Knowledge Flowing from North East – Will Board take Cognizance and Wake Up to Finish Half Baked Job of Amending Sec 84 of Finance Act, 1994
WE received a mail from an enlightened officer from a field formation in the North East, the excerpts of which are as follows:
“The following forms are prescribed for filing Appeals before the Commissioner (Appeals):
Rule 3 of Central Excise (Appeal) Rules, 2001 prescribes that an Appeal under Sec. 35 (1) of Central Excise Act to the Commissioner (Appeal) shall be made in Form E.A.-1.
Rule 4 of Central Excise (Appeal) Rules, 2001 prescribes that an application under sub-section (4) of Sec. 35 E of the Central Excise Act, 1994 to the Commissioner (Appeals) shall be made in Form No. EA-2.Rule 3 of Customs (Appeals) Rules 1982 prescribes that an application under Section 128(1) of the Customs Act, 1962 shall be made in Form No. CA-1.
Rule 4 of Customs (Appeals) Rules 1982 prescribes that an application under Section 129D(4) of the Customs Act, 1962 shall be made in Form No. CA-2.
Rule 8(1) of Service Tax Rules, 1994 prescribes that an Appeal under Section 85 of the Finance Act, 1994 shall be filed in Form ST-4.
However, there is no Form prescribed under Section 84 of the Finance Act, 1994 or Service Tax Rules 1994 for filing appeals before the Commissioner (Appeals).
In the absence of any prescribed Forms for filing appeals under Section 84 before the Commissioner (Appeals) by the Department, the local departmental authorities are following different forms in filing appeals viz., Form ST-4 in certain cases and Form EA-2 in certain cases, which appears to be not applicable for appeals filed for service tax cases.
In Budget 2009, Board/Ministry decided to dump the much criticized “revision mechanism” vested in the Commissioner in terms of Section 84 of the Finance Act, 2004 with a “review mechanism” by substituting the existing provisions with new provisions on the lines of Section 35E of the Central Excise Act, 1944.
While the Board gave a decent burial to the draconian revision provisions, though prospectively, it forgot to amend Rule 8(1) of Service Tax Rules, 1994 to prescribe a proper Form for filing an appeal under Section 84.
In the absence of a proper Form for filing an appeal under Section 84 what could be the proper course of action for the field formations. While it is true that Rule 8(1) of Service Tax Rules prescribes Form ST-4 only for appeals to be filed by assessees under Section 85, for the time being, it would be appropriate to take recourse to Section 84 itself for overcoming the obstacle of lack of a proper Form, till such time a proper Form is prescribed for filing an appeal under Section 84.
In fact Section 84(3) of the Finance Act 1994 states that an application filed by the adjudicating authority or any officer authorized in this behalf by the Commissioner, shall be heard by the Commissioner (Appeals), as if such application were an appeal made against the decision or order passed by the adjudicating authority and the provisions of this Chapter regarding appeals shall apply to such application .
The above provision states that provisions of Chapter V of the Act with regard to appeals shall apply to such application (i.e. appeal) under Section 84. Though Section 85 deals with appeals to the Commissioner (Appeals) by assessees, and Rule 8(1) of STR is enacted in pursuance of the said section, to overcome lack of specific prescription of a Form for an appeal under Section 84, the Form prescribed under Rule 8(1) of STR could be utilized for filing appeals under Section 84 by reading Section 84(3) harmoniously with Section 85 and Rule 8(1) of Service Tax Rules, 1994.
However, filing of appeals in Form EA-2 may not be appropriate for service tax cases since the said Form is prescribed for filing appeals for central excise cases only in terms of Section 35E(4) of Central Excise Act, 1944 read with Rule 4 of Central Excise Appeals Rules, 2001. Moreover this could lead to a technical snag and there is a danger of the appeals getting rejected by the CESTAT for technical violations.
However, while giving a decent burial to the erstwhile Section 84 an explanation was introduced, which declared that any order passed by an adjudicating officer subordinate to the Commissioner of Central Excise immediately before the commencement of Clause (C) of Section 113 of the Finance (No. 2) Act, 2009, shall continue to be dealt with by the Commissioner of Central Excise as if this section had not been substituted.
In this connection, another enlightened Netizen asked “where does the Appeal lie if such orders are passed now by the Commissioner in terms of erstwhile Section 84, because for filing appeal before CESTAT, Section 86 does not have any saving clause to take care of such orders since Section 84 has been deleted from Section 86.”
In this regard, recourse may be taken to Sections 6 and 6A of the General Clauses Act, 1897 to take care of such exigencies. This means that the appeals against Orders-in-Revision passed by the Commissioners for orders passed by the subordinate officers prior to this amendment coming into effect could be filed in CESTAT in terms of Section 86 of Finance Act, 1994.
In any case, Board should act swiftly and prescribe a proper Form for filing appeals under Section 84 of the Finance Act, 1994. Further, a clarification may also be issued to deal with any eventuality arising in the intervening period so that appeals filed using improper forms are not rejected by CESTAT on technical grounds.