TIOL-DDT 2729
20 11 2015
Friday

THE rumours were right, the babus got a big hike - the Cost to the Country goes up by 23.55 percent and that is the average hike for an employee. Yesterday DDT suggested that the 7th Pay Commission could cost the nation 1.20 lakh crore - And we were right. The 7th Commission submitted its report to the Finance Minister yesterday with a heavy additional burden of Rs. 1.021 lakh crores on him. And this is for next year alone. It will have a recurring effect with increased velocity year after year.

No marks for guessing why the FM is glum. After all he has to find that additional 1 lakh crore. For collecting a couple of thousand crores for cleaning up the country, he had to impose a complicated Swachh Bharat Cess, when cleaning up the country is not his job at all. Because our Municipalities failed in keeping the country clean, the Government has imposed a collective penalty on all the citizens in the form of Swachh Bharat Cess. But the failed Municipal Commissioners and his cousins have to be paid and paid well.

The babus get about 25% hike in their salaries - beyond that the Pay Commission has not made any major earth shaking recommendations. They will continue to have the same holidays, allowances, leave, LTC etc.,

Pay Commission Not Impressed by Revenue Raids - Every Demand of Revenue Officers rejected

HIGHER Salary for Revenue Officers: The Revenue officers wanted a higher salary comparable to professional agencies with whom the tax officials deal. The Commission feels that the Central Government deals with a vast array of subjects. Many department specific services, accordingly, have been constituted to handle these varied sectors. No doubt, revenue generation is an important segment of the government functioning. However, in the government system, working in a particular segment does not become the basis for determining pay. The Commission does not consider this demand justified.

No Top Heavy Department: The Commission notes that the cadre restructuring of the IRS (IT) not only increased the number of posts at the Apex/HAG+ levels, it also reduced the number of posts at the level of Commissioner of IT (CIT) from 731 to 635. This entire exercise, thus, has created an anomalous situation with the entire top rung of the IRS (IT) structure-Chairman and Members of CBDT and Principal Chief Commissioners of IT-in identical pay level. On the other hand, reduction of posts at the level of CIT, who are mostly field functionaries, has resulted in making the structure of IRS (IT) somewhat top heavy. The cadre restructuring exercise was an isolated exercise. Its implication on other similar Group 'A' Services was not taken into account. The Commission has received demand from many other services for Apex level posts, citing this case as an example, which have not been agreed to.

Board Chairman to Report Directly to the Minister?: It has been demanded that the Chairman of the CBDT may report directly to the Finance Minister. It has been stated that statutory boards, such as CBDT need not have supervisory departments as it leads to duplication of work and unnecessary procedural delays.

The Commission observed that the two separate boards of CBDT and CBEC were constituted by Central Boards of Revenue Act, 1963. According to this Act, each such Board shall be subject to the control of Central Government, exercise such powers and perform duties as may be entrusted to that Board by the Central Government. The Commission consulted the Department of Revenue who have stated that this matter has already been examined earlier in the ministry. It was felt that the two Revenue Boards deal with separate areas of taxation, the policies in respect of which need to be properly coordinated and that central tax system has to be viewed, fashioned and organised as a harmonious whole, the work of coordination has to be performed by the Secretary (Revenue) who is in a position to give independent and objective advice from a broader administrative and economic perspective. Since the need to coordinate the policies and the work of the two Boards continue to be essential for strengthening the central tax system, there appears to be no justification to reopen the proposal for making any changes in present hierarchical structure of reporting.

Give a part of the collections as Bonus?: It has been demanded that in revenue earning bodies, a specified amount of the collection made in excess of the targeted budget should be distributed as a bonus among the employees of the department in the same manner as paid in service related industries.

The DoR has stated that Revenue Department cannot be equated with business organizations which pay bonus to their employees on the basis of profit earned by them. The Commission also observes that adoption of such an approach would lead to needless distortion in the pay structure across services. Keeping this in view, the Commission therefore rejects this demand.

On promotion, make ITOs equal to Deputy Commissioners: Associations representing the Income Tax Officers (ITOs) have demanded that on promotion as Group 'A' officers, ITOs may be placed in the senior time scale as Deputy Commissioners as obtaining in the case of Assistant Executive Engineers in CPWD and Section Officers of Central Secretariat. The aforementioned demand has been made on the grounds that an Income Tax Officer (ITO) has the largest spectrum of job profile across all the Central Government Group `B' Officers.

The Commission notes that the post of ITO is a feeder post for the Assistant Commissioner, a Group 'A' entry grade post in the Income Tax cadre at GP 5400 (PB-3). Hence, placing of ITOs on promotion at GP 6600 will disturb the hierarchical structure. The Commission, therefore, recommends normal replacement levels for ITOs.

Higher Scale for Income Tax Inspector: A demand has been made to upgrade the post of Income Tax Inspectors (ITIs) of Income Tax Department (ITD) from GP 4600 to GP 4800 and place them at par with the Assistant Accounts Officers (AAOs) of IA & AD.

The Commission notes that there was never an absolute parity between the pay scales of ITIs of ITD and AAOs of IAAD. In fact, the pay scale of ITIs of ITD have generally been lower compared to that of AAOs of IAAD. The Commission recommends only replacement pay levels for ITIs.

Full Functional and Financial Autonomy to CBEC: It has demanded that CBEC may be granted full functional and financial autonomy. Similar demand has been made by CBDT. And what applies to CBDT applies to CBEC also.

Promotion for Central Excise Superintendents and Inspectors: It has been demanded that Superintendents of Central Excise should be allowed a minimum of five functional promotions after joining the post of Inspectors (the post of Inspector is the feeder grade for the post of Superintendent). If five functional promotions are not possible, they should be granted at least five in-situ promotions in the hierarchy of functional promotion. The alternative demand is for dynamic/flexible promotion scheme to be devised so as to grant at least five upgradations in the promotional hierarchy. The Association has requested the Commission to recommend creation of unorganised Group 'A' post as it exists in the provincial services of the states as well as the Central Police Organisations so that officers in the department get some relief from acute stagnation.

The Commission notes that as part of the cadre re-structuring exercise of 2013, 2118 temporary posts of Assistant Commissioners in GP ? 5400 (PB-3) have been created, which are to be filled up 100 percent by promotion of Superintendents of Customs (Preventive)/ Central Excise/ Appraisers. The Commission observes that this move would provide adequate career progression for these feeder cadres viz., Superintendents and Inspectors of Customs and Central Excise.

Direct Recruitment quota in Central Excise: It has been demanded that the Direct Recruitment Quota in the post of Assistant Commissioner may be reduced from 50 percent to 10 percent. The Commission notes that one of the attributes of an Organised Group `A' Service is that direct recruitment cannot be less than 50 percent. Reduction in the percentage direct recruitment below 50 percent will adversely affect the status of IRS (C&CE) as an Organised Group `A' Service. In this backdrop, the Commission would not recommend reduction in the Direct Recruitment Quota as demanded by the Association.

Their Salaries - Before and After

HERE is a sample of what some of the Revenue officers' would get before and after the Pay Commission - as on 01.01.2016

Customs - New Exchange Rates from Today

CBEC  has notified new exchange rates for Imported Goods and for Export Goods with effect from 20th November 2015. The USD is at 66.70 Rupees for imports and 65.65 Rupees for exports.

Notification No. 112/2015-Customs (NT)., Dated: November 19, 2015

Allahabad Bench of the CESTAT - High Court still Persistent

IT is only because of the consistent monitoring by the Allahabad High Court that a Bench of the CESTAT has started functioning from Allahabad. The Allahabad effect has spread to other places also and Chandigarh and Hyderabad Benches are likely to start functioning soon.

But it is not all smooth flow in Allahabad.

In the hearing on 28.10.2015, in the High Court, the CESTAT Registrar submitted that: "The Commissioner, Central Excise, Allahabad had initially given two rooms No.210 and 220 from where the Registry of the Tribunal started functioning w.e.f. 1.9.2015. Subsequently, the Commissioner vide letter dated 15.9.2015 directed the Registry to function from room Nos.26 and 27, based on which the Registry of the Tribunal vacated room Nos.210 and 220 and started functioning from room Nos.26 and 27, which are located on the ground floor. The Registrar has pointed out that the Commissioner has now written a letter dated 7.10.2015 requesting the Tribunal to vacate room Nos.26 and 27 on the pretext that the Registry is now functioning in the Red Building and that the rooms are required for the Chief Commissioner (AR)."

According to the Registrar, two rooms, namely, room Nos.26 and 27 are required by the Registry for keeping their own records. It has also been pointed out that a Bar Association is in the process of being formed and a request for allocating a space has been made.

The Registrar has also pointed out that there is a shortage of Members and out of the strength of 32 Members there are 12 vacancies for which advertisements had already been made in the past and interviews have also been held and appointments of judicial and technical members are in the process under the chairmanship of an Hon'ble Judge of the Supreme Court. It is expected that the outcome of the selection process would be notified in the near future by the Department of Revenue.

During the course of submission it was pointed to the Court, that there are three rooms in the Red Building in which a Guest House is running, which is maintained by the Central Excise Department. If these three rooms are given to the Tribunal a permanent Bench could function adequately.

In this regard, the counsel for the Central Excise Department pointed out that a Guest House is essential and should be allowed to continue to be used as a Guest House.

The Court was informed, that four more rooms in the main building are also being used as a Guest House.

The Court wanted that a clear cut affidavit on this aspect should be given by the Excise Commissioner, Allahabad.

The intervener pointed out that complete compliance of the orders of this Court is not being followed by the Tribunal or by the Ministry of Finance, namely, that the direction that the Tribunal should function on all days from October, 2015 is not being followed. The intervener has brought on record an order No.138 of 2015 issued by the Registrar, CESTAT indicating the sitting of the Members of the Tribunal from 5.10.2015 to 4.12.2015. A perusal of this order indicates that a Member Judicial will sit on 5.10.2015 and thereafter from 19.10.2015 to 4.12.2015 except from 19.11.2015 to 20.11.2015 and this Member will function as a Single Member Bench of the Tribunal. The Division Bench matters would be taken up from 12.10.2015 to 16.10.2015, i.e., for 5 days and again from 16.11.2015 to 20.11.2015.

The Court felt that it is not substantial compliance of its order and directed the Registrar to inform the President of the CESTAT to pass appropriate orders increasing the number of days for functioning of the Tribunal (Single and Division Bench) as an interim measure till such time the permanent vacancies are not filled. At the same time, the Ministry of Finance should take remedial measures for posting/transfer of Members at Allahabad.

The Court directed:

(1) The Registrar, Tribunal will indicate the further steps which he has taken with the Ministry of Finance with regard to establishment of the permanent Bench and/or with the Central Excise Commissioner with regard to handing over of the remaining portion of the Red Building.

(2) The Registrar, Tribunal will also inform the Court of further orders with regard to the functioning of the Tribunal on a regular basis, increasing the number of days of sitting of Single and Division Benches of the Tribunal.

(3) The Ministry of Finance will also file an affidavit indicating the remedial measures they have taken with regard to posting/transfer of Members at Allahabad, i.e., Judicial and Technical Member on a permanent basis.

(4) The Ministry of Finance will also file an affidavit indicating the action taken at their end, on the request of the Registrar Tribunal with regard to the establishment of a permanent Bench at Allahabad. If the request of the Tribunal for using the Red Building on a permanent basis is accepted, necessary orders to that extent be passed giving necessary instructions to the appropriate authorities. The Court has been informed, that the Central Board of Excise and Customs and the Director General HRD, Ministry of Finance, Department of Central Excise are looking after the Red Building and, therefore, necessary orders to that extent may be passed. In the event the building under construction at 34-A, M.G.Marg, Allahabad constructed by the C.P.W.D., is found appropriate, necessary orders to that extent be passed in consultation with the relevant Department.

(5) the Commissioner of Central Excise and Service Tax, Allahabad, respondent No.3 not to insist in asking the Registrar, Tribunal to vacate room Nos.26 and 27. In the event the Commissioner Central Excise, Allahabad is facing any difficulty it should file a separate affidavit explaining their difficulty before the Court and for appropriate direction.

(6) the Commissioner of Central Excise and Service Tax, Allahabad to file an affidavit indicating the number of Guest Houses, which are being maintained by the Central Excise Department and the necessity for retaining the Guest House in the Red Building.

The Court also found that there is a conflict of interest to some extent between the Commissioner, Central Excise, Allahabad and the Customs Excise and Service Tax Appellate Tribunal, New Delhi and its functioning of a Regional Bench at Allahabad in the Red Building. Both the parties, namely, respondent Nos.2 and 3 are appearing through a common counsel, namely, Sri R.C. Shukla. In order to avoid any conflict of interest in future, the Registrar, Tribunal is directed to engage a separate counsel.

I was told by a senior officer of the Allahabad Commissionerate that the Commissionerate is extending all possible help to the Tribunal and that is why there was no expenditure for the Bench as we reported in DDT 2719 05 11 2015.

The story obviously doesn't end here. We will bring the rest of the story soon.

Until Monday with more DDT

Have a nice weekend.

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