Withdrawal of facilities – Board may delegate Member's power to Chief Commissioner: Supdts of Central Excise may get Adjudication Powers
AS per Rule 12CC of the Central Excise Rules,
where the Central Government, having regard to the extent of evasion of duty, nature and type of offences or such other factors as may be relevant, is of the opinion that in order to prevent evasion of, and default in payment of, excise duty, it is necessary in the public interest to provide for certain measures including restrictions on a manufacturer, first stage and second stage dealer or an exporter, may by a notification in the Official Gazette, specify nature of restrictions including suspension of registration in case of a dealer, types of facilities to be withdrawn and procedure for issue of such order by an officer authorized by the Board.
Now the Member, CBEC is the officer competent to issue such orders like withdrawal of monthly payment of duty, freezing of CENVAT Credit etc.
This power vested with the Board Member may be soon delegated to the Chief Commissioner. We only hope the Board will do no such thing. This power was vested in the Board to ensure that the decision to deny the assessee eligible facilities was taken at the highest level and not routinely as is done often. In fact it may be a good idea to delete this draconian Rule 12CC from the statute. This proposes punishment before Show Cause Notice and adjudication which is against all principles of justice. Already the Bombay High Court has admitted a petition challenging the Rule - 2009-TIOL-83-HC-MUM-CX. The High Court not only stayed the order of the CBEC Member but held that the impugned decision prima facie suffers from arbitrariness.
We understand that this was one of the issues discussed in the conference of Chief Commissioners of Central Excise held in Shilling on 30 th and 31 st of October 2009, attended by nearly 30 Chief Commissioners. It seems a large number of Chief Commissioners were in favour of delegating this power to them.
In DDT 1230 05.11.2009, it was commented, And strangely while a decision to appeal to the Tribunal has to be taken by a Committee of Commissioners or Chief Commissioners, the decision to approach the High Court can be taken by a single Commissioner!
DDT understands that this was also an issue discussed by the Chief Commissioners in the conference. Maybe the order to appeal against the order of the Tribunal should be taken at the Board level. Anyway earlier the Board used to review the orders of the Commissioners – now they can do so for the Tribunal orders.
The conference also discussed issues on CENVAT Credit, Rebate Claim on exports by EOUs, Area based Exemptions, registered dealers of Iron and Steel products.
Others issues discussed include Review of Audit performance, implementation of ACES, pendency in key areas like adjudication etc,
The conference also discussed the possibility of conferring adjudication powers on senior Superintendents of Central Excise in certain areas like refund. There was a proposal sometime back to make Superintendents adjudicating authorities for Service Tax cases where a large number of cases are to be adjudicated. The Department has a large number of Superintendents in the scale of Deputy Commissioners, whose services can be used to dispose of a large number of adjudications.
Can there be a conference now without a discussion on GST? This was an Open House where the CBEC Member, Excise addressed not only the Chief Commissioners, but also the local officers of Shillong from Tax Assistant to Commissioner.
Contrary to popular belief that work in Central Excise offices will come down, the Member, Mr. Dutt Mazumder told the staff that there will be actually increase in work as the assessee base will go up 4 to 5 times and may be around 40 lakhs to 60 lakhs and maybe even 80 Lakhs depending on the threshold limit which is yet to be decided. Of course the work will be slightly different from what it is now – The future will be more Audit and Anti Evasion oriented.