Dichotomy of Appellate Procedure in Indirect Taxes
THE appeals against order of the Commissioner and Commissioner (Appeals) are, as is well known, to be filed with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
There is a little known appellate channel in indirect tax matters - the Government as Revision Authority.
Under Section 35EE of the Central Excise Act, in respect of orders passed by Commissioner(A) relating to transit loss, rebate or export without payment of duty, the appeal lies to the Central Government i.e the Revision Authority.
So in case of a dispute on rebate under Central Excise, against an order of the COMMISSIONER(A), the appeal is with the Revision Authority.
In DDT 2339 24.04.2014, I asked a question,
But why do we need this parallel Revision Authority who is a Commissioner sitting in appeal over orders passed by another Commissioner, sometimes even senior to him? Can't we simply abolish this post and make all orders of the Commissioner(A) appealable to the Tribunal?
The Punjab and Haryana High Court recently solved this problem.
But first a little background:
Who is Government?
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. 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.
The Finance Act, 1980 introduced a new system by establishing an 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 applications filed either by parties or department against the orders of Commissioners of Customs, Central Excise and Service Tax (Appeals) are considered and decided by Joint Secretary (RA).
The Joint Secretary and Commissioner (Appeals) are usually of the same rank. Sometimes, the Commissioner (Appeals) is even senior to the Joint Secretary (RA).
As of now, the appeals against the orders of the Commissioner (Appeals) lie to Revision Authority who is a Commissioner designated as Joint Secretary in the Revenue Department, in the following matters:
Central Excise
(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 manufacture 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.
Customs
(d) any goods imported or exported as baggage;
(e) 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 that destination;
(f) payment of drawback as provided in Chapter X, and the rules made thereunder:
The Tribunal has no jurisdiction to hear these cases.
All this has changed suddenly with a recent order of the P&H High Court. This appeal to the Revision Authority has come to an end.