The Central Board of Excise & Customs (Anti-Smuggling Unit) by circular no. 20/2015 dated 31-07-2015 has revised guidelines for grant of reward to informers and Government Servants

As per the circular, completely revised fresh guidelines in tune with the various recommendations and changing scenario of smuggling, evasion of duties and service tax are laid down in supersession of earlier guidelines for grant of reward to informers and Government Servants. These guidelines shall be applicable in respect of any reward proposal, which is taken up for consideration on or after the date of issuance of these guidelines and the revised ceilings shall be applicable, even if the proposal pertaining to a case, detected before this date, and final reward yet not granted.

The key Points of the New Guidelines are as under:

Guidelines for Grant of Reward to Informers and Government Servants, 2015

Applicability of the Guidelines -The Guidelines are in two parts:

Part-I is applicable to the informers/Govt. Servants in respect of cases of seizures made and/or infringements /evasion of duty I service tax etc. detected, under the provisions of the following Acts:
(a) The Customs Act, 1962
(b) The Central Excise Act, 1944
(c) Narcotic Drugs & Psychotropic Substances (NDPS) Act, 1985
(d) Finance Act, 1994 in respect of Service Tax

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 under various Export Promotion Schemes announced by the Government from time to time, unearthed on the basis of specific prior information provided by the informer or prior intelligence developed by the Government Servants.

Part-II is applicable to grant of reward to:
(a) informers (who give information relating to assets, immovable properties etc. of persons from whom arrears of duty, tax, fine, penalty etc, are recoverable and the information results in the recovery of arrears) and
(b) Government Servants who put in commendable efforts to effect recovery as per conditions specified therein.

Part-I

(A) Criteria for grant of reward:
In case of Collection of informationIintelligence- Specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, clues of persons involved etc.
In cases of successful investigation- Special efforts made by Departmental officer
In cases of post investigation work- Defending the case in CESTAT, High Court/Supreme Court/Settlement Commission, resulting in confirmation of Duty/service tax evadedI infringement of Law established/settlement of the case.
In cases of Audit/Special Audit in Central Excise and Post Clearance Audit in Customs- Outstanding contribution in detecting major cases of evasion

(B) Assignment/Payment of reward in the event of death of Informer/Govt. Servant
Assignment (transfer) of the reward by the informer is not recognized. In the event of death of the informer/Government Servant , the authority competent to grant rewards may grant reward to their legal heirs or nominees.

(C) Prohibit ion of reward to Government Servants
No reward is granted to a Government Servant informer who furnishes information  or evidence obtained in the course of normal duties as a Government Servant.

(D) Eligibility of Govt. Servants for rewards:
(i) Up to the level of Group 'A' officers of the rank of Dy.  Commissioner of Customs & Central Excise and Service Tax
(ii) Rank of Joint Commissioner/Additional Commissioner of Customs, Central Excise and Service Tax subject to a ceiling of Rs. 50000/-
(iii) Gov. Servants in other agencies such as Police, BSF and Coast Guard etc. who hold rank equivalent to the Additional Commissioner of Customs & Central Excise or lower rank.
(iv) Up to Group 'A' officers of the rank of Additional Commissioner of Customs & Central Excise and Service Tax, involved in post-investigation work including representing Department before the Settlement Commission or those posted in adjudication, COFEPOSA, legal or prosecution cells.
(v) Up to the level of Group 'A' officers of the rank  of  Additional Commissioner of Customs, Central Excise and Service Tax, engaged in audit/special audit/ Post Clearance Audit subject to maximum of Rs.50,000/- for officers upto Deputy Commissioner and not exceeding Rs.25,000/- for officers of the rank of Joint/ Addl. Commissioner.
(vi) The Authorised Representative s (ARs) upto the level of Group 'A' officers of the rank of Addl. Commissioners of Customs, Central Excise and Service Tax and other officers/ staff in the office of Chief Departmental Representatives (CDRs) CESTATsubject to ceiling of Rs. 50,000/- in each case.

(D) Quantum and Ceiling of Rewards
(i) Informers and Government Servants will be eligible for reward upto 20% of the net sale­ proceeds of the contraband goods seized (except items listed in Annexureure-A1 to A3) and/or amount of duty/ Service Tax evaded plus amount of fine and penalty levied/imposed and recovered.
(ii) Cases of Drawback frauds or abuse of duty exemption schemes under Export Promotion  Schemes upto 20% of recovery plus amount of fine/penalty levied/imposed and recovered.  
(iii) In  respect  of  opium  and  other  narcotic  drugs etc. the overall ceiling is as per Annexure A-1  A-2.  In  respect  of Gold  and Silver ceiling  is as per Annexure A-3.
(iv) Reward to Govt. Servants may ordinarily be paid up to 10% of the net sale-proceeds of the contraband goods seized and/or amount of duty/Service Tax evaded and/or amount of fraudulently claimed  Drawback recovered or duty recovered plus amount of fine/penalty levied/imposed and recovered.  In respect of Gold, Silver, Opium, Narcotic drugs, psychotropic substances and synthetic drugs etc., the reward may be limited to half of the maximum rewards indicated in Annexure A-1 and Annexure A-2 and Annexure A-3. Reward in excess of this limit but not exceeding 20% of the value may be considered only in cases where the Government Servant has exposed himself/herself to a great personal hazard or displayed 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.
(v) Govt. Servants are eligible for total reward not exceeding Rs. 20 Lakh during their entire career. In a single case, the limit of reward barring exceptional cases is Rs. 2 Lakh.
(vi) The ceiling for private persons (engaged in office for help in office work relating to intelligence/investigation and post investigation work) is Rs. 2,500/ in each case

(D) Advance/Interim Rewards
(i) In respect goldIsilver bullion and arms/ammunition, explosives, advance/Interim reward may be made to informers and Government Servants upto 50% of the total admissible reward immediately on seizure.
(ii) 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 immediately after seizure
(iii) In case of perishable  goods/chemicals, cigarettes etc. advance reward may be paid only after disposal/pre-trial disposal of the goods.
(iv) In cases, where the parties/persons involved voluntarily paid the amount of duty evaded during the course of investigation , admitting their liability, 25% of the admissible reward may be made.
(v) In exceptional cases, the Head s of Department may sanction suitable on-spot reward to  be adjusted against the advance/interim reward that may be sanctioned later.
(vi) Reward may also be paid in cases under voluntary disclosure schemes provided the initiation of the investigation preceded the filing of declaration by the assessees.

(D) Payment of Final Reward
Final reward is payable only after conclusion of adjudication/appeal/revision proceedings, and compliance as required under various Acts.

(E) Delegation of Power for Sanction/Payment of Rewards
Monetary Limit wise Rewards Sanctioning Authorities are as per Annexure-B

(F) Review of Final Rewards Sanctioned
In most exceptional cases the Government m ay review the final reward sanctioned on the specific recommendations of the Board

(G) Undertaking by the Informer
At the time of furnishing of information, the informer is required to give an undertaking that he/she is aware that extent of reward depends on the precision of the information furnished , that he/she is aware of the provisions of Section 177, 182 and 211 of the Indian Penal Code,  that false information, he/she would be liable to prosecution, that he/she shall not claim reward as a matter of right, that Government  is under no obligation to grant/sanction the maximum admissible reward up to 20% etc.

(H) Additional information in respect of identity of informer:
Presently, Left Thumb Impression (LTI) of the informer is taken. In order to reduce delay and provide adequate safeguards, informer may, on his own wish provide following additional information on the information slip/ written information viz. Visible identification marks (two), Height, Date of birth /Age.

Part-II
Scheme of Grant of Reward to Informers and Government Servants in Cases of Recovery from Tax Defaulters

(A) Condition for Reward:
The grant of reward shall be considered only in those cases where the Chief Commissioner is satisfied that:
(a) All possible efforts have been made by the Departmental Officers to trace the defaulterIdetails of defaulter's property ; and
(b) Information provided by the informer has been instrumental in the recovery of arrears.

(B) Reward Limits
(a) Maximum of 5% of the amount recovered
(b) In cases where the case was originally booked on the basis of information provided by an informer, reward shall be given out of the total reward available in the informer category.

(C) Reward to recovery Officer:
The recovery officer shall also be eligible for reward in cases showing recovery as a result of extraordinary efforts of officer subject to satisfaction of Reward Committee. The reward in such cases can be given up to a maximum of 5% of the amount subject to upper limit of Rs. 50,000/-

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