APPEAL, REVIEW & REVISION:

Transcription

1 FIRST APPEAL CCE (APPEALS) or CESTAT APPEAL, REVIEW & REVISION: 1 Write a short note on the Appellate Remedies to assessee (right of appeal to persons aggrieved by order passed by adjudicating authority) under the provisions of the Central Excise Act (7 Marks) Central Excise Act, 1944 has a self-contained system of appeal It grants the assessee a right of appeal whenever assessee feels aggrieved by any adjudication order (whether demand order, penalty order or confiscation order) passed by the adjudicating authority The appellate remedies provided to the assessee aggrieved by an order passed by an adjudicating authority have been discussed below: a) ORDER passed by ADJUDICATING AUTHORITY lower in rank than Principal CCE / CCE: Against such order, appeal lie to CCE (Appeals) Such appeal shall be preferred within a period of 60 days from the date of the receipt of the order appealed against Any delay up to 30 days in filing appeal can be condoned if delay is proved to be on account of sufficient reasons The appeal shall be filed in Form: EA-1 The CCE (Appeals) has power to confirm, modify or annul the order appealed against b) ORDER passed by Principal CCE / CCE as an ADJUDICATING AUTHORITY: Against such order, appeal lie to CESTAT Such appeal shall be preferred within a period of 3 months from the date of receipt of the order appealed against Any delay in filing appeal can be condoned if delay is proved to be on account of sufficient reasons The appeal shall be filed in Form: EA-3 In case of appeal by assessee, appeal fee is also payable (the quantum of fee depends upon the aggregate of duty, interest and penalty involved) CESTAT has power to confirm, modify or annul the order appealed against It can also remand back the case to the original adjudicating authority (ie, CCE) for passing fresh order Tutorial Note: 1 The question is very specific about appellate remedies against ORDERS passed by adjudicating authority Sec 2(a) of CEA, 1944 defines adjudicating authority to mean any authority competent to pass any decision or order under this Act but not including CCE (Appeals), CESTAT and CBEC Thus, CCE(Appeal) and CESTAT are not adjudicating authorities Thus, provisions of appeal against order of CCE(Appeal) and/or CESTAT have neither been asked for nor required to be stated in your answer APPEAL TO CCE (APPEALS) 2 The Deputy Commissioner Of Central Excise demanded central excise duty from Radiant Company under the adjudication order dated 9 th October, 2014 The said order was received by the company on 10 th October, 2014 As the dealing clerk of the company left the service suddenly, the company filed an appeal before the CCE (appeals) on 15 th January, 2015 In the delay in filling the appeal condonable by the CCE(Appeals)? [CS FINAL, JUNE Marks] As per Sec 35 of CEA, 1944, an appeal to CCE (Appeals) lie against adjudication order passed by a CEO lower in rank than the principal CCE / CCE Such appeal shall be filed within 60 days from date of receipt of communication of order appealed against If appeal couldn t be presented within 60 days and there is sufficient reason for that, then CCE (Appeal) can admit the appeal within a further period of 30 days Under the given facts and circumstances, adjudication order was received on 10 th Oct, 2014 The period of 60 days from that date expired on 9 th Dec, 2015 Appeal was not presented within that period Assuming that absence of dealing clerk of the company was admissible reason justifying condonation of delay in filing the appeal within 60 days, CCE (Appeals) could admit the appeal if filed within a further period of 30 days, ie, upto 8 th Jan, 2015 But the company filed appeal only on 15 th Jan, 2015, much after the expiry of permitted period Since CCE (Appeals) is not empowered to condone delay beyond a period of 30 days, delay is not condonable in the present case Tutorial Notes: 1 The period of limitation of 60 days starts from DATE OF RECEIPT OF COMMUNICATION OF ORDER APPEALED AGAINST and not from the DATE OF ORDER itself 2 The date on which order appealed against was received by the person (ie, served upon him) shall be excluded in computation of period of limitation prescribed for filing an appeal [Sec 35-0] 3 Maximum period for which delay can be condoned by CCE (Appeals) is 30 days as explicitly provided in the CEA, 1944 Important Points 1 Delay beyond 30 days cannot be condoned by CCE (Appeals) -- RAJ CHEMICALS RAJ HC Issue: Whether HC under writ jurisdiction can condone delay beyond 30 days and direct CCE(Appeals) to admit appeal? Divided Opinion of HC under Writ View 1: NO KHANAPUR TALUKA CO-OP SHIPPING MILLS LTD BOM HC / RAJ CHEMICALS BOMBAY HC [ICAI RTP NOV 2014]

2 STAR ENTERPRISES AP HC / HINDUSTAN APPAREL INDUSTRIES 2015 MAD HC Where the appeal filed against the order-in-original was dismissed as time-barred, the HC in exercise of writ jurisdiction could neither direct the appellate authority to condone the delay nor interfere with the order passed by the adjudicating authority View 2: Yes RUPASI CONTAINERS AP HC [ICAI RTP NOV 2014] Where assessee has sufficient case for delay, to meet the end of delivery of justice, HC can direct CCE (Appeals) to admit appeal LATHIA INDUSTRIAL SUPPLIES CO PVT LTD GUJ HC [WRIT] Though CCE(Appeals) could not condone delay beyond the statutory permissible time limit of 30 days, HC in appropriate case could examine validity of order-in-original (OIO) itself where non-consideration of issues would result in gross injustice SVRUBBER CO PVT LTD GUJ HC [WRIT] In this case, direction was issued by HC (under writ petition) to admit appeal Held that when HC had in clear terms ruled that appeal lies, the authority had no option but to proceed with the hearing of the appeal on merits WHAT TO WRITE IN EXAMS: State both views At then end, mention in ours opinion, View: is more reasonable and appealing (whatever view you feel more convincing and rational state that 3 AC passed adjudication order against A Ltd This order was sent by registered post on 10 th Sep, 2014 but returned unserviced by courier company as nobody was present at assessee s address This order was pasted on assessee s factory as assessee was not available therein and said premises was also locked Order was posted on 6 th Oct, 2014 (it was pasted in presence of 2 witnesses as required u/sec 37(1)(c) of CEA, 1944) From which date, the limitation for filing of appeal shall be considered? [SARADA TRAVELS MAD HC] As per Sec 35 of CEA, 1944, an appeal to CCE (Appeals) lie against adjudication order passed by a CEO lower in rank than the Principal CCE / CCE Such appeal shall be filed within 60 days from date of receipt of communication of order appealed against Sec 37-C of CEA, 1944 deals with manner of service of notices / orders issued under CEA, 1944 In terms of Sec 37-C, affixation of order at place of business is permissible manner of service, if notice cannot be served by tendering or by sending by registered post, speed post or courier It further provides that in event of service by way of affixation of notice, the date of service shall be deemed to be the date on which copy is affixed Thus, date of service, in instant case, shall be 6 th Oct, th Oct, 2014 being the date of service of order which is being appealed against, the limitation period of 60 days as provided u/sec 35 shall be computed from this date 4 State briefly the procedure for adducing ADDITIONAL EVIDENCE in appeal proceedings before the CCE (Appeals) under Sec 35 of the Central Excise Act, 1944 (May Marks) (May Marks) Adducing ADDITIONAL EVIDENCE in Appeal Proceedings before CCE(Appeals): Additional evidences refer to evidence not rendered/submitted before CEO in adjudication proceedings but now sought to be produced before CCE(Appeals) CCE (Appeals) is within his right to admit any additional evidence, which he thinks necessary, will enable him to dispose of the appeal Appellant assessee is entitled to submit additional evidence in the following situations: (a) Where the adjudicating authority has refused to admit evidence which ought to have been admitted; or (b) Where the adjudicating authority has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal; or (c) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by adjudicating authority; or (d) Where the appellant was prevented by sufficient cause from producing, before the adjudicating authority any evidence which is relevant to any ground of appeal If Additional evidence is admitted by CCE (Appeals) then adjudicating authority shall be allowed a reasonable opportunity (a) to examine the evidence or document or to cross-examine any witness produced by the appellant; or (b) to produce any evidence or any witness in rebuttal of said additional evidence 5 State in relation to appeals to CCE(Appeals) under the Central Excise Act and Central Excise (Appeals) Rules, 2001, regarding- (i) Time Limit for filing appeal and extended period by CCE(Appeals) (ii) Suggested time to decide the appeal (iii) Order that can be passed (Nov Marks)

3 (i) Time Limit for filing appeal and extended period by CCE(Appeals): Sec 35 of the CEA, 1944 provides for a period of 60 days for submission of appeal to the CCE(Appeals) The period of 60 days shall be counted from the date of receipt of the order to be appealed against and the date on which order is received shall not be taken into account Further, if assessee is prevented from filing the appeal within the aforesaid period and CCE(Appeal) is satisfied as to existence of sufficient cause for such failure of assessee, CCE (Appeals) can allow admission of appeal condoning such delay However, CCE(Appeals) can condone delay for a maximum period of 30 days Author: Delay beyond 30 days cannot be condoned by CCE (Appeals) -- RAJ CHEMICALS RAJ HC (ii) Suggested time to decide the appeal: Sec 35-A of the CEA, 1944 provides for 6 months as the suggestive time limit for deciding the appeal by CCE (Appeals) (iii) Order that can be passed: Sec 35-A of the CEA, 1944 provides that CCE (Appeals) may pass such orders as it thinks fit, confirming, modifying or annulling the order appealed against It shall be noted the CCE (Appeals) can t remand back the matter to the original adjudicating authority as power of remand has been specifically taken away from CCE (Appeals) In other words, CCE (Appeal) shall decide the appeal itself CCE (Appeals) does not have power of REMAND BACK Any case is said to be remanded when an appellate court sends an appellate case back to the lower court/authority for further action This, usually happens if an error occurs, which demands a new trial or hearing in the interest of public By passing an order of remand, an appellate authority directs the lower court/authority to reopen and retry the case Sec 35- of the CEA, 1944 was amended wef 11 th May, 2001, to withdraw the power of CCE (Appeals) to remand cases for fresh consideration to the original adjudicating authority MIL INDIA LTD SC: Power of remand by CCE (Appeals) has been taken away by amending Sec 35-A wef 11 th May, 2001 APPEAL TO CESTAT 6 The adjudicating authority passed an order against the assessee Rainbow Industries Rainbow Industries carried the matter in appeal before CCE (Appeals) and succeeded Revenue preferred appeal before the Tribunal At the hearing of the appeal before the Tribunal, the representative of Rainbow Industries raised a preliminary objection as to maintainability of the appeal on the ground that the appeal had been filed by CCE himself, instead of by the CEO authorized by the CCE, as required by Sec 35-B(2) of the Central Excise Act, 1944 Do you think the assessee s contention is valid in law? [ICAI RTP, June 2009] Provisions relating to filing of appeal before tribunal are contained in sec 35-B of the Central Excise Act, 1944 So far as appeal from department side is concerned, it provides that CCE may authorize CEO to file appeal before Tribunal on his behalf In the instant case, CCE has himself filed the appeal before Tribunal instead of getting it filed through some other CEO Assessee has objected to this and is contending that CCE cannot file an appeal himself, he can only authorize other CEO to file appeal on his behalf On this ground, assessee is contesting that department s appeal is not maintainable The said issue recently arose for consideration before Gujarat HC in case of SHREE GANESH DYEING & PTNG WORKS Gujarat HC held that when a person is statutorily entitled to delegate powers to another person to file an appeal on behalf of the first named person, it goes without saying that the power which can be delegated is the power which the first named person would be entitled to exercise Hence, until and unless the CCE himself is entitled to file an appeal, there is no question of the CCE authorizing another officer to file appeal on behalf of the CCE Therefore, if an appeal has been preferred by CCE himself, the appeal would be valid and shall be treated to be a valid appeal in eyes of law Thus, assessee s contention is not valid in law 7 What are the cases in which appeal cannot be heard by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under the Central Excise Act 1944? (3 Marks) Sec 35-B of the CEA, 1944 bars jurisdiction of CESTAT, the Appellate Tribunal, regarding entertainment of appeal in relation to certain orders passed by CCE (Appeals) It provides that an appeal shall not lie to the CESTAT against orders passed by the CCE(Appeals) which is of the nature of any of the following: 1 Loss of goods where such loss occurs in transit from factory to warehouse or to another factory or from one warehouse to another warehouse, or during course of processing of the goods in the warehouse, or in storage, whether in a factory or in a warehouse; 2 Rebate of ED on export of goods; 3 Export of goods without payment of duty; 4 Cenvat credit Cenvat credit (on or after the notified date not effective at present)

4 Further, if order appealed against is a case other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue and duty involved or difference in the duty involved is not more than Rs 2,00,000, CESTAT may refuse to entertain such appeal Similarly, if in any order penalty or fine determined is not more than Rs 2,00,000, CESTAT may, in its discretion, refuse to entertain the appeal *Author: Order relating to Cenvat Credit are non-appealable to CESTAT on and from the notified date Till date, no such date has been notified Hence, at present, orders relating to cenvat credit are challengeable to CESTAT 8 Write a brief note on the matters with respect to which an appeal does not lie before CESTAT against any order passed by Commissioner (Appeals) under Sec 35-B of the Central Excise Act, 1944 (Nov 2011 Marks 3) Sec 35-B of the CEA, 1944 bars jurisdiction of CESTAT, the Appellate Tribunal, regarding entertainment of appeal in relation to certain orders passed by CCE (Appeals) It provides that an appeal shall not lie to the CESTAT against orders passed by the CCE(Appeals) which is of the nature of any of the following: 1 Loss of goods where such loss occurs in transit from factory to warehouse or to another factory or from one warehouse to another warehouse, or during course of processing of the goods in the warehouse, or in storage, whether in a factory or in a warehouse; 2 Rebate of ED on export of goods; 3 Export of goods without payment of duty; 4 Cenvat credit (on or after the notified date not effective at present) *Author: Order relating to Cenvat Credit are non-appealable to CESTAT on and from the notified date Till date, no such date has been notified Hence, at present, orders relating to cenvat credit are challengeable to CESTAT 9 Write a short note on the right of a party against whom and appeal has been filed to lodge Cross-objections u/sec 35-B of the Central Excise Act, 1944 (3 Marks) Sec 35-B of the CEA, 1944 provides right of appeal to the aggrieved person (which may be assessee or department) It provides for appeal to CESTAT against orders of CCE (Appeals) or adjudication order passed by principal CCE /CCE Whenever an appeal is preferred against by one party before the CESTAT, Sec 35-B stipulates that CESTAT shall give notice of appeal to the other party The other party, on receipt of such notice, shall be entitled to file Memorandum or Cross-Objection before the CESTAT Such memorandum shall be filed within 45 days (and extended period) of the date of receipt of the notice It shall be filed in Form: EA-5 (No fee is payable for filing this) The memorandum so filed needn t necessarily covered only the points raised in appeal by the other party It can cover up any part of the order appealed against Thus, the party can agitate even those points which it lost at the lower stage The memorandum so filed by the party shall be disposed off by the Appellate Tribunal as if were an appeal Thus, basically, the memorandum is in the nature of cross-appeal RECTIFICATION OF MISTAKES: AMENDMENT BY CESTAT 10 Write a brief note on the power of rectification of mistakes given to the APPELLATE TRIBUNAL u/sec 35-C (2) of the CEA Whether the power of rectification includes the power to review the order also? (Nov Marks) Sec 35-C of the Central Excise Act, 1944 empowers Appellate Tribunal, namely Customs, Excise and Service Tax Appellate Tribunal, to amend the order passed by it rectifying the mistakes therein This power can be exercised subject to fulfillment of following related conditions: i) Rectification may be made either suo-moto or when mistake is brought to its notice by the principal CCE / CCE or by the assessee ii) Only those mistakes can be rectified (corrected) which are apparent from record Examples of mistakes apparent from records are as follows: 1) Glaring Clerical or Numerical Mistake in the order; 2) Order passed by Tribunal upholding classification in a particular heading but wrong serial no typed by mistake; 3) Failure to take into consideration the material evidence, which is present on record [BHARAT BIJLI LTD SC] 4) Non-consideration of a binding judgment of jurisdictional HC or SC even when brought to the notice of the Tribunal N T B INTERNATIONAL (P) LTD BOMBAY HC Where an issue has been argued and/or submission made on the issue and the same is not recorded and/or considered in the order, then it is mistake apparent from the record Issue of limitation of demand raised but not considered while passing the final order - Rectification of such mistake was well within the exercise of its jurisdiction under Section 35C(2) of Central Excise Act, 1944

5 HINDUSTAN ZINC LTD SC Facts TRIBUNAL passed an order Dept filed rectification application of the order The issue raised in rectification was one which was not even argued at the time of hearing of main case Held In respect of such issue, no rectification application can be entertained iii) The rectification can be made within a period of 6 months from the date of the order N T B INTERNATIONAL (P) LTD BOMBAY HC Time limit of 6 months applies only to Tribunal rectifying its errors suo moto However, when an application for rectification is made within 6 months by a party, Tribunal can pass an order on such an application even beyond a period of 6 months [Further, in case of SHREE GANESH FORGING CO CALCUTTA HC it has been held that tribunal does not have any power to condone any delay in filing of rectification application iv) Any rectification which has the effect of enhancing an assessment or reducing the refund or otherwise increasing the liability of the person can be made only after the affected party is given a notice in writing and is provided with an opportunity of being heard Rectification of Mistakes vs Review of Order Tribunal has been vested with limited power of rectification of mistakes and not with power of review of order Reconsideration of already considered matters or debatable points of law/facts don t fall within the ambit of mistake apparent from record 11 Can CESTAT amend its order u/sec 35-C(2) of the Central Excise Act, 1944 only when an application for the same is made by the assessee? Also, discuss with the help of a decided case law whether CESTAT has the power to re-appreciate the evidence u/sec 35- C(2)? No CESTAT can also amend its order u/sec 35C(2) of the Central Excise Act, 1944 when the application for the same is made by the principal CCE / CCE Further, it may also amend its order suo moto As per sec 35-C(2) of the Central Excise Act, 1944, the Appellate Tribunal may, at any time within 6 months from the date of the order passed by it and shall make such amendments if the mistake is brought to its notice by the principal CCE /CCE or the other party to the appeal Therefore, sec 35-C(2), covers two distinct situations The first part of sec 35-C(2) uses the expression 'may' Therefore, it can be inferred that the Tribunal has the discretion to specify the mistake sou motu In the second part, however, the expression used in 'shall', which implies that the Tribunal has to mandatorily exercise the power thereunder, if such brought to its notice either by the assessee or by the principal CCE /CCE RECTIFICATION OF MISTAKE vs REVIEW OF ORDER Sec 35-C empowers CESTAT to amend its order to rectify mistakes which are apparent from record, ie, mistakes which are glaring and apparently visible on face of order It is well settled law that a mistake apparent on record must be obvious and patent mistake and should not be of such nature which can be established through a long drawn process of reasoning Thus, CESTAT does not have the power to re-appreciate the evidence and reconsider its legal view taken earlier in pursuance of a rectification application This view has been taken by Hon ble SC in case of RDS CONCRETE (INDIA) PVT LTD SC 12 Discuss with the help of decided case, whether the re-appreciation of evidence on a debatable point by CESTAT can be considered as rectification of mistake apparent on record u/sec 35-C(2) of the Central Excise Act (Nov marks) No, re-appreciation of evidence by CESTAT on debatable point cannot be considered to be rectification of mistake apparent on record u/sec 35-C(2) of Central Excise Act 1944 Supreme Court in case of RDC CONCRETE (INDIA) PVT LTD SC observed that a mistake apparent on record must be an obvious and patent mistake It need not be established by a long drawn process of reasoning Arguments not accepted earlier during disposal of appeal cannot be accepted while hearing rectification of mistake application The Apex Court held that CESTAT had reconsidered its legal view as it concluded differently by accepting the arguments which it has rejected earlier Hence, the Court opined that in pursuance of a rectification application, CESTAT cannot re-appreciate the evidence and reconsider its legal view taken earlier

6 13 An assessee moved an application on u/sec 35-C (2) of the Central Excise Act, 1944 for rectification of mistakes in an order passed on The Tribunal took up the application on & dismissed the same on the ground that the Tribunal cannot entertain an application for rectification beyond a period of 6 months Explain briefly with reference to any decided case law whether the Tribunal s decision is correct in law (May Marks) Sec 35-C of the Central Excise Act, 1944 empowers Tribunal to rectify mistakes apparent from record in the order passed by it It provides that Tribunal can amend order within 6 months from date of the order passed by it Such rectification can be done on such application being brought to notice of Tribunal or even on suo-moto basis As per the given facts, assessee moved an application for rectification of mistakes in Tribunal s order within 6 months from date of Tribunal Order but Tribunal failed to consider the application immediately Later on, Tribunal rejected the application on ground that it had no power to rectify mistakes after expiry of 6 months The issue for consideration is whether the time limit of 6 months is for making of application or for passing of amendment order The identical issue came up for consideration before SC in case of SREE AYYANGAR SPINNING & WEAVING MILLS SC It was held that Tribunal can rectify mistake even after the expiry of 6 months if the application has been submitted within prescribed time-limit In the light of the above discussion, rejection of rectification application by the Tribunal on the ground of limitation is incorrect in law Tutorial Note: In case of SREE AYYANAR SPINNING & WEAVING MILLS LTD SC,Hon ble SC held that when an application for rectification of order was made by the assessee to the Appellate Tribunal within 6 months from the date of the original order, then, the Tribunal cannot reject the same after the expiry of 6 months on the ground that the time-limit of rectification of 6 months has expired Since it was the Tribunal, which took its own time to dispose of the application, the assessee should not suffer Therefore, in case of application for rectification made within 6 months, the Tribunal has the power to dispose of the same even after expiry of said 6 months N T B INTERNATIONAL (P) LTD BOMBAY HC Time limit of 6 months applies only to Tribunal rectifying its errors suo moto However, when an application for rectification is made within 6 months by a party, Tribunal can pass an order on such an application even beyond a period of 6 months [Further, in case of SHREE GANESH FORGING CO CALCUTTA HC it has been held that tribunal does not have any power to condone any delay in filing of rectification application APPEAL TO HC 14 Whether HC has power to condone delay in filing appeal? If yes, then is there any limitation on condonation? (Nov Marks) Sec 35-G provides for condonation of delay by HC if it is satisfied that there were sufficient reasons which prevented the assessee from filing appeal within specified time limit of 180 days Thus, HC is empowered to condone delay There is no limitation on condonation Delay of any number of days can be condoned 15 State whether under following cases the appeal is maintainable before HC u/sec 35-G? Case / Situation Maintainable or not Case law 1 Issue involving classification of Water- Not SAKTHI INDUSTRIES MAD HC Filter (involving substantial question of law) 2 Issue whether assessee and its buyer are Not HEERA ELECTRONICS MAD HC related in terms of Sec 4(3) of CEA, 1944 [This issue has relation to determination of (involving substantial question of law) value of goods for purposes of assessment] 3 Issue as to admissibility of cenvat credit (involving substantial question of law) Yes [This issue has no relation to determination of any question having a relation with rate of duty or value of goods for purposes of assessment] APPEAL TO SC 16 Write a brief note on the orders passed that are appealable to the Supreme Court u/sec 35-L of Central Excise Act, 1944 (2 marks)

7 In terms of Sec 35-L of the CEA, 1944, following shall be appealable to the Supreme Court: a) A judgment of the High Court, which the High Court (either on its own motion or on oral application made by/on behalf of the party aggrieved) certifies the matter as fit for appeal to the Supreme Court b) Any order of the Appellate Tribunal relating, among other things, to determination of any question having a relation to rate of duty or assessable value 17 Beauty Care Co manufactures ayurvedic-herbal face cream The company claimed classification of the cream and assessment thereof as AYURVEDIC MEDICINAL PREPARATIONS The department classified it as COSMETIC AND TOILET PREPARATION CESTAT upheld the department view It is generally believed that CESTAT is the final authority in resolving disputes between excise authorities and the assessee Are there other statutory remedies to appeal to the High Court or the Supreme Court in such cases? State the scope and details of the provisions [CS FINAL, JUNE Marks] No-doubt that the appellate tribunal, namely, CESTAT, is the final authority for resolving of disputes between excise authority and the assessee Sec 35-C of the CEA, 1944 also expressly provides that orders of CESTAT shall be considered as final order But it shall be noted that orders of CESTAT are final only in relation to question of facts So far as question of law is concerned, decisions of CESTAT can t be said to be final Sec 35-C also provides to that effect when it mentions that orders of CESTAT shall be final subject to Sec 35-G (Appeal to HC) and Sec 35-L (Appeal to SC) In terms of Sec 35-L of Central Excise Act, if order of CESTAT involves a question having a relation to determination of rate of duty or value of goods, then appeal against such order shall directly lie to the SC In other cases, order of CESTAT involving substantial question of law, then appeal shall lie before HC in terms of Sec 35-G Under the given facts of the case, the issue involved in CESTAT s order is that of classification which is definitely a question having a relation to determination of rate of duty on goods And accordingly, Beauty Care & Co can file an appeal directly to the SC in terms of Sec 35-L of the CEA, 1944 (Expected) 18 Mr A challenges excisability of his products, ie, their coverage under Schedule to CETA, 1985 He fought the case upto level of CESTAT, but lost He is considering challenging the order of CESTAT further Advice him where further appeal will lie in his case to HC u/s 35-G or directly to SC u/s 35-L? OR Question as to whether any goods are excisable or not falls within exclusion in terms of Sec 35G(1) for which appeal lies only to Supreme Court because said question is an issue directly linked to determination of rate of duty?] Sec 35-G specifies that any order of CESTAT order are appealable to HC, except the one which involves any issue having a relation with determination to rate of duty or valuation of goods The issue for consideration is whether determination of excisability of a product (ie, its coverage in CETA) can be said to be an issue having a relation with determination of rate of duty of goods and thus, excluded from scope of Sec 35-L and hence, directly appealable to SC The identical issue arose for consideration before KERALA HC in case of KERALA STATE BEVERAGES (MANUFACTURING & MARKETING) CORPORATION LTD** In that case, it was held that The question whether any particular transaction or goods is excisable is an issue directly linked to the question as to what would be the rate of duty of excise If it is not liable for levy of excise duty, then it would be a case of 0% or 'nil' The question of coverage is, thus, a matter intrinsically linked with the determination of questions having a relation to the rate of duty of excise Also, in case of EARNEST & YOUNG (P) LTD- 2014, DELHI HC held that issue pertaining to levy of duty is also a question relating to rate of duty and hence, appealable to SC u/sec 35-L FA, 2014 has also inserted sub-section (2) to Sec 35-L adopting the same position Sec 35-L(2) provides that for purposes of appeal chapter, the determination of any question relating to the RATE of duty shall include the determination of TAXABILITY or EXCISABLITY of goods for the purposes of assessment Keeping in mind the judgments and statutory amendment/clarification made by FA, 2014, Mr A is advised to file appeal to SC u/s 35-L FACT PAPER MILLS PRIVATE LTIMITED SC / NEW INDIA DYEING & FINISHING MILLS SC [ICAI RTP, May 2015] Facts: Department charged evasion of duty by clandestine removal of the goods without accounting of manufacture Assessee challenged the demand Appeal lost before Tribunal Whether further appeal lies directly to SC u/sec 35-L Issue: Tribunal order dealing with issues of clandestine removal of manufactured goods and clandestine manufacture of goods is not directly appealable to SC; appeal there against would lie to HC Author: However, if the issue involved also relates to valuation, classification or excisability of clandestine removal, then appeal would directly lie to SC Only in cases where valuation, classification or excisability is not in dispute and the only issue is evasion by way of clandestine removal, the, appeal would directly lie to HC

8 REVIEW OF ORDER- SEC 35-E 19 Write a briefly note on the powers of review to be exercised by COMMITTEE of Principal Chief CCE or Chief CCE u/s 35-E of the Central Excise Act 1944 (3 Marks) Sec 35-E of the Central Excise Act, 1944 provides the power of review to the Committee of Principal Chief CCE or Chief CCE The committee of Principal Chief CCE or Chief CCE may, on its own motion, review the orders passed by the CCE as an adjudicating authority and if it is of the opinion that such order is not legal or proper, then, it can direct the Commissioner to get the matter decided by Appellate Tribunal The review order shall be made by the Committee of Principal Chief CCE or Chief CCE within 3 months from the date of making of the order so reviewed However, CBEC may, on sufficient cause and for reasons to be recorded, extend the period of 3 months by 30 days Once the review order is made, the said CCE shall file an appeal against its own order within 1 month of review order Following points shall be noted in this regard: i) Where the Committee of Principal Chief CCE or Chief CCE differs in its opinion as to the legality or propriety of the decision or order of the CCE, it shall state the point or points on which it differs and make a reference to CBEC CBEC shall, after considering the facts of the decision or order, if is of the opinion that the decision or order passed by the CCE is not legal or proper, may, by order, direct such CCE to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order Sec 35-E provides for following: Status of OIO Review by Application (deemed appeal) to Adjudication order passed by CEO below rank of Principal CCE or CCE CCE (Appeals) Principal CCE/ CCE Adjudication order passed by Principal CCE/ CCE Committee of Principal Chief CCE / CESTAT Chief CCE MADURA COATS PVT LTD TRIBUNAL [FOLLOWED IN PAYODHI FOODS PVT LTD TRIBUNAL] Adjudication order passed by CCE order was reviewed by Committee of Principal Chief CCE / Chief CCE and it was decided to accept the decision/order of CCE (ie, a decision was taken not to file an appeal) Subsequently upon audit objection, Review committee again reviewed the order and decides for filing of appeal Thereupon, appeal was filed before CESTAT Appeal was challenged on ground that order of review committee cannot be re-opened or re-viewed Held: (*functus officio= lack of authority of a judge to Once review committee has taken a decision not to file appeal before CESTAT, then it become functus officio rehear a case after it has rendered judgment) The decision once taken by committee not to file an appeal cannot be later re-viewed or re-opened 20 To whom should the matter be referred in a case where the Committee of Principal Chief CCE / Chief CCE differs in its opinion as to the legality or propriety of the decision or order of the CCE and how the matter will be settled u/s 35-E (1) of the Central Excise Act, 1944 (Nov Marks) Sec 35-E, which deals with review of order, provides that Committee of Principal Chief CCE / Chief CCE may review the adjudication order passed by CCE so to check the legality or propriety of his order Upon such review, Committee shall arrive to a conclusion whether such order shall be challenged in appeals It has been provided that where the members of the Committee are itself divided in opinion, then matter shall be referred to CBEC and CBEC will decide whether or not appeal shall be filed and then direct the concerned CEO to file the appeal REVISION APPLICATION TO CG- SEC 35-EE 21 Under excise, certain orders of CCE (Appeals) are subject to revision jurisdiction of CG, while others are subject to appellate jurisdiction of Tribunal State some differences between these two jurisdictions (3 Marks) Appellate Jurisdiction of CESTAT Revisionary Jurisdiction of CG Governing Sections Sec 35-B (Appeals to CESTAT) Sec 35-C (Order passed by CESTAT) Sec 35-EE Subject Matter All matters other than those subject to revisionary jurisdiction of CG Following 3 matters: 1) Loss of Goods; 2) Rebate of ED on export of goods; 3) Export of goods without payment of duty; Time Limitation 3 Months + Extension of any period 3 Months + Extension of 3 Months

9 Pre-Deposit of duty by assesse in terms of Sec 35-F Types of orders which can be passed Further remedy Monetary Limitation stipulated 35-R as u/sec Every assesse is required to make mandatory predeposit while filing appeal to CESTAT (10% of duty amount as decided in CCE(Appeals) has to be deposited) Confirmation Order Annul Order Modification order Remand Back of case CESTAT s order is further appealable in terms of Sec 35-G and 35-L of CEA, 1944 CBEC has specified monetary limitation on department as to filing of appeal [Department cannot file appeal if duty amount is below Rs 5,00,000] Requirement of pre-deposit is not applicable Confirmation Order Annul Order Modification order CG order is full and final No monetary limitation has been specified as to filing of revisionary application Important 1 CCE(Appeals) order is relating to rebate of duty on export of goods Assessee filed appeal to CESTAT CESAT rejected it on ground of jurisdiction Now, assesse filing revision application to CG in terms of Sec 35-EE Whether time lost in pursuing remedy before CESTAT shall be excludible while counting limitation of 3 months for filing revision application u/sec 35-EE? Yes GILCO EXPORTS LTD 2015 P&H HC / CHOICE LABORATORIES LTD GUJ HC [WRIT PETITION] Time lost in pursuing remedy before wrong forum (viz appeal before Tribunal instead of revision application) must be excluded in computing time-limit for filing revision application [Reason of Exclusion: Sec 14 of Limitation Act] PRE-DEPOSIT- SEC 35-F & 35-FF 22 Whether pre-deposit of disputed duty is mandatory for hearing on appeal? CUSTOMS 5 Discuss with a brief note the provisions of Sec 129-E of the Customs Act, 1962 regarding DEPOSIT OF DUTY or PENALTY LEVIED PENDING APPEAL (Nov Marks) Sec 129-E of the Customs Act, 1962 = Sec 35-F of the Central Excise Act, 1944 Sec 35-F of the Central Excise Act, 1944 (as amended by FA, 2014) provides for mandatory pre-deposit of certain percentage of disputed duty in case appeal is filed before CCE (Appeals) or Tribunal In case, appeal is filed before HC or SC, then pre-deposit is not legally mandatory HC or SC has inherent power to waive pre-deposit Summarily, requirement of pre-deposit can be stated in the following table: Appeal filed with Pre-Deposit Requirement Extent of Pre-Deposit CCE (Appeals) [u/sec 35] Mandatory as per Sec 35-F 75% of disputed duty Tribunal [u/sec 35-B] Against order of Principal CCE/ CCE Mandatory as per Sec 35-F 75% of disputed duty Against order of CCE (Appeals) Mandatory as per Sec 35-F 10% of disputed duty HC [u/sec 35-G] Not Mandatory as per Sec 35-F Waiver may be given by HC [Waiver may be full or partial] SC [u/sec 35-L] Not Mandatory as per Sec 35-F Waiver may be given by HC [Waiver may be full or partial] Author: Whether penalty needs to be pre-deposited? Pre-deposit shall be computed as a percentage of only duty demanded even in cases where dispute involves both duty demanded and penalty levied Only when penalty alone is in dispute, would the pre-deposit be computed on the basis of penalty Whether interest needs to be pre-deposited? New section 35F does not include interest payable within the ambit of duty demanded Thus, pre-deposit of 75% / 10% would exclude interest, if any, payable on the duty demanded

10 How to make pre-deposit? -- By Cash (GAR-7 Challan / PLA) or by Cenvat credit CBEC has issued circular stating that pre-deposit can by made by GAR-7 Challan However, it has nowhere stated that pre-deposit cannot be made through cenvat credit Infact, it has been held by judiciary that pre-deposit can be made by utilizing credit [AKSHAY STEEL WORKS PVT LTD JHARKAND HC] Latest instruction from CESTAT CESTAT Circular F No 15/CESTAT/General / dated Clarification regarding mandatory pre-deposit for registration of an appeal after : Mandatory deposit of duty or penalty can be made 1) In Cash and evidence is produced at the time of filing the appeal 2) From CENVAT account and evidence thereof is produced In Author s opinion, pre-deposit of duty can be made through credit So far as pre-deposit of penalty is concerned, that shall be made through GAR-7 only Illustration 1 X Ltd was aggrieved by the decision of Joint Commissioner where he was confirmed demand of Rs 10 lakhs and levied penalty equal to the amount of duty u/sec 11-AC of the Central Excise Act, 1944 The adjudication order was passed on 1 st Sep, 2014 The company is planning to file an appeal against the said order and wants to know whether any amount is required to by deposited before filing such appeal and whether the same can by waived by the Appellate authority With effect from 6 th Aug, 2014, new Sec 35-F of Central Excise Act, 1944 provides that an appeal cannot be filed with the CCE (Appeals) unless the appellant has deposited 75% of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the Principal CCE / CCE the amount of such predeposit, however, will not exceed Rs 10 crores In the given case, though both duty and penalty are in dispute, quantum of pre-deposit will be 75% of only the disputed duty amount ie, 75% of Rs 10,00,000 which is Rs 75,000 The said amount cannot be waived by the appellate authority Illustration 2 In an order dated issued to M/s DG & Co, the Joint Commissioner of Central Excise had imposed a penalty of Rs 10,00,000 u/sec 11-AC of the Central Excise Act, 1944 plus a penalty of Rs 2,00,000 under rule 26 of Central Excise rules, 2002 M/s DG & sons intends to file an appeal with the CCE (Appeals) against the said adjudication order Compute the quantum of pre-deposit required to be made by M/s DG & Sons for filing the appeal with CCE (Appeals) As per Sec 35-F of Central Excise Act, 1944, 75% of the penalty has to be paid as pre-deposit where only such penalty is in dispute for filing an appeal with the CCE (Appeals) Further, CBEC Circular No 984/08/201-CX has clarified that where penalty alone is in dispute and penalties have been imposed under different provisions of the Act, pre-deposit would be calculated based on the aggregate of all penalties imposed in the order sought to be appealed against Thus, in the given case, quantum of pre-deposit will be 75% of Rs 12,00,000 [Rs 10,00,000 u/sec 11-AC of the Central Excise Act, 1944 plus Rs 2,00,000 u/rule 26 of Central Excise Rules, 2002] which is Rs 90,000 Illustration 3 In an order dated issued to M/s KG Associates, the CCE has confirmed a duty demand of Rs 1,00,00,000 and imposed a penalty of equal amount u/sec 11-AC of the Central Excise Act, 1944 plus a penalty of Rs 10,00,000 under rule 26 of CER, 2002 M/s KG Associates intends to file an appeal with the CESTAT against the said adjudication order Compute the quantum of predeposit required to be made by M/s KG Associates for filing the appeal with the CESTAT With effect from 6 th Aug, 2014, new Sec 35-F of Central Excise Act, 1944 provides that an appeal cannot be filed with CESTAT against an order passed by the Principal CCE / CCE unless the appellant has deposited 75% of the duty, in case where duty or duty and penalty are in dispute or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against The amount of such pre-deposit, however, will not exceed Rs 10 crores In the given case, though both duty and penalty are in dispute, quantum of pre-deposit will be 75% of only the disputed duty amount ie 75% of Rs 1,00,00,000 which is Rs 7,50,000 CERTAIN ISSUES [For knowledge sake] 2 Whether making pre-deposit mandatory for hearing of appeal is harsh provision and legally valid? FA, 2014 made 'pre-deposit of certain % of disputed duty' as a mandatory condition for filing appeal It was apprehended that Courts may in its writ jurisdiction will not upheld the legal provisions In very first judgment on amended section, HC has upheld the legal validity of mandatory pre-deposit SEA BREEZE COURIER 2015 KERALA HC [WRIT PETITION] Condition of mandatory pre-deposit is valid since: (a) right of appeal granted by statute is a conditional right; (b) condition of mandatory pre-deposit of 'small percentage' (ie, 75 %) of duty/penalty confirmed, prior to filing appeal, is 'not so onerous' as to deprive assessee of an effective right of appeal, and (c) same is refunded in event of assessee succeeding in appeal; hence, said condition of pre-deposit is valid 2 Pre-deposit has been made mandatory by FA, 2014 FA, 2014 has been effective from 6 th Aug, 2014 Whether mandatory pre-

11 DG Education (P) Ltd [Common Chapter : Appeal, Review & Revision] deposit requirement shall be applicable to old appeals or new appeals? Period of dispute Demand Proceedings Appeal Filed Applicability of Post FA, 2014 Post FA, 2014 Post FA, 2014 Applicable Prior to FA, 2014 Prior to FA, 2014 Prior to FA, 2014 (but appeal pending as on date of FA, 2014)?????? Prior to FA, 2014 Prior to FA, 2014 Post FA, 2014?????? Prior to FA, 2014 Post FA, 2014 Post FA, 2014?????? Following proviso in Sec 35-F is important Provided further that the provisions of this section (ie, Sec 35-F) shall not apply to the (stay applications and) APPEALS PENDING before any appellate authority prior to the commencement of the Finance Act, 2014 (Date of Commencement of FA, th Aug, 2014) ANJANI TECHNOPLAST LTD 2015 DELHI HC / GANESH YADAV ALLAHBAD HC [WRIT PETITION] As per proviso, customs section 129E (excise section 35F), mandatory 75 per cent 10 per cent pre-deposit would not apply to appeals/applications pending on ; therefore, in other words, mandatory 75 per cent 10 per cent pre-deposit would apply to appeals filed on or after In case appeal is filed with Tribunal against order of CCE (Appeals) and appeal is decided in favour of assessee, then whether assessee shall be entitled to claim interest on refund of pre-deposit? If yes, what shall be the applicable rate and what will be the procedure? In case appeal is filed with Tribunal against order of CCE(Appeals) and appeal is decided in favour of assessee, then assessee shall be entitled to claim interest on refund of pre-deposit He is entitled to interest in terms of Sec 35-FF of CEA, 1944 Interest shall be paid for the entire period, ie, from the date pre-deposit was made till the date of refund of pre-deposit to him At present, the applicable rate of interest is 6% pa (as notified in terms of sec 35-FF) Procedure for claiming refund: [as specified by CBEC Circular No 984/08/2014] 1 Sec 11-B is not applicable to refund of pre-deposit 2 Refund can be claimed by submitting an application on plain letter to concerned CEO (jurisdictional AC/DC) 3 Proof of payment of pre-deposit and favourable appeal order shall be attached 4 Refund shall be sanctioned within 15 days in favour of appellant Refund shall be alongwith interest Issues need clarification 1 What shall be the time-limit for claiming refund of pre-deposit? Sec 11-B is not applicable Hence, time limit of 1 year from relevant date is not applicable CBEC Circular has also not specified any time-limit for submission of refund claim 2 Whether pre-deposit will be refunded in cash or by way of credit to cenvat credit account? CBEC Circular is silent on this aspect In personal opinion of Author, pre-deposit shall be returned in the same manner in which it was deposited by appellant Illustration Duty demand of Rs 50 lakhs was made in terms of an order in original (OIO) dated against XYZ Ltd with Interest as applicable on the ground of clandestine removal of the products manufactured by the assessee in the month of June, 2012 Penalty equal to duty demanded was also imposed The assessee filed appeals to CCE(Appeals) and pre-deposit of Rs 375 lakhs was duly deposited on The case against XYZ Ltd was refunded the amount of such pre-deposit on Compute the interest amount payable to the company u/sec 35FF (Modified Nov 2010, 3 Marks) As the CCE(Appeals) has confirmed the duty demand of Rs 75,000 and set aside the penalty, only Rs 3,00,000 will be payable as refund to XYZ Ltd Interest would also be payable as per the provisions of Sec 35-FF Interest would be pa on such refund from the date of payment of amount till, the date of refund of such amount Interest payable = Rs 3,00,000 = Total refund admissible = Rs 3,00,000 + Rs 8,926 = Rs 3,08,926 Illustration M/s KG Associates deposits Rs 7,50,000 as pre-deposit on and files an appeal with CESTAT CESTAT decides the appeal in favour of M/s KG Associates on M/s KG Associates submits a letter seeking refund of the pre-deposit on The pre-deposit is refunded to M/s KG Associates on Compute the amount of interest payable on refund of such pre-deposit, if any With effect from , new Sec 35-FF of Central Excise Act, 1944 provides for payment of per annum on the refund of such pre-deposit from the date of its payment to the date of refund Thus, interest payable on refund of pre-deposit of Rs 7,50,000 will be Rs 16,767 (rounded off) [Rs 7,50,000 6% 136/365]