current number of units, administration is finding it difficult to properly monitor the units.