A Presentation on Practice and Procedure before CESTAT By Vipin Jain Advocate
Section 86 of the Finance Act, 1994. Service Tax Rules, 1994. (Alongwith Form ST-5) Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982.
Section 86(1) provides for the two kind of orders that are appealable before the CESTAT, viz. Order passed by a Commissioner of Central Excise under section 73 or section 83A, Order passed by a Commissioner of Central Excise (Appeals) under section 85.
All orders, except those specified in section 86(1) are not appealable before CESTAT. For instance Administrative orders and directions, such as an order rejecting an application for centralised registration. Decision of the Commissioner, which are not in the nature of an order. No appeal lies against order passed by the Chief commissioner of Customs and central Excise. See 2002 (145) ELT 352.
An interim order passed by the Commissioner (Appeals). The order must be in writing and no appeal lies against an oral order. See 1993 (64) ELT 361. An order which is not signed is not an appealable order. See 2002 (141) ELT 777. See also 2002 (143) ELT 126.
Whether there is any difference between the provision for appeals to the CESTAT under Chapter V of the Finance Act, 1994 as compared to the provision for Appeals under the Central Excise or Customs Act?
The differences between the provisions for Appeals are: Section 35B(1)(a) of the Central Excise Act, 1944 specifically provides for appeal against any decision or order passed by Commissioner of Central Excise as an adjudicating authority. These words are absent in section 86(1) with the result that only the orders and decisions passed by Commissioner of Central Excise under section 73 are appealable before CESTAT. Section 35B(1) proviso further sets out list of orders which are not appealable before the CESTAT and against which order lies before the Joint Secretary, whereas no such division as regards Service Tax Appeals.
Section 35B(1) proviso further provides for discretion to the CESTAT to refuse to admit an appeal, whereas no such discretion in service tax appeals. Section 35D(3) further provides that certain matters may be heard and decided by a member of the CESTAT sitting singly, whereas no such provision as regards service tax appeals.
What is the remedy to a party aggrieved by an order which is not appealable either before the CESTAT or the Commissioner (Appeals)? Whether a successful party can file an appeal against a finding adverse to him in the order? Are there any monetary limits below which appeals are not to be filed by the department in the CESTAT?
The Appeal is to be filed by the Assesse within three months of the date of receipt of the Order. In case of departmental appeal, the same has to be filed within three months of the date of receipt of the Order by the committee of chief commissioners or committee of commissioners, as the case may be.
Format of the Appeal Whether an Appeal which is filed in wrong form can be entertained? Enclosures to the Appeal Whether Vakalatnama has to be filed with Appeal? Signing and verifying Appeal Whether an Appeal that is not signed or verified can be entertained? Fees and stamps Whether an appeal or an application without stamp or where fees are not paid can be entertained?
Contents of the Memo of Appeal Statement of facts Whether the contents should be brief or descriptive? Grounds Whether a ground not taken before the lower authority can be taken? Prayer Who may be joined as respondents? Where should the Appeal be filed? Whether an appeal can be entertained without granting stay of the order under challenge?
Procedure to be followed when the department has to file Appeal When the order is passed by Commissioner of Central Excise under section 73 or section 83A, the same would be reviewed by a committee of two Chief Commissioners constituted by the board. In case of difference of opinion, the matter is referred to the board. When the order is passed by Commissioner of Central Excise (Appeals) under Section 85, the same would be reviewed by a committee of two Commissioners constituted by the board. In case of difference of opinion, the matter is referred to the jurisdictional chief commissioner.
When is it to be filed? Is it in the nature of a written reply to the appeal filed by the other side? Any fees to be paid? Whether appeal and cross-objection to be heard together?
Different show cause notices issued to the same person but finally disposed of under a single order. The above notices may be disposed of under separate, but identical orders. Single show cause notice issued to several persons and then disposed of under a single order.
Show cause notices to different parties separately but finally disposed of under a single order. Separate appeals filed by a single individual but all appeals disposed of under a single consolidated order. Separate appeals filed by different persons but heard together and disposed of by a single order as involving a common issue. Single appeal filed against several orders and disposed of under a single order without objection.
Different Situations Different show cause notices issued to the same person but finally disposed of under a single order. The above notices may be disposed of under separate, but identical orders. Single show cause notice issued to several persons and then disposed of under a single order. Answer one appeal - See Rule 6A of CESTAT (Procedure) Rules Since separate O-I-O, one appeal against each O-I-O. See Explanation (1) to Rule 6A of CESTAT (Procedure) Rules. Since the number of persons aggrieved are more than one, each has to file a separate Appeal. See Explanation (2) to Rule 6A of CESTAT (Procedure) Rules.
Different Situations Show cause notices to different parties separately but finally disposed of under a single order. Separate appeals filed by a single individual but all appeals disposed of under a single consolidated order. Answer Since the number of persons aggrieved are more than one, each has to file a separate Appeal. See Explanation (2) to Rule 6A of CESTAT (Procedure) Rules. A perusal of the wording of Rule 6A, would show that it does not matter if the Appeal filed before the Commissioner (Appeals) is against an O-I-O disposing of one SCN or more than one SCN, what matters is the number of O-I-O. and though these Appeals may be disposed of by common O-I-A, the number of Appeals before CESTAT under Rule 6 would be dependant on the number of O-I-O. See Rule 6A and Explanation (1) thereof.
Different Situations Separate appeals filed by different persons but heard together and disposed of by a single order as involving a common issue. Answer A perusal of the wording of Rule 6A, would show that it does not matter how many Appeals were filed. What is important is the number of persons aggrieved and the number of O-I-O. in the instant case, an Appeal should be filed by each aggrieved person against each O-I-O, even though there is a common O-I-A. See Rule 6A and Explanation (1) and (2) thereof.
Different Situations Single appeal filed against several orders and disposed of under a single order without objection. Answer It could be argued that as there was no objection raised at the previous stage, a Single further appeal would suffice as there was only one appeal earlier and which was disposed of under one order. However, a perusal of the Rule 6A would indicate that it is better to file an Appeal before the CESTAT under rule 6 by each person aggrieved and against each O-I-O. As there can be no estoppel against a statutory provision.
Stay Applications and other related applications, such as: Application seeking waiver of pre-deposit Stay of the recovery Stay of the operation of the order Application for extension of stay order Application for modification of the stay order Application for condonation of delay
Application for early hearing of Appeal/stay application Application for producing additional evidence or for introducing additional grounds Application for rectification of mistake Application for restoration of Appeal
Application for seeking implementation and enforcement of orders passed by CESTAT Application for adjournment Application for Mention Application for impleading additional parties/legal representatives.
Statutory provisions? Section 35F of the Central Excise Act, 1944, is made applicable to the Finance Act, 1994, vide Section 83 thereof. See Rule 28A of the CESTAT (Procedure) Rules, 1982. Format and contents. Issues: What is the remedy against an order rejecting stay and waiver of pre-deposit? Whether the amount directed to be deposited can be paid beyond the time granted for payment thereof? What amounts to undue hardship? Whether there is any distinction between stay application and application for waiver of pre-deposit? Whether the amount pre-deposited is duty?
How is the date of receipt to be computed? What happens when there is delay in filing Appeal? What amounts to sufficient cause? What does not amount to sufficient cause? Whether stay application can be entertained without condoning delay in filing Appeal? Whether more latitude given to COD with respect to departmental appeals?
See Collector, land acquisition Anantnag and another versus Mst. katiji and others, reported in 1987 (28) E.L.T. 185 (S.C.) Ordinarily a litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. Every day s delay must be explained does not mean that a pedantic approach should be made. Why not every hour s delay, every second s delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
Who can appear? What is the dress code? What is the manner of addressing the members of the CESTAT? Request for adjournment how made Proxy counsel without Vakalatnama/authority letter Absence during hearing and consequences Importance of precedents exceptions to the rule (Per incuriam /sub silentio)
Some Procedural tips: Who should open the arguments? Whether the person opening the arguments make rejoinder and if so whether any restrictions? Can more than one counsel appear and plead for one party? Whether one can interrupt when the other party is arguing? Synopsis/list of dates/written submissions How to deal with new evidence?
Difference of opinion third member reference What is the scope of authority of the third member to whom reference has been made by the division bench? Is there any restriction on the stage at which a case can be referred to a third member in case of difference of opinion? What happens if there is difference of opinion on some procedural aspect? Such as whether an adjournment should be granted? Or whether a senior counsel can be heard in the absence of a Vakalatnama in his favour?
Reference to larger bench What is the jurisdiction of the large bench? Whether the bench to which a matter has been referred can return the case back on the ground that it does not find any difference of opinion?
Inherent power Award of costs Award of compensation Award interest Enforcement of orders
Is the order appealable? Who is the appellate authority? When does limitation expire for filing the appeal? If it has expired is there a provision for condonation? For what period can condonation be granted? Is time yet left for that? Has affidavit for condonation been prepared giving proper reasons? Has it been signed by the proper person who can swear to the facts, either out of personal knowledge or on information? Has the affidavit been properly verified and is designation of deponent given? Has the application been prepared in the proper form?
Has the appeal memorandum been prepared in the prescribed form quoting the proper provision of law? Have the facts been properly stated in the introductory part? Have the grounds been properly arranged, each argument in a separate paragraph? If there are alternate arguments have they been properly shown as such? Has the appeal memorandum been properly signed and verified by the proper person, showing his designation? Has a proper paperbook been prepared, page numbered and indexed neatly? If additional evidence is necessary, has a proper application and supporting affidavit been prepared? If additional grounds are necessary to be urged, has a proper application and supporting affidavit been prepared and signed by the proper person to swear to the facts in the affidavit? Does the appeal memorandum refer to all the supporting evidence (original as well as additional) in the paper book with proper page numbers indicated in the appropriate place? Have proper number of copies of the appeal memorandum been prepared?
Has the Original Order been properly affixed with the necessary court fee? Has a draft for the proper amount been purchased towards fee for the appeal? Is it necessary to prepare an application for waiver of deposit of the duty and penalty? If so, has the affidavit is support thereof been prepared? Has the application been prepared and signed by the proper person? If dispatched by post would the papers reach the appellate authority in time? If not have steps been taken to present the same in person? Has an advocate or consultant or representative signed the appeal memorandum? If so has the authority in his favour been enclosed? Is a copy of the appeal and waiver application made ready to be served on the departmental representative and the jurisdictional Commissioner? If the appeal is to be sent by regd. Post has the envelope been prepared with the full current address of the appellate authority, with acknowledgement card also?