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GST and Cadre Restructure- what ails CBEC?

JULY 31, 2010

By, M Ram Kumar

THANKS to TIOL for bringing out detailed account of proposed revamp in the organizational set up in CBEC as suggested by GST implementation Group. IN this modern electronic age communication of ideas is very important and for such a historic taxation reform it is better to suggest various views without prejudice to the Government move and the personnel involved.

TIOL has raised eye brow when it puts it – Are we dreaming. A humble attempt is made in this Article regarding promotional avenues vies – viz GST roll out.

Take an example of Kerala, to start with from a Southern most part of India. A large number of Officers in the Central Excise Commissionerate in Kerala have retired/will be retiring as Superintendents during the three years of 2009, 2010 and 2011. It is very unfortunate that many of those talented and efficient Officers were retiring only with a single promotion in their Career. Despite having started as Inspectors, even the best among them could do nothing to advance in their career beyond a limit. To put it simply, either the Department never gave them an opportunity to grow, or, they were under the compulsions of circumstances that were beyond their control. Given the conditions as it exists today, it will be hardly surprising, if this trend continues for many more years, drawing into its fold, many of the promising Officers of today. What is prevailing in Kerala will be the same all over India. Before revamp it is absolutely necessary to peep into the past.

A review of the background on this issue is inevitable. Till 1959, under the common Central Board of Revenue there were three separate Class I services for Central Excise, Customs & Income tax and all were known as IRS. The promotion policy was also different for each service. On the C.Ex side, the Group A (then Class I) JTS posts were filled up 50% by promotion and 50% by DR. On the Customs side only 25% was filled by promotion of Chief Inspector of Customs and Principal Appraiser from a combined seniority list; and 75% was by DR. There was no change for the promotion quota of respective cadres even after the common service of IC&CE was implemented from 15 th Aug 1959. In 1970,the posts of Chief Inspector and Principal Appraiser were abolished (added to the strength of ACs) and the feeder cadres for Group A were made the Appraiser and Customs Inspectors (present Superintendents of Customs) and the promotion quota also was made 50% open for all the three cadres. The first posting for DRs & Promotees were as ACs in the Custom Houses whereas in Central Excise they were posted as Senior Superintendents only. As per the decision taken in consultation with the staff associations in 1972, the policy adopted was to apportion the posts between various cadres according to the numerical strength of Group B cadre as on 1 st Jan, every year for all DPCs after 1972. It was 80% for C.Ex, 20% for Customs (among them every 5 th vacancy was given to the Customs Supdts after 4 Appraisers were promoted). In other words, the quota for promotion among the three cadres was 20:4:1 (4:1 between the two Deptts.). As per the Para 5(1) of OM dt.22-12-1959, wherever the promotions are from different feeder cadres it was to be filled up from separate zone for each cadre and separate select list drawn to the extent of available quota. As per Board's letter No.A-12013/2/73 Ad IIA dt.13-2-1973 (Annexure III to AK Chatterjee's writ petition - W.P.No.4532-33/1978-before Supreme Court), the Board decided to fill up the posts in 3:1 ratio between Central Excise and Customs and after 4 Appraisers, the 5 th post of AC was allotted to the Superintendent of Customs . i.e. 15:4:1 (or 3:1).

Thereafter the prolonged litigation and contempt petition in the cases filed by AK Chatterjee & others resulted in the hasty framing of Recruitment Rules, 1987 dt.17-9-1987 thus averting the contempt proceedings.(CMP disposed on 23-9-87.) The Recruitment Rules, 1987 envisaged combined seniority by merger of the 3 separate seniority lists and not with reference to the date of joining in the Group B cadre (to the added advantage to DR Appraisers as their interse seniority was then fixed in 1:1 ratio). This change in policy was challenged by the JAC of Central Excise Superintendents & Inspectors in the Supreme Court in Writ Petition No.306/88 and 1200/88. Based on the interim orders dt. 22-12-89,the promotions to 550 posts were being made from the respective cadres on post basis till1993 against the allotted quota fixed as 338 for Superintendents of Central Excise, 48 for Superintendents of Customs; 62 for DR Appraisers; 102 for Promotee Appraisers. This had ensured temporarily no erosion in the quotas and larger no. of Superintendents of Central Excise got promotions against the retirement vacancies. But the final judgment dt.22-11-96 nullified the relief granted once for all and even backlog was ordered to be given to the Customs cadres, even though, the Court had passed an order dt.11-11-89 that promotions already made shall not be reviewed. (Annexure B&C to WP.No.651/97filedbyAIFCEGEOA).

The final outcome of the prolonged litigations in these court cases had ended up in the present policy of 6:1:2 (or 2:1). The Apex Court also ordered that all post 1979 promotions are to be reviewed and regularized on these lines. It may be seen from Para 16 of the judgment dt.22-11-96 (1997SCC(L&S) 159) that the Supreme Court had ordered the ratio accepting the proposals dated 8-6-89 formulated by the CBEC. The model Recruitment Rules prescribed quota with reference to the numerical strength of feeder cadres (para-3.12.7-CBEC Digest, June, 1988-page A144 refers). Strangely, instead of adopting the feeder cadre strength for the ratio, the quota was worked out based on the numerical strength of the ACs assigned with Central Excise and Customs functions in the field discarding the fact that in the major ports /Custom Houses the Customs cadres at Group B, C, D levels are far less than the Central Excise Cadres attending the Customs work at land/ border customs/anti smuggling work. The CBEC, therefore wrongly apportioned the posts of ACs-for Central Excise Work as –567& 187- for Customs work out of total working strength of 754 ACs in 1987.Thus the ratio was adopted as 3:1 between Central Excise and Customs and the further split up of 2:1 among the Customs Superintendents (287 nos.) and Appraisers (581 nos.) based on the respective numerical strength. i.e.6: 1:2. The CR Committee of 1989 headed by Sri.K.K.Dwivedi had recorded, the no. of posts in Group A for Customs as 252 and for Prev/Prev. collectorates as 813 & corresponding Group B cadres as 1097 for Customs; 3568 for Central Excise. With these figures, the ratio should have been 4.4:1 instead of the 2:1 adopted by Board. (Table on page 7 of CRC report dt.17-8-89 refers). The Superintendents of Customs got the backlog of 183 posts and Customs Appraisers got 58 posts of Acs .It was worked out from the total promotions of 2476 and the DRs of 873 during 1980 to 1996. Thus the 50% was taken as 3349/2=1675 and in 6:1:2 ratio it should be 1651:275:550. After adjusting the excess promotions given to Superintendents of Central Excise (1834-1651=183) the revised seniority list was made (Refer- the counter affidavit filed by Sri.R.Gopalanathan, the then Chairman, CBEC in the Contempt Petition no.513/97). The anomaly in the matter was further taken up in the Review Petition No.430/97,C.P.No.513/97&W.P.No.651/97 before the Supreme Court by the AIFCEEO & AIFCEGO but not allowed.

The apex court had upheld the ratio 6:1:2 vide judgment dated 22-2-99 based on a wrong appreciation of facts (see details above on earlier ratio ) as evident from their findings as follows -It will be noticed that prior to the proposals 8-6-99, there was no quota as between the three feeder groups for purpose of promotion to Group A and it appears promotions were being made on the basis of the length of service or continuous officiation. But then, it was found over a period such procedure created various grievances among the three feeder groups. Therefore, introduction of a quota system was found necessary.

Though the Hon'ble Supreme Court upheld the 6:1:2 ratios, disposing the IA.No.6&7 filed by the Customs Superintendents for a change in their quota, the Court ordered that the change of quota has to be done by a fresh determination and it was left open to the” applicants to make out a case for change and take appropriate steps for the same. Thus a change in the ratio 6:1:2 is now left open by the  Apex Court to the CBEC for a fresh determination.


The arrangement at the top in CBEC is ideal –out of the six members in the CBEC holding the rank of the Spl. Secretary to the Government of India , there is a Member exclusively for P&V matters. Also there is the Directorate of Organisation & Personnel Management (DOPM) headed by an experienced Commissioner of Joint. Secretary level, for the Personnel and career management directly reporting to the Member (P&V) .The entire cadre management on DPCs, seniority, deputations etc. of Group B&A cadres is being handled by the Board and personally monitored by the Member(P&V). Out of the total 65,000 (approx) employees, there is a total sanctioned strength of 12,766 in Group B and around 2304 in the Group A services. In the normal course, everything should have been handled very systematically and efficiently. But strangely, all is not well as could be seen today.


After the re-structuring implemented in Nov, 2002, there are around 1500 newly created posts never filled up till date!! The creation and distribution of these posts were definitely never need neither based nor actually required at all. But the cadres of Group C & B of Central Excise side remain the most disgruntled and stagnating even today. There are 8 to 10 Group B officers working under one AC in almost every Central Excise Division of which on an average 5 or 6 will be those in the same scale of pay of the ACs after getting the second MACP on completion of 20 years service. There are over 4000 in the ACP scale and only 250 divisions in the field set up. There were three Committees created by the CBEC during 2003-2004 viz.(i)-Study committee in Feb,2003 on removal of stagnation headed by Sri.SK Mishra, the then Member P&V.(ii)-Study committee on merger of cadres headed by the Sri.SK. Bharadwaj, Member P&V with CC of Chandigarh as a member in Sept,2003 (iii)-Committee on creation of Service Tax Commissionerates and cadre re-structuring headed by Sri. RK.Tewari, CC ,Pune in Oct,2004 (who was Member P&V for couple of months-before joining Settlement Commission.) All these committees were set up with the noble purposes and based on repeated representations made by the staff associations of Superintendents and Inspectors. The Tewari Committee set up in Oct, 2004 had done a commendable work within a record time-limit of three months and recommended for creation of 266 posts of A Cs as early in Dec,2004 and entrusting the ACP Superintendents with powers of ACs for Service tax matters in a time-bound manner. Nothing was heard there after in the matter.  Consequently the merger committee gave its Report which has become redundant now.

Therefore and in view of forthcoming GST a rational cadre review will go a long way to usher in new era. Let us hope CBEC does its homework with no hole barred manner before GST is brought in.

(The above views are personal – Inputs provided by Kerala Unit of Inspectors' Association- thanks to them)


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