By
K.Vijay Kumar, M.A.,B.Ed., B.L.,
SUPERINTENDENT OF CENTRAL EXCISE
All Excise Range offices are fully computerized.( Yes! They actually have computers). All Excise assessees have computers with software supplied by Excise at the time of registration. There will be no Excise Duty on clearances up to Rs. one crore. For an assessee with a turn over of over one crore of rupees, investing about a lakh of rupees on a computer and software is not a big problem.
There is a registration fee of Es. 10,000/-. At the time of registration, the prospective assessee fills out an electronic form with elaborate details and is given a software package with his registration number. This is his code number for all Excise purposes and there is no other code or number allotted to him. This number is to be used on all his Excise documents. His computer is linked to the computer in the Range office, which again is linked to all the computers in the Excise offices all over the country.
Immediately after registration, a classification declaration has to be filed on line. Apart from the columns given in the Proforma supplied in the software, the Superintendent or the Assistant Commissioner may ask for additional information. There are only three rates of duty and classification often is not very important. An All India code number is given for every conceivable commodity in the county and over a period of time, almost all items will be classified and codified and this will be a basis for future Finance Ministers to decide on their taxation strategies. The classification is approved by the department within a maximum period of three days. Disputes are referred to a Central Classification Council, which has trade representatives also in it.
The software contains a Modvat declaration. Immediately on filing the declaration, the computer itself tells the assessee whether he is eligible for Modvat or not. Over the years, a data base on what the inputs are for various products is built up and new products are added to the list.
The RG 1 proforma is in the software supplied by the Range. The assessee enters data at the end of every shift. So also for raw materials.
The invoice proforma is also in the software along with PLA, RG 23A and RG 23C. Credits and debits are accounted immediately. The invoice can be printed only ifl there is sufficient balance in PLA, RG 23A etc. The invoice number is automatically generated by the computer and the same number can not be printed again. If there is a mistake it has to be cancelled and a fresh invoice has to be issued. The duty debited will be refunded by the Superintendent on surrender of the cancelled invoice, immediately on line. The invoice should accompany the consignment till it reaches destination. The invoice can be seen in the Range computer also. Range can take a printout of this invoice ,but this can not be used for transport of the goods, as any invoice printed in the Range computer ill have the words "Range Copy – not for transport". Range can check the invoices, as they area issued or later at their convenience.
At the time of clearance it has to be clearly mentioned whether the goods are going to a Modvat user /Dealers/others. If they area going to the first two categories, the registration numbers of the recipients arte to be given, Every morning, the Central Excise officers check all the particulars like production, receipts and clearances on their computers. If the invoices are correct, the Range Officer transmits them to the computers of the recipient Ranges.
On receipt of the goods at the factory of the Modvat availing unit, all that he has to do is make an entry in the RG 23A/C Part I and if he is eligible for credit, based on the eligibility criteria already fed into the computer, credit will be automatically entered in the Part II immediately. If for any reason credit can not be allowed, the computer will indicate the reasons for non eligibility. The Range officer can then be contacted. If the assessee is aggrieved by the Range Superintendent's decision,. He can make an online appeal to the Assistant Commissioner, who will immediately communicate his decision., If he is also not allowing the credit, he will issue a simple on line notice explaining why the credit can not be allowed. The assessee can then give his reply and avail personal hearing. The AC's order is given within two days of the hearing.
Every week, the range staff verifies the credits and if there are any discrepancies, they are pointed out and the disputed credits are reversed immediately. If the assessee disputes it, he can ask for a show cause notice and it will be issued within a week, it will be presumed that the department is not insisting on reversal and the reversed credit can be taken back.
Once credit is taken, the fact is informed to the original Range Officer who defaces that invoice in his computer, so that nobody else can take credit on that invoice again. No need for submitting copies of invoices to Range offices and questions like "duplicate lost in transit " does not arise.
A similar procedure is adopted for dealers. As soon as a dealer issues an invoice, necessary debit entry is made against the original invoice and once the whole quantity is issued, the original invoice is defaced.
No returns are filed and an annual on line assessment is done, in which discrepancies if any are corrected. Officers do not visit the factories except on rare occasions. Audit is done once in three years and the audit party should finish the audit within a day. Internal audit groups audit the accounts from the Range computers once in six months. No routine information is asked from the factories and any officer including preventive parties visiting factories should get all the information from the Range computer before visiting the factory. Preventive party's visits to the factories will not be on suspicion or as fishing expeditions. They visit a factory only after gathering intell8igence and only lf they have strong belief that there is evasion. If a preventive party visits a factory and no case is booked resulting in realization of duty, no preventive party can visit that unit for the next six months.
There is a fast and efficient appellate mechanism. There is a Commissioner (Appeals) for every Commissionerate. No person is appointed as a Commissioner (Appeals) in a place where he has worked in a last five years. These postings are by selection and choice and not routine transfers. Like the Ranges, the Appellate Commissioners also have a network and the computer identifies cases of similar nature and they area bunched together, heard together and decided together save a lot of time and money. As far as possible, orders are issued on the day after the hearing. In the CEGAT also this type of bunching is done on an All India basis and no two benches of the Tribunal will hear identical cases. This eliminates conflicting orders on the same issue.
This is broadly what Central Excise of the next century will be or should be. Once this happens, most of the paper work in the offices can be avoided and meaningless litigation will also be reduced. Statistical information like number of provisional assessments, duty under protest, revenue particulars in various permutations and combinations can all be had at the click of a key board in the Range Office without going to the factories and the information furnished by the Central Excise offices will be accurate worth hardly any chance for manipulation.
But this has to be done carefully, after a thorough drill and fully equipping the offices with the infrastructure. Some years back as part of the Government's computerization programme, they ordered computers, the air conditioners arrived, he computers didn't , the flooring was done, still no sight of the computers. So, the computer tables were used as dining tables by the staff, and even the computer rooms with air conditioners were occupied by senior officers.
By the time the computers arrived, there were no rooms to put them in and not even tables to put them on. This kind of fiasco should not be repeated.
Is this possible? And what is the cost?
When I discussed this idea with a colleague, he said, "what you are suggesting is nothing great, you can't stop technology; all this will be done some day". It has to be done, certainly by the end of the next century. If it has to be done anyway, why not do it in the beginning of the next century instead of its ending?
As to costs; There area about 3,000 range offices in the country. Systems will cost about Rs.30 crores and may be maintenance will cost another Rs. 20 crores. A total cost of Rs. 50 crores or may be even a hundred crores. Even assume it costs 500 crores. Certainly a small price to pay for such convenience especially be a department that collects over 50,000 crores. Our shortfall this year is likely to be over 5,00 crore. Assume it to be 5,500 crores and let this department go totally electronic by the beginning of the next century.
Where duty is paid correctly and the head is held high
Where knowledge is free and online
Where the department and the assessee are not locked up
In endless and meaningless litigation
Where laws come out from the depth of experience and expertise
Where the tireless striving is for nation's good
Where the clear stream of reason has not lost its way
Into the dreary desert of loophole detection and endless litigation
Where accounting is transparent
Where profit is made by industry and not evasion
Into that computerized haven of a new era,
My God let my Central EXCISE awake awake (with apologies to GURUDEV EXCISE LAW TIMES – 15.02. 1999 – A 7
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