Committee of Commissioners - The silent killing of a good proposal of Finance Bill,2005..

By Vijay Kumar

There was a drastic change in the review provisions of the orders passed by the adjudicating authorities in the budget proposals for year 2005. The changes inter alia included the review powers of the orders passed by the Commissioner (Appeals) under s.35-A of CESA,1944 and s.129-A of Customs Act,1962. However, drastic deviation was made when the Finance Act,2005 was finally enacted.

The relevant provisions of the Finance Bill,2005 are reproduced below:-

Finance Bill,2005

70. In section 129A of the Customs Act,—

(a) after sub-section (1A), the following sub-section shall be inserted, namely:—

"(1B) The Board may, by notification in the Official Gazette, constitute a Committee consisting of two Chief Commissioners of Customs for the purposes of this Act.";

(b) in sub-section (2),—

(i) for the words "The Commissioner of Customs may, if he is", the words "The Committee of Chief Commissioners of Customs may, if it is" shall be substituted;

(ii) for the words "on his behalf", the words "on its behalf" shall be substituted.

71. In section 129D of the Customs Act, for the word "Board", occurring in sub-sections (1) and (3), the words "Committee of Chief Commissioners of Customs" shall respectively be substituted.

78. In section 35A of the Central Excise Act, in sub-section (5), for the words "Commissioner of Central Excise", the words "Chief Commissioner of Central Excise" shall be substituted.

79. In section 35B of the Central Excise Act,—

(a) after sub-section (1A), the following sub-section shall be inserted, namely:—

"(1B) The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 may, by notification in the Official Gazette, constitute a Committee consisting of two Chief Commissioners of Central Excise for the purposes of this Act."; b) in sub-section (2),—

(i) for the words "The Commissioner of Central Excise may, if he is", the words "The Committee of Chief Commissioners of Central Excise may, if it is" shall be substituted;

(ii) for the words "on his behalf", the words "on its behalf" shall be substituted.

80. In section 35E of the Central Excise Act, for the word "Board", occurring in sub-sections (1) and (3), the words "Committee of Chief Commissioners of Central Excise" shall respectively be Substituted.

It will be interesting to note the changes made in the Finance Act,2005 which is reproduced hereunder.

S.79-Amendment of section 35B.- In section 35B of the Central Excise Act.-

(a) after sub-section (1A), the following sub-section shall be inserted, namely:-

“(1B) (i) The CBEC constituted under the Central Boards of Revenue Act,1963(54 of 1963) may, by notification in the Official Gazette, constitute such Committee as may be necessary for the purposes of this Act.

(ii) Every Committee constituted under clause (i)shall consist of two Chief Commissioners of Central Excise or two Commissioners of central Excise, as the case may be.”

(b) in sub-section (2),-

(i) for the words “the Commissioner of Central Excise may, if he is “, the words “The Chief Committee of Commissioners of Central Excise may, if it is “ shall be substituted;

(ii) for the words “on his behalf ”, the words “on its behalf ” shall be substituted.

Similar changes have been made in the Customs Act,1962 vide section 70 of the Finance Act w.r.t s.129-A(1B) and sub section 2 there under. From the above it may be seen that a new Committee of Commissioners have been entrusted with the review of orders passed by the Appellate Commissioners wef.13-5-2005.

While the Finance Bill proposed the basic change of review of Orders passed both by Commissioners and Appellate Commissioners by a committee of Chief Commissioners , in the finally approved version of Finance Act,2005 an additional Committee of Commissioners was also incorporated to review the orders of the Appellate Commissioners. The rationale/reasons in the creation of the new Committee of Commissioners when there was already the committee of CCs to review the orders –in- original passed by the Commissioners is beyond the comprehension. It is pertinent to note that both the Commissioner and the Appellate Commissioner are of the same rank of Joint Secretary to the GOI. How and why there is a deliberate attempt in the statute itself to belittle certain offices /officers w.r.t the portfolios and postings.

At least the time has come to undertake a system review of the two committees especially considering the large no. of adverse comments from CESTAT , High Court etc. on the appeals being filed by the Department. The no. of Committees created with the permutation and combination among the 21 CCs and 92 Commissioners for the review of the orders passed by the 92 commissioners and 71 Appellate Commissioners would be the largest no. of regular committees set up by the CBEC.

Tailpiece:-An example of haphazard and hasty drafting is evident in the notification issued prescribing the jurisdiction of CCs, Commissioner (Appeals) etc. (Notification no.14/02-CE(NT)) dt.8-3-2002 as last amended by Notification No.1/05-CE(NT). Dt.4-1-2005.

As per the amendment vide Notn.No. 03/04- CE(NT) dt. 4/2/204, certain changes were made in the jurisdiction of Commissioner (Appeals) in Table III. Accordingly, both at sl.no.17 and 65 in the Table, we find the jurisdiction of the Commissioner(Appeals) at Cochin and Trivandrum over the three Commissionerates viz. Cochin, Calicut and Trivandrum . Apparently ,it could be an omission not to delete sl. No.65 since the post of Commissioner Appeals at Trivandrum has been diverted elsewhere. If the intention was to retain only one post for both places, there is no point in retaining both the entries simultaneously. Otherwise, a doubt can arise whether the orders are to be passed as Appellate Commissioner, Trivandrum or as Cochin when there is only Commissioner posted at Cochin. It would also be quite possible that the provisions are made for the Commissioner (Appeals) posted to choose/opt theHqrs. to be at Trivandrum or Cochin.

All the same, the position remain un- attended till date; may be nobody has bothered, as these are not sought after posts.

(sent in by a concerned netizen)