Cross Objection - A Parallel Appeal
WHAT happens if you have not appealed against the order of a Commissioner and the other party has appealed to the Tribunal? All doors are not closed and you still have a chance to appeal. Just have a look at Section 35B (4) of the Central Excise Act 1944.
Section 35 B(4): On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in the prescribed manner against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3).
There is an identical provision in Section 129 A(4) of the Customs Act.
So even if you have not appealed, if the other party had appealed, you are given another opportunity to appeal by way of cross objection and the cross objection is treated as if it is an appeal. This is a scarcely understood and rarely used provision of the law, at least by the department. Board had noticed this lapse thirteen years ago. In Circular No. 453/19/99-CX., dated 9-4-1999, Board observed, "It has been brought to the notice of the Board that the Commissioners of Customs and Central Excise in the field are generally neither filling Cross Objections under Section 35B(4) of the Central Excise Act or Section 129A(4) of the Customs Act against the appeals filed by the assessees/importers in CEGAT…". The Board, therefore directed that, "Commissioners shall, henceforth, ensure quick critical examination undertaken on appeals filed by parties in CEGAT relating to their charge, in all cases involving important law points and revenue of more than Rs. 20 lakhs each and file a memorandum of Cross Objections in the Tribunal with copy to the concerned CDR/JCDR/SDR (regional benches), within 45 days of receipt of notice from CEGAT (as per Section 35B(4) or Section 129A(4) of Central Excise & Customs Act) …"
Following Board instructions and filing cross objections are not really favourite pastime of the Commissioners. Board realised this and reiterated the instructions inCircular No. , dated 5-11-2001. The Board sadly commented , "It has been brought to the notice of the Board that the field Commissioners both in Customs as well as in Central Excise, in spite of Board's Circular No. , dated 9-4-1999 issued vide F. No. 390/48/90-JC are neither filing Cross Objections under Section 35B(4) of the Central Excise Act or Section 129A(4) of the Customs Act against appeals filed by the assessees or importers in CEGAT" The Board further lamented that, "It has been brought to the notice of Board that most of the time, neither Cross Objections are being filed nor comments are being furnished. Even in cases where specific comments are sought for, by the Departmental Representative or suomotu comments sent by Commissionerates, the same are being furnished by a junior functionary without much application of mind and that too not expeditiously."
Board had to reiterate these instructions in Circular No. 710/26/2003-CX., dated 23-4-2003 where it said , "Cross objections are not being filed to derive the benefit of Section 35B(4), under which parallel appeal can be filed by the Department in the form of a Memorandum of Cross Objection, which is to be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) of the said Section. On receipt of appeal memo filed by the party, simply para wise comments are being filed thereby nullifying the opportunity given to the Department to seek favourable orders on issues conceded (wrongly) by the lower authority.
Most often, neither the Department nor the assessee is aware that the Cross Objection is another opportunity to file an appeal.