Key appointments to the Central Board of Excise and Customs (CBEC) remain stalled even as Budget preparations are underway. The reason for no movement on the appointments is that a review of the selection process for the members as sought by finance minister Arun Jaitley is yet to be undertaken.
The CBEC comprises of seven members. In the absence of the appointments, it is functioning with two members, including the chairman.
The CBEC oversees the customs, central excise and service tax collection machinery, which is the largest revenue collector for the government.
The three taxes total around Rs 6.25 lakh crore to Central government revenue.
The board also provides critical inputs to the Budget process. As of today, the revenue shortfall from customs, central excise and service tax is around Rs 70,000 crore.
Jaitley had sought a review of the process after the Committee of Secretaries (CoS) superseded two senior officers from 1979 batch, upsetting the Indian Revenue Service (Customs & Central Excise) cadre.
The finance minister had written to cabinet secretary Ajit Seth in the second week of December seeking a review, calling the selection process as “flawed”, according to a source close to the development.
The source also added that Jaitley has appraised the addition principal secretary to the Prime Minister PK Mishra that any delay in constituting the board will have an adverse impact in the Budget exercise.
The CoS comprises of the cabinet secretary, principal secretary and additional principal secretary to the PM, secretaries for home, revenue and personnel and training.
Since 2014, selection to both CBEC and Central Board of Direct Tax (CBDT) is made by CoS. At a meeting in the last week of November the CoS had recommended four names, of which three are from the 1980 batch, superseding two officers from 1979 batch.
The reason cited for the supersession is that the two officers have got only nine “outstanding” ratings in the annual performance appraisal (APAR) reports in the last 10 years, while the 1980-batch officers had secured “outstanding” in all the 10 years.
The decision of the CoS has upset the IRS (C&CE) Association, which wrote to Jaitley seeking a review. “If APAR grading becomes an overwhelming criterion for assessment… The tendency will breed ‘Yes Men’…,”the association said in its letter.