THEME: LAW OF TAXATION-II

TITLE:

POWER OF REVISION OF CENTRAL BOARD OF

CUSTOMS AND EXCISE

SUBMITTED BY:

SHUBHA KEERTI CHATURVEDI

ROLL NO. 362

IVTH YEAR

B.A LL.B (HONS.)

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

SUBMITTED TO:

MR. GANESH PANDEY

FACULTY, TAXATION LAW-II

1

ACKNOWLEDGEMENT

As a child, you acknowledged everything you accomplished, as you grow older and more

sophisticated, you acknowledge only major accomplishments but an endeavor of this magnitude

would not have been possible without the invaluable help and support of Mr. Ganesh Pandey, I

express a deep sense of gratitude to him.

But I still fail to understand the scarcity of this page to put in the efforts of all those

people who helped me and guided me through this small part of the paper that I have completed.

Anything that I do in my life is incomplete without the blessings of my God who are my

parents only.

SHUBHA KEERTI CHATURVEDI

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METHODOLOGY OF RESEARCH

SUBJECT : TAXATION LAW-II

TOPIC : POWER OF REVISION OF CENTRAL BOARD OF CUSTOMS AND EXCISE.

OBJECTIVES:

1. To understand the concept Indirect tax.

2. To understand the concept of GST.

3. To know the importance of GST in the upcoming time.

RESEARCH METHODOLOGY:

Keeping the objectives in mind, material was collected with the help of different books and then

it was compiled to make the theoretical part of the project. Recent and important case laws are

analyzed. The methodology of my research is doctrinaire method.

RESEARCH TOOLS:

The research of this project was carried with the help of the Internet and Library of Chanakya

National Law University.

FOOTNOTING STYLE:

In whole of my project uniform footnoting style is adopted in conformity Chanakya National

Law University, Patna footnoting style along with “blue book.”

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TABLE OF CONTENTS

INTRODUCTION ….................................................................................................... 5

AN OVER VIEW OF REVISION APPLICATION UNIT …………………………. 6

JURISDICTION OF REVISION APPLICATION UNIT …………………………... 7

NORMS FOR FUNCTIONING OF REVISION APPLICATION UNIT ………….. 9

RELEVANT PROVISIONS UNDER CUSTOMS LAW…………………………...10

RELEVANT PROVISIONS UNDER EXCISE LAW ……………………………..13

CONCLUSION............................................................................................................15

BIBLIOGRAPHY........................................................................................................16

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INTRODUCTION

Central Board of Excise and Customs (CBEC) is a part of the Department of Revenue under the

Ministry of Finance, Government of India. It deals with the tasks of formulation of policy

concerning levy and collection of Customs & Central Excise duties and Service Tax, prevention

of smuggling and administration of matters relating to Customs, Central Excise, Service Tax and

Narcotics to the extent under CBEC's purview. The Board is the administrative authority for its

subordinate organizations, including Custom Houses, Central Excise and Service Tax

Commissionerates and the Central Revenues Control Laboratory.

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AN OVER VIEW OF REVISION APPLICATION UNIT

Under the scheme operative till 10.10.1982, the appeal against the orders of the Commissioners

(then called Collectors), of Customs & Central Excise lay with the Central Board of Excise &

Customs. As far as the appeals against the orders passed by the authorities below the rank of the

Collectors (now called Commissioner), were concerned, the same were to be filed before the

appellate Collectors of Customs & Central Excise. Erstwhile Section 131 of the Customs Act,

1962 and Section 36 of the Central Excise & Salt Act, 1944, empowered the Central Government

to revise the orders passed by the CBEC and appellate Collectors in exercise of their appellate

jurisdiction. At the Government level, while Secretary (Revenue) or Special Secretary disposed

of the Revision Application against orders passed by the CBEC, and the Addl. Secretary or Joint

Secretary disposed of the applications against the orders passed by the appellate Collectors of

Customs & Central Excise and executive collector of Customs and Central Excise. The Finance

(No. 2) Act, 1980 sought to introduce a new system by establishing appellate Tribunal. The

appellate jurisdiction of CBEC and Revisionary jurisdiction of the Central Government were

abolished w.e.f. 11.10.1982, except a few residual transitional provisions and the Customs,

Excise and Gold Appellate Tribunal (now CESTAT ) was set up w.e.f. 11.10.1982. The Finance

Act, 1984, revived the Revisionary powers of the Central Government in specified type of cases.

On the Customs side, Section 129 DD read with proviso to Section 129(A) of the Act,

empowered Central Government to revise the appellate orders passed by the Commissioner of

Customs (Appeals). On Central Excise side, Section 35EE read with first proviso to sub-section

(ii) of Section 35B of the Central Excise Act, 1944 gave review and revisionary powers to

Central Government to revise the orders passed by the Commissioner of Central Excise

(Appeals).

The Revision Application Unit of the Department of Revenue, Ministry of Finance, Government

of India is dealing mainly with Revision Applications filed before Central Government in

specified Customs and Central Excise matters under section 35 EE of Central Excise Act 1944

and section 129 DD of Customs Act 1962. The revision applications filed either by parties or

department against the orders of Commissioners of Customs, Central Excise and Service Tax

(Appeals) are considered and decided by Joint Secretary (RA) after following the due process of

law.

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JURISDICTION OF REVISION APPLICATION UNIT

Customs jurisdiction - Section 129 DD read with proviso to Section 129 A (1) of Customs Act,

1962 empowered the Central Government to revise or review the appellate orders passed by

Commissioner of Customs (Appeals) if such order related to:-

(a) Any goods imported or exported as baggage;

(b) 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 the destination;

(c) Payment of drawback as provided in Chapter X and the rules made there under.

Central Excise jurisdiction - Section 35 EE read with proviso to Section 35 B (1) of Central

Excise Act, 1944 empowered the Central Government to revise or review the appellate orders

passed by Commissioner of Central Excise (Appeals) if such order related to :-

(a) A case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to

another factory, or from one warehouse to another or during the course of processing of the

goods in a warehouse or in storage, whether in a factory or in a warehouse;

(b) A rebate of duty of excise on goods exported to any country or territory outside India or on

excisable materials used in the manufactured of goods which are exported to any country or

territory outside India;

(c) Goods exported outside India (except to Nepal or Bhutan) without payment of duty.

IATT jurisdiction - Rule 13 of Inland Air Travel Tax (IATT) Rules, 1989 empowered the

Central Government to revise or review the appellate orders passed by Commissioner of

Customs & Central Excise (Appeals) if such order related to payment of IATT.

FTT jurisdiction - Rule 15 of Foreign Travel Tax (FTT) Rules, 1979 empowered the Central

Government to revise or review the appellate orders passed by Commissioner of Customs &

Central Excise (Appeals) if such order related to Payment of Foreign Travel Tax.

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The Joint Secretary(RA) passes the final GOI Revision Orders on behalf of Central Government

after following due process of law1. Under the Custom and Central Excise Law, the Central

Government is the highest authority in these revision and review matters and orders passed by

Central Government are final. However, the petitioners, aggrieved with said orders, are taking

recourse to writ petitions under Article 226 of Constitution of India. The Revisionary Authority

becomes functus officio after passing the final GOI Revision Orders.

1 Rules of the erstwhile Central Excise Rules, 1944.

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NORMS FOR FUNCTIONING OF RA UNIT

The Revision Application Unit receives the revision application in prescribed form EA-8/CA-8

filed by department as well as parties. The stipulated time for filing such applications is 90 days

from the date of communication of order-in-appeal. The delay upto 90 days can be condoned by

Central Government in deserving cases2. The revision application Unit on receipt of revision

applications issues the acknowledgement to the applicant along with deficiency memo in

documents if any. Simultaneously, a check-list in prescribed format is also prepared. Notice is

issued to respondent party for filing counter reply. Thereafter, personal hearing is fixed / held in

cases, in the order of seniority. Out of turn hearings are allowed only in deserving cases

involving substantial revenue, recurring issue resulting into multiplicity of cases, interest

liability, the issue is no longer res integra, passenger is going abroad and cases of financial

hardship. After completion of hearing, final revision order is issued by JS(RA).

2 Maharashtra to abolish octroi duty: Deshmukh, Financial Express, Jan 12, 2008, See at http://www.financialexpress.com/news/maharashtra-to-abolish-octroi-duty-deshmukh/260436/

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RELEVANT PROVISIONS UNDER CUSTOMS LAW

129DA . Powers of revision of Board or Commissioner of Customs in certain cases.

(1) The Board may, of its own motion or on the application of any aggrieved person or

otherwise, call for and examine the record of any proceeding in which a Commissioner of

Customs has passed any decision or order [not being a decision or order passed under sub-

section (2) of this section] of the nature referred to in sub-section (5) of section 129D for the

purpose of satisfying itself as to the correctness, legality or propriety of such decision or order

and may pass such order thereon as it thinks fit.

(2) The Commissioner of Customs may, of his own motion or on the application of any

aggrieved person or otherwise, call for and examine the record of any proceeding in which an

adjudicating authority subordinate to him has passed any decision or order of the nature referred

to in sub-section (5) of section 129D for the purpose of satisfying himself as to the correctness,

legality or propriety of such decision or order and may pass such order thereon as he thinks fit.

(3) (a) No decision or order under this section shall be made so as to prejudicially affect any

person unless such person is given a reasonable opportunity of making representation and if, he

so desires, of being heard in his defence.

(b) Where the Board or, as the case may be, the Commissioner of Customs is of the opinion that

any duty has not been levied or has been short-levied or short-paid or erroneously refunded, no

order requiring the affected person to pay any duty not levied or paid, short-levied or short-paid

or erroneously refunded shall be passed under this section unless such person is given notice

within the time limit specified in section 28 to show cause against the proposed order.

(4) No proceedings shall be initiated under sub-section (1) or sub-section (2) in respect of any

decision or order after the expiry of a period of six months from the date of communication of

such decision or order:

Provided that in respect of any decision or order passed before the commencement of the

Customs and Central Excises Laws (Amendment) Act, 1988, the provisions of this sub-section

shall have effect as if for the words "six months", the words "one year" were substituted.

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(5) Any person aggrieved by any decision or order passed under sub-section (1) or sub-section

(2) may appeal to the Customs and Excise Revenues Appellate Tribunal established under

section 3 of the Customs and Excise Revenues Appellate Tribunal Act,1986 (62 of 1986), against

such decision or order.

129DD. Revision by Central Government.

(1) The Central Government may, on the application of any person aggrieved by any order

passed under section 128A, where the order is of the nature referred to in the first proviso to sub-

section (1) of section 129A, annul or modify such order.

Provided that the Central Government may in its discretion, refuse to admit an application in

respect of an order where the amount of duty or fine or penalty, determined by such order does

not exceed five thousand rupees.

Explanation. - For the purposes of this sub-section, "order passed under section 128A" includes

an order passed under that section before the commencement of section 40 of the Finance Act,

1984, against which an appeal has not been preferred before such commencement and could

have been, if the said section had not come into force, preferred after such commencement, to the

Appellate Tribunal.

(1A) The Commissioner of Customs may, if he is of the opinion that an order passed by the

Commissioner (Appeals) under section 128A is not legal or proper, direct the proper officer to

make an application on his behalf to the Central Government for revision of such order.

(2) An application under sub-section (1) shall be made within three months from the date of the

communication to the applicant of the order against which the application is being made :

Provided that the Central Government may, if it is satisfied that the applicant was prevented by

sufficient cause from presenting the application within the aforesaid period of three months,

allow it to be presented within a further period of three months.

(3) An application under sub-section (1) shall be in such form and shall be verified in such

manner as may be specified by rules made in this behalf and shall be accompanied by a fee of,-

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(a) two hundred rupees, where the amount of duty and interest demanded, fine or penalty levied

by an officer of customs in the case to which the application relates is one lakh rupees or less;

(b) one thousand rupees, where the amount of duty and interest demanded, fine or penalty levied

by an officer of customs in the case to which the application relates is more than one lakh rupees:

Provided that no such fee shall be payable in the case of an application referred to in sub-section

(1A).

(4) The Central Government may, of its own motion, annul or modify any order referred to in

sub-section (1).

(5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of

greater value shall be passed under this section, -

(a) in any case in which an order passed under section 128A has enhanced any penalty or fine in

lieu of confiscation or has confiscated goods of greater value, and

(b) in any other case, unless the person affected by the proposed order has been given notice to

show cause against it within one year from the date of the order sought to be annulled or

modified.

(6) Where the Central Government is of opinion that any duty of customs has not been levied or

has been short-levied, no order levying or enhancing the duty shall be made under this section

unless the person affected by the proposed order is given notice to show cause against it within

the time limit specified in section 28.

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RELEVANT PROVISIONS UNDER EXCISE LAW

SECTION 35EE. Revision by Central Government.

(1) The Central Government may, on the application of any person aggrieved by any order

passed under section 35A, where the order is of the nature referred to in the first proviso to sub-

section (1) of section 35B, annul or modify such order :

Provided that the Central Government may in its discretion, refuse to admit an application in

respect of an order where the amount of duty or fine or penalty, determined by such order does

not exceed five thousand rupees.

Explanation. — For the purposes of this sub-section, “order passed under section 35A” includes

an order passed under that section before the commencement of section 47 of the Finance Act,

1984 against which an appeal has not been preferred before such commencement and could have

been, if the said section had not come into force, preferred after such commencement, to the

Appellate Tribunal3.

(1A) The Commissioner of Central Excise may, if he is of the opinion that an order passed by

the Commissioner (Appeals) under section 35A is not legal or proper, direct the proper officer to

make an application on his behalf to the Central Government for revision of such order.

(2) An application under sub-section (1) shall be made within three months from the date of the

communication to the applicant of the order against which the application is being made:

Provided that the Central Government may, if it is satisfied that the applicant was prevented by

sufficient cause from presenting the application within the aforesaid period of three months,

allow it to be presented within a further period of three months.

(3) An application under sub-section (1) shall be in such form and shall be verified in such

manner as may be specified by rules made in this behalf and shall be accompanied by a fee of, -

3 Anthony Mitchell, Outsourcing Could Be Affected by Indian Tax, E-Commerce Times,March 08, 2004, available at http://www.ecommercetimes.com/story/35472.html?wlc=1287831351

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(a) two hundred rupees, where the amount of duty and interest demanded, fine or penalty levied

by any Central Excise officer in the case to which the application relates is one lakh rupees or

less;

(b) one thousand rupees, where the amount of duty and interest demanded, fine or penalty

levied by any Central Excise officer in the case to which the application relates is more than one

lakh rupees :

Provided that no such fee shall be payable in the case of an application referred to in sub-section

(1A).

(4) The Central Government may, of its own motion, annul or modify any order referred to in

sub-section (1).

(5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of

greater value shall be passed under this section, —

(a) in any case in which an order passed under section 35A has enhanced any penalty or fine in

lieu of confiscation or has confiscated goods of greater value; and

(b) in any other case, unless the person affected by the proposed order has been given notice to

show cause against it within one year from the date of the order sought to be annulled or

modified.

(6) Where the Central Government is of opinion that any duty of excise has not been levied or

has been short-levied4, no order levying or enhancing the duty shall be made under this section

unless the person affected by the proposed order is given notice to show cause against it within

the time-limit specified in section 11A.

4 Anil Kumar Shah, Tax Guru, December 8, 2009, available at http://taxguru.in/. html

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CONCLUSION

The Central Board of Excise and Customs (CBEC) is the national agency responsible for

administering Customs, Central Excise & Service Tax in India. The Customs & Central Excise

department was established in the year 1855 by the then British Governor General of India, to

administer customs laws in India and collection of import duties / land revenue5. It is one of the

oldest government departments of India. Currently the Customs and Excise department comes

under the Department of Revenue, Ministry of Finance. IRS officers start their careers as

Assistant Commissioners in the field and within 20 – 25 years rise to the post of Chief

Commissioners, with a few senior most officers who become Members of CBEC / CESTAT /

Settlement Commission.

5 Notification No. – 2\2010, dated 27.02.2010

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BIBLIOGRAPHY

Books Referred:

1. V. S. Datey, Indirect Tax 26th ed. Taxmann.

2. Sukumar Mukhopadhyay, Essays on Indirect Taxes, 1st Ed., Manupatra.

Website referred:

1. www.manupatra.com

2. www.google.com

3. www.businesslawyer.in

4. http://www.blonet/businessline/2001/07/31/stories/043120ju.html

5. http://research.lawyers.com/glossary/horizontal-agreement.html

6. http://www.businessdictionary.com/definition/shrinkwrapped-software.html

7. http://www.cbec.gov.in/customs/cst-0809/chap-85.pdf

8. http://www.indiainbusiness.nic.in/.htm

9. http://www.servicetax.gov.in/st-actmainpg.htm

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