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Circular No 551/47/2000-CX

F.N0.206/10/99-CX.6

Government of India

Ministry of Finance

Department of Revenue Central Board of Excise & Customs

New Delhi, the 27th September, 2000.

Subject: Central Excise-Instructions relating to monitoring of Excise Audit-2000 by Directorate General of Audit and extension of scope of EA-2000 - Regarding.

            I am directed to refer to instructions issued by the Board under Circular No.491/57/99- CX (F.N0.206/10/99-CX.6) dated 28th October, 1999 regarding implementation of Excise Audit-2000 and other subsequent instructions issued thereafter by Circular No.514/10/2000-CX dated 16th February, 2000 and by D.O. of Member, Central Excise of even number dated 19th July, 2000 and to say that initially it was decided that for the first six months, Director General of Anti-Evasion would monitor the working of the new audit system on behalf of the Board & thereafter the Director General of Inspection and Audit (Customs and Central Excise) would take over the monitoring work. It was further instructed that after four months of the actual start of audit under EA-2000, each Commissioner of Central Excise should undertake the evaluation work of EA-2000 and a Performance Evaluation Report including the performance of Audit as will be prepared and sent to Chief Commissioners who were to further evaluate these reports and send a consolidated report to DGAE (Audit). Subsequently to enable regular monitoring of the performance of each Commissionerate on the implementation of EA-2000, when the work was to be taken over by DGI (contemplated from August, 2000 onwards) a proforma was also circulated in the aforementioned D.O. letter of Member (CX), to be incorporated in the Monthly Technical Reports from July, 2000 onwards. 

2.        Considering the importance of Audit set up and need for effective implementation of EA-2000 in all Commissionerates in view of various changes including those in latest Budget, Board has decided to speed up the setting up of the Directorate General of Audit which is under process of being set up with the Director General (Audit) and few other officers having already been posted. This Directorate has been contemplated for quite sometime and detailed proposals about requirements of staff etc. are already incorporated in the cadre restructuring proposals under active consideration. Pending formal sanction of staff for the Directorate, considering the urgency and priority & exclusive attention that is required for proper implementation and monitoring of the EA-2000 & sorting out various relevant issues that are being raised/problems faced in the implementation of the new initiative, Board has by temporary diversion decided to post one of the Chief Commissioners to start working as Director General of Audit. The Directorate of Audit, Customs & Central Excise is to work under and will now constitute part of Directorate General of Audit. A few other officers are also being attached to the new Directorate General of Audit to make it functional and enable DG (Audit) to assist the Board in proper and effective monitoring and implementation of EA-2000 and various connected initiatives.

3.        Accordingly, the Board has decided that in partial modification of all previous instructions issued by the Board or Directorate General of Anti-Evasion or Directorate General of Inspection (Customs & Central Excise), all work relating to the implementation of Excise Audit-2000 project and its regular monitoring as well as further development of this project and other related projects in hand (under CIDA) shall be looked after by the Directorate General of Audit with immediate effect. All Communications and reports, which were hitherto being sent to DGI in this regard, shall be sent to DG (Audit), C.R. Building, I.P. Estate, New Delhi. Any change of address will be separately communicated to the Chief Commissioners and Commissioners by the DG (Audit).

4.        Board has also decided that a consolidated comprehensive review and evaluation of working of EA-2000 for the period April, 2000 - September, 2000 be undertaken by each Commissioner on the lines contemplated for first four months and report sent to Chief Commissioners, who will, after review send their evaluation report and suggestions if any to DG (Audit) by 15th October. The Board will be suitably appraised of the working of EA-2000 and steps/measures if any needed to make it more effective and result oriented by DG (Audit) by 3rd week of October.

5.        Further, in the Chief Commissioners' Conference, held at Mumbai in August, 2000, it was brought to notice of the Board that many Commissionerates have completed or are to complete the audit under EA-2000 of all units paying duty from account current exceeding Rs.5 crores in a financial year which was due to be undertaken as per December, 1999 instructions in the first instance. The Board has decided that such Commissionerate should extend EA-2000 Audit to those units paying over Rs.5 crores which had already been audited by normal Audit system prior to issue of October, 1999 instruction and which were not to be covered by EA-2000 in 1999-2000. Thereafter, the units paying from PLA, less than Rs.5 crores but not less than Rs.1 crore in 1999-2000 could be taken up for EA-2000, if such units have not yet been audited in the current financial year under existing normal audit system.

6.        Board also desires (as also decided in the last month's Conference of Chief Commissioners) that immediate steps be taken by Chief Commissioner/Commissioners in each Zone to train up maximum number of Audit parties, including new officers posted this year on the lines training was organised last year to equip them to take up Ea-2000 audit effectively.

7. The trade and field formations may suitably be informed.

8. Receipt of this Circular may please be acknowledged.

9. Hindi version will follow.

(P.K. Sinha) 

Under Secretary (CX.6)