HISTORY OF CHENNAI
In earlier part of nineteenth century
the British tax collection system as far as commodity taxes are concerned
were governed by many Regulations and some Enactments.
Prior to 1889, the Salt, Abkari and Customs departments were
together. However by the Madras Salt Act 1889, Salt and Abkari were
organised underthe Madras Salt department and it functioned from the
Custom House at Madras.In more ways than one, in the Salt and Abkari
department which stood separated from the Customs but functioned from the
Custom House, Madras, the initial Excise administration in Madras was
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 as found in old records have been mentioned). Besides
Salt and Abkari revenue, the Salt department also administered all the
Customs out ports in the coastal areas and land customs stations.
The year 1924 crossed an important milestone when Salt revenue was
separated from Salt and Abkari department of Madras Presidency (till this
date Excise duty on liquor remained with the State Government a fact we
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 a major
milestone in the centralisation of Modern day Central Excise Department.
In 1932, Rules were framed for the recruitment of Personnel for the
Salt department. New uniforms were also prescribed during this period.
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 for instance 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
During this time the Central Board of Revenue was constituted in 1934.
Collector of Salt Revenue, Madras looked after three fold functions i.e.
administration of Salt Act under the Central Board of Revenue;
administration of Excise on matches, sugar and other commodities under the
provincial governments and administration of Customs Outports and Land
Now that many commodities came under the tax net the need for
streamlining the system was felt acutely by the colonial government. The
British constituted King's Committee to study the feasibility of
centralising the administration of Central Excises under the Central
Board of Revenue.
Mr. 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. This report is of great
historical importance as it gave broad insight into the then existing
system and the guidelines to be followed to centralise the administration
of Central Excise under the Government of India.
The Madras Salt Department at that time had the administration of land
Customs (and outports). The report had 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 desired the
upgradation of these posts in Madras Presidency when centrally taken
over). Mr. Greenfield, then Collector of Salt Revenue, Madras, with whom
Mr.King had consulted, had informed that Inspectors in every circle of
his jurisdiction except Tuticorin circle are available to supervise the
administration of Central Excises if entrusted to his Department.
The report had compared
the system of assessment and control over sugar and match factories in the
· 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.
Consequent to the report, the administration of Central Excise was taken
over from the provincial governments by the Madras Salt Department (now
under the control of Government of India) under the Central Board of
Revenue. There were 7 Sugar factories and 3 Match factories during the
Due to compulsion of War finance, the Government had to mobilize
additional resources and took a bold decision of introducing excise levy
on un-manufactured tobacco. Survey on feasibility of imposing excise duty
on tobacco was made in 1942. The advent of excise on tobacco led to
mass recruitment of personnel to cover every nook and corner of the
country. The Madras Central Excise Collectorate at that time (1944)
covered the whole of then Madras Presidency Viz., from Vijayanagaram in
the North to Kanyakumari in the South and from Madras in the East to
South Canara in the West. The Central Excises & Salt Act, 1944 also came
into existence subsequently.
Says, Shri C.Chidambaram, Retired Collector of Central Excise,
Chennai (1972-1975) "Although the country was then ruled by an alien
power, it is to their eternal credit that the administration was totally
assessee-friendly. The principle adopted was that the procedures should
be such that they should be tailored to meet the requirements of Trade
and Industry instead of other way about. Consequently, the senior
officers went round the country to get a feedback and to find solutions
for the practical difficulties of the assessees. Officers of all
grades were also encouraged to come up with suggestions towards the same
end. The working conditions were extremely harsh. No Government vehicle
was provided at any level. Survey of tobacco fields required intensive
visits to villages. However, thanks to the inspirational leadership and
the motivation provided no one felt reluctant to undertake the onerous
tasks. Sir Harry Greenfield was the architect of tobacco excise Shri. A.N.
Sattanathan, ICS, Member Central Board of Revenue prepared a supplement of
Tobacco Manual, which was adopted for the rest of the country. Likewise,
the procedures for
Coffee and Betel nut excise.
Preventive activities centered around Karaikal, Mahe and Yanam and
the number of excisable commodities were much less. Tobacco, Matches
and Cement were the main revenue yielding commodities in 1960s and
thereafter every year few more items were added. Initially there was
physical control with Central Excise Officers, mostly Inspectors posted to
factories. In case of less revenue yielding units like Match factories,
Sub-Inspectors were posted".
The scale of pay of an Inspector in 1950 was Rs. 80-Prob.-100-5-120-8-200
(as compared to the present Rs.5500 – 9000 grade). The daily allowance on
tour was 15 Annas for a place 8 miles beyond head-quarters.
Since then much water has flown under the bridge. The cadres have been rationalised.
In particular, the grade of Assistant Inspector (in the rest of the
country it was known as Deputy Superintendent) was abolished.
The Sub-Inspector grade (that did not exit in the South) was also
abolished. Other milestones (in common with the rest of the country) were
the introduction of Self Removal Procedure (SRP) scheme, subsequent
withdrawal of unmanufactured tobacco excise, setting up of separate appeal
machinery such as Tribunal, Settlement Commission etc. in order to avoid
the impression of prosecutor himself functioning as judge etc.
The Madras Collectorate has been reorganised. Bangalore Collectorate came
existence in 1957 and Kerala was placed under newly created Cochin
Collectorate with Head Quarters at Cochin in 1960. In 1962 Hyderabad
Collectorate was carved out. Madurai Collectorate was created in 1971.
Separate and compact Collectorates at Trichy and Coimbatore within Tamil
Nadu were set up in 1983. Trichy Collectorate also looked after customs
work outside the jurisdiction of Madras Custom House.
Chennai Commissionerates was re-organised on 01.08.1997 into Chennai-I,
Chennai-II and Chennai-III Commissionerate respectively.
Madras Central Excise Collectorate was functioning from No.15, Harington
Road, Chetpet, Madras, in the forties. It moved into its own premises at
121, Nungambakkam High Road (now Mahatma Gandhi Salai), Chennai during
The States of Hyderabad, Mysore, had their own excise system. Recruitment
during the earlier period in the forties was purely on educational
qualification and on the basis of performance in the interview. In the
sixties, recruitment was made through nominations received from
employment exchanges. The recruitment system was overhauled with
Government setting up Staff Selection Commission in the eighties, which
selected candidates based on written test and interview.