In specific terms, the Charter of Functions casts the following responsibilities on the Directorate:

Ø To develop and provide policy direction and programme leadership to Central Excise internal audit including Excise Audit 2000 and ensure its effective and efficient implementation, including periodic review and updating of the Audit manual, Excise audit programme and system of ‘Audit Protocol’. Further, to develop, enhance and monitor implementation of:-

• Risk Assessment module with information technology solutions with the help of the Directorate of System
• Computer Assisted Audit Programme

A comparison of the EA 2000 methodology of audit and the earlier system is given at Annexure-3.

Ø To develop and provide policy direction and support to Service Tax Audit Programme, including preparation and periodic updating of Audit Manual for Service Tax and evolve a mechanism to ensure effective and efficient implementation of this programme, with the assistance of the Directorate General of Service Tax.

Ø To plan, organize and ensure implementation of post clearance Customs audits under the Customs Act 1962 in coordination with Directorate of Systems, as and when directed by Board

Ø To interact with NACEN to develop strategies for timely training of auditors including refresher courses for them

Ø To plan, coordinate, supervise and provide functional direction to Central Excise Commissionerates in their effective conduct of audit on selective basis, in case of :-

• Multi-unit companies/assessees
• Companies/assessees having Head Office/Corporate Office outside the jurisdiction of the Commissionerate conducting audit
• Units of different companies/assessees wherein common and repetitive modus operandi of tax avoidance/evasion or non-compliance is noticed
• Wherein audit involves a particular or greater level of expertise such as in case of companies having recently undergone mergers, acquisition or expansions
• Large assessees (i.e., those paying duty of over Rs.50 crores)

Ø      To develop strategies to ensure that the services of the Assistant Directors (Cost) are
used optimally in audit functions

Ø      To evolve a mechanism for assessing and ensuring audit quality assurance by sample reviews of major audit reports, setting up standards and norms for evaluating the quality of audit and to bring about uniformity in the audit system across the country

Ø To study the levels of compliance including recoveries of dues relating to important audit objections/points at all India/Zonal and Commissionerate levels

Ø To conduct analysis and experimental studies to develop strategy for self-compliance by assessees including identification of the areas of and reasons for persistent non-compliance and to suggest remedial measures

Ø   To enhance tax compliance by assessees through a planned program of interface with Trade Associations and Chambers of Commerce and Industries with a view to propagate self-compliance by developing an understanding and faith in the merits of such compliance

Ø To gauge the level of assessee satisfaction in EA-2000 by adopting scientific methods/tools of survey

Ø     To conduct regular studies based on audit experiences and reports of the existing laws, rules, procedures, instructions relating to Central Excise and Customs and to make recommendations to the Board to remove procedural/legal impediments/areas of revenue leakage that discourages quick compliance or to reengineer the process to improve the tax systems

Ø    To co-ordinate with Customs and Central Excise formations / Directorates and other agencies for exchange of information on new methods to ensure tax compliance

Ø To collect and disseminate information having a bearing on tax evasion/avoidance/compliance and having revenue ramification, which are noticed during conduct of audit

Ø To prepare Annual Report of the Directorate General of audit for presentation to the Board and circulation to all field formations under CBEC.