Customs/Central excise Appeals - Why do we need Revision Authorities?
YESTERDAY DDT had carried a story about a High Court order regarding whether an appeal lies to the Tribunal or Revision Authority in matters relating to Service Tax rebate. In any reasonable tax administration the adjudication and appellate mechanism should be clear and well demarcated.
The appellate mechanism for Customs and Central Excise cases is as follows:
Order passed by | Appeal lies to | |
|---|---|---|
Officers subordinate to Commissioner | Commissioner (Appeals) | |
Commissioner | CESTAT | |
Commissioner (Appeals) | CESTAT | Revision Authority in certain cases |
CESTAT | High Court | Supreme Court in Classification and Valuation matters |
High Court | Supreme Court | |
On several occasions, against orders of the Commissioner (A), appeals are routinely filed before the CESTAT where they ought to be filed with the Revision Authority and the Tribunal after five or six years decides that the appeal lies with the RA (Revision Authority) and not with CESTAT.
Under the scheme operative till 10.10.1982, the appeal against the orders of the Commissioners (then called Collectors), of Customs & Central Excise lay with the Central Board of Excise & Customs. As far as the appeals against the orders passed by the authorities below the rank of the Collectors (now called Commissioner), were concerned, the same were to be filed before the appellate Collectors of Customs & Central Excise.
Erstwhile Section 131 of the Customs Act, 1962 and Section 36 of the Central Excise & Salt Act, 1944, empowered the Central Government to revise the orders passed by the CBEC and appellate Collectors in exercise of their appellate jurisdiction. At the Government level, while Secretary (Revenue) or Special Secretary disposed of the Revision Application against orders passed by the CBEC, and the Addl. Secretary or Joint Secretary disposed of the applications against the orders passed by the appellate Collectors of Customs & Central Excise and executive collector of Customs and Central Excise.
In his 1980 Budget Speech, the then Finance Minister R. Venkataraman said,
I have a major declaim of policy to announce. For the past couple of decades, there has been a persistent public demand for the setting up of an independent Appellate Tribunal for customs and central excise matters, some what similar to the set-up on the Direct Taxes side. This demand has recently been endorsed by the Estimates Committee of Parliament. Government has, in the past, not been in favour of such a system, as it was felt that it would not be appropriate in the case of indirect taxes, and that the present departmental machinery was in fact adopting an objective approach. I think a time has come when we should gracefully accept the common view, which is based on the dictum that justice should not only be done but should also seem to be done. It is in this spirit that provision has been made in the Finance Bill for setting up an Appellate Tribunal to hear appeals in respect of customs, central excise and gold control matters. This Tribunal will be independent of the executive machinery charged with the responsibility of day-to-day administration of revenue laws. I have no doubt that this measure will meet with the whole-hearted approval of Parliament and of trade and industry.
The Finance (No. 2) Act, 1980 introduced a new system by establishing appellate Tribunal. The appellate jurisdiction of CBEC and Revisionary jurisdiction of the Central Government were abolished w.e.f. 11.10.1982, except a few residual transitional provisions and the Customs, Excise and Gold Appellate Tribunal (now CESTAT) was set up w.e.f. 11.10.1982.
The Finance Act, 1984, revived the Revisionary powers of the Central Government in specified type of cases. On the Customs side, Section 129 DD read with proviso to Section 129(A) of the Act, empowered Central Government to revise the appellate orders passed by the Commissioner of Customs (Appeals).
On Central Excise side, Section 35EE read with first proviso to sub-section (ii) of Section 35B of the Central Excise Act, 1944 gave review and revisionary powers to Central Government to revise the orders passed by the Commissioner of Central Excise (Appeals).
The Revision Application Unit of the Department of Revenue, Ministry of Finance, Government of India is dealing mainly with Revision Applications filed before Central Government in specified Customs and Central Excise matters under section 35 EE of Central Excise Act 1944 and section 129 DD of Customs Act 1962.
The Revision Authority has jurisdiction to decide appeals in the following cases:
Customs : Section 129 DD read with proviso to Section 129 A (1) of Customs Act, 1962 empowered the Central Government to revise or review the appellate orders passed by Commissioner of Customs (Appeals) if such order related to:-
a. Any goods imported or exported as baggage;
b. Any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at any such destination if goods unloaded at such destination are short of the quantity required to be unloaded at the destination;
c. Payment of drawback as provided in Chapter X and the rules made there under.
Central Excise : Section 35 EE read with proviso to Section 35 B (1) of Central Excise Act, 1944 empowered the Central Government to revise or review the appellate orders passed by Commissioner of Central Excise (Appeals) if such order related to :-
a. A case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to another factory, or from one warehouse to another or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse;
b. A rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in the manufactured of goods which are exported to any country or territory outside India;
c. Goods exported outside India (except to Nepal or Bhutan) without payment of duty.
The Law does not specify any appellate authority against orders passed by the Revision Authority. So as far as the Government is considered its orders are final and so the only option is writ in the High Court.
Do we need such a complicated and archaic appellate procedure? The Revision Authority and the Commissioner (A) are of the same rank. In a rank conscious administrative setup, is it fair for an officer to sit in judgement over an order passed by his same rank colleague who may sometimes be even his senior?
We should abolish this office as soon as possible and merge it with the Tribunal. There should be only one appellate authority against orders passed by a Commissioner (A) - and ideally that should be the Tribunal.