Circular No.752/68/2003-Central Excise, Dated: 01.10.2003

Circular No.752/68/2003-Central Excise

1^st October, 2003  

F.No.208/27/2003-CX.6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Subject: – Power of Adjudication of Central Excise Officers under Section 33 and Section 11A of the Central Excise Act, 1944 – instruction  – regarding . 

I am directed to say that the Board has decided to review the Power of Adjudication of the Central Excise officers and the monetary limit prescribed under Section 33 and Section 11A of the Central Excise Act, 1944 with the objective of expeditious adjudication of cases. For this purpose, the Board has decided to prescribe the uniform monetary limit to different categories of officers for the purpose of deciding the competence of adjudication of cases without differentiating whether or not cases involve fraud, collusion, any wilful mis-statement, suppression of facts or contravention of Central Excise Act/ Rules with an intent to evade duty and/ or where extended period has been invoked.  It has also been decided by the Board to enhance the monetary limit of the amount of duty involved from the present level for different categories of officers for adjudication cases.

2.  Accordingly, the Board has decided to –

(i)  Have uniform monetary limits for adjudication of Central Excise Cases under Section 11A and/or Section 33 of the Central Excise Act, 1944, whether or not the cases involve fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of the rules made there-under with intent to evade payment of duty and whether or not extended period has been involved.

(ii) Prescribe monetary limits for adjudication of show cause notices relating to classification and valuation of excisable goods to different categories of officers.  Prior to this circular, Deputy/Assistant Commissioners were competent to adjudicate show-cause notices relating to determination of classification and valuation without any monetary limit of the amount of duty involved.

(iii) Prescribe monetary limits for adjudication of show cause notices relating to CENVAT Credit cases for different categories of officers.  Prior to this Circular Deputy/Assistant Commissioners are competent to adjudicate show cause notices relating to CENVAT credit without any monetary limit of the amount of credit involved.

3. Attention is invited to sub-para 2.1 of Part II(Adjudication) of Chapter 13 of the Central Excise Manual issued on 1st September,2001. To give effect to the proposed changes, for the said sub-para 2.1. of Part II(Adjudication) of Chapter 13 of the Central Excise Manual, the following shall be substituted, namely:-

2.1   Adjudication of confiscation and penalty has to be done by Officers specified in Section 33 of the Central Excise Act, 1944.  Central Excise Officers have the power to determine duty short paid or not paid, erroneously refunded under Section 11A of the said Act. For this purpose, the Board has decided that the powers of adjudication and determination of duty shall be exercised, based on monetary limit (duty involved in a case) as under:-

A. All cases involving fraud, collusion, any wilful mis-statement, suppression of facts or contravention of Central Excise Act/ Rules with an intent to evade duty and/ or where extended period has been invoked in show cause notices (including classification and valuation of excisable goods and CENVAT credit cases) will be adjudicated as follows:-

B. Cases which do not fall under the Category (A) above including all cases relating to determination of classification and valuation of excisable goods and CENVAT credit will be adjudicated as follows:

C.  Cases related to issues mentioned under first proviso to Section 35B(1) of Central Excise Act, 1944 would be adjudicated by the Additional/ Joint Commissioners without any monetary limit.

4.   It is clarified that in view of the above modifications, all cases including cases relating to determination of classification and valuation and cases pertaining to CENVAT credit whether or not involving fraud, collusion, wilful mis-statement, suppression of fact or contravention of Central Excise Act/ Rules with intent to evade duty and/ or where extended period has been invoked will be treated uniformly and the prescribed monetary limit is applicable to all cases for the purpose of adjudication.

5.  All previous Board’s Circulars relating to adjudication of show cause notices are hereby rescinded/ modified to above extent.

6.  In case different show cause notices have been issued on the same issue answerable to different adjudicating authorities, attention is invited to CBEC’s Circular No.362/78/97-CX dated 9.12.97  whereby it has been clarified that all the show cause notices involving the same issue will be adjudicated by the adjudicating authority competent to decide the cases involving the highest amount of duty.

7. The value of goods/conveyance liable to confiscation will not alter the above powers of adjudication, which shall solely depend upon the amount of duty/ CENVAT credit involved in the offending goods.

8.  Regarding issue of show cause notices, it is clarified that in respect of all cases, whether or not fraud, collusion, willful mis-statement, suppression of fact or contravention of Central Excise Act/ Rules with intent to evade duty and/ or where extended period has been invoked i.e. cases falling under any category (A), (B) or (C) of para 3 above, the show cause notice shall be approved in writing and signed by the officer competent to adjudicate the said show cause notice.  This instruction will come into effect prospectively i.e.  from the date of issue of this Circular.

9.  All previous Board’s Circulars relating to issue of show cause notices are hereby rescinded/ modified to the above extent.

10. It is clarified that notwithstanding this revision, in all cases where the personal hearing has been completed, orders will be passed by the Adjudicating Authority before whom the hearing has been held. Such orders should normally be issued within a month of the date of completion of the personal hearing.

11. In all cases where personal hearing is yet to be commenced, the adjudications should be done by the appropriate level of officers as per the revised instructions. An immediate exercise should be undertaken to take stock of the present pendencies and the transfer of relevant files and records to respective adjudicating authorities and the exercise of transfer of case records should be completed by 20^thOctober 2003, under proper receipt.  The recast figures should be reflected in the Monthly Technical Report of October 2003, which is to be submitted in November, 2003.

12. The Chief Commissioners are requested to report the number of cases, which will go out of the jurisdiction of officers of different levels as a result of these modifications.

13.  The Trade and field formations may be suitably informed.

14. Receipt of this Circular may please be acknowledged.

15. Hindi version will follow.

Neerav Kumar Mallick
Under Secretary to the Government of India

F.No.208/27/2003-CX.6