No Review of Pro-Revenue orders even if improper or illegal - CBEC Legal Cell
THE CBEC in its letter F.No.275/55/2008-CX.8A dated 28.07.2008 had communicated to its field formations the contents of paragraph 4(x) of the Minutes of the Conference of Chief Commissioners held on 29th & 30th May, 2008 and sought views on the subject matter.
Paragraph 4(x) reads –
“It was suggested that the orders passed by the adjudicating authorities in favour of Revenue but apparently not proper and legal can also be taken up for review by the CCs/Commissioners. Legal Wing may issue a Circular in the matter after examination.”
We had carried the above communication in our DDT-937 dated 26.08.2008 and commented thus –
“If the orders are in favour of the revenue, but not legal and proper, obviously the assesses will take up the issue in appeal. Will the Revenue also help the appellant to win his case?
Now with the CBEC calling for comments on this issue once again, it is a foregone conclusion that the field formations will agitate the issues further and Tribunals will be saddled with even cases where proceedings are dropped at the lower levels.”
The Legal Cell of the CBEC, it is understood, has examined the issue minutely and vide letter F. No. 275/55/2008-CX.8A dated 23.02.2009 and addressed to all the Chief Commissioners of Central Excise, Customs, LTU and Customs Preventive has communicated its views, which reads –
“2. On examination of the issue, it has been observed that the propriety and legality of all the adjudication orders irrespective of the fact whether these are in favour or against the department, are required to be taken up for examination by the Committee of Chief Commissioners/Commissioners under Section 35E(1), 35E(2) of the Central Excise Act, 1944 and section 129D(1), 129D(2) of Customs Act, 1962. However, as regards filing of appeal/cross objection against such orders, it may be noted that as per Section 35(1)/35B(1) of Central Excise Act, 1944/Section 128(1)/129A(1) of Customs Act, 1962, an appeal can only be filed by an aggrieved person. The issue has been deliberated by the Hon'ble Supreme Court in the case of Jamshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai and Northern Plastics Ltd. vs. Hindustan Photo Films Mfg. Co. Ltd. , wherein it has been observed that “a ‘person aggrieved' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully affected his title to something”. Since the Revenue is not an aggrieved party in cases where orders are issued in favour of revenue; the question of filing an appeal does not arise.”
So, what should be done if the adjudicating authority chooses to pass an injudicious order? The referred letter has an answer to this poser also and that is –
“4. Though no appeal can be filed by the department against such orders, being not an aggrieved party, it is expected that the reviewing authorities i.e. the Chief Commissioners/Commissioners must communicate their observations on such injudicious orders to the adjudicating authorities concerned and advise them to follow judicial discipline and pass orders that should withstand judicial scrutiny. This exercise by the reviewing authorities would inculcate a sense of accountability amongst the adjudicating authorities. Recurrence of passing of non-speaking orders has to stop.”
If the issue is as simple as has been projected by the Legal Cell, the provisions in section 35E(1)/(2)/(4) of the CEA, 1944 [or for that matter in 129D(1)/(2)/(4) of the Customs Act, 1962] ought to have been worded accordingly. The aforesaid provisions employ the words “apply to the Appellate Tribunal/Commissioner(A)” and do not use the words “may appeal to” as observed in section 35B(1) of the CEA, 1944.
Further, section 35E(4) of the CEA, 1944 [129D(4) of the Customs Act, 1962] treats such ‘applications' made to the Appellate Tribunal/Commissioner(A) as ‘appeals' by employing the following wording – “such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply to such application .”
It appears that the Legal Cell of CBEC has not fully appreciated the provisions of Section 35E ibid especially sub-section (4) thereof before issuing these instructions. Further, if the CBEC is worried that its officers would spend time in unnecessarily reviewing pro-revenue orders, it would be in the fitness of things that the caption and the contents of Section 35E of the CEA, 1944/129D of the Customs Act, 1962 is made to say so explicitly and propose amendments accordingly!
CBEC Letter F.No.275/55/2008-CX.8A., Dated: February 23, 2009