Circular No. 768/01/2004-CX
January 5, 2004

F.No . 390/85/2002-JC (Pt II)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Subject : Effective handling of Central Excise & Customs Appeals, Recommendations of the Expert Group-instructions

Attention is invited to Board’s Circular No. 746/62/2003-CX dated 22nd September 2003 issued vide F.No . 390/85/2003-JC and Circular No. 710/26/2003-CX dated 23rd April 2003 issued vide F.No .390/198(M-2)/2002-JC, wherein field formations were sensitized on the need to remove deficiencies and inadequacies in the manner of filing department appeals. As you are aware, the Expert Group constituted to carry out an in depth study of departmental procedures in appeal matters, and to find out lacunae in dealing with appeal cases at all levels, has made specific recommendations on the subject and the Board has accepted most of the said recommendations. Based on the Board’s decision, the following guidelines are being issued for strict compliance by the field formations:-

i )

In order to make the Department’s representation before Commissioner (Appeals) more effective, it has been decided that the Commissioner’s representative may be present during the hearing before Commissioner (Appeals). It is left to the best judgment of the Commissioner as to the level of officer who should represent the Department, and also the cases in which such representation is desirable.


Copy of the Department’s appeals both against the order of the Commissioner as well as Commissioner (Appeals), should be handed over to the office of CDR/Jt . CDR after filing of the same in the CEGAT Registry so as to enable them to scrutinise such appeals for pointing out the technical defects and possible remedial measures.


The field formations should not issue Show Cause Notices on trivial issues. The show cause notice should be drafted properly and suppression clause should be invoked only after careful scrutiny of the fact. Relied upon documents such as panchnama and statements with their English translations,. seizure memo, test report etc., should invariably be attached and their mention be made in the Show Cause Notice. The Commissioner should exercise utmost caution and careful check in ensuring that the ‘suppression’ clause is not invoked on frivoious grounds. While passing the Adjudication order, correct legal provisions and case laws should be invoked.


Voluntary compliance should be encouraged by acquainting the assessees about the provisions of Section 11A (2B) of the Central Excise Act (waiver of Show Cause Notice in cases where voluntary payment is made) and in the case of short payment etc. pointed out by Audit or detected during Audit/scrutiny of Returns in terms of the Sec. 11A (2B) of the Act, as amended.


Many old cases pertaining to a particular Commissioner now relate to the restructured new Commissioner. In all such cases the new Commissionerate which deals with the same, should promptly write to the Registry giving the particulars and the address of the new Commissionerate so that problem of wrong address may be avoided.


Refund Orders should invariably also be a speaking order in the form of an order-in-original. All Orders-in-original, including those relating to Refunds, must be reviewed by the Review Branch of the Commissionerates .


On the basis of the terminal list provided by the Supreme Court Registry, the Directorate of Legal Affairs may list out all cases likely to come up in the next session of the Supreme Court and send it to the concerned Commissionerates . The Commissionerate in turn should review their files and take necessary action to follow up contacting the concerned advocates. Any defects or pending orders which require to be removed/implemented should be attended to well in advance of the actual date of listing.


The Commissionerate should appoint a nodal officer responsible for maintaining a data-base of their cases and keep the same updated on the basis of references received from the DLA, Board office, Central Agency Section, Supreme Court website and take step accordingly. The nodal officer will also be reponsible for attending to any important message telephon /fax relating to cases of the Commissionerate from the Boards office/Directorate of legal Affairs. The Commissionerate should inform the DLA/Chief Commissioner and the Board about the appointment of the nodal officer of the Commissionerate .


All correspondence with the office of the CDR/ Jt . CDR or the Registry of CEGAT should be under the signature of an officer not below the rank of Addl./ Jt . Commissioner in the Commissionerate .


Appeals should be filed with proper authorization by Commissioner and after citing correct provisions of law i.e. Section 35 B or 35 E of Central Excise Act or Section 129 A or 129 D of the Customs Act. When the Board authorizes Commissioner to file appeal, it should be filed against each respondent. Appeal authorization should clearly indicate that order has been found to be not legal and proper. Commissioners should invariably file cross objection or send para -wise comments in terms of the Board’s order on the subject, within the stipulated period of 45 days. Conversant officers should be deputed to brief the DRs so that the case can be presented effectively before the CESTAT.


The improper order in favour of revenue should not be accepted in routine and the review authority should give its observations for guidance of the adjudication authorities. The tendency to invariably pass the orders in favour of revenue without application of mind or to file frivolous appeals should end forthwith. Whenever any such cases noticed, the CDR should send a note to the Chief Commissioner concerned with a copy to the Board.

Receipt of the above circular may be acknowledged.

B.K. Gupta
Joint Secretary (Review)

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