Central Excise – a peep into history
Prior to 1889, the Salt, Abkari and Customs departments were together. However by the Madras Salt Act 1889, Salt and Abkari (liquor) were organised under the Madras Salt department and it functioned from the Custom House at Madras. It was the Salt department which alchemised into the Central Excise Department.
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 are old). Besides Salt and Abkari revenue, the Salt department also administered all the Customs out ports in the coastal areas and land customs stations. This is how the major ports came under the control of the Customs department and the other ports under Central Excise.
In 1924, salt was separated from the salt and Abkari department. Abkari or liquor excise remains with the State Government even today. 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 Presidency, at Cuddalore, Nagapattinam, Portonovo, Vizagapatam, Baindoor, Gangoli, Cannanore, Moolky, Badagara, Ponnani, Allepey, Quilon and Trivandrum.
The Salt Amendment Act transferred the Madras Salt Department to the administrative control of Government of India in 1926. This was the first step to the Central Excise Act.
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 like Iron and Steel, Matches, Sugar and Mechanical Lighters. 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.
In 1934, the Central Board of Revenue was constituted. This Central Board located in Simla used to send handwritten letters to the field formations.
I had the privilege of seeing some of those letters. However the Governor in Madras had a typewriter and letters from the governor were typed.
Collector of Salt Revenue, Madras had three functions
1. administration of Salt Act under the Central Board of Revenue;
2. administration of Excise on matches, sugar and other commodities under the provincial governments and
3. administration of Customs Outports and Land Customs stations.
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.
His report 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 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. Finally the Madras Salt Department under the Government Of India took over the administration of Central Excise. There were 7 Sugar factories and 3 Match factories during the year 1938-39.
To collect more Revenue to meet the war expenditure, excise duty on tobacco was introduced in 1942 with Collectorates in madras, Bombay and Delhi. The Collector had a jurisdiction far wider than UK.
An Inspector of Central Excise in the fifties used to get a starting salary of Rs. 80/- compared to today's Rs. 6500/-, which they(the inspectors) hope will be Rs. 20,000/- after the latest Pay Commission.
Even though the country was ruled by a foreign power, their laws were fair. The Excise laws were assessee friendly. The procedures were such that they were tailored to meet the requirements of Trade and Industry instead of other way about. Senior officers went round the country to get a feedback and to find solutions for the practical difficulties of the assessees. Officers were encouraged to come up with suggestions. The working conditions were extremely harsh. No Government vehicle was provided at any level. Survey of tobacco fields required intensive visits to villages. A.N. Sattanathan, ICS, Member Central Board of Revenue prepared a supplement of Tobacco Manual, which was adopted for the rest of the country.
Since then no better manual was ever prepared. It was to be a series of confusing, contradictory and uncompiled bulk of instructions therafter – with which we have to bear!