Circular No. 476/42/99-CX
dated 3/8/1999


Government of India
Ministry of Finance
Department of Revenue,
Central Board of Excise & Customs, New Delhi

Subject : Filing of Civil Appeal against CEGAT Orders involving rate of duty and valuation – Review/scrutiny of CEGAT orders by the Commissioners – Instructions regarding

On the question of review/scrutiny of CEGAT orders involving any question having a relation to the rate of duty of Excise or to the valuation of goods for purposes of assessment, and filing civil appeals to the Hon”ble Supreme Court in appropriate cases, the Board has issued various instructions from time to time. As early as 1993, in view of the judgements of the Hon”ble Supreme Court in C.A. No. 2674 (NM)/1992 in the matter of CCE, Chandigarh v. Manjeet Industries and C.A. No. 2531 (NM)/1992 in the matter of CCE, Meerut v. M/s Saggu Body Builders, the Board vide its D.O.F. No. 390/170/92-JC dated 13.1.93 had clarified that filing of appeals before the Hon”ble Supreme Court may be considered only where substantial questions of law are involved and there is no direct ruling or case law of the S.C. on the issue and that no appeal to the S.C. may be filed where revenue involved in Rs. 5 lakhs or less without recurring effect. However, the Board vide its. D.O.F. No. 390/170/92-JC dated 27.10.93, in modification of its earlier instructions dated 13.1.93, further clarified that in cases where substantial questions of law are involved and there is no direct ruling of the Highest Court on the specific issues, appeal may be filed even if revenue involved therein is less than Rs. 5 lakhs.

Board observes that the above instructions are not being implemented seriously and effectively in many zones. In a large number of cases, revenue implications and their recurring nature or otherwise is not indicated by the Commissioners while sending their recommendations for filing civil appeals against CEGAT orders. In a number of cases, on enquiries, revenue implications have been found to be less than Rs. 5 lakhs and that too without recurring effect and without any substantial law point leading to the entire exercise of examination/processing of the matter at the Board”s level instructions.

The Board also feels that all the Commissioners are apparently not carefully scrutinizing personally the CEGAT orders adverse to revenue and many orders are getting accepted considering their low revenue implications and ignoring at times the fact that it may be involving substantial point of law. Board has noticed in this regard that even some larger Bench adverse orders have been accepted in some Commissionerates on this logic, though the same merited an appeal for getting a final judgement by the Apex Court. The constitution of CEGAT”s larger Bench, prima facie, goes to show that there was a law point involved in the matter on which there were difference in opinion, otherwise the need of constitution of larger Bench could not have arisen. Whether such adverse judgements by Larger Benches (of 3 or 5 members) are to be accepted or not should need a very careful consideration, as apparently, there may be a case of filing civil appeal because the majority decision is doubted/questioned by an authoritative decision of one or more Members of the Bench. There is no arrangement either to ensure that at least all adverse orders are also scrutinized in the 10% or higher percentage checking, which C.C”s are under taking at present to ensure that adverse orders are being rightly accepted or there is need for filing civil appeal.

The Board has, therefore, decided that in future for all CEGAT orders passed by larger Benches-3-Members Bench which are adverse to revenue, the final decision for their acceptance or filing an appeal will be taken in the Board. All such decisions should be, on receipts, carefully examined by the concerned Commissioners irrespective of the revenue involved (and its recurring or non-recurring nature) and their detailed comments whether they recommend filing of civil appeal or not (with reasons therefore) should be sent to the Board within 10 days of receipt of the adverse order with a copy to their Chief Commissioner.

Board would like that in all such cases dissenting orders must be studied very carefully for their merit and comments whether these have been adequately answered by the majority members in view of case law available, or a ruling by Apex Court will be desirable. Where Commissioners strongly feel that the majority judgement has much stronger justification for acceptance, considering the case law quoted, or some other Apex Court rulings or Boards instructions etc., it must be elaborated in Commissioner”s comments.

Board desires that Chief Commissioners should also send by Telex their considered recommendation on acceptability of such Larger Bench judgements latest within a week of receipt of Commissioner”s comments as aforesaid. Further CDR/JDR and concerned SDR should invariably send their considered views on acceptability or otherwise of such adverse orders to Commissioners and JS (Review) within 10 days of passing of the orders in question.

It has also been noted that in a large number of civil appeal proposals, the commissioners are forwarding an attested copy of the CEGAT judgement, which is of no use as the Supreme Court accepts only Certified Original copy of the CEGAT order as received in the Commissionerate from the CEGAT”s Registry office Non-availability of the Certified copy of the paper work and consequently causing avoidable delays in filing civil appeals within the stipulated period of 60 days from the receipt of the order in the Commissionerate.

You are, therefore, advised to take appropriate note of the aforesaid instructions, as also the instructions issued by the Board from time to time for guidance and action, and ensure that proposals/reports are sent to the Board in all such cases, expeditiously within the time limits mentioned so that the orders can be further examined in the Board for taking  a view on their acceptability or otherwise and for suitable further action.

Board desires you to review if there are any Larger Bench judgements of his nature received in your jurisdiction which may have been accepted in last 3 months. Your comments indicating the reasons for acceptance covering the points mentioned above may be sent to the undersigned within next 10 days, for considering whether any appeal, with condonation of delay application is called for.

Joint Secretary (Review)

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