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| In
earlier part of nineteenth century the British tax collection system as
far as commodity taxes are concerned were governed by
many Regulations and some Enactments. |
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Prior
to 1889, the Salt, Abkari and Customs departments were together. However
by the Madras Salt Act 1889, Salt and Abkari were organised under the
Madras Salt department and it functioned from the Custom House
at Madras. In more ways than one, in the Salt and Abkari department
which stood separated from the Customs but functioned from
the Custom House, Madras, the initial Excise administration
in Madras was initiated.
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| The
Salt department, under the Collector of Salt Revenue, Madras had three divisions - Northern, Central and Southern. Northern division consisted of Cocanada, Nellore, Massulipattinam and Chicacole. Central Division consisted of Chengleput, Bellary, Arcot and Cuddalore. Southern division consisted of sub-divisions like Nagapattinam, Tinnavelley, Trichinapally, and Calicut (Names as found in old records have been mentioned). Besides Salt and Abkari revenue, the Salt department also administered all the Customs out ports in the coastal areas and land customs stations. |
| The
year 1924 crossed an important milestone when Salt revenue was separated
from Salt and Abkari department of Madras Presidency (till this date Excise
duty on liquor remained with the State Government a fact we all know). |
| A
separate Salt department was carved out with Collector of Salt Revenue as
the head. This department also looked after the Customs out ports. The Salt
department located its Offices in various places like Triplicane,
Cathedral Road and finally Sterling Road. There were 13 Customs
Outports in the Madras. |
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Presidency
at Cuddalore, Nagapattinam, Portonovo, Vizagapatnam, Baindoor,
Gangoli, Cannanore, Moolky, Badagara, Ponnani, Allepey, Quilon and Trivandrum.
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| The
Salt Amendment Act transferred the Madras Salt Department to the administrative
control of Government of India in 1926. This was a major milestone
in the centralisation of Modern day Central Excise Department. In 1932,
Rules were framed for the recruitment of Personnel for the Salt department.
New uniforms were also prescribed during this period. |
| In
1930 Silver was made an excisable commodity. In 1931 Provisional Collection
of Taxes Act was legislated. In 1934 more commodities were brought under
the Tax net for instance Iron and Steel, Matches, Sugar and Mechanical Lighters.
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Also
a Tariff Act was legislated in 1934. Elaborate procedures, rules and regulations
were framed for assessment, levy and collection of duty on the new excisable
commodities like matches and sugar.
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| During
this time, the Central Board of Revenue was constituted in 1934. Collector
of Salt Revenue, Madras looked after three fold functions i.e. administration
of Salt Act under the Central Board of Revenue; administration of Excise
on matches, sugar and other commodities under the provincial governments
and administration of Customs Outports and Land Customs stations. |
| Now
that many commodities came under the tax net the need for streamlining the
system was felt acutely by the colonial government. The British constituted
King's Committee to study the feasibility of centralising the administration
of Central Excises under the Central Board of Revenue. |
| Mr.
F.C. KING, was deputed by the British Government to study the feasibility
of the Government of India taking over the administration of Central Excises
from the Provincial Governments. Hitherto the respective Provincial Governments
administered the revenue department and the collection of tax from the various
commodities. This report is of great historical importance as it gave broad
insight into the then existing system and the guidelines to be followed
to centralise the administration of Central Excise under the Government
of India |
| The
Madras Salt Department at that time had the administration of land Customs
(and outports). The report had noted that the staff employed by the Madras
Government for the purposes of the administration of the Central Excises
was of the lowest grade (the report desired the upgradation of these posts
in Madras Presidency when centrally taken over). Mr. Greenfield, then Collector
of Salt Revenue, Madras, with whom Mr.King had consulted, had informed that
Inspectors in every circle of his jurisdiction except Tuticorin circle are
available to supervise the administration of Central Excises if entrusted
to his Department. |
| The
report had compared the system of assessment and control over sugar and
match factories in the various provinces. |
| The
total expenditure of collection of Central Excise was estimated to be about
Rs.4,97,000/- per year. The then existing cost of collection was found to
be highest in Bombay and lowest in Madras. Consequent to the report, the
administration of Central Excise was taken over from the provincial governments
by the Madras Salt Department (now under the control of Government of India)
under the Central Board of Revenue. There were7 Sugar factories and 3 Match
factories during the year 1938-39. |
| Due
to compulsion of War finance, the Government had to mobilize additional
resources and took a bold decision of introducing excise levy on un-manufactured
tobacco. Survey on feasibility of imposing excise duty on tobacco was made
in 1942. The advent of excise on tobacco led to mass recruitment of personnel
to cover every nook and corner of the country. The Madras Central Excise
Collectorate at that time (1944) covered the whole of then Madras Presidency
Viz., from Vijayanagaram in the North to Kanyakumari in the South and from
Madras in the East to South Canara in the West. The Central Excises & Salt
Act, 1944 also came into existence subsequently. |
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Says,
Shri C.Chidambaram, Retired Collector of Central Excise, Chennai (1972-1975)
"Although the country was then ruled by an alien power, it is to their eternal
credit that the administration was totally assessee-friendly. The principle
adopted was that the procedures should be such that they should be tailored
to meet the requirements of Trade and Industry instead of other way about.
Consequently, the senior officers went round the country to get a feedback
and to find solutions for the practical difficulties of the assessees. Officers
of all grades were also encouraged to come up with suggestions towards the
same end. The working conditions were extremely harsh. No Government vehicle
was provided at any level. Survey of tobacco fields required intensive visits
to villages. However, thanks to the inspirational leadership and the motivation
provided no one felt reluctant to undertake the onerous tasks. Sir Harry
Greenfield was the architect of tobacco excise Shri. A.N. Sattanathan, ICS,
Member Central Board of Revenue prepared a supplement of Tobacco Manual,
which was adopted for the rest of the country. Likewise, the procedures
for Coffee and Betel nut excise. |
| Preventive
activities centered around Karaikudi, Mahe and Yanam and the number of excisable
commodities were much less. Tobacco, Matches and Cement were the main revenue
yielding commodities in 1960s and thereafter every year few more items were
added. Initially there was physical control with Central Excise Officers,
mostly Inspectors, posted to factories. In case of less revenue yielding
units like Match factories, Sub-Inspectors were posted". The scale of pay
of an Inspector in 1950 was Rs. 80-Prob.-100-5-120-8-200 (as compared to
the present Rs.5500 - 9000 grade). The daily allowance on tour was 15 Annas
for a place 8 miles beyond head-quarters. |
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Since
then much water has flown under the bridge. The cadres have been rationalised.
In particular, the grade of Assistant Inspector (in the rest of the country
it was known as Deputy Superintendent) was abolished. The Sub-Inspector
grade (that did not exit in the South) was also abolished. Other mile
stones (in common with the rest of the country) were the introduction
of Self Removal Procedure (SRP) scheme, subsequent withdrawal of un-manufactured
tobacco excise, setting up of separate appeal machinery such as Tribunal,
Settlement Commission etc. in order to avoid the impression of prosecutor
himself functioning as judge etc.
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| The Madras Collectorate has been reorganised. Bangalore Collectorate came existence in 1957 and Kerala was placed under newly created Cochin Collectorate with Head Quarters at Cochin in 1960. In 1962 Hyderabad Collectorate was carved out. Madurai Collectorate was created in 1971. |
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