2.

CENTRAL BOARD OF EXCISE & CUSTOMS (CBEC)

2.1 Organisation & Functions
2.1.1 CBEC essentially deals with the task of formulation of policy concerning levy and collection of customs and central
excise duties, prevention of smuggling and administration of matters relating to Customs, Central Excise and Narcotics (to the extent
under CBEC's purview). The Board is the administrative authority for its subordinate organisations, namely, Customs Houses,
Central Excise Collectorates, and the Central Revenue Control Laboratory.
2.1.2 In the performance of its administrative and executive functions, the Board is assisted by the following attached and
subordinate offices:—
(i) Directorate-General of Inspection & Audit;
(ii) Directorate-General of Revenue Intelligence;
(iii) Directorate-General of Anti-Evasion;
(iv) National Academy of Customs, Excise & Narcotics;
(v) Directorate of Organisation and Management Services:
(vi) Directorate of Statistics & Intelligence;
(vii) Directorate of Preventive operations;
(viii) Directorate of Publicity & Public Relations;
(ix) Central Revenues Control Laboratory; and
(x) Chief Vigilance Officer.
The functions of these offices are indicated in Annexure I.
2.1.3 The Collectorates of Customs and Central Excise which are spread over the country perform the executive functions
entrusted by the Board. There are 34 Collectorates predominantly concerned with Central Excise and organised as territorial units
(usually extending to parts or whole of a State, or a metropolitan area). There are 4 major Customs Houses at Bombay, Calcutta,
Madras and Cochin and 7 Customs Collectorates at Bombay Airport and Delhi, Bangalore, Goa, New Kandla, Nhava Sheva and
Vizag, mainly handling Customs work. In addition, Goa and Vizag Collectorates handle Central Excise work also. Besides, there are
6 Customs Preventive Collectorates at Ahmedabad, Bombay, Calcutta, Patna, Shillong, and Lucknow, dealing mainly, with anti-
smuggling work. The Narcotics Department is another important subordinate office of the Board. That Department is headed by a
Commissioner having headquarters at Gwalior and looking after cultivation and procurement of opium and preventive works relating
thereto. In addition, the Chief Controller of Factories, with his headquarters also at Gwalior, looks after the two Government Opium
and Alkaloids Factories, situated at Ghazipur and Neemuch. The appellate machinery of Collectors (Appeals) deals with appeals
against the orders passed by the officers lower in rank than the Collectors of Customs and Central Excise under the Customs Act,
1962, and the Central Excises and Salt Act, 1944. There are, at present, 23 such Collectors stationed at the four metropolitan cities
of Delhi, Bombay, Calcutta and Madras and other industrially important places.
2.1.4 Appeals against decisions/orders of the Collectors of Customs and Central Excise and those of the Collectors of
Customs and Central Excise (Appeals) lie with the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT).
2.2 Computerisation of Customs and Central Excise Operations
2.2.1 Computerisation of Customs Operations
(i) The Computerisation of Customs operations had its beginning in the year 1987. This scheme covers the major custom
houses and airports at Bombay, Madras, Calcutta and Delhi. The hardware acquired for this purpose was the Sperry
univac System with MAPPER as the software platform. The custom houses were also connected by telecom and
satellite links to enable quick access into information relevant for assessment purposes.
(ii) The underlying objective in computerising the customs operations is to provide a durable and accurate information base
for trade statistics, a data base which will provide information on classification and valuation practices at different
custom houses and also enable close monitoring of revenue realisation and monitoring the progress in clearances of
documents and goods. This scheme, however, entailed large scale data entry of the basic information as shown from
the import and export declarations filed by the importers/exporters and their agents. Custom bonding operations,
administration of licensing regime and controls in various goods were also monitored from the system though in a
limited way.
(iii) Presently the Customs Department has embarked on replacing the Sperry system with open systems bases on Unix-
Oracle platform. The Pilot project is underway in New Delhi which envisages electronic data interchange applications
by way of EDI connectivity between customs and other EDI partners such as importers/exporters and other agents, the
custodians of cargo, the licensing authority and other regulatory agencies. The pilot project aims at minimum paper
work and in majority of cases online assessment and clearance of goods with the use of electronic media. Bringing
about greater selectivity in the examination of goods is also being contemplated as part of the scheme.
(iv) Based on the experience gained from the pilot project the refashioning of the customs computerisation system would be
undertaken in the rest of the locations in the country including ports and airports which have not been provided with the
computer systems. The new system while providing for online assessment and clearance of cargo, would also enable
monitoring of revenue and trade statistics.
2.2.2 Computerisation of Central Excise Operations
(i) Computerisation of Central Excise operations began in 1987 with the implementation of pilot projects at Madras and
Delhi. Building on the experience gained, computerisation has been extended to 28 Central Excise Collectorates and
210 Divisions since March 1992. The application software is based on UNIX and ORACLE.
(ii) The computerisation scheme now in operation in the 28 Central Excise Collectorates covers a large number of
divisional offices as also Collectorate headquarter offices. The distributed data base system concept has been adopted
and interconnectivity between the divisional and head-quarter offices has also been established for exchange of
information as well as verification of assessment information.
(iii) Computerisation scheme aims at providing the assessing officers a data base giving past precedents and also enabling
them to cross check tax credits allowed as part of the Excise duty collection system. The scheme also envisages
monitoring of revenue and assessee related information to check compliance as far as duty payment is concerned. A
management information system to enable supervisory and senior officers to monitor the progress of various pending
issues, is also part of the scheme.
 2.3 Excise Duty
2.3.1 Revenue from Union Excise Duties (excluding cesses administered by other Departments) during 1992-93 and 1993-94
based on departmental records is given below:
(Rs. in Crores)
1992-93 1993-94
Budget Actual Budget Actual
Estimate realisation Estimate realisation
32080.90 30651.37 333600.50 31711.14
(Provl.)
The budget estimates for 1994-95 (excluding cesses administered by other Departments) was placed at Rs.36530.85 crores.
As against the same, the collection upto December,1994 was Rs. 26,333.62 crores (P).
2.4 Budgetary Changes
2.4.1 Budgetary Changes : Various measures were taken in the last few years to simplify the structure of excise duties to the
advantage of the tax payers as also the administering authorities. In the budget 1994-95, a major thrust was given to achieve
simplificatise duty structure. The major policy steps taken towards simplification of excise taxation in 1994-95 budget were:
(a) The reduction in the number of ad-volorem rates to about half the existing number for simplicity and transparency.
(b) Reduction in the dispersal of rates in each Chapter of Tariff.
(c) Reduction in the number of exemtion notifications to about half.
(d) Shift in the bulk of excise taxation from specific to ad valorem rates to ensure built in buoyancy of revenues.
(e) Continuing the process of lowering rates when they are unduly high.
(f) Removal of complicated price list procedure.
(g) Extension of MODVAT to capital goods, petroleum goods and spun yarns.
2.4.2 Significant changes in Budget 1994-95:
* In the budget 1994-95, the MODVAT scheme was extended to two important sectors, namely, capital goods and
petroleum products. The excise duty structure on petroleum products was rationalised and existing specific duty rates
were replaced by ad valorem rate of 10% on all petroleum products with the exception of motor spirit on which excise
duty of 20% was prescribed.
* The existing rates of additional excise duty (in lieu of sales tax) for cotton and man-made fabrics of ad valorem and
specific rates were switched over to ad valorem rates of 5%, 10% and 20%. A uniform excise duty of 20% was
prescribed for various fibres and blended or spun yarns. For cotton yarns excise duty of 5% was prescribed. As regards
the filament yearns, an ad valorem duty rate of 60% was prescribed for polyester filament yarn, 30% for nylon and
polypropylene yarns and 15% for viscose filament yarn.
* The excise duty structure on textile sector was rationalised. A uniform excise duty of 20% has been prescribed for all
fibres. Ad valorem rates of duties have also been fixed for yarns to obviate the problems of classification. For cotton
yarns, a uniform rate of 5% excise duty has been prescribed.
* The MODVAT scheme was extended to more items with the exception of textiles, tobacco products and matches. Even
in the case of textiles, limited MODVAT scheme comprising fibres and yarns was brought into operation. The MODVAT
scheme was extended on capital goods to give a boost to investment by helping to reduce the capital cost. A uniform
excise duty of 15% was prescribed for all matters except aluminium for which excise duty of 20% was prescribed as
against 25% earlier. However, a low rate of 10% was prescribed for pig iron and certain other products of iron.
* The excise duty structure for single formulation of Schedule II drugs and branded drugs were unified at 15%. However,
excise duty at 10% was imposed on branded Aayurevedic and Homoeopathic medicines and medicines of other
alternative systems.
* The duty structure for various chemicals and chemical based products was simplified and a nuiform excise duty of 20%
was prescribed. A uniform excise duty of 30% was prescribed for major bulk plastics, synthetic paints and detergends
as against 35% earlier.
* The excise duty rates for paper and paper board were unified at 20%. The scope of exemption currently available to
paper mills using unconventional raw material was enlarged.
* The exise duty on cosmetics was reduced from 70% to 50%.
* The excise duty rates on cigarettes were increased by about 12%. However, in the non filter segment the excise duty
for "upto 60 mm catgory" was reduced from Rs. 120 per thousand to Rs. 60 per thousand for increased utilisation of
tobacco in the industry to help the tobacco growers.
2.4.3 Major changes made after presentation of Budget, 1994-95:
* Excise duty exemption was given to footwear upto a value of Rs. 50 per pair. Hawai chappals & prts thereof were
exempted from excise duty.
* Excise duty on paper or paper board or articles manufactured from pulp containing atleast 75% unconventional raw
material was reduced from 10% to 5%.
* Full exemption was provided to woollen yarn in plain reel hanks and to made up articles of handloom fabrics. Excise
duty of 10% was prescribed for other woollen yarns. Excise duty on jute yarn, jute fabrics, jute twine, floor coverings of
jute, bags of jute was reduced to 5%. Laminated & resistant jute products and diversified jute products were exempted
from excise duty. A uniform additional excise duty in lieu of sales tax @ 10% was prescribed for all knitted & crocheted
fabrics. Corrugated boxes & cartons were exempted from excise duty.
* Excise duty on cement clinkers was reduced from Rs. 250 to 185 per tonne.
* Excise duty on pan masala not containing lime, katha or tobacco was reduced from 50% to 20%.
* Soap made without the aid of power was exempted from excise duty.
* Excise duty on umbrellas and parts was abolished.
* Excise duty on split air conditioners for use in buses was reduced from 60% to 30%.
* Excise duty on motor vehicles of GVW not exceeding 2700 kg. was flxed at 25%.
* Compounded levy duty was prescribed for cold rolling machines utilised for cold rolling of stainless steel @ 10000/- cold
 * Excise duty on medical, surgical, dental or veterinary furniture & their parts was reduced from 20% to 5%.
* Compounded rubber was exempted from excise duty.
* Excise duty on insulated ware was reduced from 20% to 10%.
2.4.4 Changes in Excise Duty Regime for Small cale Sector
The general small scale scheme was modified in 1994-95 budget. Earlier, for availing of the exemption, SSI units had to obtain
registration certificate from Development Commissioner (SSI) or from Department of Industries in the concerned States. This
requirement was removed in the Budget 1994-95. This has provided relief to a number of unregistered units mainly in the
metropolitan areas. The SSI units have been given the option to pay normal excise duty so as to enable them to take full input duty
credit and pass on the duty credit to the buyer. The scheme was extended to various goods like rubber tyres and tubes, unbranded
pan masala, unbranded chewing tobacco, conveyor beltings, monofilaments of HDPE and polypropylene, coated fabrics of cotton,
certain products of ferrous and non-ferrous metals, woollen yarns, polypropylene spun yarn, acrylic spun yarn, narrow woven fabrics,
textured filament yarn, gauze, rubberised textile fabrics etc.
The brand name provision in the general SSI scheme was amended in order to plug certain looholes whereby large
companies were avoiding payment of excise duty by getting their brand name registered in the name of SSI units and getting the
goods manufactured from a number of SSI units.
Certain procedural facilities have also been provided in the Small Scale Duty Exemption Scheme in and after the presentation
of the 1994-95 Budget. The small scale units are not required to maintain any extra record. The small scale units which are fully
exempted have been given the facility of sending goods outside without payment of duty for getting any job work done. The job
worker of the small scale unit is also not required to pay any excise duty on the job work. As a further facility, the clearance of such
goods sent outside for job work will not be taken into account for determining the eligibility of the small scale unit. This scheme would
give substantial relief and flexibility to the small scale units to upgrade the technology without losing the exemption available.
2.5 Customs Duty
2.5.1 The revenue from customs duties during 1992-93 and 1993-94 is as given below:—

(Rs. in Crores)
1992-93 1993-94
Budget Actual Budget Actual
Estimate realisation Estimate realisation
25211.65 23717.28 27727.00 22079.49
(Provl.)

The budget estimates for 1994-95 were placed at Rs. 25200.00 crores. As against the same, the collection at the end of
December,1994 was Rs.18694.20 crores (P).
2.5.2 Budgetary changes
The exercise of the tax reform initiated in Budget 1991-92 was continued in the Budget 1994-95 for simplification of the tax
structure & movement towards moderate rates of taxation.
The customs duties lowered in the past three Budgets were further brought down to make key imported raw material and
capital goods available to Indian industry at reasonable rates and thus accelerate process of integration with the world economy and
also to reduce unduly high levels of protection to industry. The scale of duty reduction was calibrated to ensure that it does not place
unreasonable pressure on domestic producers of similar products. The main features of customs tariff reform were:—
(i) The maximum rate of customs duty was reduced to 65% with the exception of passengers baggage, liquor, dried
grapes, almonds, ball and roller bearings.
(ii) The customs duty on capital goods was further reduced to 25% to boost investment to help domestic capital goods
industry.
(iii) Substantial reduction in the duties on key raw materials, such as steel and chemicals.
(iv) Reduction or removal of anomalies caused by import duties on raw materials and components being higher than on
finished products.
(v) Elimination of the notification governing the administration of customs duties, thus reducing discretionary power &
possibilities for disputes.

2.5.3 Significant changes in Budget 1994-95:

The major budgetary changes in customs duty in the Budget 1994-95 were as follows:—
* The peak rate of customs duty was further reduced to 65% with the exception of dried grapes, almonds, alcoholic
beverages, ball and roller bearings and passenger baggage.
* The basic customs duty on project import and general capital goods was reduced from 35% to 25% and the benefit was
extended to port development projects. Countervailing duty at 10% was also imposed on capital goods to safeguard the
interest of domestic suppliers of capital goods.
* The customs duty on most parts, whether imported as parts of original equipment or as spares was also reduced to
25%.
* The duty structure on machine tools was also implified to two slabs of 35% or 45% from the existing varying rates of
40%, 60% and 80%.
* The import duties on all ores and concentrates, melting scrap and iron ore pellets were reduced and unified at 10% to
help domestic metal producers.
* In order to give thrust to the export efforts of the leather industry, the customs duty on a large number of machinery and
raw materials used in the industries were reduced to 20%.
* The tariff structure for electronics and telecommuni-cations was rationalisheed. The customs duty on computer parts
was reduced to 50% and on application software to 20%. The duty on specified components and piece parts was
reduced to 40% and 30% respectively. In order to encourage the telecommunication sector the import duty on non-
 electronic parts for the manufacture of telecom equipment was reduced to 40% and on optical fibres for manufacture of
optical fibre cables (telecom grade) was also reduced to 40%.
* The import duty on speficied medical equipment was reduced to 40% which was earlier attracting the customs duty of
85%. The customs duty on specified medical equipment was also reduced from 40% to 15% without any CVD.
* The import duty structure for coal and petroleum was simplified and 35% customs duty was prescribed on crude
petroleum and coal. The duty on coke was also reduced to 25%. The import duty of 15% was prescribed on LPG and
other petroleum gases. On other petroleum products the customs duty of 30% was prescribed.
* The overall dispersal dispersal of customs duty rates on chemicals was reduced by the reduction of peak rate of 65%.
In addition, the duties on DMT, PTA and MEG were reduced from 70% to 60% and on certain intermediates the duty
was reduced from 40% to 30%.
* In the pharmaceutical sector, the import on a large number of raw material were lowered to two rates of 50% or 25%
from the existing rates of 85% to 50%. In a few cases, there has been some upward adjustment of import duty having
regard to the need to protect the interest of domestic manufacturers of drug intermediates.
* The general free allowance for passenger baggage was increased from Rs. 3000 to Rs. 4000.
2.5.4 Major changes made after the presentation of the budget:
* Refined sugar, crystal sugar and raw sugar were exempted from whole of customs duty & countervailing duty.
* Raw cotton was exempted from whole of duty of customs.
* A uniform rate of customs duty was prescribed for almonds in shell as Rs. 44/39 per kg for standard/preferential areas.
* Concessional rate of import duty of Rs. 220 per 10 gm & Rs. 500 per kg to gold & silver respectively when imported
under special Import Licences was extended.
* The exempted life saving equipments were replaced by a new list of 83 items. The list of medical equipments attracting
15% customs duty was replaced by a new list of 131 items. The customs duty on spre parts imported for the
maintenance of all specified medical equipments was reduced to 15% plus CVD.
* Finished wool on leather manufactured from imported leather by 100% EOU or by EPZ unit was exempted from export
duty.
* Animal embryos were exempted from whole of customs duty.
* Customs duty on unwrought aluminium was reduced from 25% to 10%.
2.5.5 The information on number of customs and central excise notifications issued during the year 1993-94 is as under:

No. of notifications* Revenue implication in

one full year@
(Rs. in crores)
Customs 190 -3681.41
Excise 99 -1249.00

* It includes the procedural and drawback notifications. It excludes the notifications issued during the Budget 1994-95.
@ The figures includes the revenue implication of Budget Notifications issued during the Budget, 1993-94 but excludes the
revenue implication of Budget Notifications, 1994-95.
(P) Provisional
2.6 Central Excise Procedure
2.6.1 Modvat credit was made admissible on documents issued by a registered dealer.
2.6.2 Depreciation was allowed for valuation ofcapital goods when they are removed after certain period of usage by the
manufacturer.
2.6.3 As in the case of the inputs used for manufacture of finished goods, provision was made to enable a manufacturer
availing modvat on capital goods to send such goods for test, repairs and reconditioning.
2.6.4 Modvat credit on capital goods obtained under a hire-purchase agreement or lease was made admissible.
2.6.5 The procedural law on documentaion relating to availment of modvat credit on capital goods were aligned to the similar
procedure governing modvat credit on inputs.
2.6.6 Modvat credit was made available on the basis of invoices issued by registered persons for the transitional period viz. for
period prior to registration of such persons.
2.6.7 The procedural law relating to manner of preparation of invoice by registered persons were aligned to the similar
procedure governing preparation of modvatable invoices by manufacturers.
2.6.8 While the aforesaid changes have been brought out by suitable amendment to the law certain other changes relating to
modvat as enumerated below have been made by issue of instructions :—
(a) Consolidated instructions have been issued superceding all earlier instructions relating to modvat, during the period
1986 to 1994. The consolidated instructions will be handy for the Central Excise Officers to implement the relevant
provisions of the Central Excise Rules.
(b) The interpreation of the term 'job work' and 'job worker' is the cause of dispute between such job worker and the
department. On the basis of legal pronouncements suitable clarification was issued for guidance of the staff on the
exact scope of job work and job worker.
(c) As a measure of facilitation to the trade the documents like challans used by the job worker is to be self autheticeted by
the job worker himself. (Cir. No. 60/60/94-CX dated 15.9.94)
(d) Instructions were issued that the goods could move on a despatch advice/challan showing the particulars of the value
and payment of duty to facilitate movement of Iron and Steel products from SAIL's factory premises to their duty paid
stock yard.
(e) Instructions wer issued regarding issuance of invoice (a) by registered dealers clarifying various points raised by
dealers where such dealers did not own the godown to store duty paid inputs.
2.7 Self-removal procedure was introduced for domestic tariff area clearances of 100% EOU units vide Notification No. 36/94-
CE(NT) dated 11.8.94. This notification has amended the erstwhile rule 100-D, 100-E and 100-G. The effect of this notification is that
such units are now not required to intimate and get prior approval of the department for clearance of their goods to domestic tariff
area. Restrictions on removal of the goods on Saturdays and Holidays have also been dispensed wih. These units area also not
required now to pre-authenticate their clearance documents by the department and they can remove the goods now under their self
authenticated invocies.
2.7.1 A clarification has been issued to field formations that wherever invoice price for domestic tariff area clearances is in the
nature of the transaction value and in conformity with the provision of the rule 3 of the revised cutoms valuation rules 1988 such
invoice value can be accepted for the purpose of assessment. However, in other circumstances viz. in case of sales to sister
concerns or other inter-related concerns or where there are other reasons to believe that the invoice price does not represent the
transaction value recourse may be taken to determine assessable value.
2.7.2 Another relaxation was also granted permitting the exporters not to print their names or trade mark on the packages
meant for export where foreign buyers required so.
2.7.3 A circular was issued to facilitate the sealing of export consignment in a manner as desired by the exporter.
2.7.4 The method for calculating depreciated value while assessing capital goods cleared by 100% EOU to domestic market
has been prescribed.
2.8 Ordinarily, movement of non-duty paid central excise goods from one warehouse to another warehouse is allowed for
certain notified mass consumption commodities. This is mainly to facilitate easyavailability and to reduce inventory cost on the public
sector companies. As the essential feature of the scheme is to facilitate easy availability of the goods to the public, permission was
accorded for creation of new warehouse stations in different places in the country (as many as elevan).
2.9 Small Scale Industries
2.9.1 Procedural facilities have been provided in the Small Scale Duty Exemption Scheme in and after the presentation of the
1994-95 budget. The small scale units are now not required to maintain any extra record. Their own records with minor additional
requirements are treated adequate for excise purposes. The small and tiny units with clearances up to Rs. 30 lakhs are not required
to file any declaration with the Central Excise Department. Secondly, separate gate passes or other documents are also not required
for clearance of such goods. Moreover, when the exemption limit of Rs. 30 lakhs is crossed, the duty can be paid on the basis of
bills or challans or invoices. Monthly returns have been replaced by simple quarter statements for filing with the Excise Department.
2.9.2 The executive instructions have been issued stating that no Inspector or Superintendent can visit the premises of a small
scale manufacturer except with the written permission of the Assistant Collector. The Assistant Collector before granting any such
permission is also required to indicate the purpose of such visit.
2.10 Export
A major simplification on the procedure law relating to export stands notified. The salient features of the scheme are detailed
below :
(1) As against earlier Rules 12, 12A and 191A of the Central Excise Rules, now there will be only new Rule 12 for exports
under claim of rebate of duty.
(2) As against earlier Rules 13, 191B and 191BB of the Central Excise Rules there will be only new Rule 13 for export of
goods under bond. Prior approval of manufacturing formula for export goods under the old rules, is being dispensed
with.
(3) "Manufacture": The term 'manufacture' for the purpose of export has been defined to include the processing or bleding
of any goods or making alterations or any other operations thereon.
(4) Provisions in Chapter IX of the Central Excise Rules pertaining to procedural aspects of exports, is being rewritten as a
matter or simplification and rationalisation, with highlights being:
(i) no intimation will be required to be given to central excise officers by exporter if he desired that examination will
take place only at the point of shipment i.e., at ports, airports or land customs stations only. If the exporter desires
examination of export goods in a factory or warehouse or ohter point of storage and not at the point of export, then
prior intimation has to be given to central excise officers, who will examine and seal the goods.
(ii) rebate claim can be lodged either with Maritime Collector at the point of shipment of the Assistant Collector having
jurisdiction over the factory or warehouse of the exporter;
(iii) with regard to marking and numbering on export packages, Collector has been empowered to relax any of the
conditions of Rule 185 of the Central Excise Rules.
(5) Chapter X procedure has now been made applicable to movement of non-duty paid inputs from the place of the
manufacture to the place of manufacture of poor goods.
(6) In case of export of duty paid goods under claim of rebate of duty, facility which was hitnerto available only to some of
the goods, notified on a case to case basis, has been extended to all items permitted for export. Earlier minimum limit
of rebate of Rs. 5 is, however, being enhanced to Rs.500/- with a view to reationalise the system.
(7) Similarly, the facility of manufacture under bond of export goods has been extended to all goods including intermediate
goods, even when they are manufactured by a job worker.
(8) As a measure of simplification and rationalisation, 95 notifications have been rescinded and replaced with 11
notifications.
(9) The new provisions have come into effect from October 1, 1994.
(10) Instructions have been issued on aforesaid export procedure for guidance of staff. These instructions will be handy for
the Central Excise Officers to implement the relevant provisions of Central Excise rules on Export.
(11) A circular was issued to facilitate the sealing of export consignments as desired by the exporter.
2.11 Invoice:
Detailed instructions have been issued to field formations on the procedures to be followed for invoice based assessment
introduced in Budget 1994-95.
The salient features of the scheme, inter alia, as indicated below:—
(1) The assessee can use his own invoice with certain minimum required particulars necessary for the department to
complete assessment.
(2) The invoice value should reflect the assessable value as determinable under section 4 of the Act which is nothing but
the transaction value of the goods.
(3) Except for some specified types of clearance, no prior permission or prior or prior approval of the value declared in the
invoice is called for.
 (4) In specified type of goods the assessee is required to submit the manner of determination of value by him but is not
required to wait for any approval before clearance of the goods.
(5) The invoice also serves the purpose of transport document thereby avoiding duplication of excise records.
(6) Elaborate instructions have been issued for guidance to field staff on invoice basis assessment procedure. This has
helped the trade as well as the departmental officers in smooth change over to the present scheme of invoice based
assessment.
(7) The pre-authentication of the gate pass now replaced by invoice has been dispensed with. It is enough if such in are
preauthenticated by the Managing Director of the person responsible for carrying on the business.
(8) Invoice has been recognised as a relevant document even for purpose of availing modvat credit.
(9) Legal provision has been made in the Central Excise Rules to recognise the invoice issued by a registered dealers so
that trading pattern of excisable goods is not disturbed and remains in tact. This also helps the small scale industry to
obtain their requirement of inputs in retail free the nearest market instead of depending on the manufacturer.
2.12 Other Procedural Relaxation
1. Instructions were issued to field formations on Supervision of destruction of tea waste by Central Excise Officers in view
of the abolition of Central Excise duty on tea.
2. Instructions were issued to field formations delegating Powers under Rule 56-B of Central Excise Rules to Assistant
Collector. Earlier the power to granting permission under Rule 56-B vested with Collector. These instruction have been
issued to reduce the difficulties faced by manufacturers located in places away from Collectorate Headquarters.
3. Instructions were issued to the effect that those Collectorates where the post of Collector-II exists, Collector-I will issue
Show Cause Notice and Collector-II will adjudicate the cases.
4. Notification on set-off procedure for Cut-tobacco was issued stating that cigarettes when exported under bond, the duty
already paid on Cut-tobacco used in the manufacture of such cigarettes shall be allowed as a credit to be utilised
towards payment of duty on cigarettes cleared for home consumption.
2.13 Arrears of Central Excise
Arrears of Central Excise as on 31st December, 1994 were about Rs.2597.40 crores. Measures like administrative, legal and
pursuasive as are considered necessary, contiue to be taken in order to liquidate the arrears.
2.14 The year 1994-95 was remarkable and several changes were carried out in the Customs Law & Procedure with a view to
simplify and liberalise the same, as also to facilitate smooth transit of goods/passengers through the Customs and for the purpose of
Export Promotion.
2.14.1 Measures taken to promote exports from Export processing Zones and from units working under various EOU
Schemes:—
(i) Aquaculture units, whether integrated or otherwise, set up under the 100% Export Oriented Units (EOU) Scheme have
been permitted customs duty free imports of their requirements such as Capital Goods, raw materials, feeds,
chemicals, medicines, etc.. Such units are also exempt from the customs bonding. Similar exemption from customs
duty has been made available to 100% Export Oriented Units in horticulture/viticulture/Animal husbandry/poultry and
sericulture sectors.
(ii) In keeping with the policy to promote setting up of new export processing zones, two privately managed Export
Processing Zones have been permitted, one in Akurli near Bombay and the othe at Sachin near Surat both for export of
gems and jewellery.
(iii) Infrastructural equipments imported by a Software Technology Park Unit have been permitted to be linked up to
research or educational institutes in the Domestic Tariff Area subject to the said institute not being engaged in
commercial activities.
(iv) Inter unit transfer of goods from one Software Technology Park Unit to a 100% Export Oriented Unit or to a unit in the
Export Processing Zone has been permitted for the purposes of development of software for export.
(v) Temporary removal of goods from Electronics Hardware Technology Park Units to the Domestic Tariff Area for repairs,
processing or display has been allowed.
(vi) Import of goods within three years of exportation for repairs/reconditioning has been allowed to the Export Processing
Zones/Free Trade Zone Units.
(vii) Debonding of 100% Export Oriented Units/ Export Processing Zones/Free Trade Zone Units, is allowed on the payment
of customs duty based on the depreciated value of imported goods and at the rate of duty in force at the time of
debonding.
(viii) Exemption of Capital goods, material handling equipments captive generating sets, office equipments, etc., for
repairs/reconditioning/reengineering of goods imported for re-exporation thereof is allowed, subject to the activity being
done in a customs bonded area.
(ix) Direct import of gold without any restriction on fineness of gold has been allowed to jewellery export units.
(x) Export of gem & jewellery from the EPZs/Jewellery Complex has been allowed by post parcels and as personal
baggage besides exports as cargo.
(xi) Re-export of dead-stock or broken stones upto 5% of the value of import of such stones had been allowed to gem and
jewellery export units.
(xii) Inter-unit transfer of goods manufactured or packaged in the gem & jewellery units within the same zone/complex has
been allowed.
2.14.2 Drawback of Duties for Exports
In order to ensure expeditious payment of drawback to exporters and with a view to fully compensate for the duties suffered
on the inputs, the working of duty drawback scheme was constantly monitored and a number of changes effected during the year.
Some of the changes introduced were as under :—
(i) A number of new items have been added in the Table and the rates of drawback for 160 categories of items have been
improved w.e.f. 1.6.1994. Special emphasis has been given to items of exports falling in the thrust sector and rates
against these entries have been considerably improved.
 (ii) In order to mitigate difficulties faced by exporters in cases where there was delay in filing application for fixation of
Brand Rate, guidelines have been issued specifying the circumstances under wich and the extent to which the
condonation of delay will be considered by the Ministry.
(iii) On the basis of recommendations by a Committee consituted to review the instructions regarding drawal of samples for
drawback purpose, comprehensive guidelines have been issued to ensure that samples are drawn only where
necessary so that exporters get their payment expeditiously.
(iv) For the expeditious settlement of drawback claims in resect of exports made through Inland Container Depot/C.F.S.
etc., instuctions have been issued for payment of drawback immediately after an order for clearance and loading of the
goods has been made without waiting for transferance copy of Shipping Bill from gateway port of export.
(v) A compilation of instructions on Duty Drawback Scheme has been prepared in the form of a book and made available to
the field formations as well as the exporters in keeping with the Government policy of making procedures transparent.
2.14.3 Duty Exemption Scheme
Procedure for clearance of goods under Duty Exemption Scheme was further streamlined. For all duty free imports under
Special Imprest Licences, issued in terms of Exim Policy as amended upto 30th March, 1994, a consolidated Notification No.128/94-
Cus. was issued on 10.6.1994, as against four notifications which existed for such imports in terms of Exim Policy applicable prior to
that date. The facility of broad banding of inputs for import by exporters of writing instruments under Value Based Advance
Lincencing Scheme was extended vide notification No.199/94-Cus dated 23.12.1994.
2.14.4 Other Measures for Trade Facilitation
(i) A special facility for clearance of imported cargo by select exporters in the category of Super Star Trading Houses, Star
Trading Houses, Trading Houses and Manufacturing Export Houses was introduced. The facility included the creation of
a special assessment group in the Customs Houses for assessment of the import cargo of such exporters. Further, a
green channel system of expeditious examination and clearance of cargo was also extended. As a special case these
exporters were also permitted to take the cargo direct to their premises for destuffing and examination.
(ii) The facility of customs clearance for export cargo between 0800 hours to 2200 hours was extended at all major
ports/airports at Bombay, Calcutta, Delhi, Madras, Kandla and Bangalore. This facility was introduced with a view to
ensure expeditious clearance of export cargo and was made available without any extra charge on the exporters.
(iii) With a step to facilitate the movement of imported transhipment cargo such movement was allowed by road on motor
vehicles in a routine manner and not as an exception as earlier.
(iv) Transhipment of imported cargo has been allowed through private air taxi operator also besides Indian Airlines. This
facility would ensure expeditious movement of the import cargo which would benefit the Trade.
(v) Steps were taken to ensure expeditious transhipment of containerised cargo from ports to Inland Container
Depots/Container Freight Stations by review and simplification of the procedure particularly in the area of
documentation. A single document was prescribed for movement of the cargo.
(vi) Powers have also been delegated to Collectors to extend the retention period of vehicles brought under carnet
procedure.
(vii) Warehousing policy has been liberalised by delegating certain powers to Collectors to extend the warehousing period,
and bilateral trade agreement has been signed between India and Mayanmar and trade has since been started from the
specific Land Customs Stations.
2.14.5 New Customs Ports/Airports/Inland Container Depots
(i) The Government has declared as Customs Airports of Visakhapatnam Airport, Bhubaneshwar Airport, Coimbatore
Airport, Ahmedabad Airport and Indore Airport, under section 7(a) of the Custom Act, for unloading of imported goods
and loading of export goods or any class of such goods.
(ii) Shipkila in Himachal Pradesh has been appointed as Inland Customs Station for clearance of goods or any class of
goods imported or exported by land from or to China and a Notification exempting 15 items when imported fromChina
through Land Customs Stations Gaunji and Shipkila has since been issued.
(iii) For facilitating exporters and importers, two new Inland Container Depots were opened at Indore and Surat
respectively.
2.14.6 Clearance of Passengers at International Airport
(i) Baggae: As a measure of liberalisation and rationalisation, the baggage rules have been re-drafted and a single set of
Baggae Rules, 1994 have come into effect from 1.3.94, by amalgamating the provisions of three separate set of
baggage rules viz Baggage Rules, 1978, Transfer of Residence Rules, 1978 and the Tourist Baggage Rules, 1978.
Moreover, as aa further facilitation measure, the Tourist Baggage Re-export (TBRE) procedure which required a tourist
to get all high value items being imported by him temporarily endorsed in his passport, has been scrapped. This has
further simplified clearance of tourists at the international airports.
(ii) Gold and Silver Import Schemes : With a view to obviate the need of personal carriage of gold/silver by the passengers,
both the Schemes have been modified so as to give further option to the eligible passenger to either take delivery of the
gold/silver in India from the Customs Bonded Warehouses of the SBI/MMTC or to import the same within 15 days of his
arrival in India.
Adhoc Exemptions
2.14.7 Ad-hoc exemption are concerned with requests for exemptions from customs duty from two types of organisations,
namely those engaged in commercial activity (such as private companies, public sector/Government undertakings) and those
engaged in non-commercial activity such as research institutions charitable organisation etc.. The requests relate usually to import
of, in the former case, capital goods etc. which may be required in large projects of public interest (e.g. hydroelectirc/power projects)
where the goods may have to be re-exported after the completion of the same. In the case of the latter, the goods are usually
received from abroad in the form of gifts, donation etc.. The goods in either case are not covered by general exemption notifications
and each case is examined on merits, whereever these are considered to be in the public interest and fall within the ambit of section
25(2) of the Customs Act, 1962.
During the period 1.4.94 to 31.12.94 a total of 182 ad-hoc exemption orders were issued involving a revenue sacrifice of
Rs.153 crores, out of which 30 cases related to commercial exemptions, and the remaining 152 cases related to non-commercial
exemptions.
 2.14.8 Court Cases Customs
The cases pending in the Supreme Court are being vigorously followed for expeditious disposal through the Ministry of Law,
Justice and Company Affairs and the progress is being monitored at senior level. As a result, the cases pending in the Supreme
Court have shown a declining trend. There are now 1627 cases pending in the Supreme Court involving a revenue of Rs. 78.17
crores.
2.14.9 Arrears of Customs Revenue
Arrears of Customs Revenue (Confirmed Demands) as on 31.12.94 is Rs.12675.19 lakhs as compared to Rs.13467.40 lakhs
as on 31.10.93 (as on 31.12.93 Rs.13763.23 lakhs). Considering the total Customs revenue, these arrears form very small
percentage of the total revenue. Arrears of revenue are kept under constant watch and their recovery is pursued.
2.14.10 Inland Air Travel Tax (IATT) & Foreign Travel Tax (FTT): The provision relating to levy and collection of Foreign Travel
Tax and Inland Air Travel Tax were modified in the Finance Act, 1994, in order to strenghthen the enforcement mechanism and
recovery of these taxes. In particular the following provisions have been introduced :—
(i) It is now provided that any IATT and FTT dues not paid to the Government within the specified time would be subject to
levy of interest @ 20% per annum.
(ii) The carrier or other person failing to pay the tax shall be liable to penalty which shall extend upto three times the
amount of tax not so paid.
(iii) A new provision allows the restrain or arrest of any aircraft or other property of the carrier or any other person who does
not pay his dues relating to Inland Air Travel Tax. In case the dues are still not paid within 30 days, the aircraft or other
property may be caused to be sold for recovery of the dues.
2.14.11 Court Cases Central Excise
2.14.12 During the year, smooth and close Co-ordination was maintained with the Ministry of Law and efforts were made to
file all departmental SLPs/appeals within the prescribed time limit in the Supreme Court. Effective and meaningful briefing was
rendered by Departmental Officers to the Advocates and Law Officers with regard to cases which came up for hearing. Further lists
of cases were bunched issue-wise and sent to Central Agency Section/Additional Solicitor General for early listing and final disposal
of these cases. The matter was also taken up at the review meetings with the Ministry of Law. As a result of these concerted efforts,
it has been possible to secure sizeable disposal of pending cases both at the level of Supreme Court and High Courts.
2.14.13 With regard to cases pending in different High Courts, Principal Collectors and Collectors have been advised to hold
meetings with Chief Justice (s) and Regisrars of High Courts and request them to take up issue-wise cases together.
2.14.14 The comparative position of cases relating to Central Excise and Customs pending in Supreme Court and High Courts
as on 1.10.93 and 30.9.94 is given below

Position as on 1.10.93 Position as on 30.9.94

No. of cases Amount of No. of Amount of
pending Revenue cases Revenue
Involved pending Involved
(Rs. in (Rs. in Crores)
Crores)
Supreme Court 4577 800.02 4482 929.87
High Court 13063 1689.66 12622 1896.89

It will thus be seen that during the year there has been a net reduction of 95 cases at the level of Supreme Court and 441
cases at the level of High Courts. This is after taking into account the fresh cases added during the period.
2.15 Anti Smuggling Measures
2.15.1 The relentless drive against smuggling and duty evasion continued in 1994-95. All the Collectorates along the coast,
the land borders and incharge of the international airports remained fully alert to check smuggling of contraband both into and out of
the country. A number of remarkable seizures of contraband were effected during the year by various Collectorates and the
Directorate of Revenue Intelligence. The success of the anti-smuggling efforts is clearly reflected by the fact that contraband goods
worth Rs.350.01 crores (prov.) were seized in 1994-95 (Till December). The pressure on the organised syndicates engaged in the
smuggling was kept up by promptly attending to post-seizure activities like investigations, prosecutions as well as detentions under
Cofeposa Act. Steps were taken to update existing dossiers on the smugglers and open new dossiers of fresh gangs which had
come to the notice of various field formations involved in the anti-smuggling activities. Timely action was also initiated for disposal of
the contraband goods as well as forfeiture of properties acquired with funds generated by smuggling.
2.15.2 In addition to the seizure of contraband, all the Customs Houses as well as the Directorate of Revenue Intelligence
detected a large number of cases involving violation of import-export control laws, evasion of customs duty, fraudulent claims of
export benefits like drawback and duty free imports under Advance Licence/DEEC scheme. These cases involved both loss of
customs duty and illegal remittances amounting to crores of rupees. Goods concerned in majority of such frauds were computer
parts, brass, plastic articles, pharmaceuticals and chemicals etc.
2.15.3 Customs formations all over India made extensive efforts in tracking down narcotics smuggling especially of Mandrax
which resulted in busting of several major gangs alongwith seizure of record quantities of mandrax, heroin etc.
2.15.4 Special efforts were made to upgrade the collection of intelligence on the sensitive Indo-Pak, Indo-Nepal, Indo-Burma,
and Indo-Bangladesh borders and Indo-Sri Lankan coastline.
2.15.5 The Directorate of Revenue Intelligence, the apex intelligence agency in the field of anti-smuggling, continued to
maintain close liasion with the Coast Guard, CRPF, Income-tax, NCB and all other field formations of Customs and Central Excise
in the country.
2.15.6 The year also saw continuing efforts at better coordination with the intelligence/enforcement agencies of other
countries. Efforts are afoot to enter into bi-lateral agreements for cooperation in customs matter with countries like Israel, Korea,
Hongkong etc. Such agreements will no doubt go a long way in curbing economic offences and booking the offenders.
 2.15.7 The most discernible indicator of the performance on the anti-smuggling front is the seizure of contraband goods
effected by various agencies. The value of contraband goods seized during 1992-93 and 1993-94 stood at Rs. 458.65 and Rs.
456.25 crores respectively. During 1994-95 (Till December) seizures were of the order of Rs.350.01 crores (Prove.). These seizure
figures must be viewed in the perspective of liberalised economic policies of the Government which included gold and silver import
policies and a liberal import-export policy. During 1994-95,144.25 MTs of gold was legally imported and a duty of Rs. 318 crores was
collected in foreign exchange. Similarly during the same period, 1809 MTs of silver has been imported into the country on payment of
customs duty amounting to Rs. 90.43 crores in foreign exchange. Thse imports relates to major international airports only.
2.15.8 Breakup of important contraband seized during 1992-93, 1993-94 and 1994-95 is as follows:—

(Value Rs. lakhs)

Commodity 1992-93 1993-94 1994-95 (Prov.)
(till 24th Dec.)
Gold 9575 5502 3916
Silver 9859 708 332
Watches 213 142 261
Synthetic Fabrics 319 530 345
Electronic Goods 3622 2768 2867
Indian Currency 202 446 164
Foreign Currency 1634 2015 1402
Narcotic Drugs 1681 2286 4579

2.15.9 Sector-wise break-up of value of contraband goods seized during 1994-95 (upto Dec.) as compared to two previous
years is as follows:—
Sector 1992-93 1993-94 1994-95 (Prov.)
(Till Dec.)
West Coast 22422 24054 14116
East Coast 9101 13054 11313
Indo-Sri Lanka 467 560 4186
Indo-Nepal 2910 2279 635
Indo-Pak 1885 1070 748
Indo-Bangladesh 1635 1887 1352
Indo-Burma 113 420 444
Others 7332 12301 2207
Total 45865 45625 35001

2.15.10 Post seizure work handled during 1994-95 upto Dec., 94 (Prov.) in comparison with the previous two years is as
follows:—

(Rs. lakhs)
Item 1992-93 1993-94 1994-95 (Prov.)
(Till Dec.)
i) No. of seizures 56793 49803 33270
ii) Value of goods seized 45865 45625 35001
(Rs. in lakhs)
iii) No. of persons arrested 1537 1205 720
iv) No. of persons convicted 317 340 188
v) No. of detention orders issued under 799 517 323
Cofeposa
vi) No. of persons actually detained under 336 386 277
Cofeposa
*vii) No. of detention orders Under PIT 97 116 87
NDPS
(1992) (1993) (1994)
*viii) No. of persons actually detained 80 92 45
(1992) (1993) (1994)
Note:— Figures are calender year-wise.
2.15.11 Marine
(i) Four wooden dhows of 80 feet with designed speed of 13.6 knots are being built by M/s. N.M. Wadia Billimera. The
construction is in progress and the vessel are likely to be inducted into service by Aug., 95.
(ii) Out of the 12 craft the contract for the retrofitment of which has been given to M/s. Bristol Boats Arror (Cochin) 11 has
already been retrofitted and delivered to the maritime Collectorates. The last craft is still under retrofitment and
expected to be completed during the financial year 1994-95. Proposals are under consideration in the Ministry for
retrofitment of three more CPCs which have been found to be suitable out of the remaining five. The department has a
total of 18 CPCs. One of them was retrofitted earlier as a pilot project.
(iii) Orders were placed for 10x60' CPLs with M/s. Bristol Boats Aroor (Cochin) with design spped of 20 knots on 25.10.89.
The builder have requested for an escalation in price which is under consideration by DGS&D.
(iv) 27 confiscated crafts were appropriated for departmental use during the year 1994-95.
(v) A proposal for acquisition of 20 fast intercepters with a speed of 30 knots and the proposal for acquisition of 18 CPDs is
 (vi) The department procured 15 nos. Furune Marine Madars Modle/1940 from M/s. Ultra Marine Air Aides (P) Ltd. New
Delhi for installation on Customs crafts with a view to increase their operational efficiency. The work of installation is in
progress and likely to be completed in the current financial year.
(vii) Proposal for procurement of 20 GPS Navigators is under consideration.
2.15.12 Anti-Smuggling Equipment
(i) Baggage X-Ray Machines: Baggage X-ray Machines have been in use in the department at vulnerable entry/exit points
(Custom Houses, Airports, Ports and LGS) in the Charge of Customs. For augmentation of such machines in the
department a comprehensive proposal for provision of 67 X-ray machines was submitted to Ministry vide DPO U.O.
F.No. 441/18/DPO (AS)93/6922 dated 24-11-93 out of which Ministry sanctioned 2 Multi-Energy Baggage X-ray
machines for installation at IGI Airport and Sahar Airport both of which were installed in March 94 and are operational.
Proposals for remaining machines including that of Karipur Airport and Madras Airport is under consideration in
Ministry.
(ii) Door Frame Metal Detector:—Upto January '95, 54 Door Frame Metal Detectors have been installed in the field
formations such as at LGS's, Airports and Custom Houses for detection of contraband Gold etc. concealed on the body
of person. Proposal for additional 24 Door Frame Metal Detectors was sent to Ministry for sanction vide this Directorate
U.O.F. No. 445/5/DPO(AS)93/Pt. I/6701 dated 9-11-93. However, on a reference from Ministry, this Directorate is in the
process of identifying up graded/sophisticated Door Frame Metal Detectors for consideration of sanction by the
Ministry.
(iii) Gold Detector:—The Gold Detector developed by B.A.R.C., Bombay is installed at U.B.C. of Bombay Custom House
interms of Ministry's letter F.No. D-2101/7/93-CUS(AS) dated 19-12-93 addressed to Director Preventive Operations
and endorsed to Principal Collector of Customs, Bombay and Collector of Customs, Sahar Airport, Bombay.
(iv) Ionsoan - 350 System:—On a proposal for acquisition of 7 Ionscan-350 System submitted to Ministry vide U.O.F. No.
441/23/DPO(AS)93/6785 dated 17-11-93 Member (AS) has agreed for acquisition of a two such equipment for Sahar
Airport, Bombay and Attari LCS from Special Equipment Fund. Further modolities in this regard are being worked out.
(v) Bullet Proof Vests:—Sensitive field formations are equipped with 840 Bullet Stopping Harnesses acquired from
D.R.D.O., Ministry of Defence, New Delhi.
(vi) Hand Held Metal Detector:—Upto 1993-94, 560 Hand Held Metal Detectors were acquired and deployed which include
unserviceable and irreparable ones also. The Ministry has sanctioned additional 109 Hand Held Metal Detectors for
acquisition in 1994-95 for which supply order has been placed upon M/s E.C.I.L., Hyderabad. The supplier has assured
of supplies within the Financial year 94-95.
(vii) Hand Held Search Light:—Till 1993-94, 528 Hand Held Search Lights were acquired and supplied to field formations
which included irreparable and unserviceable ones also. The Ministry sanctioned 140 Hand Held Search Lights in March
'94 which have been acquired in 1994-95 and allotted to field formations most of these have been delivered to allottee
formations.
(viii) Night Vision Binocular:—Till 1993-94, 308 Night Visions were deployed in the department which include unserviceable
and irreparable pieces also. Proposal for consideration of sanction of additional 308 Night Visions was submitted to
Ministry vide DPO U.O.F. No. 445/5/DPO(AS)93/Pt.I/6701 dated 9-11-93. The Ministry has desired DPO to identify
make, model etc. of the Night Visions proposed to be acquired.
An exercise to this effect for identification of specific make and model of Night Visions proposed to be purchased is in
the process in DPO.
(ix) Sniffer Dogs:—As per reports from field formations 12 Sniffer Dogs for detection of Narcotics Drugs are operational in
CC(P) Ahmedabad, Shillong, CC Sahar Airport, Delhi, CCEx Chandigarh, Jaipur, Trichy and N.C. Gwalior.
(x) C.C.T.V:—A proposal for installation of C.C.T.V. at International Airports like IGI, Sahar, Madras, Trivendrum and
Calicut is under active consideration of the Ministry.
(xi) Simple Binoculars: Upto 1993-94, 282 Binocular were deployed in the field formations, most of these are, however,
non-operational. The non-operational Binoculars are proposed to be replaced out of 100 pcs. Sanctioned by the
Ministry in 1990-91 and proposal to be revalidated during 1994-95.
2.16.1 Sale of confiscated silver from stock of customs was started w.e.f. August, 1993 through Customs Retail outlets at
Delhi, Bombay, Calcutta and Madras.
Encouraged with the realization through sale of silver, sale of confiscated gold (of customs) was started from Customs Retail
Outlet at Bombay w.e.f. 1st December, 1994 with kind permission of Hon. F.M. It has been possible to realize a sum of Rs. 144
crores from sale of confiscated silver from the Custom Retail outlets at Bombay, Delhi, Calcutta & Madras from 1.4.94 till January,
95. A sum of Rs. 17.2 crores has been realized from sale of confiscated gold from Bombay Retail outlet from 1.12.94 till 27.1.95.
2.16.2 Cultivation, production and export of opium
(i) As a result of various measure taken to reduce stocks of opium, 619 tonnes of opium was exported in 1993-94, as against
the domestic production of 415 MTs. During the year 1994-95 about 500 M. Tonnes of opum is expected to be exported
because of diminished stocks.
(ii) The total area licensed for poppy cultivation during the year 1994-95 is about 24.995 hectares. The qualifying yield of
opium for grant of licence to poppy cultivators for the year 1994-95 has been prescribed as 43 kgs. per hectare.
2.17 Printing, Publication and Publicity
2.17.1 The Directorate of Publicity and Public Relations is looking after the requirements of Printing, Publicity and Public
Relations of the Customs, Central Excise and Narcotics Department. The Directorate functions under the direct control of the
Central Board of Excise & Customs. Its broad functions are as under:—
i) Printing of all Customs and Central Excise Notifications issued by the Government of India and despatch to the same
to the field formations under the CBEC and to the subscribing trade and public.
ii) Publication of monthly CBEC Digest containing Customs and Central Excise Notifications, Circulars ITC and ETC
Public Notices for, exclusive circulation amongst Departmental Officers, for the benefit of trade and public a similar
digest known as ICE Trade Digest containing only relevent information is also published and supplied against annual
subscription.
iii) Compilation, printing and publication of an in-house journal known as ICE Magzine.
 iv) Publication of Budget Bulletins, Customs and Central Excise, immediately on the presentation of the Budget.
v) Publication of Customs and Central Excise Tariffs containing rates of Duties and exemption Notifications after the
presentation of annual Budget for use by the Departmental Officers.
vi) Updating, printing and publication of all other Departmental Manuals like Customs and Central Excise Manuals, Basic
Manual, Appraising Manual, Adjudication Manual etc. after frequent intervals. Printing and circulation of all other
literature pertaining to the Department as and when issued by the Board.
vii) Publicity through various mass medias like Radio, T.V., Newspaper, hoardings and Department of Posts.
viii) To act as nodal officer for interaction/co-ordination with DAVP and Films Division etc. to carry out various publicity
compaigns through these agencies.
ix) To act as Public Relation Officer to liaise with World Customs Organisation to highlight their activities and to celebrate
International Customs Day and other important occasions such as Central Excise Day.
2.17.2 Printing and publication
During the year 1994 (upto 31.12.1994), as many as 31 publications comprising a total mumber of 3.5 crore pages were
printed. Publications brought out on monthly bases were CBEC Digest, and ICE Trade Digest and those on quarterly basis were ICE
magazine, Audit Bulletin and Law Reporter. As usual a Hand Book 1994 containing Telephone Directory alongwith other important
information was also brought out. The Civil List 1994 was also brought out by the Directorate.
In addition to the above, exceptional and ad-hoc printing jobs as an when received from the Central Board of Excise &
Customs were also undertaken. To name some of such publications are (i) Duty Drawback Rate Schedule,(ii) Agenda and Minutes
for34th meeting of Customs and Central Excise Advisory Council, (iii) Export without payment of Central Excise Duty in bond under
rule 13(1)(a), (iv) Export under claim of rebate under rule 12(1) and (v) Simplified Export Proceedure. To cater to the needs of
training programmes a brochure on GATT Valuation Seminar and Indian Customs at a Glance was published.
The Customs and Central Excise Budget Bulletin 1994 were printed and supplied to field formations and general public within
18 hours from the presentation of the Budget. The up to date Customs and Central Excise Tariffs 1994, incorporating the changes
announced in the Budget were printing and made available to the Department within one month from date of presentation of Budget.
2.17.3 Publicity
During the year under review, publicity carried out though various medias was as under:—
i) Publicity through T.V.:- A one minute video animation film on Central Excise was shown on Doordarshan alongwith an
interview with Shri Tarun Roy, the then Member Central Excise on 24th Feb. 1994 on the occasion of the Golden
Jubilee of Central Excise. A video film entitled 'Happy Landing' has been prepared by the Directorate, excerpts from
which were shown on National Network on 26th January, 1995. A similar filmcovering cargo clearance has also been
prepared. Another video film on Public Relations, is under production.
ii) Publicity through Radio :- A radio jingle highlighting activities of the Department was prepared by the Directorate and
was broadcasted on AIR for one weak with effect from 24th Feb. 1994.
iii) Publicity through Newspapers:- During the year two Newspaper supplements covering two pages each were released
on the occasion of the Golden Jubilee of Central Excise on 24th February, 1994 and International Customs Day on 26th
January, 1995 respectively. In addition a number of Display Ads highlighting various activities of the Department like
concession to SSI Units, Introduction of Service Tax and rationalisation of duty schedule on Yarn and Paper etc. were
released for the information of the Trade.
iv) Publicity through Department of Posts:- On the Golden Jubilee of the Central Excise Department on 24th Feb. 1994
and International Customs Day on 26th Jan. 1995 a special cover with special cancellation stamp were got released
through the Department of Posts. Ordinary cancellation of mail with special insignia was done at nine Post Offices in
Delhi for one week from 24th February, 1995. Inland Letter Cards to mark the Golden Jubilee of the Central
Department was also got released through the Department of Posts. We were also pursuing the issue of
commemorative stamp on the occasion of the Golden Jubilee of the Department.
v) Printed Publicity:- For the benefit of the travelling public and tourists, three brochures containing various concessions
available to various categories of passengers and other relevant information were issued and distributed through
various customs houses and Ministry of External Affairs etc. for use of our Missions abroad.
External Publicity:- The Directorate appropriately carried on its role as Public Relations officer of World Customs
Organisation and brought out a brochure "Indian Customs At a Glance". A brochure was also brought out on Seminar
on GATT. Valuation Agreementheld at New Delhi between 11-15, April 1994. The Directorate also reproduced and
circulated copies of the posters released by the World Customs Organisation on the occasion of the "Year of the
Traveller". It had also participated in the poster competition for the selection of Poster for the year of Traveller 1995
with two entries which were sent to the World Customs Organisation, Brussels. The Department also prepared metal
badges for the Year of Traveller and distributed them amongst the Customs field formations as well as Central Excise
Collectorates having international pessenger traffic before 26.1.95. Baggage Rules 1994, were prepared in three
formats-combined, Baggage Rules for T ourists and Baggage Rules for Transfer of Residence. Each of the formats
has a different cover. They have been sent to the MEA authorities, travel agents and the major hotels.
vi) Two special brochures were published on 24th Feb. 1994 and 26th January 1995 in connection with the celebration of
Golden Jubilee of the Central Excise Department and International Customs Day. On 14th September 1994 "Hindi
Divas", was celebrated and a special issue in Hindi known as "Prakashita" was also published.
2.17.4 Activites of the Directorate General of Inspection:
Customs
2.17.4.1 Special study of misuse of concessions granted to Charitable Trusts for duty free imports of garments etc. was
undertaken. As a result of special study undertaken by DGICCE, a major racket operating from Haryana who had already imported
more than 150 containers of garments through ICD, Delhi was exposed leading to increase awareness in the Customs Department
of the nature of fraud committed by unscrupluous businessmen in the name of charity which has helped in preventing such fraude in
future.
2.17.4.2 Special study was carried out by the Customs section regarding Value Based Advance Licence Scheme (VABAL)
which led to discovery of large scale misuse in all the Customs Houses. It was found that almost all exporters of excisable goods
had made false declarations regarding availment of MODVAT in respect of the goods exported under VABAL. The study also
revealed that almost all the Custom Houses failed to implement the instructions of the Ministry, regarding implementation of VABAL
which led to gross misuse of the scheme.
2.17.4.3 The Directorate also undertook a study of liceces granted to a public sector unit which led to the discovery of a large
scale fraud which caused the Central Exchequer of its legitimate Customs duties to the tune of morethan Rs.127 crores.
2.17.4.4 The Directorate carried out study of the Calcutta Customs House regarding the large scale imports of plastic
materials in which the description was misdeclared with a view to seek assessment at lower rate of Customs duty and also to get
away with the import restrictions under the Import Export Policy. The Directorate was able to expose the fraudulent manner in
which the unscrupulous importer was able to get away with.
2.17.4.5 Besides the above special studies, the Directorate has carried out its routine functions also such as conducting
inspections, preparation of monthly technical reports on Customs side, keeping track of imports under ATA Carnet Scheme.
Central Excise
2.17.4.6 Procedure for cleasrance of excisable goods for export under bond, without payment of Central Excise duty.
2.17.4.7 Central Excise Procedure for clearances of excisable goods on payment of Central Excise duty under claim for
rebate.
2.17.4.8 Central Excise procedure for clearances of goods for export under claim for rebate of Central Excise duty paid on
excisable materials unsed in the manufacture and packing of export goods.
2.17.4.9 Compilation of Monthly Technical Reports on pendencies of various items of work on Central Excise side.
2.17.4.10 Compilation of Monthly Report regarding arrears of Revenue in Central Excise Collectorates.
2.17.4.11 Inspection done by DGICCE - 06
Inspection done by Regional Units of DGICCE - 37
- 43
2.18 Use of Hindi in different organisations of C.B.E &C.:
The achievement attained by the attached and subordinate offices of CBE&C with regard to use of Hindi in official work are
summarised below:—
i) 91% of all the attached and subordinate offices of CBE&C have compiled with the provisions of Rule 5 of O.L. Rules i.e.
all the letters received in Hindi were replied to in Hindi only.
ii) 17 Collectorates/Directorates located in all the three Regions have attained 100% compliance of the provisions
contained in Section 3(3) of the O.L. Act, 1963 by issuing 100% specified documents in both Hindi and English.
iii) 10 offices in Region 'A' possess 21% to 52% Devanagri Typewriters. The percentage of Devnagari typewriters randed
from 7% to 17% in the remaining offices in Region 'A', 9% to 35% in all the offices in Region 'B' and in Region 'C' 6
were equipped with 8% to 11% and the rest of offices 1% to 7% Devanagari typewriters. Efforts were made to procure
Devanagari typewriters as per prescribed percentage.
iv) At present there are 91 Billingual Electronic Typewriters, 5 Billingual Teleprinters, 12 telex machines, 89 computers, 2
addressographs steps to procure more are being taken.
v) OLICs set up in 277 offices reviews all progress made with regard to use of Hindi in the quarterly meeting held in their
respective formations.
vi) All the Rules made under Central Acts have been translated into Hindi.
vii) Practical training in noting and drafting in Hindi was imparted to 1914 officials through organising workshops in all the
attached and subordinate offices. A large number of officials were detailed for receiving training in Hindi, Hindi
shorthand and typewriting.
viii) 200 copies of the Annual Programme for the year 1994-95 were procured and distributed amongst all the field
formations.
ix) 31 Journals are being brought out on all India basis by different formations of CBE&C.
x) Academy of Training organised 2/3 sessions on OL Policy and 10 courses on functional use of Hindi during the year.
xi) Besides, training was imparted in mixed language i.e. in both Hindi and English on all the training courses conducted by
the staff college, Delhi.
xii) Hindi Diwas or Hindi Week was organised in all the offices of CBE&C including their lower formations. The spirit behind
the commemmoration of the day helped increating a congenial and favourable atmosphere for promoting use of Hindi
in official work.
2.19 Statement showing the sanctioned strength as on 1.7.94 in various grades in CBEC:

Group Sanctioned
strength
Group - A 1958
Customs Department
Group - B 1240
Group - C 8093
Group - D 2615
Central Excise
Group - B 4982
Group - C 34427
Group - D 13954
NC & CCF
Group - B 82
Group - C 1121
Group - D 1393
Others (Directorates & CRCL)
Group - B 190
Group - C 1306
 Group - D 397
Total 71758

2.20 Audit
2.20.1 During the year 1994-95, 298 Draft Audit Paras relating to Union Excise Duties have been received from the office of
the C.& A.G. of India. 212 Draft Audit Paras out of 298 have since been replied to. Remaining DAPs are under examination.
2.20.2 During this period, efforts have been made to settle the old outstanding audit objections also through mutual
discussions with the officers of C.&.A.G. as well as in tripartite meetings with the representatives of Ministry of Law and C.& A.G.
As a result outstanding objections upto the year 1987-88 have been either dropped or settled. Similarly a number of paras
pertaining to the year 1988-89 have also been closed.
2.20.3 In a massive programme of computerisation of audit objections, the objections raised during the year 1992-93 and
1993-94 have already been entered into the Computer.
2.20.4 Efforts are also being made to computerise the objections received during the previous years.
2.20.5 The Department had received 155 audit paragraphs from the comptroller & Auditor General of India for inclusion in the
Draft Report for the year ended 31st March, 1994 (Revenue Receipts - Indirect Taxes - Customs). As on 16.02.1995, replies in
respect of 123 paragraphs out of the said paras have been sent to the C&AG.
2.20.6 During the year 1992-93, out of 125 Audit Paras, advance Remedial/Corrective Action Taken Notes on 47 paras have
been furnished to the C&AG for vetting, 17 paras have been duly vetted by C&AG and send to the Monitering Cell.