Introduction
Chapter V of Finance Act, 1994 (‘Act’ for short) provides for adjudication of tax and imposition of penalty by Adjudication Authorities. The monetary jurisdiction for such Adjudication Authorities has also been fixed by the law. The service tax provisions provide for appeal. The first appellate authority is the Commissioner of Central Excise (Appeals) against the order of the Central Excise Officer lower level to the Commissioner. The Second appellate authority is the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). Against the order of CESTAT appeal may be filed before High Court. In this article the practical aspects relating to the appearance before Commissioner of Central Excise (Appeals) are discussed.
Appeal provisions in Finance Act, 1944
Separate procedures are prescribed for filing appeal by the assessee and appeal by the Department.
Appeal by assessee
Section 85 of the Act provides for filing appeal by the assessee. The following is the procedure for filing appeal:
- Any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals);
- Every appeal shall be in the prescribed form and shall be verified in the prescribed manner;
- An appeal shall be presented within two months (three months before 2012) from the date of receipt of the decision or order of such adjudicating authority, relating to service tax, interest or penalty under this Chapter made before the date on which the Finance Bill, 2012 receives the assent of the President;
- the Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of one month (three months before 2012);
- The Commissioner of Central Excise (Appeals) shall hear and determine the appeal and, subject to the provisions of this Chapter, pass such orders as he thinks fit and such orders may include an order enhancing the service tax, interest or penalty;
- an order enhancing the service tax, interest or penalty shall not be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement;
- in hearing the appeals and making order under this section, the Commissioner of Central Excise (Appeals) shall exercise the same powers and follow the same procedure as he exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944 (1 of 1944);
Pre Deposit
Section 35F of the Central Excise Act, 1944 (also applicable to service tax provisions) provides for deposit of duty demanded or penalty levied pending appeal. This section provides that where in an appeal, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall pending the appeal deposit with the adjudicating authority the duty demanded or the penalty levied. Where in any particular case, the Commissioner (Appeals) is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of revenue. The assessee if he wants to waive the pre deposit he has to make an application for waiver of pre deposit along with the appeal. The Commissioner (Appeals) shall, where it is possible to do so decide such application within thirty days from the date of its filing. If the assessee is directed to pay the tax, interest and penalty either partly or fully he has to comply with the same. If he fails to pay as per directions within the time stipulated the appeal shall automatically dismissed for non compliance of pre deposit order.
Procedure
- An appeal under section 85 of the Act to the Commissioner of Central Excise (Appeals) shall be in Form ST-4;
- The appeal shall be filed in duplicate and shall be accompanied by a copy of order appealed against;
- The following particulars are to be furnished in Form ST-4:
- Designation and address of the officer passing the decision or order appealed against and the date of the decision or order;
- Date of communication of the decision or order appealed against to the appellant;
- Address to which notices may be sent to the appellant;
- Period of dispute;
- Amount of tax, if any, demanded for the period;
- Amount of refund if any claimed for the period;
- Amount of interest involved;
- Amount of fine imposed;
- Value of taxable services;
- Whether service tax or interest or penalty or all the three have been deposited?
- Whether the appellant wishes to be heard in person?
- Reliefs claimed in appeal.
- The grounds of appeal and the form of verification as contained in Form ST-4 shall be signed,-
- in the case of an individual, by the individual himself or where the individual is absent from India, by the individual concerned or by any person duly authorized by him in this behalf; and where the individual is a minor or is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;
- in the case of a Hindu undivided family, by the Karta and, where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family;
- in the case of a company or local authority, by the principal officer thereof;
- in the case of a firm, by any partner thereof, not being a minor;
- in the case of any other association, by any member of the association or the principal officer thereof; and
- in the case of any other person, by that person or any person competent to act on his behalf.
- The Commissioner (Appeals) shall give an opportunity to the appellant to be heard, if he so desires;
- The Commissioner (Appeals) may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing;
- No such adjournment shall be granted more than three times to a party during hearing of the appeal;
- The Commissioner (Appeals) may, at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal, if the Commissioner (Appeals) is satisfied that the omission of that ground from the grounds of appeal was not willful or unreasonable;
- Production of additional evidence before Commissioner (Appeals)
- The appellant shall not be entitled to produce before the Commissioner (Appeals) any evidence, whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the adjudicating authority except in the following circumstances, namely:-
- where the adjudicating authority has refused to admit evidence which ought to have been admitted; or
- where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by adjudicating authority; or
- where the appellant was prevented by sufficient cause from producing before the adjudicating authority any evidence which is relevant to any ground of appeal; or
- 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.
- No evidence shall be admitted unless the Commissioner (Appeals) records in writing the reasons for its admission;
- The Commissioner (Appeals) shall not take any evidence produced under sub-rule (1) unless the adjudicating authority or an officer authorized in this behalf by the said authority has been allowed a reasonable opportunity,-
- to examine the evidence or document or to cross-examine any witness produced by the appellant; or
- to produce any evidence or any witness in rebuttal of the evidence produced by the appellant under sub-rule (1).
- Nothing contained in this rule shall affect the power of the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal.
- The Commissioner (Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against;
- where the Commissioner (Appeals) is of opinion that any tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any tax not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit prescribed show cause against the proposed order;
- The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision.
- The Commissioner (Appeals) shall, where it is possible to do so, hear and decide every appeal within a period of six months from the date on which it is filed;
- On the disposal of the appeal, the Commissioner (Appeals) shall communicate the order passed by him to the appellant, the adjudicating authority and the Chief Commissioner of Central Excise and the Commissioner of Central Excise.
Appeal by Department
An appeal cannot be filed directly by the Department against the order of Adjudicating Authority. Section 84(1) provides that the Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any central Excise Officer subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the - Commissioner of Central Excise in his order. Every such order shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority.
In pursuance of the order of Commissioner of Central Excise, the Adjudicating Authority or the authorized officers shall make an application to the Commissioner (Appeals) within one month from the date of communication of the order to the Adjudicating Authority. Such application shall be heard by the Commissioner (Appeals), as if such applications were an appeal made against the decision or order of the Adjudicating Authority and the provisions of this Act regarding appeals
Service of summons or notice
Section 37C of the Act provides that any summons or notices issued under this Act or the rules made there under, shall be served,—
- By tendering summons or notice, or sending it by registered post with acknowledgement due or by speed post with proof of delivery or by courier approved by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), to the person for whom it is intended or his authorized agent, if any;
- If the summons or notice cannot be served in the manner provided as above, by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended;
- If the summons or notice cannot be served in the manner provided above, by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice.
Every decision or order passed or any summons or notice issued under this Act or the rules made there under, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or courier or a copy thereof is affixed in the manner provided above.
Jurisdiction of Commissioner (Appeals)
The Commissioners (Appeals) have been given concurrent jurisdiction of the entire zone and jurisdiction of Chief Commissioner has been extended to all the Commissioners of Central Excise (Appeals) within his zone. Chief Commissioner of Central Excise, within his jurisdiction, may specify the jurisdiction of individual Commissioner (Appeals), under his charge, by issuing suitable orders. In normal situations, each Commissioner (Appeals) should continue to handle the appeals arising out of the jurisdiction of specific Commissionerates of Central Excise, as specified by Chief Commissioner of Central Excise. However, Chief Commissioner may allocate additional charge or any individual cases to Commissioner (Appeals) as and when required.
Delay condonation
Under Section 35 of the Central Excise Act, 1944 the Commissioner (Appeals) cannot condone the delay beyond a period of 30 days. However in exercise of writ jurisdiction, the High Court may issue a writ order, even where the order is appealable or the appeal has been dismissed as barred by time, provided the impugned order or proceedings have perpetuated injustice or would lead to a miscarriage of justice.
