News Update

Customs - More Staff for Post Clearance Audit (PCA) work - PAC Comments and Board Directions


DDT in Limca Book of Records - Third Time in a rowTIOL-DDT 2826
13 04 2016

IN an instruction to the Chief Commissioners of Customs, the CBEC invites the attention of the Chief Commissioners to the Observation / Recommendation 9 of PAC (Twenty-Third Report of the Public Accounts Committee (16th Lok Sabha).

The Committee observes that shortage of staff is severely affecting the performance of the Customs Department. They note that CBEC had directed that the time On-site Post Clearance Audit (PCA) was made applicable to all categories of importers. Further, the percentage of B/Es selected for PCA at Customs House should be suitably enhanced to safeguard the interest of revenue.

The Committee understands that the concerned Chief Commissioners of Customs were supposed to review the staff position in their jurisdiction and reallocate more manpower of audit work as increased facilitation in terms of reduced examination had led to lesser requirement of staff for examination of goods. It was, therefore, imperative that excess staff should have been diverted for activities such as PCA and Special Investigation and Intelligence Branch (BSSIB) in Customs Houses.

However, the compilation of information on PCA activity received from field offices revealed that the Board's instructions to reallocate more manpower for PCA to increase scrutiny of RMS cases have not been followed in any location and showed increasing trend in pendency of cases in 8 of the 10 Custom locations for which data has been received. The Committee therefore recommends that more manpower be allocated to the field office for strengthening PCA and SIIB in Customs Houses .

First of all, see the highlighted sentences. Only God and Board will know how the Chief Commissioners will understand those sentences.

They note that CBEC had directed that the time On-site Post Clearance Audit (PCA) was made applicable to all categories of importers. Further the percentage of B/Es selected for PCA at Customs House should be suitably enhanced to safeguard the interest of revenue.

What is the meaning of that the time On-site Post Clearance Audit?

This is the Board's ‘copy and paste' gone awry.

What the Public Accounts Committee stated was,

"They note that CBEC had directed that till the time On-site Post Clearance Audit (PCA) was made applicable to all categories of importers , the percentage of BEs selected for PCA at a Customs House should be suitably enhanced to safeguard the interest of revenue."

Anyway, Board wants that the concerned competent authority may reconsider the staff position in their jurisdiction and reallocate additional manpower to enhance the performance of PCA and Special Investigation and Intelligence Branch (SIIB) in Customs Houses.

CBEC Instruction No. 18/2016-Cus., Dated April 12, 2016

Adverse Comments of PAC on Customs ICES

IN the Report mentioned above, the Public Accounts Committee made certain adverse (to put it mildly) comments on the working of the Customs ICES.

- Although the ICES application has been operating for the last 18 years, the CBEC could not overcome its weaknesses in areas of IT strategic planning, personnel management and training and policy for internal assessment and audit of core applications, as highlighted in the C&AG's scrutiny as well as in the Committee's examination of ICES 1.5. At the application level, date validations in several critical areas such as customs and excise exemption notifications, country of origin based exemptions, Retail Sale Price (RSP) based assessments. etc., which are essential for ensuring correct exemptions have been found to be lacking thereby allowing incorrect exemptions by the applications leaving scope for mis-declarations and incorrect assessments and resultant leakage of revenue. The Committee observe with serious concern that even after incurring Rs. 604 crore in upgrading the version form ICES 1.0 to ICES 1.5, the Department did not assess their cost and time saving, if any, due to the enhanced competence of ICES 1.5.

- Customs exemption notification dated 17 March 2012 which was amended by notification dated 23 January 2013 enhancing the BCD rate from 'nil' to 2.5 percent in respect of certain goods involving crude oil imports. However, in 15 instances of imports of 'crude sunflower oil' and 'crude palm kernel oil' made on 23 and 24 January 2013 under Chennai Sea Customs were assessed at 'nil' rate of BCD vide exemption notification dated 17 March 2012 instead of the revised version dated 23 January, 2013, resulting in short collection of duty of Rs. 2.29 crore. Similarly, according to Section 14 of the Customs Act 1962,valuation of goods for assessment of duties of customs is to be ascertained with reference to the 'rate of exchange' of the foreign currency of the invoice as in force on the date of presentation of BE and the rate notified by CBEC. The Board, vide NT notifications dated 21 May 2012 and 24 May 2012, had upwardly revised the exchange rates for the Japanese Yen, the U.S. Dollar and the Hong Kong Dollar, effective from 22 May 2012 and 25 May 2012, respectively. However, the changes were not updated in the system, resulting in incorrect assessment and consequently short levy of duty. The Committee desire that the Ministry may probe the matter and take suitable action against the erring officers for furnishing incorrect information. The Committee also feel that failure in updation of central excise duties, exemption notifications and exchange rates is a serious lapse and a matter of dereliction of duty on the part of concerned officers/staff particularly since the Chennai Customs, where audit noticed the irregularity, itself has been the nodal site for updation of notifications.

- The Committee observed various Audit paras of CAG and found that there had been numerous cases of short levy due to casual and negligent attitude of the concerned officers and staff resulting in huge revenue loss to the Government exchequer. As per the Performance Audit report only, the total revenue implication was calculated as Rs. 847.16 crore, The Committee are surprised that even after numerous such incidents of short levy no responsibility has been fixed upon the concerned staff/officers of the Department.

- The Committee note that the Department, although aware of the challenge faced by them due to a surge in the online shopping transactions across borders is yet to fully grasp the custom implications of the online shopping businesses, both national and international. It is evident from the reply given to the Committee which merely informed that such transactions, being either through courier or posts mode, are dealt with under the relevant procedures of the Customs Act.

- The Committee observe that optimum utilization of hardware was not being done and the procurement and distribution of the same lacked proper planning. The Committee take critical note of the Audit observation that only 250 and 100 Thin Client terminals have been installed at Chennai Sea and Chennai Air Commissionerates against 414 and 166 received by them. Again, in case of Chennai Air and ICD Patparganj, it was observed that out of 100 and 62 numbers of installed terminals, only 80 and 30 terminals were actually in use as on 31st March 2013.

Source: 23rd Report of the public Accounts Committee to the 16th Lok Sabha

ACES Troubles - ADG Clarifies

WE received this message from Ms. R. Bhagya Devi, ADG, Systems, CBEC.

With reference to the posting in TIOL-DDT under the heading "ACES Troubles", it is to inform that there were some minor issues in Service Tax & Central Excise Return filing which were immediately analysed and resolved. There were no major issue in ST3 return filing and wherever any issue was reported to the Service Desk, the same was escalated and resolved and the feedback from the affected assesses was also received to the effect that they were able to file their return. Further the last date of filing ST3 return is 25th April, and DG Systems is constantly monitoring the filing processes in ACES.

As regards to the allegation that on the last day of filing the CE Returns i.e. 10th April, 2016, the ACES website was down for most part of the day, it appears to be incorrect as seen from the number of returns filed on that day. The trend of previous months indicate that about 15000 to 17000 Returns are filed on an average on the last day of the Return filing date and on 10th April, 2016, 19,582 Returns have been filed . We have received a total of 1,48,416 Returns for the month in Central Excise which is in consonance with the average monthly figure of Returns filing ranging from 1,40,000 to 1,50,000. Further no complaint or mail has been received from any assessee regarding any problem in filing return on the last day i.e. 10th April, 2016.

I wish to add that if at all any assessee has any problem in filing return in Service Tax, he/she may approach or call Toll Free No. 1800 425 4251

Thank you Ms. Bhagya Devi - your prompt response and the will to solve the issues are laudable. We need more civil servants like you.

Legal Corner Icon

But an assessee told us that the site was frequently down as the above screenshot would show.

Declaration of Assets and Liabilities by Babus - No more Extension - Date further extended

GOVERNMENT had notified the Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the limits for Exemption of Assets in Filing Returns) Rules, 2014 under the Lokpal and Lokayukt as Act, 2013 on 14.07.2014.

The Government servants were required to file returns of their assets and liabilities by 15th September 2014. Obviously the babus are not ready to part with this information.

In September 2014, the Government extended the last date to 31st day of December 2014.

Come December and they extended it to 30th April 2015.

In April also babus were not ready and the government extended the last date to 15th October 2015.

On October 11th, a Sunday, the Government extended the date to 15th April 2016.

Today is the last working day before 15th April. The Government had emphatically stated on 28th March 2016 that there shall be no further extension of the aforesaid last date i.e. 15.04.2016.

A fortnight later, the Government has now extended it till 31st July 2016. This is the fifth extension - and certainly not the last.

Please also see DDT 2815 2702, 2585, 2505 2504, 2433, 2405

DoPT Notification in F.No.407/12/2014-AVD-IV (B)., Dated: April 11, 2016

Uniform for Law Students

THE Bar Council of India has suggested to the Law Colleges in India to have uniform dress for the students. The suggested dress is white shirt with white/black/grey trousers.

Recently a girl student in a top Law University attended a class wearing shorts and when the professor made some allegedly inappropriate remarks, the whole class turned up in shorts!

Attack on CBI Officers - Habeas Corpus Dismissed; CE Supdt Arrested

THE Madurai attack on CBI officers while nabbing a Central Excise Superintendent taking a bribe is turning into something like a high voltage Tamil film.

It all started with a cable operator complaining to CBI about a Central Excise Superintendent of Madurai Commissionerate asking for a bribe. The CBI laid a trap and caught the Superintendent and his assistant red-handed. Here starts the filmy style drama. If it was shown in a Tamil film, people would have laughed it off, but truth is stranger than Tamil films - an armed gang barged into the Central Excise office, attacked the CBI officers and walked away with the caught red-handed Superintendent, the tainted money and other papers. It is heard that there was another two lakh rupees found in the office other than the bribe amount. The attackers walked away with that money also. Even as the Superintendent is absconding, CBI searched his house and found cash and gold. In the meantime, the Police booked cases against several persons including the absconding superintendent.

The mother of the Superintendent filed a habeas corpus in the Madurai Bench of the Madras Court alleging that the police have kept the wife of the Superintendent in illegal custody. The High Court dismissed the petition yesterday.

There is a Central Excise Officers Association (CEOA) School in Madurai with which our superintendent is closely connected. The Police yesterday arrested another Superintendent of Central Excise, who is the Chairman of the school, charging him with attempt to murder the CBI officers. The bribery accused superintendent is still absconding.

The exciting Climax is nowhere near.

It's a long weekend for the Government of India. Tomorrow is a holiday on account of Ambedkar Jayanti, Friday, 15th is Ram Navami.

Until Monday with more DDT

Have a nice weekend.

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