This has been a fairly old system for giving awards and rewards to revenue officials. It is now almost accepted that these are the incentives. The pay scale is there in any case. I have chosen this subject because recently newspapers have reported that the finance minister, while addressing revenue officers, has said: "I will clap for you when you achieve the target.” She said many good things but I am here writing only for the aspect of clapping for achieving the target. Actually, clapping takes the form of giving awards, such as silver cups which are to be kept in the office. But these cups are also translated as achievements, which are recorded in the confidential reports of officers.
Some 60 years ago when we were junior officers, we used to have targets for each post and we used to have quarterly meetings to analyse the situation as to why the targets could or could not be realised. There was no pressure for realising extra revenue for reaching the target. It was in the time of VP Singh as finance minister when the extra pressure to reach the target started and cups were being given to the person holding the post of a collector. He did not realise at that time that the system would deteriorate in the course of time when the officers would torture taxpayers to realise the target. In short, it got to be known as tax terrorism. I am giving some common examples. In the case of central excise, officers used to hold up the input credit though they were perfectly entitled cases. They used to simply take away the register in which taxpayers would take the credit. In the first month of the new year, they would grant the credit. In customs, one of the methods was to force the importer to pay the duty in the customs house, rather than warehousing them in another jurisdiction where his factory was situated. If goods are warehoused in the factory godown, then he can clear the goods on payment of duty as and when he needs the goods for manufacture.
The fact is that duty cannot be collected on more than what is imported or manufactured. In some cases, duty suddenly increases when a factory increases its production because of some new project. For example, when a car model was introduced by Maruti in 1991, all of a sudden the duty collected in Delhi central excise jumped high though the collector did nothing for this. But he got a cup. This is a fluke. When international prices of crude petroleum increases, the duty collection shoots up and the collector gets a cup. Or a clap, as the present FM says.
Now about rewards to officers. What I say now will be quite unpopular to the existing officers of the department. But truth be told, this is also a highly rotten system. Rewards are given to officers for making seizures of smuggled goods. This system is misused in different ways. Favourite officers are given rewards even when there is no real reason for considering the seizure as a most hazardous one or needing special skill. There is a lot of padding done in the description of how difficult the case was. There are certain posts such as in revenue intelligence, airports and the preventive department where seizures are frequent. Many seizures are just made by chance when our officers simply cover the landing areas by moving in jeep in a body. They show it as seizure by collecting information. At airports, particularly in Mumbai, there are many chance seizures which are shown as having been done on the information. It is not true that the officers getting reward do not get corrupt. The 1993 Bombay blasts were caused because preventive officers allowed RDX in trucks after taking a bribe at the rate which is paid for smuggling gold.
The conclusion is that officers must work for the pay they get. And not for award or reward. Their attitude must change. Both awards (claps) and rewards are undesirable. Sooner they are abolished the better.
The writer is member, Central Board of Excise & Customs (retired)