Grant of reward to informers and Government Servants; Review of Policy, Procedure and Guidelines; regarding. - Customs - F.No. R-13011/6/2001-Cus(AS)

F.No. R-13011/6/2001-Cus(AS) Government of India Ministry of Finance Department of Revenue New Delhi, the 20th June, 2001 To 1. All Chief Commissioners of Customs 2. All Chief Commissioners of Central Excise 3. All Chief Commissioners of Customs Central Excise 4. Director General, DRI/DGCEI/Vigilance/Inspection/Audit, New Delhi 5. Director General, NACEN, Faridabad 6. Director General, Service Tax, Mumbai 7. Commissioner(PO), Directorate of Preventive Operations, New Delhi 8. All Commissioners of Customs 9. All Commissioners of Customs (Preventive) 10. All Commissioners of Central Excise 11. All Commissioners of Customs Central Excise 12. All Directorates under CBEC Subject: Grant of reward to informers and Government Servants; Review of Policy, Procedure and Guidelines; regarding. Madam/Sir, The existing policy, procedure and guidelines in respect of grant of reward to informers and Govt. servants, issued under Ministry's letter F.No. 13011/3/85-Ad.V dated 30th March, 1985, as amended from time to time, so far as it relates to the cases of seizures made/ infringement or evasion of duty etc. detected, by the field formations under the administrative control of Central Board of Excise Customs, have been subject to comprehensive review by the Government, in the light of the recommendations made by the Working Group set up to review the Reward Schemes in the Department of Revenue and various suggestions received from the field formations. It has been decided to keep the scheme, without any fundamental changes, though in tune with the various recommendations and changing scenario of smuggling commercial frauds certain modifications have been considered necessary. Accordingly, it has been decided to lay down the following revised consolidated guidelines for grant of reward to informers and Govt. servants. All previous guidelines issued on the subject may be deemed to be modified and revised to the extent indicated in the succeeding paras. The guidelines/procedure contained in the previous orders/instructions issued by the Ministry, in so far as they are not inconsistent with the present/revised guidelines will, however, remain unchanged. 2. SCOPE OF THE REWARD GUIDELINES 2.1 These guidelines will be applicable for grant of rewards to the informers and Govt. servants in respect of cases of seizures made and/or infringements/evasion of duty etc. detected, under the provisions of the following Acts :- (1) The Customs Act, 1962 ; (2) The Central Excise Act, 1944 ; (3) Narcotic Drugs Psychotropic Substances (NDPS) Act, 1985. 2.2 These guidelines will also be applicable for grant of rewards in respect of cases of detection of Drawback frauds or abuses of duty exemption schemes such as DEEC, DEPB, EPCG etc. unearthed on the basis of specific prior information. 3. ELIGIBILITY FOR REWARD TO GOVT. SERVANTS 3.1 Ordinarily, Govt. servants upto the level of Group 'A' officers of the rank of Dy. Commissioner of Customs Central Excise, will be eligible for reward depending on the contribution made by them as a team as well as in their individual capacity with regard to collection of intelligence, surveillance, effecting of seizure/detection of duty evasion and post-seizure investigation. 3.2 Group 'A' officers above the rank of Dy. Commissioner of Customs Central Excise will not be eligible for reward on the basis of the value of seized goods/amount of duty evaded etc. However, in appropriate cases, they may be considered for grant of lump-sum payment and/or recognition, in any other manner, of the services rendered by them, for which proposals may be forwarded by the jurisdictional Chief Commissioners of Customs and Central Excise to the Ministry, through DGRI or DGCEI, as the case may be. 3.3 Govt. servants working in other Departments/Agencies such as Police, BSF and Coast Guard etc. may also be considered for sanction of reward in respect of cases of seizures of contraband goods effected by these agencies under the provisions of Customs Act, 1962 . However, only such officers of these Departments/Agencies who hold rank equivalent to the Dy Commissioner of Customs Central Excise or lower rank, will be considered eligible for sanction of rewards in terms of para 3.1. above. 3.4 In view of the emphasis of economic crime shifting now-a-days from outright smuggling to commercial frauds endash; which require an in-depth investigation and collection of evidence for establishing the various infringements of law endash; there is a need for better appreciation of the work of the officers engaged in the investigation work. The officer(s) engaged in the investigation work should, therefore, be considered at par with the officers involved in the collection of intelligence and search/seizure operations, while sanctioning reward. 3.5 Govt. servants involved in post-investigation work such as those posted in adjudication, COFEPOSA, Legal or Prosecution Cells of the Commissionerate/Custom House may also be considered for grant of lump-sum payment of reward, not exceeding Rs. 5,000/- in each case, if there is evidence to show extra hard work, exceptional zeal, enthusiasm or initiative displayed by the officer(s) to assist in speedy and effective finalisation of adjudication, COFEPOSA, Legal or prosecution proceedings resulting in favourable decisions like confiscation of seized goods, confirmation of duties demanded and/or imposition of penalties, detention/convictions etc. 3.6 Govt. servants engaged in audit/special audit and who have made outstanding contribution in detecting major cases of evasion of central excise duty, may also be considered for grant of lump-sum payment of reward, not exceeding Rs. 5,000/- in each case. 3.7 The Departmental Representatives and other officers/staff working in the office of Chief Departmental Representative (CDR) CEGAT, may also be considered for sanction of reward in deserving cases, for which purpose specific proposals may be sent to the Ministry by the Chief Departmental Representative. Only such cases should be recommended for reward where the opposite party was represented by a senior advocate or eminent lawyer and where the Govt. would have lost the case but for the pain-staking efforts and effective pleading by the Departmental Representative. Clear-cut cases where the point at issue was already settled by a Supreme Court/High Court judgement would not qualify for reward, just because the stakes involved in the case were very high. 4. QUANTUM AND CEILING OF REWARDS 4.1 Informers and Govt. servants will be eligible for reward upto 20% of the net sale-proceeds of the contraband goods seized and/or amount of duty evaded plus amount of fine and penalty levied/imposed and recovered. However, in respect of gold, silver, opium and other narcotic drugs etc. seized under the provisions of the Customs Act, 1962 /Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, the overall ceiling of reward will be as per specific rates indicated in the Annexure. These ceilings would be subject to periodical revision in the light of the price fluctuations of these items, for which periodical intimations may be sent to the DGRI/DGNCB, who, in turn, will send suitable recommendations to the Ministry, for appropriate revision, as and when warranted. 4.2 In respect of cases of detection of Drawback frauds or abuse of duty exemption schemes such as DEEC, DEPB, EPCG etc. unearthed on the basis of specific prior information, the informers and Govt. servants will be eligible for reward upto 20% of recovery of drawback claimed fraudulently and/or recovery of duties evaded under DEEC/DEPB/EPCG schemes, plus amount of fine/penalty levied/imposed and recovered. 4.3 Reward to Govt. servants, however, may ordinarily be paid upto 10% of the net sale-proceeds of the contraband goods seized and/or amount of duty evaded and/or amount of fraudulently claimed Drawback recovered plus amount of fine/penalty levied/imposed and recovered. Similarly, in respect of Gold, Silver, Opium Narcotic drugs etc., the reward may be limited to half of the maximum rewards indicated in the Annexure. Reward in excess of this limit but not exceeding 20% of the value may be considered only in such cases where the Govt. servant has exposed himself/herself to a great personal hazard or displayed an exemplary courage, commendable initiative or resourcefulness of an extraordinary nature or where his/her personal efforts have been mainly responsible for the detection of case of seizure/evasion of duty. 4.4 Govt. servants will be eligible for sanction/payment of total reward not exceeding Rs. 10 Lakhs during their entire career. As regards reward in a single case, an individual officer should not be sanctioned a total reward (advance reward and final reward put together) exceeding Rs. 1 Lakh. However, in exceptional cases, reward in excess of this limit i.e. above Rs. 1 Lakh can be sanctioned to an individual officer, by the Board, on the recommendations of the Reward sanctioning authority for which proposals may be sent to the Ministry, through DGRI or DGCEI, as the case may be. 5. REWARD SHOULD NOT BE GRANTED AS A MATTER OF ROUTINE 5.1 Reward is purely an ex-gratia payment which, subject to guidelines, may be granted on the absolute discretion of the authority competent to grant rewards and cannot be claimed by anyone as a matter of right. In determining the reward which may be granted, the authority competent to grant reward will keep in mind the specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues to persons involved in smuggling, or their associates etc., the risk involved for the Govt. servants in working out the case, the difficulty in securing the information, the extent to which the vigilance of the staff led to the seizure, special initiative, efforts and ingenuity displayed, etc. and whether, besides the seizure of contraband goods, the owners/organizers/ financiers/racketeers as well as the carriers have been apprehended or not. 5.2 Reward should not be sanctioned for routine and normal nature of work. 6. PAYMENT OF ADVANCE / INTERIM REWARD 6.1 Advance/Interim reward may be paid to informers and Govt. servants upto 50% of the total admissible reward immediately on seizure in respect of the following categories of goods, namely :- a) gold / silver bullion; b) arms and ammunition, explosives; and c) opium and other narcotic drugs. 6.2 In other cases of outright smuggling, involving seizures of contraband goods, including foreign currency, advance/interim reward upto 25% of the total admissible reward may be paid to the informers and Govt. servants, immediately after seizure, if the authority competent to sanction reward is satisfied that the goods seized are reasonably expected to be confiscated on adjudication and the adjudication order is likely to be sustained in appeal/revision proceedings. 6.3 In all other cases, including Customs appraising cases, cases of town-seizures and Central Excise duty evasion cases, normally, no advance/interim reward will be granted. However, in cases where the parties/persons involved have voluntarily paid the amount of duty evaded during the course of investigation, admitting their liability, 25% of the voluntary deposits may be considered for payment as advance/interim reward to the informers , after the issue of the show-cause notice (SCN), provided the authority competent to sanction reward is satisfied that there is reasonable chance of confiscability/infringement/evasion, as the case may be, being established in adjudication and sustained in appeal/revisionary proceedings. However, in such cases, the Govt. servants will become eligible for payment of advance/interim reward only after adjudication of Show-Cause Notice resulting in confirmation of duty. 6.4 In exceptional cases, the Heads of Department may, having regard to the value of the seizures effected and magnitude of the evasion of duty/infringement detected and special efforts or ingenuity displayed by the officers concerned, sanction suitable reward on the spot to be adjusted against the advance/interim reward that may be sanctioned subsequently. 7. PAYMENT OF FINAL REWARD 7.1 Final rewards, both to officers as well as informers, should be sanctioned and disbursed only after conclusion of adjudication/appeal/revision proceedings. The final reward will be determined on the basis of the net sale proceeds of goods seized/confiscated (if any) and/or the amount of additional duty/fraudulently claimed Drawback recovered plus penalty/fine recovered, and the total reward admissible, i.e., advance and final reward put together, will not exceed the ceiling of 20% of the net sale proceeds (if any) plus amount of additional duty/ fine/penalty recovered or the amount of drawback fraudulently claimed recovered, as the case may be. This will also be subject to instructions in para 4.3. above as regards rewards to Govt. Servants is concerned. The advance / interim reward sanctioned and disbursed, if any, shall be adjusted from the final reward to be paid to the officers/informers. 8. DELEGATION OF POWERS FOR SANCTION/PAYMENT OF REWARD The monetary limit for sanction of rewards to informers and Govt. servants are given below:- 8.1 TO INFORMERS Monetary Limit Reward Sanctioning Authority Upto Rs. 5 Lakhs Jurisdictional Head of Department, i.e., Commissioner of Customs and Central Excise/Addl. Director General, DRI/Addl. Director General, DGCEI. Above Rs. 5 Lakhs upto Rs. 10 Lakh A Committee comprising: (i) Jurisdictional Commissioner of Customs Central Excise/ADG, DRI/ADG, DGCEI, (ii) One of Jurisdictional Addl. Commissioner/ Director or Senior most Jt. Commissioner/ Director of the Commissionerate or the DRI/DGCEI as the case may be, and (iii) An officer of equivalent rank, outside the Commissionerate/Directorate i.e., Addl. or Jt. Commissioner of Customs Central Excise of another local Commissionerate/Nearest Jt. Director (DRI) or Jt. Director (CEI) or Jt. Director (DPO), nominated by Jurisdictional Commissioner/ADG, DRI/ ADG, CEI. Above Rs. 10 Lakhs upto Rs. 20 Lakh A Committee comprising: (i) Jurisdictional Chief Commissioner/DGRI/ DGCEI, (ii) Jurisdictional Commissioner of Customs Central Excise/ADG, DRI/ ADG, DGCEI, and (iii) Commissioner (Preventive Operations) or any other Commissioner rank officer, nominated by the Chief Commissioner/DGRI/DGCEI. Above Rs. 20 Lakhs A Committee comprising: (i) Jurisdictional Chief Commissioner, (ii) Director General (Revenue Intelligence) and (iii) Director General (CEI). 8.2 TO GOVT SERVANTS Monetary Limit Reward Sanctioning Authority Upto Rs. 5,000/- Jurisdictional Addl. Commissioner/Jt. Commissioner/ Director of Customs Central Excise. Above Rs 5,000/- upto Rs10,000/- Jurisdictional Head of the Department i.e. Commissioner of Customs Central Excise/Addl. Director General (DRI)/Addl. Director General (CEI). Above Rs. 10,000/- upto Rs. 50,000/- A Committee comprising: (i) Jurisdictional Commissioner of Customs Central Excise/ Addl. Director General (DRI)/Addl. Director General (AE), (ii) Jurisdictional Addl. Commissioner of Customs Central Excise/Jt. Director (DRI)/Jt. Director (CEI), (ii) An outside Addl./Jt. Commissioner/Jt. Director (DRI)/Jt. Director(CEI), nominated by Jurisdictional Commissioner in consultation with concerned Commissioner/DG/ADG. Above Rs. 50,000/- but less than Rs. 1 Lakh A Committee comprising: (i) Jurisdictional Chief Commissioner/DGRI/DGCEI; (ii) Jurisdictional Commissioner of Customs Central Excise/ ADG(DRI)/ADG(CEI), and (iii) Commissioner (Preventive Operations) or any other Commissioner of Customs/Central Excise, nominated by the Chief Commissioner/DGRI/DGCEI. 9. REVIEW OF FINAL REWARDS SANCTIONED BY THE COMPETENT AUTHORITY Final reward sanctioned by the duly constituted reward sanctioning authority/committee shall not be reviewed or reopened. However, in most exceptional cases, where DGRI, DGCEI, or the Chief Commissioner, as the case may be, is satisfied that the review of the final reward sanctioned by the competent authority is absolutely necessary to redress any grave injustice meted out to the Informer/Govt. servant and make a recommendation to the Board to this effect, the Govt. may review the final reward sanctioned on the specific recommendations of the Board. 10. MECHANISM TO MONITOR THE REWARD SANCTIONED TO THE GOVT. SERVANTS To ensure that the Govt. servants do not exceed the ceiling of Rs. 10 Lakhs of total reward during their career, all rewards sanctioned to the Govt. servants should be entered in their Service Book, before the same are disbursed. Detailed instructions issued vide Ministry's letter F.No. 394/46/95-Cus(AS) dated 18th September, 1998, may be scrupulously followed in this regard. 11. In view of the liberalisation of rewards, the Heads of Departments will take special care to ensure that the value of goods fixed at the time of seizure is fully realistic and represents the correct value of the goods seized. 12. To ensure that reward is not cornered by a few officers only, it is necessary that larger number of officers are given an opportunity to work on the anti-smuggling and anti-evasion posts. It is, therefore, desired that there should be periodic rotation of officers and no officer should be allowed to be posted to airports, DRI, DGCEI or Headquarters Preventive of a Commissionerate /Custom House for more than the prescribed tenure, as per the existing instructions of the Board on the subject. 13. UNDERTAKING BY THE INFORMER At the time when an informer furnishes any information or documents, an undertaking should be taken from the informer that he/she is aware that the extent of the reward depends on the precision of the information furnished by him/her; that the provisions of Section 82 of the Indian Penal Code have been read by and/or explained to him/her; that he/she is aware that if the information furnished by him/her is found to be false, he/she would be liable to prosecution; that he/she accepts that the Govt. is under no obligation to enter into any correspondence regarding the details of seizures made etc., if any, and that the payment of reward is ex-gratia in the absolute discretion of the authority competent to grant reward. It may also be made specifically clear to the informer that the Govt. is under no obligation to grant/sanction the maximum admissible reward upto 20% of the net sale proceeds of the seized/confiscated goods, (if any) and/or the amount of additional duty / penalty / redemption fine recovered and that the amount of reward to be sanctioned to the informer, will purely depend on the specificity accuracy of the information other dependent factors, as indicated in para 5.1 of these guidelines. 14. Please acknowledge receipt of this letter. Yours faithfully, (Dr. N.K. Soren) Under Secretary to the Govt. of India Telefax No.: 379 3021 ANNEXURE (Paras 4.1 and 4.3) Sl.No. Commodity Range of illicit prices indicated Rate of maximum reward @ 20% of illicit prices Prescribed purity (1) (2) 3 (a) 3 (b) (4) 1 Gold - Rs. 500/- per 10 grams 999.5 mille or more 2 Silver - Rs. 1,000/- per kg. 99% or more 3 Opium Rs. 1,100/- Rs. 2,000/- Rs. 220/- per kg. Standard opium 4 Morphine base and its salts Rs. 40,000/- Rs. 50,000/- Rs. 8,000/- per kg. 90% or more of anhydrous morphine 5 Heroin and its salts Rs. 1,00,000/- Rs. 3,00,000/- Rs. 20,000/- per kg. 90% or more diacetyl morphine 6 Cocaine and its salts Rs. 2,00,000/- Rs. 6,00,000/- Rs. 40,000/- per kg. 90% or more of anhydrous cocaine 7 Hashish Rs. 2,000/- Rs. 3,500/- Rs. 400/- per kg. With THC content of 4% or more 8 Hashish oil Rs. 10,000/- Rs. 17,500/- Rs. 2,000/- per kg. With THC content of 20% or more 9 Ganja Rs. 400/- Rs. 500/- Rs. 80/- per kg Should be commercially acceptable as Ganja 10 Mandrax Tablets - Rs. 500/- per kg. Presence of Methaqualone NB: Rewards shall be reduced pro-rata if the purity is less than the one prescribed above