CBEC Action Plan to Reduce Litigation
CBEC Member (L&J) Ananya Ray has issued instructions to the officers to avoid unnecessary litigations. She has frankly admitted the lapses of departmental adjudication and litigation mechanism. Her instructions are divided into 2categories, one remedial for actions taken in the past and the other preventive:
Remedial Action
1. Withdrawal of appeals filed by Department below the threshold limit prescribed by the Board in CESTAT & High Courts (See instruction F.No. 390/Misc/163 2010-JC dated 17.12.2015 in this regard).
2. Withdrawal of appeals in CESTAT and High Courts by the Committee of Principal Commissioners/Chief Commissioners following a Supreme Court decision which has been accepted by the department {See instruction F.No. 390/Misc/67-2014-JC dated 18.12.2015 in this regard).
3.
(a) CC's to assign cases of adjudication officer-wise on a monthly basis in personam for disposal and report sent to the respective Zonal Member by 5th of the following month with a copy to JS (Review).
(b) CC's to take up with the Chief Justices of their respective states to setup more benches to deal with taxation matters for quicker disposal.
Madam, there are a lakh of cases pending in the CESTAT. Why don't you start more CESTAT Benches and provide them infrastructure and Members?
And why don't you review all the pending cases in the High Courts and withdraw all the frivolous appeals and concede in all the legitimate appeals of the assessees and then maybe you can request the chief justices to allot a bench for a couple of months to throw out all the mindless litigation cases.
Preventive Action
2. Trade & CESTAT have repeatedly voiced concern about the non-observance of principles of natural justice, non-adherence to judicial discipline, lack of analysis/appreciation of the relevant facts, evidence and legal principles which force more appeals/litigation. A bimonthly conference at the level of Zonal Chief Commissioners/Pr. Commissioner to advice and counsel the respective adjudicating authorities/appellate authorities on how to pass good adjudication orders/ appellate orders, is being made mandatory. Persistent ignoring of such advice would render the officer concerned liable to strict action.
Madam, don't you think the Commissioners and other adjudicating authorities know all this? If you are serious about this strict action, do something to ensure that an adjudicating authority will tremble on passing an illegal order which invites censure from CESTAT.
I have seen a letter written by a Commissioner to his boss that the Commissioner (Appeals) was also helpful in meeting his revenue target. Doesn't this Commissioner know that the job of the Commissioner (A) is not to boost revenue targets?
I was told by a Chief Commissioner that during the revenue drive, he met the Chief Justice to request him to list high value cases which he thought were favourable to revenue. Is it fair for one of the litigating parties to go and meet the chief justice with regard to cases pending in the court? And remember this was part of target reaching action of the department.
3. National Academy (NACEN) to conduct regular training for all adjudicating authorities - former members of the CESTAT (The Appellate Tribunal) to be invitees to lecture the officers. Intensive training also to AR's in the act of advocacy, interpretation of statues, to be given. Similarly officers working in TRU as well as policy wings in the CBEC to be trained in proper drafting of laws, rules, notification, etc. so that there is little room for disputes arising due to ambiguity or misunderstandings.
NACEN should instil this at the very beginning. DDT has reported about adjudication by young Assistant Commissioners, like one Assistant Commissioner charged the assessee with not following principles of natural justice and another Assistant Commissioner refused to follow the decision of the jurisdictional High Court, because it was in the case of a different assessee! As for training the TRU guys, Board has to do it. If you can really start there, half the litigation can be avoided.
4. Adjudicating authorities to be suitably empowered/assured of the backing of the Board, so that they do not succumb to pressure from enforcement agencies like DRI, DGCEI etc. to confirm demands and levy penalties on all the accused. Similarly on non-adherence by the adjudicating authority to these directions, the review committees not to file appeal when it is not warranted.
So, it is an admitted fact that DRI and DGCEI put pressure on adjudicators and they succumb to it. Now that DRI is given the power to adjudicate, there is no pressure to succumb to. Why don't you ask DRI and DGCEI also to be a little fair in adjudication?
5. Pre show cause notice consultation with the Principal Commissioners and Commissioners is being made mandatory prior to issue of SCN in the case of demands of duty above Rs. 50 Lakhs (except for preventive/offence related SCN's).
Madam, do you think consultation with the Commissioner or Principal Commissioner (in more than 50 lakh cases) will make the Show Cause Notices any better? Madam, as of now such Show Cause Notices are issued and signed by the Principal Commissioners or Commissioners. They have only to consult themselves! Remember the days when Show Cause Notices were to be approved by Chief Commissioners?
6. Re-examination of all exemption notifications and withdrawal of the same wherever possible. Exemption notifications are a major cause of litigations amongst the trade.
Major cause of litigation is officers - not the law - when the Tribunal and High Courts are able to understand an exemption notification, why can't a departmental officer? As,officers are major cause of litigation - Re-examine their performance and remove THEM - not the notifications.
7. Adjudicating authorities should be made accountable for the quality of orders passed by them. With about 70 to 80% of the orders passed by the departmental officers at the level of Commissioners and Commissioner (Appeals) being set-aside by the CESTAT, speaks poorly about the quality of adjudications and the appellate orders. Revenue bias is clearly evident in most of the case. This adds to litigation.
Periodic review of the orders set-aside by the CESTAT should be undertaken by the Zonal CCs of the adjudicating authorities posted under him/her, if the orders are found to be bad in law, a mention of the same made in their APAR's be considered.
Madam, the field has successfully frustrated every effort of the Board to improve the quality of adjudication, review and appeal. A mind set has to be developed that an order in favour of revenue by itself is not welcome and that an order against revenue will not land the adjudicator in trouble. There should be data on every order passed by an officer with the ultimate decision. If more than half his orders are set aside, in a period of ten years, he should not be eligible for a promotion.
Please note all the words marked in red. If they had an English teacher in the Board, she would have told them that an apostrophe is not used for plural as AR's don't mean ARs. And training on 'interpretation of statues' is not really a good idea as they should be trained in statutes and that 'advice' is a noun.The para numbers above are as in the Board's letter.
CBEC Member's instruction in F.No. 1080/09/DLA/MISC/15/757., Dated: December 21, 2015