Quality of Adjudication Orders - Imposition of Cost by CESTAT - CBEC Concerned
IN 2015-TIOL-2647-CESTAT-DEL, the CESTAT observed, the impugned order is a product of complete non-application of mind on the part of the adjudicating authority who seems to have passed it in a state of delirium. Such conduct on the part of the adjudicating authority is too irresponsible to be ignored as it makes a mockery of the quasi-judicial process and can shake the faith of the assessees in the adjudication proceedings thereby inter alia adversely impacting the "ease of doing business" environment in the country. Such conduct clearly falls within the unacceptable range of gross adjudicatory indiscipline which is a matter of concern for CESTAT in its official capacity as an appellate body. Imposing of costs is one of the means available to CESTAT to instil a sense of responsibility and discipline in the lower adjudicating authorities with regard to adjudication matters and this is a fit case for CESTAT to exercise the power to do so .
Obviously, the Board is perturbed with such orders. On examination of such ‘ cost ly' orders, Board found that cost has been imposed on the officers/ department for ignoring;
1. the directions and principles laid down made de novo order while Hon'ble Tribunal directing the original adjudicating authority to re-examine the duty liability only, (See how confused the Board is; what is the meaning of this sentence?)
2. Principles of natural justice,
3. the pleadings and evidences on record before deciding the matter or
4. non-application of mind. (And what does this mean? Ignoring non-application of mind?)
Board has further noticed that the Committee of Commissioners or the Committee of Chief Commissioners is not reviewing the orders in favour of Revenue. So, Board wants the Chief Commissioners and Commissioners to examine orders in favour of revenue also.
Board wants the Principal Chief Commissioners/Chief Commissioners to sensitize the adjudicating authorities about the issue of imposition of costs by the Tribunals due to poor quality of the adjudications.
To address the issue, the Principal Chief Commissioners/ Chief Commissioners (under whose jurisdiction orders imposing costs have been passed by the Tribunal) are to send a report after examining such cases of the last two years regarding the feasibility for challenging before the High Court/Supreme Court by way of Writ Petition or Special Leave Petition.
In a recent case [], the Tribunal had observed,
It is this type of irresponsible adjudication which is burdening this Tribunal with mounting pendency, besides increasing the cost of compliance with the tax laws for the assessees. Safeguarding the interests of the Revenue does not mean that a duty demand must be confirmed ignoring the facts on record, pleas made by the assessee and the judgments of the Tribunal and the courts. Such irresponsible exercise of adjudication not only represents a cost for the assessee, who has to waste his time and money in pursuing the appeals, but also a cost for the Tribunal being run with tax payer's money, which has to waste its time in deciding appeals against orders which should never have been passed. What we find disturbing is that the tendency to pass such irresponsible adjudication orders is increasing and if unchecked, it would result in collapse of the dispute resolution mechanism and no amount of increase in the number of benches can bring down the increasing pendency of appeals.
And the Tribunal imposed a cost of 10,000 rupees on the Commissioner.
The Revenue took up the matter in appeal before the High Court. The High Court did not find any merit in the Revenue appeal. ().
Please also see , DDT 2315 , DDT 2608 .
Interestingly, the instruction is captioned - "Imposition of cost by CESTAT on grounds of quality of adjudication order". Shouldn't it be "poor quality"?
CBEC Instruction in F. No.390/CESTAT/69/2014-JC., Dated: December 22 2015