Material Prepared by Smt. M.

Janaki Devi,AAO(Customs), PDA(Central), Hyderabad

REVENUE AUDIT MANUAL

The wing at CAG office is known by Revenue Audit Wing. The wing
is headed by Principal Director who reports to Deputy C&AG who in turn
reports to C&AG of India. The PD is assisted by a team of
Director(Customs), Sr. Administrative Officers (Customs) and sectional staff
in discharging duties.

Functions of Revenue Audit Wing (Customs):-

1. The Principal Director functions as Principal Audit Officer and are
vested with the responsibility of preparing annual audit report, which
after approval of C&AG is submitted to the President of India for
being laid before both Houses of Parliament.
2. Draft paras on Customs and also draft Review Report on Performance
received from the field offices are vetted at HQrs and issued as draft
audit paragraphs (DAP) and draft review report to the Ministry of
Finance or Commerce as the case may be for their comments. Based
on the Ministrys reply, Audit Reports (Compliance and Performance)
are prepared. The Audit Reports are duly signed by P D (Customs)
and countersigned by CAG of India and submitted to the President of
India through the Ministry of Finance, who causes them to be laid on
table of both the houses of Parliament every year preferably during
budget session.
3. CRA wing at HQrs coordinates customs audit work in the field offices
which includes issue of directions/instructions for audit planning,
execution and reporting, etc. Topics for review type of DPs on

Material Prepared by Smt. M.Janaki Devi,AAO(Customs), PDA(Central), Hyderabad
systems defects and recurring failures are identified and guidelines for
undertaking the systems review on the subject.
4. PD (Customs) may consider attending some of the meetings of the
conferences of Commissioners of Customs convened by CBEC.
5. Tripartite meetings: In case of difference of opinion on interpretation
of legal points arising between the CAGs office and Ministry, on
points of law involved in audit objections and resolved in Tripartite
meetings held in the Ministry of Law.
6. Technical inspections of CRA wing of field offices are conducted on
rotational basis by HQrs inspection team.
7. Association with Public Accounts Committee: After the report is laid
on the table of the Parliament, the PAC takes up the report for
discussion, identify the topics/issues for oral discussion.
8. Organising seminars and workshops: Periodical seminars/workshops
on customs matters are organized by HQrs office with the help of field
offices.
Field formations:-
The audit of receipt is conducted in the field under the overall
supervision of AG/PDA (Central) having state wise jurisdictional charge of
the area under Customs Commissionerates. CRA wing functions under the
charge of a Group Officer supported by field inspection parties. The field
parties visit the commissionerate offices, preventive units, etc and conduct
audit of customs receipts. The audit of expenditure relating to these offices
is also simultaneously conducted by the CRA parties. In major
commissionerates, the CRA also carries out concurrent test audit of bills of
entry and shipping bills at the customs houses.

Material Prepared by Smt. M.Janaki Devi,AAO(Customs), PDA(Central), Hyderabad
Besides, the Customs commissionerates, the CRA wing also insects
records at various offices of the Director General of Foreign Trade (DGFT),
the Development Commissioner under the Ministry of Commerce, the
Director, STP, etc.
In addition, every year, CRA wing also undertakes performance audit
reviews on topics/schemes as per HQrs directions.

Concurrent Audit:- Objection are issued in the form of Test Audit Memos
under the signature of SAO/AO, incharge of concurrent audit to the
jurisdictional incharge through the internal audit department and
acknowledgement obtained. The Audit Memos should bear running serial
numbers and kept in record. Receipt of documents for audit from customs
house and their return after audit are watched through a register called Key
Register. The Audit Memos issued are watched through a Register of Test
Audit Memos, which is submitted to the Branch Officer and Group Officer
every month for review.
Local Audit:-
All objections in the form of Audit Queries/Half Margins under the signature
of SAO/AO, incharge of the party should be issued to the jurisdictional in
charge of Customs. The objections which could not be settled on the spot
during the course of audit should be drafted in the Local Audit Report
(LAR). The LAR should contain three parts:-
Part I:_ Inroductory
Part II A:- Should contain all Major Irregularities noticed in current audit
which is likely to find a place in the Audit Report of CAG.
Part II B:- Should contain paras which are not required to be pursued
through Part IIA of the LAR

Material Prepared by Smt. M.Janaki Devi,AAO(Customs), PDA(Central), Hyderabad
Part III:- Minor objections ( less than 10000).
All objections should be entered in Objection Book and closed every
month and submitted.
Draft LAR should be prepared by the AAO and reviewed by the
SAO/AO, incharge of the party. Before submitting it to HQrs section, the
cases should be discussed with the concerned Asst. Commissioner in case of
Division or Superintendent. The fact of discussion should be mentioned in
the lar. LAR should be issued within 5 days of completion of audit to HQrs
section. The report should be vetted by AAO, then AO/SAO at local HQrs
and approved by the Group Officer. The complete and neatly typed report
should be issued to the concerned officer with a copy to AC/DC, Customs
within one month from the date of completion of audit. A Register of LAR
should be maintained.
Objection Book:- All objections should be entered in the OB. It should be
closed every month under the signature of SAO and reviewed by Group
Officer.
PDP (MI) register:- All Potential Draft Paras/Major Irregularities are entered
in the register and only those cases which are converted into Statement of
Facts or dropped on approval of PDA should be cleared from the PDP
register. Should be submitted on 10
th
of every month to the GO/PDA for
their review.
SOF register:- All Statement of Facts may be forwarded to the department
for confirmation of facts within 6 weeks. Based on the SOF and
departments comments, draft paragraphs are processed. If the para is not fit
to be developed as DP based on the reply of the department, the case may be
removed from the SOF register. The register is to be putup to PDA by 10
th

of every month.

Material Prepared by Smt. M.Janaki Devi,AAO(Customs), PDA(Central), Hyderabad
Returns to HQrs office:- (Authority:- HQrs circular No. 1/2011-Customs /
No.240/85/RA-INDT-Cus/2011 dated 2.9.2011.
Sl.No. Name of returns Periodicity
1. Half yearly performance report April and October
2. Objections accepted and not converted into
DPs
April (Annual)
3. Statement of objections for which first replies
have not been received within six months of
issue
April and October

4. Assurance Memo October 15