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ADJUDICATION AND APPEALS

Contraventions of the provisions of the Central Excise Law and also the connected Rules are punishable by the Department. The Department is required to follow certain procedures before imposing any punishment under the Law. The procedures to be followed by the Department and the rights of the assessees are detailed hereunder:

PROCEDURE FOR DEMAND OF DUTY/INTEREST::

When duty has not been levied or short levied or erroneously refunded or interest not paid, part paid or erroneously refunded, a notice demanding the said duties/interest is required to be issued by the Department. {Section 11A of the Central Excise Act, 1944)

Time Limit for issue of notice: Notice shall be issued within One Year. In case of demand by reason of suppresion of facts, mis-declaration, collusion or wilful statement, the demand can be raised within FIVE YEARSfrom relevant date.

REQUIREMENTS OF A SHOW CAUSE NOTICE::

The demand notice or show cause notice should give a clear description of the allegations and charges against the persons concerned.

It should give particulars of facts, which furnish the reason for issue of the demand notice or show cause notice.

All Rules or Sections of the relevant Acts, or notifications issued alleged to have been contravened should be clearly and specifically be quoted in the show cause notice.

All Rules and Sections of the relevant Acts under which the punishment or penalty, fine or confiscation etc., proposed to be imposed should be clearly and specifically be quoted in the show cause notice.

The show cause notice must disclose all the materials/evidence relied upon in making the allegations.

The show cause notice must be accompanied by copies of all documents relied upon.

An opportunity of personal hearing must be offered in the Show cause notice.

The time limit allowed to the person for reply to the show cause notice should be mentioned. Generally the period allowed should be thirty days from receipt of the notice.

The show cause notice must give full designation and address of the authority to whom the written submission is to be made.

SERVICE OF SHOW CAUSE NOTICE::

Service of show cause notice is through registered post or hand service to the person concerned or to his authorized agent. If the service of the notice is not possible by the said means the notice will be pasted on the premises of the noticee in the presence of witnesses and drawing up of a Panchanama / mahazar. If these attempts do not fructify, the notice is considered to be served by placing it on the notice board of the Range/Division/Commissionerate. {Section 37 C of the Central Excise Act, 1944}

ADJUDICATION::

To adjudicate is to decide judicially some dispute as to what is right and what is wrong. The adjudication proceedings in Customs, Central Excise & Service Tax are known as quasi-judicial proceedings as the officers here are not fettered by strict compliance of judicial procedures laid down in the Criminal Procedure Code. However the Officers of Customs & Central Excise are required to act judicially and not arbitrarily.

POWERS OF ADJUDICATION::

Sl.No.

Adjudicating Authority

Monetary Limit

1

COMMISSIONER

WITHOUT LIMIT

2

ADDITIONAL COMMISSIONER/JOINT COMMISSIONER

Rs.5LAKHS TO Rs.50 LAKHS

3

DEPUTY COMMISSIONER/ASSISTANT COMMISSIONER

Rs.1 LAKH TO Rs.5 LAKHS

4

SUPERINTENDENT

Rs.1 LAKH

REQUIREMENTS OF ADJUDICATION::

1. The adjudication authority shall follow the ‘principles of natural justice’. These principles are un-codified and are based on justice, equity, common sense, fair play and rule of law.

2. The adjudicating authority shall act without bias and should be impartial.

3. PERSONAL HEARINGBefore adjudicating a case, the person on whom a demand notice/show cause notice has been served must be heard and is not to be denied. The Adjudicating authority must himself hear the parties concerned. The adjudicating authority may permit the appearance of legal practitioners in complicated and important cases. A record of the personal hearing must be maintained. Adjournment of personal hearing to be considered reasonably by the adjudicating authority. Granting of ‘Personal hearing’ is an important tenet of ‘principles of natural justice’. however, as per enactment, the maximum number of adjournments for personal hearing is capped at three.

4. The order passed by an adjudicating officer must be a speaking order and requires reasoned decisions.

REQUIREMENTS OF ADJUDICATION ORDER::

Must contain a distinctive order number and the file number from which it is issued along with the date and the designation of the officer passing the order.

It must contain a preamble indicating the defence the provisions of appeal, the appellate authority and the time limit for appeal.

It must contain the brief facts of the case, the charges and evidence relating thereto.

The provisions alleged to have been contravened and action proposed in the notice.

The written submissions made, including the evidence tendered by the defence must be mentioned in the order.

The particulars of personal hearing needs to be mentioned

Analysis and findings of the adjudicating authority with reference to each charge indicating clearly whether a particular charge stands proved or not.

Finally the order of the adjudication authority quantifying duty liability, fine in lieu of confiscation and penalties.

APPEAL::

Sl. No

Order passed by

Appellate authority

Time limit

1.

All officers upto & including Additional Commissioner

Commissioner (Appeals)

60 days from the date of communication of the order

2.

Commissioner or Commissioner (Appeals)

CESAT except in cases where order relates to

      • Any goods imported or exported as baggage;
      • 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;
      • Payment of drawback as provided in Chapter X and the rules made thereunder;

3 months from the date of communication of the order

3.

Commissioner or Commissioner (Appeals)

Revision application to Central government (in matters relating to baggage, drawback, export without payment of duty, goods short landed, loss of goods in transit). No further appeal.

3 months from the date of communication of the order

4.

CESAT

Supreme court (Classification and valuation cases)

180 days from the date of communication of the order

5.

CESTAT

High Court (other than classification and valuation matters)

180 days from the date of communication of the order

6.

High Court

Supreme court

60 days from the date of communication of the order

APPEALS TO COMMISSIONER(APPEALS)::

Any person aggrieved by the order of an officer of Customs lower in rank than a Commissioner may file an appeal to Commissioner (Appeals) within sixty days from the date of the communication of the order. The appeal shall be in Form E.A-1.

The Commissioner (appeals) shall dispose of the appeal in writing, stating the points for determination, the decision taken and the reasons for the decision within a period of six months where it is possible.

The aggrieved persons may note that, the department allows a period of three months from the date of decision for payment of dues adjudicated before resorting to coercive measures to recover such dues. The aggrieved person may file an application for stay before Commissioner (Appeals) to prevent the coercive measures for recovery of dues by the Department. The Commissioner (Appeals) must dispose of the stay application within one month of its filing.

The address of Commissioner (Appeals):

Commissioner (Appeals)
7th Floor, Kendriya Shulk Bhavan,
L.B.Stadium Road, Basheerbagh,
Hyderabad.

APPEALS TO APPELLATE TRIBUNAL::

Any person aggrieved by the order passed by Commissioner of Customs or Commissioner Appeals may appeal to the appellate tribunal called Customs, Excise, Service Tax Appellate Tribunal within three monthsin Form EA-3 from the date on which the order sought to be appealed against is communicated.

Address of Tribunal:

SOUTH ZONAL BENCH,
1st FLOOR, WTC BUILDING,
FKCCI COMPLEX, K.G.ROAD,
BANGALORE - 560 009